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Pain Therapeutics, Durect Shares Plunge on Pain Drug Rejection

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Development partner Pfizer didn't say why the FDA rejected the tamper-proof oxycodone painkiller Remoxy. Acura shares rise.

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Since Oxycontin hit the market in the mid-90s, abuse of the drug became a big problem. So developing an abuse-resistant version of the powerful, widely used painkiller would seem like a slam dunk.

Two companies partnered with pharma giant Pfizer (PFE) are seeing their shares plunge this morning as the Food and Drug Administration rejected their application to sell the tamper-resistant oxycodone painkiller Remoxy.

Pain Therapeutics (PTIE) fell more than 40% to $5.35 in Friday morning trading, while Durect (DRRX) dropped almost 30% to $2.25. Pfizer fell 1% to $20.37. The big drug maker's shares are up 16% this year.

Remoxy was rejected by the FDA in 2008. Last December, Pain Therapeutics and partner King Pharmaceuticals (now part of Pfizer) resubmitted their application to the sell the drug. Remoxy uses technology developed by Durect.

Pfizer didn't disclose today why the FDA rejected the drug again, leaving investors guessing about Remoxy's future.

"Pfizer is working to understand and address the (FDA) issues," Olivier Brandicourt, Pfizer's president of primary care, says in a statement. "Pain is an important strategic disease area for Pfizer. We share the concern about misuse and abuse of opioid medicines and are committed to being part of the solution to address this important public health and safety issue."

Since last year, Oxycontin, known generically as oxycodone, has itself been sold as a reformulated version of the original tablet that's supposed to be more difficult to abuse. The drug is made by closely held Purdue Pharma.

Pfizer and another drug development partner Acura Pharmaceuticals (ACUR) announced on Monday that they received approval for a similar drug, Oxecta, designed to be harder to inject or snort. That drug, approved for moderate to severe pain, was the first immediate-release version of oxycodone approved. (See Acura Surges on Painkiller Approval.)

Acura shares rose on this morning's news, climbing 10% to $4.11 in mid-morning trading. The stock is up 25% this year.

Pain Therapeutics and Pfizer also were seeking approval for treatment of moderate to severe pain but Remoxy is a version designed to release the drug over a longer period of time. The drug would be used in patients who need pain medication 24 hours a day. Purdue's reformulated Oxycontin is approved for the same indication.

There is no truly abuse-proof version of oxycodone on the market and the companies can't claim that they have such a product. Yet the abuse problem is so bad in the US that investors viewed an opportunity for Acura, Pain Therapeutics, Durect, and Pfizer to resolve an unmet medical need. Now investors will have to wait to hear whether Pfizer proceeds with the development of Remoxy.
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No positions in stocks mentioned.
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