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J&J's (JNJ) Nasal Spray Spravato Gets FDA Nod for Depression

Zacks Equity Research

Johnson & Johnson JNJ announced that the FDA has approved its nasal spray Spravato (esketamine) for treatment-resistant depression (TRD) in adults but with a boxed warning.

With the approval, Spravato, which is thought to work differently than currently approved therapies, will be the first new medicine in 30 years to treat depression, a difficult-to-treat mental disease. It has been seen that while most antidepressants take a couple of weeks or months to show effects, Spravato works in hours

The nasal spray has been approved for use in conjunction with an oral antidepressant in patients with major depressive disorder (MDD) who have not benefited from multiple standard treatments. Approximately one-third of U.S. adults with MDD are considered to have TRD as they have not found relief with at least two different antidepressants and could benefit from Spravato.

Moreover, Spravato has a close chemical relation to ketamine, which is often abused for recreational purposes and is popularly known as Special K. To avoid misuse and abuse of the drug, Spravato has been approved with a boxed warning on its label regarding a Risk Evaluation and Mitigation Strategy (REMS) and the risk of suicidal thoughts and behavior in pediatric patients and young adults. Moreover, the drug will be available through a restricted distribution system and can be given only at a doctor’s office and not at home.

J&J’s stock has risen 7.5% this year so far compared with an increase of 3.3% recorded by the industry.



Last month an FDA advisory committee had recommended approval of Spravato. The Psychopharmacologic Drug Advisory Committee and Drug Safety and Risk Management Advisory Committee jointly voted 14-2 in favor of approval of Spravato stating that the data supports the favorable benefit-risk profile of the nasal spray.

J&J filed a new drug application for Spravato in September last year while a regulatory application is also under review in the EU. The NDA was based on five pivotal phase III studies of esketamine nasal spray — three short-term studies, one withdrawal maintenance of effect study, and one long-term safety study — in patients with treatment-resistant depression.

Data from a short-term and a long-term study showed that Spravato in combination with newly initiated oral antidepressant (“NIOD”) led to statistically significant, rapid and clinically meaningful improvement in depressive symptoms in patients with TRD. Importantly,

On the fourth-quarter conference call held last month, J&J management sounded confident about esketamine approval in 2019. Another investigational medicine, erdafitinib for metastatic urothelial cancer is also expected to be approved this year. J&J believes that both these medicines have the potential to garner more than $1 billion of peak revenues.

The depression market is quite large and has many players including biggies like Allergan AGN with products like Vraylar and Viibryd and Eli Lilly LLY with Cymbalta and Zyprexa.

J&J currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A better-ranked large-cap pharma stock is AstraZeneca, plc AZN, carrying a Zacks Rank #2 (Buy).

AstraZeneca’s earnings estimates have risen 5.3% for 2019 and 4.6% for 2020 over the past 30 days. The stock has risen 11.4% this year so far.

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