Tetraphase Shares Rise Amidst Positive Results Of A New 'Superbug' Fighting Drug

Tetraphase Pharmaceuticals Inc TTPH shares rose 17.5 percent in after-hours trading on December 17 after the company announced its antibiotic to treat complicated intra-abdominal infections proved to be successful in a late-stage study. In fact, the antibiotic was just as effective as Merck & Co Inc’s ertapenem.

Shares are up more than 14 percent on Thursday.

The antibiotic, called eravacycline, is meant to treat infections caused by gram-negative bacteria, a type of antibiotic-resistant pathogens mostly knows as superbugs. In addition, Tetraphase is seeking to apply for U.S. regulatory approval of the drug by the end of 2015.

If approved, the drug will be in competition with a variety of new superbug-fighting antibiotics, including drugs from Cubist Pharmaceuticals, Actavis Plc and AstraZeneca Plc.

On December 18, Needham analyst Alan Carr reiterated a Buy rating and raised his price target from $28 to $46 on Tetraphase following the company’s positive results on eravacycline.

He noted, “Considering clinical safety and efficacy profile, surveillance data, and IV/oral flexibility, we believe eravacycline will be well-positioned in the Gram-negative space relative to current options, including carbapenems, and other late-stage antibiotics. We assume launch in 2H16.”

In addition, “We reiterate our BUY rating and raise our target to $46, based on 25x our $3.68 2020 EPS estimate, discounted 15 percent annually.”

Carr has made 65 successful ratings out of 96 total recommendations this past year, earning a 68 percent success rate and a +37.4 percent average return with no benchmark.

Brean Capital analyst Jonathan Aschoff also reiterated a Buy on Tetraphase and set a $50 price target following the successful results of the drug.

Over the past year, Aschoff has made 75 successful ratings out of 120 total recommendations, earning a 63 percent success rate and a +12.1 percent average return per recommendation.

On average, the top analyst consensus for Tetraphase is a Strong Buy.