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Flexion nabs FDA OK for its potential blockbuster osteoarthritis drug, triggering new buyout buzz

The buyout buzz around Flexion $FLXN is spiking this weekend, after the FDA came through with an approval of its injectable drug for osteoarthritis-related knee pain.

The agency’s OK of Zilretta introduces a new pain therapy at a time the feds are bending over backwards to fight a nationwide opioid crisis. And at about $500 a shot, RBC — which is pushing up the odds of an acquisition again — had modeled peak sales at just over the $1 billion-a-year mark, which would qualify as a hotly sought after blockbuster.

Mike Clayman

There’s been dead silence on the M&A front, though, since FiercePharma reported back in March that Sanofi was in ongoing talks related to a potential buyout. Nothing has come of that, so far, but the approval for a one-product company will only sharpen speculation about deal talks to come.

Further helping Flexion in maximizing the value of this product, the biotech was able to get recent data demonstrating how this drug, unlike steroids, won’t cause a sudden spike in blood sugar onto the label. As diabetics are one of the prime groups likely to turn to this therapy for the progressive and incurable condition, the FDA just helped give a big boost to their marketing plans.

More than 4 million people suffering from osteoarthritis get these steroid shots, Flexion CEO Michael Clayman told me recently, and 20% of them have diabetes — about 800,000 patients. Having some data that illustrates the differentiation in the blood glucose profile — where hyperglycemia, even quickly flushed away as it is with steroids, is to be avoided wherever possible — could help persuade vigilant payers to opt for a much more expensive branded therapy.

Flexion’s share price jumped 10% on Friday afternoon, after news of the approval came through.

The Burlington, MA-based biotech’s announcement of the approval includes a range of endorsements from key opinion leaders in the field, which Flexion has been cultivating for years now.

“As OA progresses, many patients experience intractable joint pain, which can ultimately lead to the need for a total joint replacement,” said John Richmond, medical director for network development, New England Baptist Hospital. “As a result, healthcare providers are eager for new, non-opioid therapies that may help patients manage their OA pain for extended periods of time. Zilretta gives us an important new non-surgical intervention.”

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