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PropThink: Priority Review For Amitiza Sending SCMP Higher; Big Potential Market


September 26, 2012 -

By David Moskowitz
Sucampo Pharmaceuticals (NASDAQ:SCMP) announced with its partner Takeda Pharmaceuticals that the FDA has granted priority review for its sNDA (supplemental new drug application) for Amitiza in the treatment of OIC (opioid-induced constipation) in patients with chronic, non-cancer pain. Given the rapid review period now expected by the FDA, the company anticipates a decision on the new indication by late January 2013. Amitiza has been experiencing strong growth of late as newly approved and development-stage treatments are increasing the visibility of the drug's current indications in chronic idiopathic constipation (CIC) and irritable bowel syndrome with constipation (IBS-C) (See our prior story on SCMP).
Given that opioids are among the largest categories of drugs dispensed in the U.S. and chronic use of these pain medicines in arthritis and back pain patients is commonly associated with constipation, analysts estimate that the OIC indication has a billion-dollar market potential. While Amitiza is known to have some side effects that could limit the product from optimum market penetration, even a small percentage of this market could enable Amitiza to grow substantially off of its current $250M annual base of sales. According to Sucampo, there are 3 million patients in the U.S. on chronic opioid therapy, and roughly 80% experience OIC. If one assumes that Amitiza is used in just 10% of this population (annual cost/patient of ~$2,800 per year), this would translate into $675M in new sales of the drug. SCMP is up 13.7% in premarket trading, however, the large potential of this indication could continue to fuel upside as the company moves closer to approval.
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PropThink is an intelligence service that delivers long and short trading ideas to investors in the healthcare and life sciences sectors. Our focus is on identifying and analyzing technically-complicated companies and equities that are grossly over or under-valued. We offer daily market coverage, weekly feature stories, and a newsletter to investors who subscribe on PropThink.com. To learn more, follow us on Twitter or visit us at http://www.propthink.com.
You should assume that as of the publication date of any report or letter, PropThink, LLC and persons or entities with whom it has relation ships(collectively referred to as ""PropThink"") has a position in all stocks (and/or options of the stock) covered herein that is consistent with the position set forth in our research report. In connection with SCMP, PropThink has taken a long position and  stands to realize significant gains if  the price of SCMP appreciates. Following publication of any report or letter, PropThink intends to continue transacting in the securities covered herein, and we may be long, short, or neutral at any time hereafter regardless of our initial recommendation. To the best of our knowledge and belief, all information contained herein is accurate and reliable, and has been obtained from public sources we believe to be accurate and reliable, and not from company insiders or persons who have a relationship with company insiders. PropThink was not compensated to publish this article. Our full disclaimer is available at http://www.propthink.com/disclaimer.




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