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Jazz (JAZZ) Falls as Sleep Drug Gets Extended Review From FDA

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Jazz Pharmaceuticals plc (JAZZ - Free Report) announced that the FDA has extended the review period of its new drug application (“NDA”) for its lead investigational therapy, solriamfetol (JZP-110), by three months to Mar 20, 2019. Currently, the company is looking to get solriamfetol approved as a treatment to improve wakefulness and reduce excessive daytime sleepiness in adult patients with narcolepsy or obstructive sleep apnea (“OSA”).

Shares of Jazz plunged 11.3% following the announcement on Dec 21. The company’s stock has decreased 13.9% compared with the industry’s decline of 21.1%.

 

 

In March, the FDA accepted Jazz's NDA and granted a PDUFA date of Dec 20, 2018. However, during this period, Jazz submitted updated data on draft labeling, which the FDA classified as a major amendment to the NDA filed. This led to the extension of the review period.

We remind investors that Jazz acquired worldwide development, manufacturing and commercial rights to JZP-110 from Aerial BioPharma in January 2014.

The company has completed evaluating the above candidate in a phase II study for ES in Parkinson’s disease. Top-line data is expected in early 2019. We note that JZP-110 enjoys an Orphan Drug designation in the United States for narcolepsy.

Per Jazz, there is a significant unmet need in narcolepsy and OSA with many patients showing inadequate response to the current wake-promoting therapies.

Notably, Jazz already has one marketed therapy called Xyrem for treating cataplexy and excessive daytime sleepiness in patients suffering from narcolepsy. Xyrem is currently sold across 21 countries by UCB Pharma, a multinational biopharmaceutical company with rights to market Xyrem in 54 countries.

Significantly, successful development and commercialization of JZP-110 should strengthen Jazz's sleep disorder portfolio and help boost its top line.

However, several companies are also developing their candidates for the treatment of cataplexy and EDS in narcolepsy patients including Avadel Pharmaceuticals plc (AVDL - Free Report) . Novartis AG's (NVS - Free Report) Ritalin-SR is a marketed drug for narcolepsy. Moreover, a few companies are trying to bring the generic version of Xyrem to market.

Zacks Rank & Stock to Consider

Jazz currently has Zacks Rank #4 (Sell). Bellicum Pharmaceuticals, Inc. is a better-ranked company from the same sector carrying a Zacks Rank #2 (Buy).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bellicum’s loss per share estimates have narrowed from $2.37 to $2.30 for 2018 and from $2.22 to $2.01 for 2019 over the last 60 days. The company pulled off a positive earnings surprise in three of the trailing four quarters, with an average beat of 3.52%.

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