Elite Pharmaceuticals Inc (OTCMKTS:ELTP) Has A Path To Approval For SequestOx

The end of the year is pretty much here, and we're going to highlight Elite Pharmaceuticals Inc (OTCMKTS:ELTP) one last time. We've done so numerous times over the last couple of quarters, pointing out the company's potential for growth on numerous fronts. This month we got a couple of updates that are well worth taking a look at, so let's reiterate our thesis, and figure out how, or if, the latest announcements change things.Elite, for those not familiar with the company, is a biotechnology company with a two pronged operation. First, it's got a development arm, through which it's attempting to bring fresh drugs to market. Specifically, right now, it's working on abuse deterrent opioids. The opioid epidemic in the US is a massive problem, and companies are rushing to be the first to bring abuse deterrent assets to physicians as an alternative to the current SOCs. We'll get back to this shortly.The second arm is a generic drug manufacturing operation. The company has eight generic products that it manufactures and sells out of its own real estate, and has an aggressive growth strategy that should see this unit double or treble in revenues over the next twelve months. Again, we'll get back to this shortly, as one the latest announcements relates to this generic expansion strategy.Our thesis is simple: that as an investment prospect at this end of the biotechnology space, and given its current market capitalization, Elite is unique. Why? Because its generic operations fund (for the most part) its development arm. Not only this, but it's set to be profitable mid 2017, based on the revenues this generic operation brings in.The two recent announcements strengthen this thesis.First, SequestOx. This is the abuse deterrent opioid mentioned above, specifically, an oxycodone hydrochloride and naltrexone hydrochloride, designed to target the management of moderate to severe acute pain where the use of an opioid analgesic is appropriate. The FDA issued a CRL for the drug back in July (Elite subsequently collapsed in value) and the company has since been trying to get the program back on track. It recently sat down with the agency to try and carve out a pathway to getting the drug approved, and it looks like it's been able to do just that.Here's what Nasrat Hakim, President and CEO of Elite had to say post meeting:

"We are extremely pleased that there is a path forward to seek FDA approval of SequestOx… Based on the guidance received from the agency, Elite will begin to execute the proposed plan immediately.”

Management thinks it can get things in place very quickly, and we'll get more information at the end of January, when the company puts out the minutes and holds a conference call to discuss the pathway. We think a small clinical trial is probably the most likely outcome here, but it's only speculation.The second announcement highlighted the submission of an ANDA for a generic combination, hydrocodone and acetaminophen, targeting general care pain management. This is one of the quarterly ANDA submissions that we expect the company to submit through the end of 2017, and will provide a framework on which to build revenues as the company moves towards profitability going forward. These are billion dollar indications, and Elite need only snap up a tiny portion of the market to dramatically improve its current revenue take. It's proven it can execute on this model, with the generics that make up its current product portfolio, and so we don't see any problem on the revenue growth front near term.Cash is pretty strong, coming in at $12.5 million at last count, so there should be no problem funding the trial that the FDA requested as part of the SequestOx CRL resolution (if that is indeed the resolution), taking the risk of dilution of the table – at least for now.We will be updating our subscribers as soon as we know more. For the latest updates on ELTP, sign up below!Disclosure: We have no position in ELTP and have not been compensated for this article.