Aratana shares soar on first FDA filing for approval of canine arthritis drug

Shares of Aratana Therapeutics ($PETX) jumped 25% to $3.99 a share in after-market trading on January 25, after the company announced it had filed for FDA approval of Galliprant (grapiprant), its drug to treat pain in dogs with osteoarthritis. It is Aratana's first FDA filing, and it comes after a turbulent 2015 for the company, which disappointed investors with dashed hopes for its canine lymphoma franchise.

The FDA is expected to render its verdict on Galliprant by March 25, according to an Aratana press release. If it is approved, Aratana will be ready to market it by fall. "This submission marks the beginning of what we expect will be a momentous year for Aratana," said Ernst Heinen, the company's chief development officer, in the release.

Galliprant (formerly known as AT-001) is part of an emerging class of drugs known as piprants, which block a pain receptor called EP4. The market for canine pain remedies is dominated by Zoetis' ($ZTS) Rimadyl, which is a COX-2 inhibitor, but Aratana's executives are confident their drug is less likely to cause side effects like stomach upset and bleeding. In December 2014, the company announced that in a pivotal trial in 280 dogs, a once-daily dose of Galliprant produced statistically significant improvements in pain over placebo.

Aratana has been building up its portfolio of pain drugs. The company is also in late-stage development of Nocita (bupivacaine liposome injectable suspension), formerly AT-003, which is an extended-release drug to treat postsurgical pain in dogs. In July, the company said Nocita performed well in a clinical trial in dogs who underwent knee surgery. Aratana also expects to launch that drug this year.

Aratana's stock settled back to $3.15 in morning trading on January 26, and it's still way off its one-year high of $20.63. The company's shares dipped last fall on news that its two canine lymphoma drugs, AT-004 and AT-005, were not hitting their therapeutic targets as expected and were unlikely to be much of a market opportunity for the company.

In November, Aratana CEO Steven St. Peter expressed optimism for the company's portfolio at its investor day in New York. In addition to launching Galliprant and Nocita, he told investors, the company could get a third drug on the market this year: Entyce (capromorelin) to stimulate appetite in dogs. Aratana is also looking for partners to help it break into key overseas markets, he said.

- here's the press release

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