Jazz Pharmaceuticals' Sleep Drug NDA Awaits FDA Decision

Jazz Pharmaceuticals plc’s (NASDAQ:JAZZ) NDA for lead pipeline candidate solriamfetol (JZP-110) awaits FDA decision on Wednesday. The new drug application (“NDA”) under review seeks approval of the drug as a treatment to improve wakefulness and reduce excessive daytime sleepiness (“EDS”) in adult patients with narcolepsy or obstructive sleep apnea (“OSA”).

The NDA was filed in March 2018 with a PDUFA date of Dec 20, 2018. However, in December, the FDA extended the review period for the NDA by three months. The extension was due to submission of updated data on draft labeling by Jazz, which was considered as a major amendment to the NDA by the regulatory authority.

Solriamfetol has also been evaluated in a phase II study for excessive sleepiness associated with Parkinson's disease. Top-line data is expected soon.

Jazz’s shares are up 9.3% so far this year compared with the industry’s rally of 17%. A potential approval to solriamfetol may lead to significant increase in the company’s share price.

We note that the company has developed solriamfetol in an indication similar to its sole marketed drug, Xyrem. The drug is currently sold across 21 countries by UCB Pharma, a multinational biopharmaceutical company with rights to market Xyrem in 54 countries. Jazz is also developing another candidate, JZP-258 (a low sodium formulation and a Xyrem follow-on product) in late-stage studies for EDS and cataplexy in narcolepsy patients.

Xyrem sales grew significantly in 2018 and totaled $1.4 billion. In 2018, the drug generated almost 75% of Jazz’s total revenues. The company expects Xyrem’s sales to be in the range of $1.53-$1.57 billion in 2019. However, several patents protecting the drug are nearing expiration, starting December 2019. Moreover, an authorized generic version of the drug is likely to hit the markets as early as 2023.

Potential approval for solriamfetol will be crucial for the company as it will strengthen Jazz’s sleep disorder portfolio as well as help offset a potential decline in Xyrem sales following a generic launch. Successful development of JZP-258 and its potential approval will be an additional boost for the company.

Some other pharma/biotech companies are developing treatments for narcolepsy. Avadel Pharmaceuticals plc (NASDAQ:AVDL) is one of them. Approved drugs for narcolepsy include Teva Pharma’s (NYSE:TEVA) Provigil and Novartis’ (NYSE:NVS) Ritalin-SR.

A negative decision from the FDA tomorrow is likely to have a significant unfavorable impact on the company’s stock.

Jazz Pharmaceuticals PLC Price

Jazz Pharmaceuticals PLC Price | Jazz Pharmaceuticals PLC Quote

Zacks Rank

Jazz currently has Zacks Rank #3 (Hold).

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

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