Cubist Pharmaceuticals Inc. (CBST) received a boost recently as the US Food & Drug Administration (FDA) approved a two-minute intravenous injection version of its antibiotic Cubicin (daptomycin). Cubicin is approved in the US and several other markets as a once-a-day, 30-minute infusion for the treatment of severe bacterial infections of the skin and bloodstream.
Besides granting approval to the 2-minute injection, the FDA asked the company to incorporate several changes to the Cubicin label. These include changes and reformatting of the Warnings and Precautions segments in the label and overall re-formatting of the label to be compliant with the FDA’s Physician Labeling Rule (PLR). Further updates to the Post Marketing Experience section of the label have also been recommended.
With the approval, patients receiving Cubicin, particularly those in the outpatient setting, will benefit as they will now have to spend only two minutes a day receiving the drug, thereby saving time and reducing the impact that IV therapy has on their daily lives.
Cubicin is the only marketed drug at Cubist and accounts for about 95% of the company’s total revenue. For the fiscal year 2010, the company expects sales of Cubicin to range from $605 million to $615 million.
The company purchased Cubicin’s worldwide development and commercialization rights from Eli Lilly and Co. (LLY) in 1997 in exchange of royalties on product sales. Cubist currently commercializes Cubicin on its own in the US and has distribution agreements with several companies for the commercialization of the drug in countries outside the US.
Cubist is partnered with Novartis AG (NVS) for the marketing of Cubicin in Europe and some other international markets. The company also has a development and commercialization agreement with AstraZeneca plc (AZN) for China and certain other markets in Asia. Cubist has an agreement with Merck & Co. Inc. (MRK) for the development and commercialization of Cubicin in Japan.
We currently have a Neutral recommendation on Cubist. In addition to increasing competition for Cubicin, we are concerned about the pending litigation with Teva Pharmaceutical Industries Ltd. (TEVA), which is seeking to launch a generic version of Cubicin. The ongoing litigation poses a significant threat to the Cubicin franchise and could be a source of overhang on the company’s shares in the foreseeable future.
However, we are pleased to see that Cubist is working on expanding its pipeline through partnerships and acquisitions. The recent acquisition of Calixa Therapeutics is a case in point.
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