Biotech Catalyst Play: IntellipharmaCeutics Intl Inc (USA) (NASDAQ:IPCI)

We had some real winners during the second quarter of the year with our Biotech Catalyst series and here's another one that just teed up in the pain management side of the space.Microcap biotech company IntellipharmaCeutics Intl Inc (USA) (NASDAQ:IPCI) just announced that the FDA has set an advisory panel meeting, at which two committees, the Anesthetic and Analgesic Drug Products Advisory Committee and the Drug Safety and Risk Management Advisory Committee, will convene to discuss the risks and benefits of the company's lead development asset – a drug called Rexista. IntellipharmaCeutics is trying to get the asset approved as an abuse deterrent opioid drug and – if the agency in the US green lights it for commercialization – there's a potential blockbuster market waiting for it when it hits shelves.The PDUFA for the drug isn’t until September, but the upcoming advisory panel meeting is going to offer some real insight into its chances come decision day and – by proxy – will serve as a bell-weather for sentiment near term.Here are the two sides of the argument for approval and an attempt to settle on one or the other.So, as mentioned, it's called Rexista and it's an abuse deterrent formulation of oxycodone hydrochloride, which is commonly referred to (and commercially referred to) as Oxycodone in the US. IntellipharmaCeutics has taken the active compound and added a bunch of features to it that should – theoretically, at least – make it difficult or unpleasant to abuse. If a user tries to crush it (say, to then inhale it nasally) it turns into a viscous gel. Similarly, crushing activates a blue dye type substance that means a patient that then tries to swallow or inhale it gets a stigmatizing blue dye on their face. If it's mixed with alcohol (dose dumping) the active compound basically becomes ineffective. It's resistant to heat and flame, meaning it can't be smoked.So that's the theory – how does it work in practice?The company put it through its paces as part of a trial that compared it to Oxycodone, in an attempt to demonstrate that the pharmacokinetics of the asset (and in turn, its impact on pain in the target population) was comparable to the current standard of care treatment in this space; in other words, to demonstrate bioequivalence.And the study ended up going pretty well. Patients that took Rexista did experience pain relief at or about the levels experienced by patients that took Oxycodone and there were no real safety concerns reported on the back of the investigation.That's all well and good, but it's not really what matters here.We'd have been surprised if the numbers didn’t show bioequivalence when administered normally. What's really important with this one, and what we're focusing on from the upcoming panel meeting, is whether the members of the panel feel that the mechanisms put in place to deter abuse justify an abuse-deterrent labeling for Rexista when it hits shelves.The thing is, this one's almost certainly going to get approved as a pain management drug in the target population, which is patients that need round the clock analgesia for an extended period of time. An approval doesn’t matter, however, if the FDA doesn’t give it an abuse deterrent label. The money is going to be made here on prescriptions by physicians that want to minimize the chances of a patient abusing the drug. If this isn’t a feature, there's no incentive (from a physician's perspective) to prescribe Rexista over current SOC.The application that's with the FDA right now does serve up some data that underpins the above-mentioned abuse-deterrent properties. However, we've seen numerous examples of companies submitting similar data and not quite persuading the agency that its portfolio of AD features is superior to another's.So what's our conclusion on this one?Well, we're leaning (cautiously) towards optimism here. The AD data, while in some instances generic and stuff we've seen before, is strong in parts, and we think there's probably just enough justification (and concurrently, just enough market demand) for this one to pick up a thumbs up from the panel come meeting day.The catalyst (the meeting outcome) will hit press on July 26, the same day as the meeting takes place. Chances are we'll really start to see markets move after the close on the 26th and into the session open on July 27.We will be updating our subscribers as soon as we know more. For the latest updates on IPCI, sign up below!Image courtesy of Iqbal Osman via FlickrDisclosure: We have no position in IPCI and have not been compensated for this article.