Elite Pharmaceuticals Inc (ELTP)

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Here's A Theory As To Where Elite Pharmaceuticals Inc (OTCMKTS:ELTP) Is Going With Generic OxyContin

https://insiderfinancial.com/here-are-two-ways-elite-pharmaceuticals-inc-otcmktseltp-could-win-from-generic-oxycontin

ByChris SandburgPosted on September 21, 2017 COMMENTS
Elite Pharmaceuticals Inc (OTCMKTS:ELTP) just announced its submission of an abbreviated new drug application (ANDA) for a generic version of extended-release oxycodone hydrochloride.

Some reading may already be familiar with this drug by way of its commercial name, OxyContin. Others may also be familiar with the difficulty that a number of other companies, most notably Epic Pharma, which was acquired by PuraCap back in March last year for around $550 million, had with their respective attempts to do what Elite is trying to do right now.

For those not familiar with the situation, the original developers and marketers of OxyContin, privately held Purdue Pharma L.P., have long been trying to stymie any attempt by another company to bring a generic version of its blockbuster pain management asset to market in the US by way of lawsuits and various appeals on the back of the lawsuits in question.

Repeatedly, courts have overruled the objections of Purdue and thrown out the company’s efforts to enforce certain patents associated with the drug but, as yet, and despite what seems to be a degree of policymaker support for a generic version of this asset hitting the shelves, no companies have succeeded in doing so.

The situation is still up in the air, with a handful of companies (one of which is the above-mentioned PuraCap) still pushing for a regulatory green light on their respective generic assets. These green lights could come any day now and this is the importance of Elite joining the fray (relatively) early with its latest submission.

The company is now one of a handful of companies that could hit markets with a generic OxyContin and it’s positioned itself in this space at what is arguably the best time to do so – a time when the major legal arguments are in the rearview mirror and ­– by proxy – the major time and cost associated with an effort like this is already expended by other entities.

But even that isn’t the most interesting part of this latest development – at least not for us.

We ask readers to join us in a bit of speculation for the moment.

Say the FDA does green light both PuraCap’s and Elite’s generic OxyContin products. The nature of such products is that there is no chemical difference between these and the root asset and, in turn, no difference between the actual physical product that both Elite and PuraCap will be pushing to market.

This means, then, that there is no reason why the same entity couldn’t manufacture both products – PuraCap’s and Elite’s.

Those who are familiar with Elite might already know this, but for those that don’t, the company operates a GMP and DEA registered facility for research, development, and manufacturing located in Northvale, NJ. It is at this facility that Elite has stated in the past that it intends to manufacture the generic drugs for which it is waiting on approval from the FDA (and of which there are four fresh applications with the agency from the past 15 months alone) before they are distributed to pharmaceutical retailers.

If both PuraCap and Elite get green lights, therefore, it is not beyond the realm of possibility that Elite will be responsible for manufacturing both assets before they head out for branded resale.

This means that not only will Elite generate revenues from the chunk of the market it manages to secure (and we are talking about a $2.3 billion market here) for its own product, but also manufacturing fees (or royalties, depending on how any deal is structured) on the product of its primary generic competitor.

In the same vein, even if the Elite ANDA isn’t approved right away and PuraCap beats the former to market, Elite is ready to start producing the asset for PuraCap once it gets regulatory approval.

Keep in mind that this is highly speculative and there is a good chance that things won’t pan out this way. With that said, however, it’s not beyond the realm of possibility and thus could be a nice thesis on which to base a speculative punt on Elite.