Jazz Pharmaceuticals Inc. (Nasdaq: JAZZ) shares are up more than 30% on strong premarket volume and may be one of the most active biotech stocks today after the fibromyalgia treatment developer said preliminary data from a second Phase III trial of its pain drug Xyrem met its primary endpoint.
The company in a press release said 573 patients treated with Xyrem in a 14-week trial showed a 30% reduction in pain and fatigue and demonstrated improved daily function.
The positive test result for Xyrem may negatively affect shares of Cypress Bioscience Inc. (CYPB) today, which has a competing drug called Savella marketed with Forest Laboratories Inc. (NYSE: FRX) that was approved to treat fibromyalgia in January.
Beyond today however, the Street may come to realize that the data in the second Phase III trial for Xyrem is similar to that of the first trial, so there is not necessarily a new competitive threat.
Also, the Cypress Biosciences drug is generally seen a closer competitor to existing drugs on the market, while Xyrem is seen as a late-stage treatment for the disease.
The two most established treatments for fibromyalgia are Pfizer Inc.’s (NYSE: PFE) Lyrica and Eli Lilly & Co.’s (NYSE: LLY) Cymbalta. — Mike Tarsala.
Jazz Pharmaceuticals (Nasdaq: JAZZ) plans to halt development of three drug candidates in an effort to preserve much-needed cash.
As of its last filing, the company had about $17 million in cash on hand, but it has yet to make its fourth-quarter interest payments on about $19.5 million in senior secured notes.
The company does plan to continue developing its Phase 2 experimental drug to treat fibromyalgia.
But given its liquidity crunch, how much can JAZZ really plow into its promising fibromyalgia candidate?
Jazz’s woes may be a positive for small-cap biotech Cypress Bioscience, Inc. (Nasdaq: CYPB). The Cypress fibromyalgia drug Savella was approved by the FDA in January, and just became available to the market in late April.
It’s possible that Cypress may gain from its upstart rival’s financial pain.
– Mike Tarsala