Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX) sentiments on the Street received a much-needed boost after the FDA approved its Relistor treatment for Opioid-induced constipation. Developed in partnership with Valeant Pharmaceuticals Intl Inc (NYSE:VRX) the drug was first approved in 2008 as a treatment for OIC in adults receiving Palliative care. In 2014, the FDA approved the subcutaneous injection as a treatment for OIC in patients struggling with chronic non-cancer pain.
Spike in Traded Volume
Chief Executive Officer, Mark Baker, believes the FDA approval will go a long way in providing patients an alternative treatment that is less intrusive compared to other approved injection treatments.
A spike in average trading volume for Progenics stock was the order of the day, more than 12.48 million shares having exchanged hands compared to the stock’s daily average of 1.24 million shares. The surge in traded volume does not come as a surprise given that FDA approvals are known to have such effects on stock’s sentiments on the Street.
Upon its approval in 2008, Progenics licensed rights to the drug in most markets to Salix Pharmaceuticals in 2011. Valeant acquired Salix in 2011 in an $11.1 billion takeover. The Relistor treatment accounts for a majority of the drug maker’s revenue through royalty payment. In the first quarter, the drug brought in $2.2 million out of the company’s total $2.5 million revenue.
Progenics had initially stated that an FDA approval of the treatment would trigger a $50 million milestone payment.
For how long Progenics will ride on the positive news is still a point of discussion given that TheStreet currently rates the stock as a ‘sell.’ Disappointing return on equity as well as deteriorating net income and disappointing historical performance are some of the concerns that continue to deal the stocks sentiments a big blow on the Street.
Progenics Pharmaceuticals, Inc. (NASDAQ:PGNX) is already down by more than 15%for the year awaiting to see the kind of impact the Relistor treatment approval will have on it going forward.