Cubist Gets Priority Review from FDA for Antibiotic Candidate - Analyst Blog

Cubist Pharmaceuticals CBST, which is expecting the FDA to approve its antibiotic candidate Sivextro today, received encouraging news yesterday on another pipeline candidate, ceftolozane/tazobactam. The FDA stated that it will review Cubist's New Drug Application (NDA) for ceftolozane/tazobactam on a priority basis and assigned a target date of Dec 21, 2014. We expect the market to react positively to the news on ceftolozane/tazobactam.  

Cubist is looking to get the candidate approved for treating complicated urinary tract and intra-abdominal infections. We remind investors that the NDA was submitted by Cubist to the FDA in April this year. The NDA was submitted on the basis of positive results from two phase III studies. EU approval of ceftolozane/tazobactam will be sought in the latter half of the year for the same indications. We expect the candidate to gain approval.

Sivextro is on the verge of gaining approval with a decision expected today. We believe that the FDA will render a favorable decision on Sivextro, making it the third approved antibiotic in Cubist's portfolio.

We note that in Mar 2014, the Anti-Infective Drugs Advisory Committee of the FDA unanimously (14-0) recommended the approval of the candidate for the treatment of acute bacterial skin and skin structure infections. The advisory panel's favorable view on the antibiotic was based on encouraging safety and efficacy data from two global phase III studies (ESTABLISH 1 and ESTABLISH 2). Data revealed that the candidate was non-inferior to Pfizer's PFE Zyvox, requiring less frequent dosing and a shorter treatment period.

Furthermore, the candidate is under review in the EU for the complicated skin and soft tissue infections indication. A final decision from the European Commission is expected in the first half of 2015.

The company expects to have four antibiotics (ceftolozane/tazobactam, Sivextro in addition to the already approved Cubicin and Dificid) in the market by 2015. The company intends to spend approximately $400 million in 2014 alone to develop its antibiotic pipeline. Surotomycin is another interesting phase III candidate in the company's pipeline. It is being developed for treating C. difficile acquired diarrhea. We expect investor focus to remain on updates regarding Cubist's antibiotic portfolio going forward.

Cubist carries a Zacks Rank #3 (Hold). Gilead Sciences GILD and Regeneron Pharmaceuticals REGN are better-ranked stocks in the healthcare sector, sporting a Zacks Rank #1 (Strong Buy).

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