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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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