Zacks_Analysts' Blog : Cornerstone Seeks Approval - Analyst Blog

On July 15, 2009, North Carolina-based specialty pharma company Cornerstone Therapeutics Inc. (CRTX) announced the submission of a regulatory filing with the  US Food and Drug Administration (FDA) for an extended-release antitussive (cough suppressant) product, CRTX 067. On approval, it will compete directly in the narcotic antitussive market, which includes big players like Covidien (COV) and UCB. The company expects the product to hit the US market by 2011.

According to Wolters Kluwer Health, in 2008, there were over 30 million prescriptions generated for oral antitussive and antitussive combinations. Nearly 10 million of these prescriptions were for products that only contained a narcotic antitussive and an antihistamine.

The drug has a huge market opportunity since cough can adversely affect the quality of life, leading patients to seek medical attention. Most antitussive and antitussive combination products currently in the market must be dosed every four to six hours, which can be inconvenient. Patients may not be able to sleep through the night because their antitussive is not effective for more than four hours.

Cornerstone believes that CRTX 067 could improve patients’ life quality by providing more convenient twice-daily, longer lasting dosing.

This submission is one of the many positives the company has seen ever since it was established late last year through the merger of Critical Therapeutics with Cornerstone Biopharma Holdings Inc. The merged company has a wide range of products including AlleRx for allergic rhinitis; Balacet 325 for pain; Spectracef, an oral antibiotic for infections; and Zyflo/Zyflo CR for Asthma.

The company currently promotes its products in the United States to respiratory-focused physicians and key retail pharmacies using its specialty sales force. It also boasts of a deep late-stage clinical pipeline.

The recently signed $70 million deal with Chiesi Farmaceutici, an Italian pharmaceutical firm, has broadened its product portfolio further apart from strengthening its balance sheet. The deal includes U.S. rights to the Chiesi drug Curosurf, which is used to treat respiratory distress syndrome (RDS) in premature babies.

A couple of days ago, Cornerstone acquired the commercial rights to Factive, an antibiotic from Oscient Pharmaceuticals Corp. (OSCI) in North America and certain European countries, thus expanding its presence in is segment.

We have a Buy rating on Cornerstone Therapeutics based on its solid performance in the first quarter of 2009 and a positive outlook in the next few quarters despite the current economic environment.