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ATXI: No Pain? We See a Gain; Developing Tramadol

By John Vandermosten, CFA


Avenue Therapeutics (NASDAQ:ATXI) is developing IV tramadol for postoperative pain. The drug has been approved by the FDA since 1995; however, only in oral form. Avenue has licensed a patented administration of IV tramadol that is able to limit side effects and provide a solution for moderate to severe pain which avoids many of the risks of opioids and non-steroidal anti-inflammatory drugs (NSAIDs). The drug also allows for transition to step down therapy with oral tramadol, which mirrors the pharmacokinetic, side effect profile and pain control of the IV form.

Tramadol is an attractive alternative to Schedule II opioids and NSAIDS as it is naturally a multi-modal approach to pain management. The drug acts as both an agonist upon the µ-receptors and inhibits both serotonin and noradrenaline reuptake which provides a synergistic benefit in pain control. There exists a gap in the postsurgical setting where moderately severe pain control is required and there are limitations and contraindications with other analgesics making effective pain control difficult. Tramadol may avoid the bleeding risk, gastrointestinal side effects, respiratory depression and risk of dependence that other options carry in the post-operative pain management setting. With the completion of successful clinical trials, we see a solution for the unmet need in this space and a drug that can treat moderate to moderately severe pain that avoids some of the negatives often observed with traditional opioids and NSAIDs.

Avenue currently holds only one development product in its portfolio, IV tramadol, which is currently undergoing two Phase III trials. One is a bunionectomy study which is examining the sum of pain intensity differences over 48 hours in this orthopedic model. A safety study is also underway. Following the anticipated read out of the bunionectomy study in 2Q:18, Avenue will begin a second Phase III study in a soft tissue model that is scheduled to start in 3Q:18. Based on company guidance, both the safety study and the soft tissue study are expected to read out by mid-2019 followed by the submission of an NDA to the FDA using the 505(b)(2) route of approval.


Pain control in surgery runs along a continuum where mild to severe pain treatment is needed. Currently there is a gap in the acute care space between moderate and severe pain control where the risk of conventional opioids is too high and IV acetaminophen provides insufficient analgesia. IV tramadol can successfully fill this space and address patients who may have susceptibility to adverse events or contraindications that prevent the use of some analgesics.

The current movement in pain control seeks to limit the use of opioids and employ multi-modal approaches that maximize efficacy and minimize side effects. The concept hypothesizes that agents with different mechanisms of analgesia may have synergistic effects on addressing acute pain when used together. Tramadol is an example of a drug that has a dual mechanism of action that gives it opioid-like efficacy with less abuse potential. In addition to being a weak µ-receptor agonist, the drug is able to block pain signals at both the spinal column and the brain by inhibiting the norepinephrine and serotonin re-uptake pathway.

Tramadol is well-understood and widely used globally. It was initially approved in 1995 and now accounts for 20% of all US opioid prescriptions and 10% of post-operative IV analgesic use in the EU.

IV tramadol was licensed from Revogenex Ireland for development in the United States with patent protection until 2036 for which Avenue will pay milestone payments and royalties. The desire to reduce the use of opioids, their related side effects and addiction potential as well as the material population for which NSAIDs are insufficient or inappropriate creates an opening for IV tramadol. There are approximately 50 million surgeries that fall along the continuum of post-surgical pain care and 300 million prescriptions for injectable analgesics written annually.

Key reasons to own ATXI shares:

‣ Phase III IV Tramadol Asset with NDA Expected in 2019
   ◦ IV Tramadol Fills Gap in Pain Treatment Continuum
   ◦ Avoids IV Opioid and IV NSAID Contraindications
   ◦ Relatively Low Potential for Abuse
   ◦ Multi-modal Action
‣ Completion of Registrational Studies Anticipated in 2019
‣ 505(b)(2) Route of Approval
   ◦ Historically Shorter than 505(b)(1) Pathway
   ◦ Historically Higher Rates of Approval vs. 505(b)(1) Pathway
‣ Pursuing Hospital Market of 300 Million Units
‣ Sufficient Cash to Complete Currently Active Trials

In our report (link below), we frame the post-operative paradigm of pain control, examining the continuum from mild to severe pain and the gap that exists along this horizon. We also review the risks of the commonly used analgesics used in the post-operative setting and explore the addiction potential with Schedule II opioids. We compare this with IV tramadol’s profile and examine the relative addiction risk of the drug compared to Schedule II opioids. IV tramadol has many characteristics that can address shortcomings that exist and we believe the drug can carve out a meaningful market share. Currently used in Europe, the analgesic has proven its worth in large populations. The report also reviews the development of the candidate and the trial design being used. With favorable outcomes expected from the three Phase III trials, we anticipate a successful 2020 launch of the product.


Tramadol was developed by the German pharmaceutical company Grunenthal during the 1960s and was approved and brought to market in 1977 as Tramal. It was not approved in the United States until 1995 under the trade name Ultram and was marketed as an oral capsule/tablet for moderate to moderately severe pain in adults. In 2014, the Department of Justice placed tramadol into Schedule IV for controlled substances.

Tramadol is used to relieve moderate to moderately severe pain and can be used in conjunction with acetaminophen and ibuprofen. While it is a Schedule IV substance, it can still cause withdrawal if used for a long time. Side effects are mild at the anticipated 50 mg dose but can include nausea, vomiting, constipation, lightheadedness, dizziness, drowsiness and headache.

The pharmacodynamics and pharmacokinetics of tramadol are well understood, illustrating that the analgesic is particularly useful in step down therapy from the IV version to the oral version following discharge after surgery. IV and oral tramadol have a similar Cmax and AUC. This indicates a smooth transition from the hospital to discharge where the patient can rely on a pain therapy that addresses the same side effects and contraindications that supported the drug’s use in the hospital. Switching medications between surgery and discharge can result in unexpected metabolite effects resulting in unexpected safety signals, further supporting consistent use of the same analgesic in both settings.

Benefits Compared to Current Treatment Paradigm

IV tramadol has a number of benefits for its target segment of the pain continuum. There are currently three broadly used classes of pain medications available. On the low end of the spectrum is IV acetaminophen which is appropriate for mild pain, but may have issues related to hepatic impairment. Moving to moderate pain, IV NSAIDs are appropriate, however, they are associated with bleeding risk, slowed healing, gastrointestinal issues and renal impairment. For severe pain, Schedule II intravenous opioids are used, but have a host of risks tied to them. Addiction potential, respiratory depression and constipation are some of them and the drug may put the patient in a state of strong sedation which is not appropriate for some surgeries. For patients that are contraindicated for IV NSAIDs and IV opioids and who suffer from moderately severe pain, IV tramadol may be the appropriate option.

Summary of IV tramadol benefits:

‣ Convenience in the post-surgical and acute care setting
‣ Lower addiction and abuse risk compared to traditional opioids
‣ Faster onset of action as compared to oral tramadol
‣ Appropriate for patients who cannot take oral medications
‣ As patient moves from operating room to discharge, they can shift from IV tramadol to the oral form of the same drug
‣ Effective analgesia
‣ Does not cause respiratory depression as do conventional narcotics


Avenue Therapeutics obtained the rights to develop IV tramadol in the United States to address an unmet need in the postoperative pain space. Since tramadol is a known chemical entity and the necessary pharmacokinetic and pharmacodynamic work has been done, only Phase III trials are necessary for approval and the resulting data may be submitted in an NDA using the 505(b)(2) route for approval. This means that the product can potentially generate sales in 2021.

In the current continuum of IV pain medications uses in the operational space, there is a gap in treatment for moderate to moderately severe pain. There is a strong desire by stakeholders to reduce the use of potent opioids due to the side effect, addiction and abuse potential. Contraindications with other analgesics, such as NSAIDs also create an opening where an alternative is needed. Tramadol can avoid the bleeding risk, GI effects, respiratory depression, hepatic damage and risk of dependence that can arise with the use of other analgesics. There is a large market for IV analgesics and with many patients exposed to the aforementioned obstacles, IV tramadol has a good chance of achieving material penetration. We look to the European market to get a sense of what might be possible for IV tramadol and see that the drug has achieved a 10% penetration into the IV analgesic market. Our forecasts for the US market anticipate a conservative ~4.5% penetration rate at the peak.

In summary, we believe that the proven characteristics of IV tramadol make it a low risk pursuit for Avenue and we expect a short runway to generate registrational data and submission of an NDA. Given the strong argument for addressing a material unmet need, we anticpate a rapid uptake in the surgical setting.

Please refer to our full report for additional information and important references to data and exhibits used in this excerpt.


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