Optimer Pharmaceuticals, Inc. (OPTR) posted second quarter 2011 earnings loss per share of 52 cents, wider than the year-ago loss of 26 cents per share and the Zacks Consensus Estimate of a loss of 39 cents. The wider loss was the result of increased operating expenses associated with the commercial launch of antibiotic Dificid, Optimer’s only marketed drug.
In the second quarter, revenues were $0.33 million versus $3.6 million in the prior-year quarter. Year-ago revenues were generated from research grants and collaborative agreements. Optimer did not have any marketed product in the second quarter of 2011 as Dificid was launched in the US in July.
Marketing expenses surged 950% to $6.9 million in the quarter. The sharp rise was primarily attributable to increased expenses on establishing a commercial infrastructure for launch of Dificid. General and administrative expenses increased approximately 103% in the quarter due to higher personnel and legal expenses. Research & development expenses rose 65% to $10.57 million in the reported quarter. The increase was primarily attributable to higher expenses incurred for developing OPT-822 in breast cancer patients. We believe that investor focus is currently more tuned to the commercial performance of Dificid rather than financials per se.
Dificid Update
Optimer received approval from the US Food and Drug Administration (FDA) for Dificid for the treatment of clostridium difficile-associated diarrhea (CDAD) in May 2011. Dificid was launched in July 2011. CDAD is the most common nosocomial or hospital-acquired diarrhea and is a significant malaise in hospitals and nursing home facilities.
The FDA approval was based on combined data from two of the largest late-stage studies ever conducted for the disease. Data revealed that Dificid was non-inferior to ViroPharma’s (VPHM) Vancocin in achieving clinical response at the end of treatment. In addition, data showed the superiority of Dificid over Vancocin in sustaining clinical response through 25 days post treatment. Dificid thus becomes the only drug which has shown superiority over Vancocin in sustained clinical response for CDAD. The superior recurrence benefits of Dificid over Vancocin have been included in the label which we believe is of great importance for Dificid sales, providing a clear differentiation from existing options.
Our Recommendation
We currently have an Outperform recommendation on Optimer. The stock carries a Zacks #1 Rank (short-term “Strong Buy” rating).
We are very positive about the FDA approval and subsequent launch of Dificid. Dificid scores better than currently available treatment options on many parameters. Particularly, we believe the inclusion of superior recurrence benefits over Vancocin in the product label will provide valuable benefit and help Dificid sales. Dificid is the first drug to be approved in almost 25 years for the treatment of CDAD and thus targets a market with significant unmet need. Further, the deals with Cubist Pharmaceuticals (CBST) and Astellas bode well for Optimer as it will benefit from their experience in marketing hospital based antibiotics. Moreover, these partnerships should maximize the impact of Dificid’s commercial launch.
