Hot Watch List (comments).

OPTR (buy)

March 16, 2011 by BiotechInvest

I know that this time is not good for investment in biotech (may be only in CBLI because of recent radiation treat in Japan). However we have some binary events in April.

The FDA has granted to OPTR six-month priority review for Fidaxomicin, our lead product candidate, is a new antibiotic with a novel mechanism of action being developed for the treatment of Clostridium difficile infection or CDI, the most common nosocomial, or hospital acquired, diarrhea.
FDA has assigned a Prescription Drug User Fee Act, or PDUFA, goal date of May 30, 2011 for its review of the NDA. The FDA also informed OPTR that it plans to discuss the NDA at a meeting of its Anti-Infective Drugs Advisory Committee currently scheduled for April 5, 2011.

OPTR said:

"Fidaxomicin acts by inhibiting RNA polymerase, a bacterial enzyme, which results in the death of specific bacteria such as C. difficile. We currently hold rights to fidaxomicin in all regions of the world except for Europe and certain other countries in the Middle East, Africa and the Commonwealth of Independent States, or CIS.

In February 2011, we entered into an exclusive collaboration and license agreement with Astellas Pharma Europe Ltd., or Astellas, to develop and commercialize fidaxomicin in Europe and certain other countries in the Middle East, Africa and the CIS, which we refer to as the Astellas territory. In return for an exclusive license to fidaxomicin in the Astellas territory, Astellas paid to us an upfront cash payment of 50 million Euros, or $69.2 million, and we are eligible to receive additional cash payments totaling up to 115 million Euros upon the achievement of certain regulatory and commercial milestones. Furthermore, we will be entitled to receive escalating double-digit royalties ranging from the high teens to low twenties on net sales of fidaxomicin in the Astellas territory, if approved. Astellas will be responsible for all future costs associated with the development and commercialization of fidaxomicin in the Astellas territory including the costs associated with the Marketing Authorization Application, or MAA, for fidaxomicin in Europe. In connection with the collaboration and license agreement, we also entered into a supply agreement with Astellas pursuant to which we will be the exclusive supplier of fidaxomicin to Astellas in the Astellas territory and Astellas is obligated to pay us an amount equal to cost plus an agreed mark-up for such supply."

We have completed two fidaxomicin Phase 3 trials which showed that fidaxomicin achieved the primary endpoint of clinical cure and demonstrated a significantly lower recurrence rate and significantly higher global cure rate (defined as cure with no recurrence within four weeks of completing therapy) compared to Vancocin, the only FDA-approved antibiotic for the treatment of CDI. In the two Phase 3 trials, among subjects who had experienced a prior CDI episode and recurred within three months of entering the study, treatment with fidaxomicin resulted in a 47% reduction in repeat CDI recurrence compared to Vancocin (p=0.045). The data also indicated that treatment with fidaxomicin significantly improved the recurrence rate and global cure rate in CDI patients requiring concomitant antibiotics compared to Vancocin. Fidaxomicin was also well-tolerated in the trials. In February 2011, the New England Journal of Medicine published results from the first Phase 3 trial. We have also reported additional data from the second Phase 3 trial showing a clinically meaningful reduction in recurrence rates and higher global cure rates compared to Vancocin in both the hyper-virulent BI/NAP1/027 and the non-BI strain type subgroups. Clinical cure rates for fidaxomicin and Vancocin were similar in these two strain type subgroups.

It's very impressive results.

According to IMS Health, sales for antibiotics designed to treat serious infections caused by Gram-positive bacteria exceeded $1 billion in U.S. sales in 2007. Vancomycin sales were more than $380 million and accounted for 85 percent of the courses of therapy prescribed.

Thus, Fidaxomicin will compete with Vancomycin (Vancocin) that had annual sales $380M.

OPTR Market Cap: $544.68M and pps $11.80 i.e. this company is very good target for buyout. OPTR drug candidate pipeline is also very impressive.  

Disclosure: I don't have OPTR positions now. May be will buy OPTR before panel
(for short-term). I don't see the serious reasons for panel negative vote i.e. the probability of positive vote is >75%. However the upside potential can be not so big because of unhealthy market (25-30% spike on positive vote).

March 17, 2011 by BiotechInvest

I will buy OPTR today and keep it through panel meeting. OPTR has strong science basis and impressive pipeline. Will not say that this company is next DNDN. But OPTR new drug is effective. Physicians like new antibiotics because old ones become useless (bacteria elaborate the resistance very soon) so panel members should be positive. 

April 05, 2011 by BiotechInvest

"Panel voted 13-0 that fidaxomicin is safe and effective

* Panel divided on infection recurrence finding

SILVER SPRING, Md. , April 5 (Reuters) - Optimer Pharmaceuticals Inc's (OPTR.O) experimental antibiotic is safe and effective in treating a bacterial infection that causes diarrhea, a U.S. advisory panel said on Tuesday.

The advisory panel of 13 independent experts voted unanimously that the drug was effective but said there were concerns regarding the drug's use in pregnant women and children.

However, the panel was divided on whether the oral drug, fidaxomicin, was also effective in lowering the risks of recurrence of infection-related diarrhea.

Last week, the U.S. Food and Drug Administration staff said the drug was effective in fighting an infection that causes a life-threatening diarrhea. [ID:nN01111028]

The FDA is expected to give its decision on the drug by May 30. A positive vote by the panel does not guarantee an approval, but the agency usually follows panel recommendations."

So, OPTR drug won. Now OPTR is a perfect acquisition target for big pharma.  Should open at least at $20 ($13.80 before halt). May be buyout rumor will drive it to $25-30 level. At Market Cap: 637.27M OPTR is an easy target even for not for giant pharma.

April 07, 2011 by BiotechInvest

Well, it seems like that big pharmas are waiting for final FDA approval of fidaxomicin. OPTR PDUFA is May 30, but it may happen earlier.Definitely  I will keep OPTR through PDUFA because the probability of straight approval is close to 100%. Even if fidaxomicin take 50% of Vancomycin annual sales (i.e. $190-200M) OPTR will be already billion cap company with $25-30 pps. Add here Astellas Europe sales and 115M Euros milestone to OPTR. Then questions is here: Will Astellas acquire OPTR?

About Astellas

Astellas Pharma Inc., with global headquarters in Tokyo and US headquarters in Deerfield, Illinois, is a pharmaceutical company dedicated to improving the health of people around the world through the provision of innovative and reliable pharmaceutical products. The organization is committed to becoming a global pharmaceutical company by combining outstanding R&D and marketing capabilities and continuing to grow in the world pharmaceutical market.

Astellas was formed by the historical merger of Japan's third and fifth largest pharmaceutical companies - Yamanouchi, founded in 1923, and Fujisawa, founded in 1894. Today, Astellas is one of the largest pharmaceutical companies in Japan with a market capitalization of approximately $17.7 billion as of January 26, 2009, and, for the fiscal year ended March 31, 2008, net income of approximately $1.8 billion.

U.S. Employees 1,900 (May 2009)
North American Product Sales $1.9 billion (May 2009)*

"TOKYO -(Dow Jones)- Astellas Pharma Inc. (4503.TO) said Wednesday it has set its share offering price at Y3,050 per share."

Answer: Easy. For example for 50% premium of today ($13) price i.e. for $1B.

Disclosure: I have OPTR positions and will keep it through PDUFA.

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