What Happened: The Solana Beach, California-based specialty pharma company said the FDA gave its nod for its Gimoti nasal spray that would allow the company to commercially market it in the U.S.
Gimoti is the first and only nasally-administered product indicated for the relief of symptoms in adults with acute and recurrent diabetic gastroparesis. The company had earlier faced a prior rejection of the drug by the FDA.
H.C. Wainwright analyst Raghuram Selvaraju estimates peak U.S. annual sales of over $300 million by 2027, with patent expiration in 2030.
In the wake of the approval, the analyst upgraded shares of Evoke from Neutral to Buy, with a $10 price target, suggesting roughly 300% upside potential.
Why It Matters: Gastroparesis patients exhibit symptoms such as nausea, abdominal pain, bloating, early satiety as well as vomiting, with the delayed gastric emptying often resulting in erratic absorption of orally administered drugs.
Since Gimoti is administered nasally, bypassing the diseased GI track, allowing the drug to enter the bloodstream directly, the company said.
"We are excited to be able to offer health care providers and their patients a unique non-oral treatment option to relieve symptoms and help improve their quality of life," said David Gonyer, CEO of Evoke.
What's Next: Evoke said it will work along with its partner EVERSANA to commercialize Gimoti by leveraging on the latter's integrated suite of capabilities and highly experienced sales and marketing team.
The company expects to begin commercializing the drug in the fourth quarter of 2020.
The approval allows Evoke access to its existing $5 million line of credit from EVERSANA to support manufacturing and other aspects of GIMOTI's commercialization.
Evoke said its cash balance of $4.7 million, along with the EVERSANA line of credit, will support its operations into 2021, without consideration of potential Gimoti revenue.
In pre-market trading Monday, Evoke shares were trading higher by 93.62% to $4.55.