The specialty pharmaceutical company KemPharm, Inc. (NASDAQ: KMPH) has been seeing its shares skyrocketing in early trades today. As of 10:46 a.m. EST, the stock was at a rise of +57.37% to $14.84. The increase came the following approval a new drug application (NDA) by the Food and Drug Administration (FDA).
What’s behind the surge?
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KemPharm is an experimental drug developer dedicated to the discovery and development of novel pharmaceutical compounds to treat serious medical conditions and the development of future drug candidates through its novel LAT (Ligand Activated Therapy) technology.
KemPharm’s proprietary LAT technology enables companies to develop prodrug versions of FDA-approved drugs as well as to develop prodrug versions of already-existing compounds that could potentially treat new disease indications.
Today, KemPharm announced that the FDA has approved AZSTARYS, which is an anti-attention deficit drug for the treatment of attention deficit hyperactivity disorder (ADHD) in patients aged six and older through a single daily dose.
- According to the definitive collaboration and license agreement between KemPharm and an affiliate of Gurnet Point Capital (GPC), Corium, Inc., a portfolio company of GPC, will lead the commercialization of AZSTARYS.
- It is expected that Corium will be able to commercially launch AZSTARYS in the U.S. by the second half of 2021.
- As per the License Agreement, AZSTARYS was granted FDA approval will make KemPharm eligible to receive regulatory milestone payments as set forth in the License Agreement.
- The KemPharm team is working with GPC to evaluate the provisions and amounts related to these payments.
- KemPharm could receive up to $468 million in regulatory and sales milestone payments, as well as tiered royalty payments, on a product-by-product basis for net sales.
- The potential is 20% for U.S. net sales, and mid-single digit percentage for net sales in each country outside of the United States.