FDA clears Labopharm’s antidepressant

The FDA has approved Labopharm’s Oleptro extended release tablets, a once-daily formulation of the antidepressant trazodone, to treat major depressive disorder in adults.

“Oleptro represents Labopharm’s second Contramid technology-based product to receive FDA approval in just over a year,” CEO James Howard-Tripp said in a statement, adding that the company  (TSX:DDS; NASDAQ:DDSS) is preparing the product for launch into the $11 billion-plus U.S. antidepressant market.

“We are working towards finalizing a commercialization path for Oleptro that will maximize the value of our product in this market.” Such alternatives range from out-licensing the product to a distribution partner while retaining the right to some degree of co-promotion, through to a full co-promotion arrangement under which Labopharm would share the sales function with a partner, he said.

The company expects to finalize the commercialization plan for Oleptro in the near-term and is well advanced in its preparations for the U.S. launch. The formulation is currently under regulatory review in Canada.

In a new report, Versant Partners raised its 12-month price target to $4 from $3 on a subtle revision to its forecasts and a reduced discount rate. Labopharm shares are down 14 cents at $2.59 in early afternoon trading on Wednesday, after jumping to as high as $3.16 after the opening.

Analyst Doug Loe writes that the stock could experience some selling pressure as investors “liquidate recent returns, but forthcoming trazodone partnership provides near-term catalyst and share price support.”