During a conference call with investors, Baudax Bio Inc. CEO Gerri Henwood let out an exuberant “woohoo!” to celebrate the FDA’s approval – after two turndowns and much haggling over data – of Anjeso (meloxicam) for moderate to severe pain. Echoing her sentiment was Piper Sandler analyst David Amsellem. “It’s nice to see the pain division finally get this one right,” he said.

Baudax won clearance of Anjeso for use alone or in combination with other analgesics that are not nonsteroidal anti-inflammatory agents (NSAIDs). Anjeso became the only 24-hour intravenous (I.V.) cyclooxygenase type 2 (COX2)-preferential NSAID that offers once-daily dosing, and is expected to launch in late April or early May at $94 per treatment. Shares of Baudax (NASDAQ:BXRX) closed at $9.16, up $1.26, or 16%, after trading as high as $10.14.

By targeting the COX2 pathway, Anjeso reduces the biosynthesis of prostaglandin, and the approval was supported by two phase III efficacy studies that tested the approach, as well as one double-blind, placebo-controlled phase III safety experiment. The results from those studies, plus data from four phase II studies and other safety studies, were included in the NDA package.

A complete response letter (CRL) delivered to Recro Pharma Inc. in March 2019 – before Baudax was spun out from Recro, which took place in November of that year – focused on the onset and duration of meloxicam, noting that the delayed onset fails to meet the prescriber expectations for I.V. therapies. The dispatch also cited regulatory concerns about the role of meloxicam as a monotherapy in acute pain, along with how it might meet patient and prescriber needs in that setting. Recro said at the time that it “strongly” disagreed with the way regulators viewed the clinical findings. That wasn’t the first CRL. Gatekeepers said in May 2018 that “data from ad hoc analyses and selective secondary endpoints suggest that the analgesic effect does not meet the expectations of the FDA” and raised CMC-related questions aimed at “extractable and leachable data” provided in the submission, Recro said.

In October 2019, the FDA granted Recro’s appeal of the CRL, saying that the move was made “specific to the request … that the NDA provides sufficient evidence of effectiveness and safety to support approval.” The agency cautioned that “before I.V. meloxicam can be approved and legally marketed, agreed-upon labeling (prescribing information) must be negotiated,” and Recro set about putting together label language that the FDA would accept.

In the conference call, Amsellem broached the “ketorolac question,” asking for details on how Malvern, Pa.-based Baudax will go about “winning over hearts and minds” – persuading doctors who use I.V. ketorolac to switch to Anjeso. CEO Henwood described ketorolac as “a good drug, it performs well in relieving moderate to severe pain,” though on a shorter-acting basis, “about a six-hour drug, in principle.” She pointed out that ketorolac has “been around for a long time, it’s well understood, and that includes some areas of safety concerns that clinicians have, even though they don’t run into them all the time. When we talk to anesthesiologists, they worry about patients who may be more mature, like 55, 60-year-olds [who] have some degree of mild renal impairment [undetected by lab work before surgery]. Of course, no NSAID should really be given to a patient with moderate to severe renal impairment. I don’t think that happens with ketorolac, and we would certainly never advocate that for I.V. meloxicam. [But] clinicians have occasionally run into problems with [mild renal impairment], leading to more severe kidney issues, so that’s in the back of their minds.” Bleeding issues can be a problem, too, since the drug has “a little bit more of an effect on platelet stickiness.” The longer action of Anjeso confers a health-economic benefit over competitors as well, according to data that come from observational, double-blind placebo controlled trials, she said.

Debt likely to support launch: analyst

Amsellem likes the “sufficiently wide labeled indication for the postoperative pain management setting. We continue to believe that Anjeso will emerge as a valued addition to a treatment landscape that is very much in need of more non-opioid options,” he said in a report, adding that Anjeso sales “could easily approach those of other brand non-opioid modalities.” Included in that segment are Exparel (bupivacaine, Pacira Biosciences Inc.) and Ofirmev (acetaminophen, Mallinckrodt plc), which rack up about $470 million and $340 million per year, respectively. Amsellem reiterated his overweight rating on Baudax shares, raising the price target to $14 from $11.

John Harlow, chief commercial officer for Baudax, said that of 5,000 to 6,000 hospitals as potential targets, Ofirmev is already listed on about 1,000 formularies. A certain number of accounts are “not spending any branded dollars, including [for] Ofirmev and Exparel, for non-opioids,” he said. “They prefer opioids and ketorolac and we’re not going to win the clinical discussion.” However, a “significant opportunity” exists in about 2,000 accounts beyond what Ofirmev has sewn up, and pursuing them will require between 80 and 100 sales reps, he said. “We haven’t put any clear milestones down [as to] when we would scale up.” Timing will depend on how uptake goes at ambulatory surgery centers and formularies. “We would anticipate probably around the middle to late next year making decisions,” he said. “From a physician standpoint, we have done the same type of segmentation work” among orthopedic, colorectal and general surgeons. “We have those who want to reduce opioids, we have physicians who love ketorolac and think it’s an oldie but goodie and don’t want to change, and we have a handful we somewhat label as ‘spreaders’ because they like to use all products” in a multimodal approach, he said. The most likely prospects for Anjeso will be selected from among them.

Oppenheimer analyst Leland Gershell said pricing of Anjeso “comes in slightly above our expectations,” and he pegged sales between $250 million and $300 million in the perioperative pain setting. “We believe Baudax will prioritize nondilutive means to bring in additional capital for launch support, most likely in the form of debt,” he wrote in a report, keeping his outperform rating and raising his price target from $12 to $16.

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