Boston, MA 11/27/2014 (wallstreetpr) – Avanir Pharmaceuticals Inc (NASDAQ:AVNR) suffered a blow this week when the U.S. Food and Drug Administration declined to approve its migraine drug device. The company had sought marketing approval for the device, which in many ways has good revenue promise. However, even though the FDA rejected the device, analysts believe that all is not lost for Avanir. They are confident that the product will eventually secure approval only that such cannot happen until next year, according to Reuters.
In its rejection, the FDA cited the root-cause of some errors that were observed in the data that Avanir Pharmaceuticals Inc (NASDAQ:AVNR) obtained from the human trial of the device. The trial specifically sought to establish the safety and efficacy of the device.
Fresh human data
The product in question is known as AVP-825, and it is designed for the delivery a prescribed migraine medicine known as sumatriptan powder. The delivery is made through the nose. Following the FDA objection, Avanir Pharmaceuticals Inc (NASDAQ:AVNR) promised to do more to get the product approved. Such efforts would mean obtaining fresh human trial data for the product for submission next year.
Analysts are confident about the fate of the drug delivery device because the regulator did not raise issues with active ingredient of the product, but the device. Nonetheless, according to analysts at Cowen, the delay in the approval of the device means that its launch would be delayed until 2016.
Huge market opportunity
Avanir Pharmaceuticals Inc (NASDAQ:AVNR) is targeting millions of Americans with its AVP-825 product. According to the CDC, more than 37 million Americans have migraines problem. With confidence expressed by analysts and the market opportunity that awaits AVP-825, there are good reasons to believe that investors are in a good company with Avanir Pharmaceuticals Inc (NASDAQ:AVNR).
According to Bloomberg, Avanir Pharmaceuticals Inc (NASDAQ:AVNR) could be targeted for acquisition by Shire PLC (ADR) (NASDAQ:SHPG). The report also cited Eli Lilly & Co. (NYSE:LLY) among position acquirers. The reason is that Avanir enjoys some interesting marketing exclusivity. Also, according to Bloomberg, the company’s rich product pipeline could trigger acquisition moves.
Avanir Pharmaceuticals Inc (NASDAQ:AVNR) has been in a strong uptrend on subdued volumes. The stock is trading above its 20-Day EMA of $13.48 with RSI in overbought zone at 79.14. Going forward the stock has support near $14.7 and $14.30 in near term.