Tuesday, October 10, 2017 7:33:12 PM
Sorrento Therapeutics Inc. (NASDAQ:SRNE) received word from the FDA in September that its re-submitted New Drug Application (NDA) from August had been welcomed this time around for lead candidate ZTlido. A next-generation, non-opioid lidocaine patch created to offer pain relief correlated with post-herpetic neuralgia (PHN), ZTlido awaits a wide open door into exciting commercial prospects in the lidocaine patch market – all pending prospective approval from the agency for its PDUFA date set for February 28.
H.C. Wainwright analyst Ram Selvaraju sounds off from a bullish stance, believing the accepted NDA application is one step forward towards a market that last year between the United States and Europe posed roughly $750 million in sales for currently approved prescription lidocaine patches. The analyst argues that Sorrento's PHN candidate can very well steal a "meaningful" slice of market share should approval be won.
Therefore, the analyst assumes a Buy rating on SRNE stock with a $20 price target, which represents a nearly 1,030% increase from where the shares last closed.
Anticipating the FDA review process would need six months, Selvaraju finds the February 28 PDUFA date aligns with his expectations, adding that Scilex has its eyes on submitting a marketing authorization application (MAA) for the lidocaine patch in Europe by the close of this year.
Importantly, "Investors should also be aware that there is currently an absence of competing promotional activities in this niche, allowing Scilex to take advantage of a lack of counter-detailing if ZTlido were to be launched in the U.S.," asserts Selvaraju.
It is worth noting that the data of a past adhesion trial bolsters ZTlido's NDA domestic submission, with past 90% of trial patients revealing an over 90% adhesion beyond the course of 12 hours under the FDA-recommended five-point scale. Selbaraju explains why this is another key advantage for Sorrento: "Adhesion is critical to safety and efficacy for patch-based products. Investors may recall that a comparative adhesion performance study showed superior adhesive properties for ZTlido vs. the European Union reference product Versatis® (lidocaine medicated plaster 5%)."
Moving forward, a domestic commercial launch for the asset could proceed on the heels of regulatory approval, predicts the analyst, who would not be surprised should Scilex choose to focus on a domestic launch hinging upon "a proprietary or contract sales force." In the context of ZTlido's prospective approval, Selvaraju foresees these wheels turning by the middle of next year.
Additionally, according to TipRanks, Mark Breidenbach of Oppenheimer echoes Selvaraju's confidence in Sorrento's corner, rating a Buy on the stock with a $7 price target, indicating a 295% upside from where the shares last closed.
Read more: H.C. Wainwright Sees Over 1000% Upside for Sorrento Therapeutics (SRNE) | Investopedia http://www.investopedia.com/investing/hc-wainwright-sees-over-1000-upside-sorrento-therapeutics-srne/#ixzz4v9QoXF9v
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