Benzinga | May 7, 2021 07:33AM EDT

KemPharm Announces Serdexmethylphenidate (SDX) Has Been Classified As A Schedule IV Controlled Substance By The DEA

KemPharm, Inc. (NASDAQ:KMPH), a specialty pharmaceutical company engaged in the discovery and development of proprietary prodrugs, today announced that serdexmethylphenidate (SDX), KemPharm's proprietary prodrug of d-methylphenidate (d-MPH) and the primary active pharmaceutical ingredient (API) in AZSTARYS(tm), has been classified as a Schedule IV controlled substance by the U.S. Drug Enforcement Administration (DEA). AZSTARYS is classified as a Schedule II controlled substance as it includes a 70:30 mixture of SDX (Schedule IV) and d-MPH (Schedule II), respectively.

According to the "Schedules of Controlled Substances: Placement of Serdexmethylphenidate in Schedule IV," which has been published in the Federal Register (federalregister.gov/d/2021-09738), the DEA concluded that SDX meets the 21 U.S.C. 812(b)(4) criteria for placement in schedule IV of the Controlled Substances Act (CSA). This determination was based on an eight-factor analysis of the abuse potential, legitimate medical use, and dependence liability of SDX by the U.S. Department of Health and Human Services (HHS), which concluded that "SDX is related in action and effect to the schedule IV substance phentermine, and can therefore be expected to have a similar potential for abuse." Notably, in its report, HHS affirmed that "in clinical studies, SDX demonstrated a lower potential for abuse when compared to d-MPH," a Schedule II controlled substance under the CSA.



"We are pleased with the publication of the analysis conducted by HHS and the DEA's decision to classify SDX as a Schedule IV controlled substance, affirming our research which indicated SDX has a lower potential for abuse when compared to d-MPH," stated Travis C. Mickle, Ph.D., President and CEO of KemPharm. "We believe the combination of the AZSTARYS product label received at approval, the Schedule IV designation for SDX and the economic terms of the recently announced amendment to our Licensing Agreement with GPC will provide the opportunity to generate substantial value for KemPharm for many years to come."

"The decision by the DEA further builds our confidence in how parents, healthcare providers and payors will view AZSTARYS as an option to consider for patients living with ADHD," said Perry Sternberg, President and CEO of Corium, Inc., which will commercialize AZSTARYS in the U.S. "We believe the knowledge that SDX, which comprises 70% of the API in AZSTARYS, has been classified as a Schedule IV controlled substance, will be meaningful when considering the potential benefit of SDX's lower abuse potential. We are enthusiastically continuing our commercial launch preparations to bring AZSTARYS to the U.S. market as early as the second half of 2021."

"The DEA's decision may also positively impact the value proposition for KemPharm's lead pipeline product candidate, KP879, and potentially other SDX-based products," Dr. Mickle continued. "KP879, which is intended for the treatment of stimulant use disorder, is based on SDX as the sole API. If approved, KP879 could be a Schedule IV product, and physicians who are treating patients seeking to overcome addictions to cocaine, methamphetamine or other stimulants may be able to prescribe KP879 with the knowledge that the product candidate could have a significantly lower potential for abuse. For a therapeutic area that currently has no approved treatments available, this determination could be a game changer."

Per the License Agreement, as amended, with an affiliate of Gurnet Point Capital (GPC), KemPharm has earned a $10 million milestone payment which is payable within 30 days following the scheduling determination of SDX by the DEA.