Wednesday, November 30, 2016

Recro Pharma, Inc. (REPH) Says No to Opioids for Post-Operative Pain Control with IV Meloxicam

An announcement earlier this week from revenue-generating specialty pharmaceutical company Recro Pharma, Inc. (NASDAQ: REPH) is good news for those suffering from pain after major surgery. From its headquarters in Malvern, Pennsylvania, the company announced positive results from a phase III clinical trial evaluating intravenous (IV) Meloxicam for the treatment of acute post-operative pain.

In this trial, the second of two phase III trials, IV Meloxicam achieved the primary endpoint of a statistically significant differential in Summed Pain Intensity Difference over the first 24 hours (SPID-24) in patients who had undergone abdominoplasty surgery, as compared to placebo. With the positive data from this study, the company believes this completes the efficacy program for IV Meloxicam and opens the way for a New Drug Application (NDA).

A report from Aegis Capital (, released earlier this month when it initiated coverage on Recro Pharma, shows why this is a big deal. Aegis estimates the size of the U.S. post-operative pain market at around $5.9 billion. At present, many of the analgesics employed, such as morphine, codeine, and hydrocodone, are opioids. But such powerful anodynes are notoriously addictive and their use is often subverted from pain relief. According to the Centers for Disease Control (CDC), 29,000 Americans die every year from opioid-related overdoses.

Consequently, there is growing demand for less addictive pain medications, particularly in the post-op environment, where conventional pain management drugs such as morphine are still commonly used. In addition to being less addictive than morphine, IV Meloxicam can be delivered as a 15-second infusion and has been shown to have fast onset of action in clinical trials. As a result of these factors, Aegis expects peak year revenue for IV Meloxicam to be in the range of $150-200 million.

This trial focused on testing the efficacy of IV Meloxicam in combating pain following abdominoplasty surgery, a complicated procedure that generally involves the removal of excess fat and skin and may include the restoration of weakened or separated muscles from the abdominal area. The American Society for Aesthetic Plastic Surgery reports that abdominoplasty is among the top five most common cosmetic surgeries in the U.S., with more than 164,000 performed in 2014. It is a procedure that, typically, results in intense postoperative pain.

In July, Recro announced positive top-line data from the IV Meloxicam (30 mg dose per 24 hours) in bunionectomy phase III trial. This first phase III trial measured its primary endpoint in terms of Summed Pain Intensity Difference over 48 hours (SPID-48) and showed a statistically significant reduction in SPID-48 versus placebo. It also achieved statistical significance across 15 of 19 secondary endpoints.

With the successful completion of these two phase III trials, an NDA is expected to be filed in summer 2017, followed by potential FDA approval in mid-summer 2018.

Recro Pharma is a clinical development-stage pharmaceutical company geared toward the development of non-opioid treatments for the management of acute pain in hospital and ambulatory care (outpatient) settings. The company currently earns revenue from a contract manufacturing, royalty and formulation business in Gainesville, Georgia, acquired in April 2015 from Alkermes, the Irish drug maker. Its lead product candidate, IV Meloxicam, is a cyclo-oxygenase 2 (COX-2) inhibitor, exclusive worldwide rights to which were acquired as part of the 2015 Alkermes deal.

Aegis originally put a price target on Recro Pharma stock, currently trading on the NASDAQ at around $9.00 under the symbol REPH, of $21.00. This was based on a 70% probability that the abdominoplasty phase III trial would be successful. With that study yielding such decidedly positive results, the price target was raised to $25.00 in an updated report (

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