Optimer Pharmaceuticals Inc. (OPTR) recently announced that it has entered into an exclusive collaboration and license agreement with Astellas Pharma Europe Ltd. for the development and commercialization of its pipeline candidate, fidaxomicin, in Europe and certain other countries in the Middle East, Africa and Commonwealth of Independent States (CIS).
Fidaxomicin is an antibiotic which is being developed for the treatment of clostridium difficile infection (CDI), the most common nosocomial or hospital-acquired diarrhea.
Per the terms of the agreement with Astellas, Optimer can receive payments of up to $224 million from Astellas, comprising $68 million of upfront payment in cash and up to approximately $156 million of regulatory and sales milestones. In addition, Astellas will pay tiered double-digit royalties (ranging from the high teens to low twenties) on the sales of fidaxomicin in Astellas’ territory, if approved.
Astellas will bear all development, manufacturing and commercial costs associated with the drug in Astellas’ region, which includes the costs of managing the ongoing marketing application in Europe.
Fidaxomicin is currently under US Food and Drug Administration (FDA) review with a decision expected in May 2011. Optimer has also filed a Marketing Authorization Application (MAA) with European Medicines Agency (EMA), which will now be taken over by Astellas.
In mid-2010, Optimer presented encouraging combined data from two late-stage studies. The combined data revealed that fidaxomicin was superior to vancomycin (the only FDA approved antibiotic for the treatment of CDI) in reducing disease recurrence by up to 47%. The data further revealed improved global cure rates for fidaxomicin compared to vancomycin.
CDI is a serious illness caused by infection of the inner lining of the colon by C. difficile bacteria. The toxins produced from this bacterial infection result in inflammation, severe diarrhea and sometimes even death.
The disease has high clinical incidence across Europe, which includes about 81,000 cases/year in Germany alone. Both Astellas and Optimer aim to develop fidaxomicin as a first-line treatment for high-risk patients that comprise around 65-70% of the total CDI population.
We believe Astellas will be an ideal partner for Optimer in Europe because of prior experience in commercializing anti-infective drugs like Mycamine, Avelox, Vivotif, and isavuconazole.
Our Recommendation
Currently, we have a Neutral recommendation on Optimer, which is supported by a Zacks #3 Rank. Optimer has limited sources of revenue and is largely dependent on the success of its lead pipeline candidates – fidaxomicin and Pruvel.
Although we are encouraged by the partnership deal with Astellas and are optimistic about the prospect of both these pipeline drugs in terms of their clinical trial results and FDA approval, we are also mindful of competition in this area. We believe the initial sales ramp could be slow.
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