Non-Opioid Therapeutics And Significant Pain Treatments Make For A Buy Rating

• The share price of Recro Pharma Inc (NASDAQ: REPH) has surged more than 356 percent year-to-date.
• Ching-Yi Lin of HC Wainwright & Co has initiated coverage of Recro Pharma with a Buy rating and price target of $19.
• The company has two promising late-stage products that have demonstrated meaningful pain reduction and are expected to be key value drivers for the stock.

The two treatments being developed are IV/IM meloxicam, which is a rapid onset and long-acting COX2 inhibitor, and Dexmedetomidine, which is an intranasal formulation that is a selective alpha 2 adrenergic receptor agonist. Both products are meant for the treatment of post-operative pain and are expected to enter Phase 3 trials later in 2015.

According to the HC Wainwright report, “IV/IM meloxicam demonstrated significant pain reduction in both hard and soft tissue trials over a 24-hour period after surgery while Dex-IN exhibited significant pain reduction in a hard tissue trial over a 48-hour period beginning one day after surgery.”

Lin believes that these non-opioid therapeutics will reach the market at just the right time, given the growing anti-opioid sentiment. Due to the dangers of using opioids, “the American Society of Anesthesiologists and the Joint Commission, a healthcare accreditation organization, have called for a multi-modal approach to treating postoperative pain,” Lin stated.

In addition, Recro Pharma has acquired the worldwide rights for IV/IM meloxicam, as well as a cGMP manufacturing facility and a royalty and formulation business from Alkermes Plc (NASDAQ: ALKS).

Lin believes that Recro Pharma’s late stage treatments are at present underpriced, while the stock is undervalued.