Pernix Therapeutics Holdings Inc (NASDAQ: PTX) is having an incredibly strong start to the trading session this morning. However, if you go digging, you’re not going to see any news that was released today via SEC filing or press release. So, what’s the deal? Today, we’ll talk about why Pernix Therapeutics is headed up, what we’re seeing from the stock, and what we’ll be watching for ahead.
Why PTX Is Headed Up
As mentioned above, Pernix Therapeutics is having an incredibly strong start to the trading session this morning, but there hasn’t been any news released today. The most recent news came via SEC filing on November 21, 2018. I believe that this filing may have a bit to do with the gains. The filing was ultimately two-fold. The first part discussed a change to the CEO’s compensation and the second part, the part that I believe is the reason for the gains, discussed Zohydro. Here’s what we saw from the filing:
John A. Sedor Compensation Change
The first bit of the SEC filing discussed an approved amendment to the employment agreement of John A. Sedor, the CEO of PTX. Moving forward, the Company will pay Sedor a housing allowance of $6,300 per month for November and $6,612 per month from the end of November through June 30, 2019. The amendment states that Sedor’s residence must be located within 50 miles of the company’s offices in Morristown NJ.
This is what I believe to be the reason for the gains. In the SEC filing, the company said that on November 15, it received feedback from the FDA with regard to the formulation change to its 20 mg. strength capsules of Zohydro ER with BeadTek. PTX said that the FDA has determined that it will consider the submission a prior approval supplement (PAS), rather than a changes being effeective (CBE) supplement.
The company is seeking to change the quantity of an inactive ingredient. That ingredient is polyethylene oxide beads. The change in formulation is ultimately to improve the manufacturing process. However, until the FDA review is complete, Zohydro 20mg ill be on back order. It is expected that this will be until the second quarter of 2019. Fortunately, the company is still distributing all other strengths of Zohydro, one of which is 10 mg. Therefore, patients previously using Zohydro 20 mg. could theoretically be prescribed two 10 mg. pills for each 20 mg. pill prescribed previously.
Also, it is important to note that while the company is expecting for the delay in production of 20 mg. strength Zohydro to effect overall prescription counts, it did say that it is expecting for 10 mg, 15 mg., and 30mg. strengths to see growth in prescription counts. The company also made it clear that it is not expecting for the unavailability of the treatment to have a material financial impact on the company overall.
What We’re Seeing From The Stock
With the news that the delay in 20 mg. strength Zohydro will not have a material financial impact on the company, it’s not surprising to see that Pernix investors are excited this morning. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:02), PTX is trading at $0.62 per share after a gain of $0.12 per share or 22.77% thus far today.
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on PTX. In particular, we’re interested in following the story surrounding Zohydro prescription counts as the company waits on the FDA for the review of the new formulation of the 20 mg. strength option. However, we don’t believe that there will be a large impact due to the fact that the 10 mg. option is still available and can be used to supplement the 20 mg. option with a higher volume of pills. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!