Here's Why Antares Pharma Jumped Higher Today

What happened

Shares of Antares Pharma (NASDAQ: ATRS) were up 16.7% at 12:12 p.m. EDT on Tuesday after the company gained Food and Drug Administration (FDA) approval for its testosterone treatment Xyosted.

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The approval comes about a year after Antares disclosed that the FDA wasn't going to approve Xyosted on the first attempt. A complete response letter -- the agency's euphemism for a rejection -- followed a week later. After meeting with the FDA, Antares determined that it could address the agency's concerns by reanalyzing existing data and through changes to the proposed label and potential post-approval risk mitigation strategies.

The strategy clearly worked.

So what

The testosterone market is a fairly large but competitive space. The biggest seller, AbbVie's (NYSE: ABBV) AndroGel, recorded sales of $577 million last year.

Unlike Abbvie's gel, Xyosted is injected once a week. Normally a gel would be preferred over an injection by most patients, but Antares has a couple of things going for it that should make it easier to compete with the market leader:

  • Xyosted is injected with a single-dose, disposable auto injector, so it's fairly simple to use.
  • It's a once-weekly injection (daily injection versus daily gel would certainly be less appealing).
  • Gels run the risk of accidental dosing by people the patient comes in contact with -- a major concern with testosterone, especially for women and children.

Xyosted's label includes warnings about increases to blood pressure, which could give doctors pause about using the drug, but high blood pressure is also listed as a side effect of the higher dose of AndroGel, so it might not be a huge sticking point for doctors.

Now what

Antares is working on getting a sales force in place and plans to launch Xyosted before the end of this year. Investors should expect a slow launch. But with a couple of drugs already on the market and partners using Antares' injection system for their own drugs, it won't take much in the way of sales of Xyosted to justify Antares' market cap of around $600 million.

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