EpiCept moving forward with pain, say Edison analysts

US drug developer EpiCept’s (Nasdaq; EPCT) investment case is centered on finding a development partner for AmiKet (amitriptyline 4%, ketamine 2% cream), a product for chemotherapy-induced peripheral neuropathy, comment analysts at Edison Investment Research.

In January 2012, EpiCept engaged SunTrust Robinson Humphrey to assist the company in exploring strategic alternatives to maximize the commercial opportunity of AmiKet for the treatment of CIPN following taxane-based therapy. The engagement is focused on the identification and implementation of a strategy designed to optimize AmiKet’s value for the company’s stockholders, which includes the evaluation of potential transactions involving the sale of EpiCept.

Although EpiCept’s valuation is depressed as a result of the ongoing regulatory and commercial setbacks with respect to Ceplene (histamine dihydrochloride) and Azixa (MPC-6827), the upside from a successful deal – which might include an M&A transaction – could be considerable. Cash currently lasts to the third quarter, while Edison’s valuation – presuming AmiKet is partnered – is a multiple of the current share price.

The US Food and Drug Administration’s recent award of Fast Track designation to AmiKet for chemotherapy-induced peripheral neuropathy (CIPN) should shorten regulatory timelines and could help attract a development partner. In January, EpiCept received finalized FDA guidance for the Phase III clinical development plan. EpiCept also recently received European Medicines Agency guidance that is consistent with the FDA, which should make it easier to design a Phase III programme for filing an NDA in both the US and EU that is faster and cheaper.