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Assertio to Divest Shingles Pain Drug to Alvogen for $127.5M

Zacks Equity Research

Assertio Therapeutics, Inc. ASRT inked a deal with Alvogen to sell its product Gralise (gabapentin) to the latter for a total value of $127.5 million. The consideration includes $75 million in cash upon closing of the deal and the balance in the form of a royalty on the first $70 million in Gralise net sales. Both companies expect the majority of the royalties to be paid in the first calendar year.

Assertio intends to focus on the growth of its other pain products by divesting Gralise. Alvogen will now assume all responsibilities associated with the product. The transaction is expected to close in early January 2020, subject to regulatory approval.

The shares of Assertio have slumped 65.9% year to date against the industry’s growth of 11.4%.

Gralise is Assertio’s s proprietary, once-daily formulation of gabapentin indicated for the management of postherpetic neuralgia (PHN), a persistent pain condition caused by nerve damage during shingles, or herpes zoster, viral infection. Assertio recorded Gralise product sales of $46.0 million for the nine months ended Sep 30, 2019.

Assertio is taking these steps to focus on its growth products — Cambia and Zipsor. The company also aims at strengthening its balance sheet, and boost its cash resources. Cambia is a non-steroidal anti-inflammatory drug (NSAID) indicated for the acute treatment of migraine attacks, with or without aura, in adults 18 years of age or older. Sales generated by the product were $23.7 million for the nine months ended Sep 30.

Zipsor is an NSAID indicated for the relief of mild-to-moderate acute pain in adults. The product recorded sales of $9 million for the nine months ended of Sep 30.

 

ASSERTIO THERAPEUTICS, INC Price

 

ASSERTIO THERAPEUTICS, INC Price

ASSERTIO THERAPEUTICS, INC price | ASSERTIO THERAPEUTICS, INC Quote

Zacks Rank & Other Key Picks

Assertio currently carries a Zacks Rank #1 (Strong Buy). 

A few similar-ranked stocks in the medical drugs sector are Ironwood Pharmaceuticals Inc. IRWD, Jounce Therapeutics Inc. JNCE and AcelRx Pharmaceuticals, Inc. ACRX. While Ironwood and Jounce Therapeutics  sport a Zacks Rank #1 (Strong Buy), AcelRx carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ironwood’s earnings per share estimates have increased from 55 cents to 78 cents for 2020 in the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters by 236.80%, on average.  

Jounce Therapeutics’ earnings per share estimates have increased from $1.64 to $1.92 for 2019 in the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters by 27.10%, on average.

AcelRx’s loss per share estimates have narrowed from 75 cents to 70 cents for 20-19 and from 71 cents to 62 cents for 2020 in the past 60 days. The company delivered a positive earnings surprise in the trailing four quarters by 24.24%, on average.

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