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Tickers in this Article: IPXL, VRX, GSK, SLXP
Impax Laboratories, Inc. (IPXL) received a major setback recently with the US Food and Drug Administration (FDA) issuing a complete response letter (CRL) for the company's New Drug Application (NDA) for Rytary (IPX066). Rytary, an extended-release capsule formulation of carbidopa-levodopa, is being developed for the symptomatic treatment of Parkinson's disease. According to the CRL, the NDA may be approved only after a satisfactory re-inspection of the company's Hayward facility for which a warning letter was issued in May 2011.The facility is involved in the development of Rytary.

However, while the NDA was being reviewed, Impax had withdrawn the Hayward site as an alternative site for the production of Rytary.

Impax has a license, development and commercialization agreement with GlaxoSmithKline (GSK) for Rytary. As per the terms of the Dec 2010 agreement, Glaxo is completely responsible for the development and marketing of the candidate outside the US and Taiwan.

Our Take

The regulatory path for Rytary has been far from smooth. The FDA, which was initially expected to respond on Rytary in Oct 2012, had extended the action date by three months to Jan 2013.  The review period had been extended as Impax had submitted certain information that had been requested by the FDA.

The CRL is a huge disappointment and Impax shares were down more than 7.0% on the news. Currently, we have low visibility on the extent of delay that Rytary is facing. Impax carries a Zacks Rank #5 (Strong Sell).

Some pharmaceutical companies performing well are Salix Pharmaceuticals Ltd. (SLXP) and Valeant Pharmaceuticals International, Inc. (VRX), both of which carry a Zacks Rank #1 (Strong Buy).

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