Insys Therapeutics (INSY) announced that the FDA has granted orphan drug status to its epilepsy candidate, pharmaceutical cannabidiol, for treating Dravet syndrome, a rare form of intractable epilepsy that commences in infancy.
We note that the FDA grants orphan designation to candidates being developed to treat rare diseases/disorders (affecting less than 200,000 people in the U.S.). Moreover, the status makes the candidate eligible for seven years of marketing exclusivity in the U.S. following approval. This designation also makes Insys eligible for certain other benefits aimed at recovering the costs of developing pharmaceutical cannabidiol, as this catastrophic epilepsy form has a small target population.
Insys stated in its press release that its epilepsy candidate provides an alternative to cannabinoids derived from plants. We remind investors that Insys had received a similar designation from the FDA for the candidate for treating another rare form of pediatric epilepsy – Lennox-Gastaut syndrome. The company is also evaluating the candidate in several other indications including adult epilepsy and chemotherapy-induced peripheral neuropathy.
Insys’ primary marketed product is Subsys. The product was responsible for 96.5% of the company’s total sales in 2013. The drug is available for the treatment of breakthrough cancer pain in patients who are opioid-tolerant. We remind investors that the shares of the specialty pharmaceutical company declined significantly in May this year following news on Subsys’ prescribing patterns (Read more: Insys in Focus on Subsys Worries).
Insys carries a Zacks Rank #4 (Sell). Better-ranked healthcare stocks include Regeneron Pharmaceuticals (REGN), Biogen Idec (BIIB) and The Medicines Company (MDCO). All three stocks sport a Zacks Rank #1 (Strong Buy).