Cornerstone Therapeutics Inc (CRTX), a North Carolina-based specialty pharma company, got into a definitive asset purchase agreement with biopharmaceutical company Oscient Pharmaceuticals Corp. (OSCI) on July13, 2009.
Under the agreement, CRTX agreed to purchase the commercial rights of Factive (gemifloxacin mesylate) for $5 million in North America and some European countries from OSCI, which has filed for Chapter 11 bankruptcy protection. Subsequently, the bankruptcy court is expected to pass its verdict within the next two months.
Factive is indicated for the treatment of community-acquired pneumonia (CAP) of mild to moderate severity and acute bacterial exacerbations of chronic bronchitis (AECB).Factive belongs to the fluoroquinolone class of antibiotics. It received FDA approval in May 2007 for the five-day treatment of CAP.
Cornerstone Therapeutics currently promotes its products in the United States to respiratory-focused physicians and key retail pharmacies with its specialty sales force. Cornerstone also generates revenue from the sale of multiple marketed product lines that it does not promote. The company has a deep late-stage clinical pipeline with quite a few regulatory approval submissions expected between 2009 and 2011.
CRTX’s recent $70 million deal agreement with Chiesi Farmaceutici, an Italian pharmaceutical firm, further broadens its product portfolio. The deal includes U.S. rights to the Chiesi drug Curosurf, which is used to treat respiratory distress syndrome (RDS) in premature babies. The inclusion of Factive is an impressive addition to the already accomplished portfolio and strengthens its presence in the respiratory market.
Cornerstone operates in a highly competitive respiratory market. All its products compete with both big players and generic counterparts. However, we believe the company’s strategy will carve a niche in this market. Cornerstone’s top competitors include big players like AstraZeneca (AZN) and Merck (MRK).
We believe that the current share price represents an attractive entry point for long-term investors.
Read the full analyst report on “CRTX”
Read the full analyst report on “OSCI”
Read the full analyst report on “AZN”
Read the full analyst report on “MRK”
Zacks Investment Research
