A green light from the FDA can change everything for a healthcare company. This might just be the case for Eton Pharmaceuticals (ETON).
On September 29, the company announced that the FDA had given Alkindi Sprinkle, its taste-neutral sprinkle (granule) formulation of hydrocortisone designed as a replacement therapy for pediatric adrenal insufficiency (AI), its stamp of approval.
The verdict came on the previously scheduled PDUFA date. Additionally, six clinical studies, including the first and only interventional Phase 3 study of oral hydrocortisone for pediatric AI in neonates to children under eight years of age, served as the basis for the approval.
Before the therapy got the FDA approval, oral hydrocortisone was only approved in tablet formulations of 5mg and stronger, with many pediatric patients requiring significantly lower doses. Alkindi Sprinkle will be available in 0.5mg, 1mg, 2mg and 5mg strengths, which will give clinicians flexibility to individualize dosing based on each patient’s needs in accordance with the instructions for dosage and administration.
Weighing in on the development for H.C. Wainwright, 5-star analyst Raghuram Selvaraju stated, “In our view, the drug could be launched with a very small, targeted sales effort and may generate peak sales of $57 million by 2026. This is the third agent from Eton's pipeline to receive regulatory approval —after Biorphen in October 2019 and Alaway a few days ago—and this ought to be viewed as further validation of Eton's pharmaceutical product development capabilities.”
According to management, the product could be commercially available in Q4 2020. That being said, the rest of its pipeline could also serve as significant upside drivers, in Selvaraju’s opinion.
ETON currently has three more product candidates under review at the FDA. In May, the company submitted a first-to-file challenge on Elcys (DS-300), which is a cysteine hydrochloride injection designed as an additive to amino acid solutions to meet the nutritional requirements of newborn infants requiring total parenteral nutrition (TPN), with an approval potentially coming in 2H21.
New Drug Applications (NDAs) for DS-100, its dehydrated alcohol injection for the treatment of methanol poisoning, and ET-104, its potential treatment for partial seizures in patients with epilepsy, have also been submitted. Both candidates could be approved and launched in 2021.
Everything that ETON has going for it convinced Selvaraju to keep a Buy rating on the stock. Along with the call, he bumped up the price target from $18 to $20, suggesting 153% upside potential. (To watch Selvaraju’s track record, click here)
Turning now to the rest of the Street, other analysts agree with Selvaraju. 3 Buys and no Holds or Sells translate to a Strong Buy consensus rating. At $15.67, the average price target implies 100% upside potential. (See ETON stock analysis on TipRanks)
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