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OPNT: Developing Longer-Acting Opioid Overdose Treatment

02/13/2018
By David Bautz, PhD

NASDAQ:OPNT

Business Update

Opiant to Develop OPNT003, An Improved Opioid Antagonist

On February 12, 2018, Opiant Pharmaceuticals, Inc. (NASDAQ:OPNT) announced the development of OPNT003, a long-lasting opioid overdose treatment. OPNT003 is an intranasal formulation of nalmefene, a naltrexone derivative. Based on its favorable pharmacokinetic profile, we believe OPNT003 could become a best-in-class opioid overdose treatment. 

The U.S. continues to battle an opioid epidemic. The following chart shows the number of overdose deaths in the U.S. from certain drugs, with the rapid rise in deaths from synthetic opioids just since 2013 particularly striking. This increase in synthetic opioid deaths has led the National Institutes of Health (NIH) to call for improved opioid antagonists that are capable of counteracting their effects (Volkow et al., 2017).  

 

Synthetic opioids such as fentanyl and carfentanil are particularly problematic due to their potentcy (five and 50 times more potent than heroin, respectively) and longer half-lives. For example, heroin has a half-life of approximately 30 minutes while fentanyl’s half-life is two to four hours, thus necessitating opioid antagonism for an extended period of time. Naloxone has a half-life of approximately 1-2 hours and typically requires repeated administration during the treatment of someone suffering from an overdose. 

Nalmefene is an opioid antagonist with a much longer half-life than naloxone (7-9 hours). It was approved by the FDA in 1995 as an injectable treatment for opioid overdose sold under the brand name Revex®, however Baxter discontinued it in the U.S. in 2008. Opiant has developed an intranasally administered nalmefene formulation using the Intravail® technology, which was developed by Aegis Therapeutics, LLC. It comprises a broad class of chemically synthesizable transmucosal absorption enhancement agents to allow the intranasal (although other routes of administration are available including oral, rectal, ocular, etc.) administration of therapeutics up to 30,000 Daltons molecular weight. 

Opiant has successfully completed a Phase 1 study of intranasally administered nalmefene that showed rapid increases in plasma levels with an onset faster than an intramuscular injection along with a long half-life (6.7-7.8 hours). These data formed the basis for a meeting with the FDA regarding the planned development of OPNT003. Based on the guidance received from the FDA, Opiant believes it will be in a position to file an NDA in 2020. In addition, the company has applied for a grant from the NIH to get the compound to an NDA-ready stage, which is likely to get funded given the agency’s interest in a longer-acting opioid antagonist. 

Opiant owns all commercial rights to OPNT003 and the company’s prospects for partnering remain wide open at this point. We believe that if the company were to enter into a commercialization partnership it would be able to command favorable terms given the commercial success of NARCAN® Nasal Spray and the company’s strong financial position.

Financial Update

Opiant to Record Approximately $11.7 Million in Royalty and Milestone Payments

On February 8, 2018, Opiant announced that it will record approximately $11.7 million in royalty and milestone payments for the five-month transition period ending Dec. 31, 2017 as the company moves its fiscal year end from July 31 to December 31. We had previously speculated that Opiant would record at least $10.5 million in revenue following the announcement that the company would begin receiving 90% of royalty and milestone payments related to the sale of NARCAN® Nasal Spray in the first quarter of 2018, which according to our calculations meant sales of NARCAN® Nasal Spray totaled at least $75 million in 2017. Thus, sales of NARCAN® Nasal Spray came in a little bit above our estimates, and we are currently forecasting sales in 2018 to be at least $100 million. 

Conclusion

OPNT003 represents an exciting opportunity for Opiant and would fill a significant unmet public health need in the ongoing opioid crisis. There is no end in sight to the dramatic increase in overdose deaths due to synthetic opioids, and nalmefene could be an effective weapon against those compounds. We have adjusted our valuation model based on the fact that following approval of OPNT003, we believe net sales of NARCAN® Nasal Spray would decrease while sales of OPNT003 ramp up. As of now we believe a royalty/milestone deal similar to what Opiant has with Adapt Pharma will be signed by the company, however the terms are likely to be a bit more favorable for Opiant in regards to increased milestone payments and royalties. Based on these adjustments we have raised our valuation from $51 to $55. 

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