Katelyn Baker
Well-Known Member
Summary
Last year, the company submitted an NDA (New Drug Application) for a synthetic, orally administered, liquid formulation of the cannabinoid THC (dronabinol) - administered in the form of a sublingual spray. The U.S. Food and Drug Administration (FDA) extended the Prescription Drug User Fee Act (PDUFA) date from April 1st, 2016 to July 1st, 2016 for the drug, called Syndros.
After the submission of the original NDA, the company submitted information relating to the rescheduling of Syndros under the Controlled Substances Act - this was a big enough amendment to the NDA that the FDA exercised its option to extend the PDUFA date in order to provide them more time to complete the review.
With the review date just around the corner, let's take a closer look. First, a bit about the science. Cannabinoids are the group of 60 different active chemical constituents of cannabis - they bind to receptors in your body and then affect your immune system and brain. The product currently available from Insys is their original form of dronabinol, Marinol, whose mechanism of action is via gel-capsules. Marinol's success and growth is indicative of a favorable outcome for Syndros (and Insys) come the drugs PDUFA date. The company claims that Syndros has distinct advantages over the existing Marinol. Specifically, the liquid variant offers the following benefits: a faster onset of action, more consistent bioavailability, and more flexible dosing.
Cannabis, in both synthetic and natural formulations, can currently be prescribed in 25 states and Washington DC for medical use. And, according to the American Cancer Society, studies have shown that vaporized marijuana helps treat nausea, vomiting, and neuropathic pain caused by chemotherapy. Clearly, this can have huge implications for cancer sufferers worldwide, and for the pharmaceutical companies producing legalized medical marijuana products. Studies also indicate that marijuana helps food intake in patients undergoing treatment for AIDS and in clinical trials when patients use marijuana extracts, they tend to need less pain medication.
Popular opinion is rapidly changing, but predispositions about cannabis have slowed its growth in the medical market. Yet despite the issues regarding its legality, people have been taking advantage of the medicinal benefits provided by cannabis for almost as long as history has been recorded. More recent medical studies and clinical trials have served to reinforce the benefits of its usage. Everything points at the fact that Insys' innovation may have come along just at the right time - for those benefiting directly from its medicinal uses, and those invested in the market.
In the 1990s, scientists discovered why it works so well and for such a large variation of illnesses. They discovered a natural system in the human body called the endocannabinoid system, which includes chemicals that replicate the activity of cannabis. Effectively, to "decrease inflammation, increase immunity, decrease pain, and increase appetite" according to Dr. Heather Auld, a fellow at the University of Arizona (Department of Integrative Medicine).
Currently, dronabinol is the only synthetic cannabinoid that the United States Food and Drug Administration (FDA) has approved. The drug has effective antiemetic and appetite stimulant properties. Considering that anorexia and cachexia are diagnosed in more than two-thirds of all cancer patients, dronabinol (especially in the form of vapor - for reasons discussed below) could play a vital part in treating the symptoms that accompany the disease and can greatly improve a patient's quality of life.
In fact, nausea and vomiting often are described as "more significant inhibiting factors for quality of life of cancer patients than even intense pain," (According to the National Institute of Health). It has had proven success in the treatment for loss of appetite and weight loss in those who have acquired immunodeficiency syndrome (AIDS). On a micro level, dronabinol is a cannabinoid designed chemically as (6aR-trans)-6a,7,8,10a-tetrahydro-6,6,9-trimethyl-3-pentyl-6H-dibenzo(b,d)pyran-1-ol. It has complex effects on the central nervous system (CNS). When cannabinoids are introduced to the body, they latch onto the cannabinoid receptors. It is this process that has been shown to positively affect the body in a number of ways.
The trial on which the NDA is based compares Syndros to Marinol, which, as noted, is the currently available formulation of dronabinol. Syndros won out against a range of comparison points, with the primary focus being on its strengths related to: (drug) absorption and rate of absorption. Syndros demonstrated detectable plasma levels (an indication of absorption) at 15 minutes in 100% of patients in the study - this compared to less than 25% for Marinol.
On top of this faster onset of action and more consistent bioavailability, as noted at the beginning, Syndros also offers more flexible dosing than Marinol because of its specific and predictable effect on the patient. Therefore, from an efficacy perspective, being that the bio-equivalence of Syndros and Marinol came in on par, the potential for approval (of the NDA) and success of the drug (following the PDUFA date), looks promising.
What is the market potential, and what would an approval mean for Insys? One thing that will likely foster the rapid growth of Syndros is the existing concentrated market for dronabinol. There are only 8,000 physicians responsible for over 70% of dronabinol prescribed today, with the cancer indication accounting for 55% of prescriptions and the AIDS indication accounting for another 45%. This is a notable sign of potential for Insys come July 1st because it means that the company has to pitch and sell their drug to a relatively small base of physicians.
According to Insys, their plans to utilize about fifty sales reps will allow them to reach their goal of $500 million annual revenue, following a conversion from the current Standard of Care (from Marinol to Syndros). Additionally, Insys predicts an expansion in sales of $200 million on top of the current market of $500 million, bringing the total market potential of Syndros to $700 million annually - this based on indicators of increased drug availability, method of drug administration, results of clinical trials, and a change in public opinion towards medical cannabis.
Where do the risks lie? Well, those familiar with the company will be aware of the furor surrounding off label administration of Subsys. For those that aren't familiar, Insys CEO Michael Babich stepped down as CEO in November last year on the back of allegations that the company had promoted off label use through various channels. The allegations seem founded, and Insys has since paid out various settlements relating to this off label promotion, while a number of its sales reps have plead guilty to pharmaceutical sales fraud in what seems to be a pretty expansive network of sales channels. What does this mean?
Well, it makes it difficult to accurately assess the future sales of Subsys, because we aren't sure just exactly how much of the Subsys revenues to date was derived from above board issue, and how much was derived from off label administration.
As a secondary implication of the situation, on the stepping down of Babich, company chairman Dr. John Kapoor took over as CEO. He owns just shy of 60% of the outstanding shares, and this makes Insys a controlled company. This isn't necessarily a bad thing, so long as the guy in control makes the right decisions. It's not clear whether Kapoor had any direct involvement in the sales scam (the assumption is that he didn't) but it adds an element of uncertainty for anyone considering a new exposure. This uncertainty could weigh on open market interest.
All this aside, there's obviously the risk that the FDA will turn down Syndros. The delay in PDUFA came on the back of what was only referred to as a scheduling issue, with Insys supposedly submitting some new information related to scheduling (for those not familiar, scheduling refers to the five categories a drug is placed in when it hits market - all defined here).
The data relates to scheduling, so this suggests it won't have any impact on an approval decision, but it was enough to initiate a delay, so it could affect labeling. This is the second primary risk after a CRL - that the agency approves the drug with a severely limiting label. With the scheduling issue in focus, there is a good chance this could happen.
Financially, things look pretty solid, so there's no immediate risk there. The company had around $73 million cash on hand at March 31, and brought in first quarter revenues of $62 million for a net income of $2.4 million.
All said, this is a risky one, but one with plenty of potential upside on approval. It's not all or nothing like some of the other dev stage biotechs we've looked at (purely based on the fact that the company already markets Marinol and Subsys) but there's a double-digit downside if the FDA flat out rejects the drug, or issues a CRL. There's an equal or greater upside however, so as a small speculative exposure, it might be one to watch.
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: Insys Therapeutics Is Hoping Syndros Is Its Blockbuster Marijuana Ticket
Author: Samuel Rae
Contact: Seeking Alpha
Photo Credit: Jim Mone
Website: Seeking Alpha
- Insys has a PDUFA for Syndros scheduled for July 1.
- The drug is a sublingual spray reformulation of its currently marketed Marinol.
- An approval is a potential double-digit upside catalyst for the company.
- There are risks, and the company has a chequered past, the fallout of which is not yet fully clear.
Last year, the company submitted an NDA (New Drug Application) for a synthetic, orally administered, liquid formulation of the cannabinoid THC (dronabinol) - administered in the form of a sublingual spray. The U.S. Food and Drug Administration (FDA) extended the Prescription Drug User Fee Act (PDUFA) date from April 1st, 2016 to July 1st, 2016 for the drug, called Syndros.
After the submission of the original NDA, the company submitted information relating to the rescheduling of Syndros under the Controlled Substances Act - this was a big enough amendment to the NDA that the FDA exercised its option to extend the PDUFA date in order to provide them more time to complete the review.
With the review date just around the corner, let's take a closer look. First, a bit about the science. Cannabinoids are the group of 60 different active chemical constituents of cannabis - they bind to receptors in your body and then affect your immune system and brain. The product currently available from Insys is their original form of dronabinol, Marinol, whose mechanism of action is via gel-capsules. Marinol's success and growth is indicative of a favorable outcome for Syndros (and Insys) come the drugs PDUFA date. The company claims that Syndros has distinct advantages over the existing Marinol. Specifically, the liquid variant offers the following benefits: a faster onset of action, more consistent bioavailability, and more flexible dosing.
Cannabis, in both synthetic and natural formulations, can currently be prescribed in 25 states and Washington DC for medical use. And, according to the American Cancer Society, studies have shown that vaporized marijuana helps treat nausea, vomiting, and neuropathic pain caused by chemotherapy. Clearly, this can have huge implications for cancer sufferers worldwide, and for the pharmaceutical companies producing legalized medical marijuana products. Studies also indicate that marijuana helps food intake in patients undergoing treatment for AIDS and in clinical trials when patients use marijuana extracts, they tend to need less pain medication.
Popular opinion is rapidly changing, but predispositions about cannabis have slowed its growth in the medical market. Yet despite the issues regarding its legality, people have been taking advantage of the medicinal benefits provided by cannabis for almost as long as history has been recorded. More recent medical studies and clinical trials have served to reinforce the benefits of its usage. Everything points at the fact that Insys' innovation may have come along just at the right time - for those benefiting directly from its medicinal uses, and those invested in the market.
In the 1990s, scientists discovered why it works so well and for such a large variation of illnesses. They discovered a natural system in the human body called the endocannabinoid system, which includes chemicals that replicate the activity of cannabis. Effectively, to "decrease inflammation, increase immunity, decrease pain, and increase appetite" according to Dr. Heather Auld, a fellow at the University of Arizona (Department of Integrative Medicine).
Currently, dronabinol is the only synthetic cannabinoid that the United States Food and Drug Administration (FDA) has approved. The drug has effective antiemetic and appetite stimulant properties. Considering that anorexia and cachexia are diagnosed in more than two-thirds of all cancer patients, dronabinol (especially in the form of vapor - for reasons discussed below) could play a vital part in treating the symptoms that accompany the disease and can greatly improve a patient's quality of life.
In fact, nausea and vomiting often are described as "more significant inhibiting factors for quality of life of cancer patients than even intense pain," (According to the National Institute of Health). It has had proven success in the treatment for loss of appetite and weight loss in those who have acquired immunodeficiency syndrome (AIDS). On a micro level, dronabinol is a cannabinoid designed chemically as (6aR-trans)-6a,7,8,10a-tetrahydro-6,6,9-trimethyl-3-pentyl-6H-dibenzo(b,d)pyran-1-ol. It has complex effects on the central nervous system (CNS). When cannabinoids are introduced to the body, they latch onto the cannabinoid receptors. It is this process that has been shown to positively affect the body in a number of ways.
The trial on which the NDA is based compares Syndros to Marinol, which, as noted, is the currently available formulation of dronabinol. Syndros won out against a range of comparison points, with the primary focus being on its strengths related to: (drug) absorption and rate of absorption. Syndros demonstrated detectable plasma levels (an indication of absorption) at 15 minutes in 100% of patients in the study - this compared to less than 25% for Marinol.
On top of this faster onset of action and more consistent bioavailability, as noted at the beginning, Syndros also offers more flexible dosing than Marinol because of its specific and predictable effect on the patient. Therefore, from an efficacy perspective, being that the bio-equivalence of Syndros and Marinol came in on par, the potential for approval (of the NDA) and success of the drug (following the PDUFA date), looks promising.
What is the market potential, and what would an approval mean for Insys? One thing that will likely foster the rapid growth of Syndros is the existing concentrated market for dronabinol. There are only 8,000 physicians responsible for over 70% of dronabinol prescribed today, with the cancer indication accounting for 55% of prescriptions and the AIDS indication accounting for another 45%. This is a notable sign of potential for Insys come July 1st because it means that the company has to pitch and sell their drug to a relatively small base of physicians.
According to Insys, their plans to utilize about fifty sales reps will allow them to reach their goal of $500 million annual revenue, following a conversion from the current Standard of Care (from Marinol to Syndros). Additionally, Insys predicts an expansion in sales of $200 million on top of the current market of $500 million, bringing the total market potential of Syndros to $700 million annually - this based on indicators of increased drug availability, method of drug administration, results of clinical trials, and a change in public opinion towards medical cannabis.
Where do the risks lie? Well, those familiar with the company will be aware of the furor surrounding off label administration of Subsys. For those that aren't familiar, Insys CEO Michael Babich stepped down as CEO in November last year on the back of allegations that the company had promoted off label use through various channels. The allegations seem founded, and Insys has since paid out various settlements relating to this off label promotion, while a number of its sales reps have plead guilty to pharmaceutical sales fraud in what seems to be a pretty expansive network of sales channels. What does this mean?
Well, it makes it difficult to accurately assess the future sales of Subsys, because we aren't sure just exactly how much of the Subsys revenues to date was derived from above board issue, and how much was derived from off label administration.
As a secondary implication of the situation, on the stepping down of Babich, company chairman Dr. John Kapoor took over as CEO. He owns just shy of 60% of the outstanding shares, and this makes Insys a controlled company. This isn't necessarily a bad thing, so long as the guy in control makes the right decisions. It's not clear whether Kapoor had any direct involvement in the sales scam (the assumption is that he didn't) but it adds an element of uncertainty for anyone considering a new exposure. This uncertainty could weigh on open market interest.
All this aside, there's obviously the risk that the FDA will turn down Syndros. The delay in PDUFA came on the back of what was only referred to as a scheduling issue, with Insys supposedly submitting some new information related to scheduling (for those not familiar, scheduling refers to the five categories a drug is placed in when it hits market - all defined here).
The data relates to scheduling, so this suggests it won't have any impact on an approval decision, but it was enough to initiate a delay, so it could affect labeling. This is the second primary risk after a CRL - that the agency approves the drug with a severely limiting label. With the scheduling issue in focus, there is a good chance this could happen.
Financially, things look pretty solid, so there's no immediate risk there. The company had around $73 million cash on hand at March 31, and brought in first quarter revenues of $62 million for a net income of $2.4 million.
All said, this is a risky one, but one with plenty of potential upside on approval. It's not all or nothing like some of the other dev stage biotechs we've looked at (purely based on the fact that the company already markets Marinol and Subsys) but there's a double-digit downside if the FDA flat out rejects the drug, or issues a CRL. There's an equal or greater upside however, so as a small speculative exposure, it might be one to watch.
News Moderator: Katelyn Baker 420 MAGAZINE ®
Full Article: Insys Therapeutics Is Hoping Syndros Is Its Blockbuster Marijuana Ticket
Author: Samuel Rae
Contact: Seeking Alpha
Photo Credit: Jim Mone
Website: Seeking Alpha
