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Flexion's Zilretta Gets FDA Approval for Knee Pain, Stock Up

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Flexion Therapeutics, Inc.’s shares rose almost 10.4% on Friday following the FDA approval for its osteoarthritis (OA) knee pain drug, Zilretta. With the approval, the drug becomes the first and only approved extended-release, intra-articular injection for treating knee pain.

Zilretta is a non-opioid medicine, which provides pain relief for over a period of 12-weeks, superior to currently available steroid treatments.

Shares of Flexion have risen 57.3% so far this year, outperforming the industry’s gain of 3% in the period.

The approval was based on data from an ongoing phase III study, which showed that Zilretta reduced the usage of daily rescue medication tablets by 30% compared to saline-placebo. The final data is expected in the second half of 2018. Zilretta’s label also includes data from a phase II study in patients with type 2 diabetes and OA of the knee. The data showed that the drug didn’t significantly increase the blood glucose level, which is associated with an immediate-release steroid.

The drug’s approval also comes at an opportune time when the country is looking to get rid of opioid based treatments due to abuse.

Flexion has been expanding its sales team as the company expects to launch the drug by the end of this month. However, the drug will face competition from Sanofi’s (SNY - Free Report) Synvisc-One, which is also approved for long-term pain relief in patients with OA of knee.

Osteoarthritis is the most common form of arthritis, which can progress to become an incurable condition, ultimately leading to total joint replacement. Per the recent press release, OA affects more than 30 million people in the United States with an expected annual expense of $185 billion. An approximate of 5 million people are treated with immediate-release corticosteroid or intra-articular injection to reduce knee pain.

Zacks Rank & Stocks to Consider

Flexion carries a Zacks Rank #4 (Sell).

A couple of better-ranked stocks in the health care sector include Adaptimmune Therapeutics PLC and Aduro BioTech, Inc. . Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Adaptimmune’s loss per share estimates have narrowed from $1.07 to 95 cents for 2017 and from $1.00 to 90 cents for 2018 over the last 60 days. The company pulled off a positive earnings surprise in two of the trailing four quarters, with an average beat of 2.56%. The share price of the company has increased 101.5% year to date.

Aduro’s loss estimates per share have narrowed from $1.36 to $1.29 for 2017 over last 60 days. The company came up with positive earnings surprises in two of the trailing four quarters, with an average beat of 2.53%.

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