Zogenix, Inc. (NASDAQ:ZGNX) Gains Capped After The FDA Approval

Zogenix, Inc. (NASDAQ:ZGNX) won the Food And Drug Administration (FDA) approval for a new formulation its much-debated painkiller Zohydro. Late on Friday the FDA signaled green to the company’s new Zohydro Extended Release capsules that claim to be abuse deterrent. The company said that the formulation is designed to build into a thick gel when dissolved in liquid or crushed, without losing its hydrocodone features.

Expert breakdown of the ZGNX candlestick chart.

Abuse Deterrent Claims

The company’s Zohydro will be abuse-deterrent as against other prescription painkillers that are either crushed or dissolved by people for the purpose of injecting or snorting. Zogenix, Inc. (NASDAQ:ZGNX) said that it would replace the existing available version of its drug with the new formulation by the second quarter of the year. Despite carrying abuse-deterrent properties, the drug label will not specify such claims. Meanwhile, the FDA has instructed the company to present sufficient clinical data to establish the fact that its new formulation carries abuse-deterrent properties before it is marketed to doctors or patients.

Need To Show More Data

In response, Zogenix, Inc. (NASDAQ:ZGNX)’s President, Stephen Farr said that they are working towards the goal to complete studies as required by the FDA. He said that they would seek additional changes in label establishing its anti-deterrent properties by the close of the year.

The company had gained the FDA approval for its original formulation back in 2013 after which it became the center of discussions of the critics. Many health advocates and law enforcement agencies opposed the FDA’s action of approving the company’s drug that lacks anti-abuse features. The critics said that the marketing of such drug will only add to prescription painkiller abuse.

Zohydro consists opioids that are released into the body over a period of 12 hours to relieve pain. However, abusers could heroin-like high feeling on release of the entire dose at once. Meanwhile, shares of the company witnessed limited headway as the gains were capped to 2.22%, with share closing price of $1.38.

Brown Terrel

Brown Terrel

Terrel is US Markets Daily's business news reporter. She joined US Markets Daily after five years as a print reporter.