One of the most lucrative pockets of opportunity in the pharmaceutical landscape is drug abuse prevention. I’m not talking about chemicals that help people in drug rehab programs. Instead, I’m talking about packaging opiate and pain management drugs in such a way that they are less prone to abuse.
There have been a lot of news articles and media attention focused on the rampant abuse of opiates in the United States. Thanks to changing demographics, pharmaceutical and prescription pain medications have been the most abused drugs in the US. This has prompted drug manufacturers to come up with all sorts of abuse prevention systems from non-crushable pills to better packaging and other techniques.
If you are in the market for a biotech or a pharma IPO, you might want to consider Coralville, Iowa-based pharma company KemPharm (NASDAQ:KMPH). This company is going through the IPO process and is slated to issue four million shares at a range of $12 to $14 a share.
The interesting thing about this company is that it focuses on prodrugs. Prodrug is a chemical compound that is not the actual active drug. For example, for your body to enjoy the benefits of a pain prescription medication, it has to metabolize the compound you ingested into a form that it can use. Depending on the actual drug, certain compound presentations and structures can be more addictive than others. Also, there’s less protection when a compound can be easily metabolized.
KemPharm focuses on hydrocodone and acetaminophen prodrug chemical compounds. These base compounds are very popular for the treatment of severe pain or moderate pain. KemPharm’s innovation is that it uses the prodrug molecular structure to prevent the release of the opioid active ingredient if the package is physically manipulated or crushed. This is how addicts normally abuse hydrocodone. They would crush the pill to release the opiate in the more concentrated and powerful form. Since Kempharm works with the actual molecular structure of hydrocodone, it’s harder to get the opioid to release if it’s been tampered with. This is a very interesting approach to drug abuse deterrence.