Recently, Optimer Pharmaceuticals, Inc. (OPTR) received a boost when its candidate fidaxomicin, which is being developed for treating adults suffering from clostridium difficile infection (CDI), fared well in late-stage multi-center, randomized, double-blind studies (n=1,164).
Results from the trials, presented at the 50th annual interscience conference on antimicrobial agents and chemotherapy in Boston, revealed that fidaxomicin was superior to vancomycin in treating CDI recurrence and in reducing the probability of another relapse. Vancomycin is the only US Food and Drug Administration (FDA) approved antibiotic for the treatment of CDI. Fidaxomicin scored better than Vancocin in terms of both recurrence and global cure rates.
We note that CDI is the most common nosocomial or hospital-acquired diarrhea. CDI is a serious illness caused by infection of the inner lining of the colon by C. difficile bacteria that produces toxins resulting in inflammation, severe diarrhea and sometimes death. CDI accounts for approximately 20% of the antibiotic-associated diarrhea incidences as well as number of cases of antibiotic-associated colitis. The anti-infective market is one of the largest therapeutic categories worldwide.
Optimer intends to file a New Drug Application (NDA) with the US Food and Drug Administration (FDA) later in the year. The candidate enjoys fast track status from the FDA for the treatment of CDI. Last month, the European Medicines Agency accepted the Marketing Authorization Application (MAA) fidaxomicin for the same indication.
While the company currently holds worldwide rights to fidaxomicin, it is on the lookout for a suitable partnership deal for the commercialization of fidaxomicin in Europe. Leading financial holding company, JP Morgan (JPM) has been engaged to help Optimer find a partner in Europe.
Our Take
Apart from fidaxomicin, Pruvel, an antibiotic currently in phase III trials for the treatment of travelers’ diarrhea (a form of infectious diarrhea), is another interesting candidate at Optimer. Although we are optimistic about the prospect of both these drugs in terms of their clinical trial results and regulatory approvals, we are very concerned about the competition in this area. We believe the initial sales ramp for these products will be slow. Furthermore, the excessive dependence of the company on these two candidates also concerns us.
Our Recommendation
Optimer currently has a Zacks #3 Rank, which translates into a short-term Hold rating. We are also Neutral on the stock in the long term. Our Neutral stance indicates that the stock is expected to perform in line with the US equity market over the next 6+ months. We advise investors to retain the stock over the time period.
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