Jazz Pharmaceuticals has good, not bad news

In today’s news Jazz Pharmaceuticals (JAZZ) announced the submission of a Marketing Authorization Application (MAA) to the European Medicines Agency for the approval of solriamfetol. 

Solriamfetol is a selective dopamine and norepinephrine reuptake inhibitor (DNRI) in development for treatment of excessive daytime sleepiness in adult patients with narcolepsy, obstructive sleep apnea, and Parkinson’s disease. In 2014, Jazz Pharmaceuticals acquired a license to develop and commercialize solriamfetol from Aerial Biopharma. The aim of the product is to improve wakefulness and to reduce excessive daytime sleepiness in adult patients with narcolepsy (with or without cataplexy) or obstructive sleep apnea.

Professor Yves Dauvilliers, M.D., Ph.D., Head of Sleep and Wake Disorders at the University Hospital of Montpellier, France, explained, “In the European Union, there is no approved treatment for people with excessive daytime sleepiness associated with obstructive sleep apnea, and people with excessive daytime sleepiness due to narcolepsy may benefit from the availability of new treatment options. As the sleep medical community improves its understanding and diagnosis of these conditions, it is increasingly important that patients have multiple treatment options available to help them manage their condition more effectively.”

Jazz Pharmaceuticals conducted extensive studies on solriamfetol in a Phase 3 program, which is comprised of studies that evaluated the following:

– Solriamfetol in excessive day sleepiness in adult patients with narcolepsy or obstructive sleep apnea.

– A long-term safety and maintenance of efficacy for solriamfetol as a treatment for excessive day sleepiness in patients with narcolepsy or obstructive sleep apnea.

Obstructive sleep apnea (OSA) is a prevalent disease in the EU, reaching as high as 14% in men and 7% in women. A major complication of OSA, in most cases, is excessive daytime sleepiness associated with impairments in cognitive function, safety, productivity, interpersonal relationships and overall quality of life.

Although positive Airway Pressure (PAP) therapy is effective for sleep-related airway obstruction, pathological sleepiness often continues to occur in spite of the primary treatment of the airway obstruction with PAP or other therapies. It is estimated that excessive daytime sleepiness persists in one in three people utilizing continued positive Airway Pressure (CPAP) for OSA.

Narcolepsy: According to the National Institutes of Health (NIH) fact sheet, Narcolepsy is a chronic neurological disorder that affects the brain’s ability to control sleep-wake cycles.  People with narcolepsy usually feel rested after waking, but then feel very sleepy throughout much of the day. Many individuals with narcolepsy also experience uneven and interrupted sleep that can involve waking up frequently during the night.  People with Narcolepsy may unwillingly fall asleep even if they are in the middle of an activity like driving, eating or talking.

Other symptoms include: sudden muscle weakness while awake that makes a person go limp or unable to move (cataplexy), vivid dream-like images or hallucinations and total paralysis just before falling asleep or just after waking up (sleep paralysis).

Narcolepsy affects both males and females. Symptoms often start in childhood, adolescence or young adulthood, but can occur at any time in life.

Incidence: It is estimated that anywhere from 135,000 to 200,000 people in the United States have Narcolepsy.  However, since this condition often goes undiagnosed, the number may be higher.  Since people with Narcolepsy are often misdiagnosed with other conditions, such as psychiatric disorders or emotional problems, it can take years for someone to get the proper diagnosis.

Narcolepsy is a lifelong problem. The symptoms can partially improve over time but never disappear completely. The most typical symptoms are excessive daytime sleepiness, cataplexy, sleep paralysis and hallucinations.  Though all have excessive daytime sleepiness only 10 to 25 percent of affected individuals will experience all of the other symptoms during the course of their illness.

Excessive daytime sleepiness is the primary symptom of Narcolepsy and is present in all people with the disorder.

The Drug’s Rights

As mentioned above, Jazz Pharmaceuticals acquired a license to develop and commercialize solriamfetol from Aerial Biopharma. Jazz Pharmaceuticals has worldwide development, manufacturing and commercialization rights to solriamfetol, excluding certain jurisdictions in Asia. SK Biopharmaceuticals, the discoverer of the compound, maintains rights in 12 Asian markets including: Korea, China and Japan.

Solriamfetol has orphan drug designation in the U.S. for Narcolepsy. In March 2018, the FDA accepted for filing the company’s New Drug Application (NDA) for the approval of solriamfetol for adult patients with narcolepsy or obstructive sleep apnea.

The Prescription Drug User Fee Act (PDUFA) goal date for an FDA decision is December 20, 2018.

 Prohost Observations

A few days ago, Jazz Pharmaceuticals’ stock price was subjected to a selloff after the firm announced quarterly financial results. Yesterday, we expressed our opinion that the selloff was largely exaggerated. No drug was rejected, there were no losses and no impacting bad news that deserved a slashing of around $20 from the stock price. On the contrary, we were waiting to hear good news from the firm and, as a matter of fact, the first positive news came yesterday and today.

In yesterday news, Jazz Pharmaceuticals announced that the National Institute for Health and Care Excellence (NICE) has published a Final Appraisal Determination (FAD) recommending Jazz’s approved product Vyxeos® for routine use on the National Health Service (NHS) in England and Wales for the treatment of adults with newly diagnosed, therapy-related, acute myeloid leukemia (t-AML) or AML with myelodysplasia-related changes (AML-MRC)1 – two types of secondary AML.

Should we accumulate the stock?

We decided to accumulate until the stock price reaches its fair value, which are our targets for 2018 and 2019.

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