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Tetraphase Pharma Shares Plunge After Antibiotic Fails Late-Stage Trial

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Tetraphase Pharma Shares Plunge After Antibiotic Fails Late-Stage Trial
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Tetraphase Pharmaceuticals Inc (NASDAQ: TTPH)'s Ignite3 trial evaluating the company's lead drug candidate eravacycline for treating complicated urinary tract infections, or cUTIs, failed to ace a late-stage trial.

At last check, the shares were plunging nearly 61 percent to $2.12.

Ignite3 Fails to Ignite Shares

The Ignite3 trial evaluated the efficacy and safety of once-daily intravenous eravacycline compared to ertapenem for treating patients with cUTIs. The trial did not achieve statistical non-inferiority of eravacycline to ertapenem, the company said in a release.

The trial failed to meet the co-primary efficacy endpoints of responder rate in the microbiological intent-to-treat population at the end-of-IV treatment visit and at the test-of-cure visit, evaluated using a 10-percent non-inferiority margin.

On the safety front, the candidate was found to be well-tolerated.

See also: 19 Biotech Stocks With Clinical Trial Outcomes In February

The Way Forward

Tetraphase Pharma said it is moving ahead with its registration strategy for eravacycline in complicated intra-abdominal infections, or cIAI. The company now has a NDA pending before the FDA and an MAA under review by the EMA in Europe, based on positive outcomes from Ignite1 and Ignite4 Phase 3 clinical trials in cIAI.

Assuming regulatory approvals, the company said it is preparing for the commercialization of eravacycline as a treatment for cIAI.

BMO Removes cUTI Revenues From Model

Following the failed trial results, BMO Capital Markets analyst Ian Somaiya removed revenues associated with the cUTI indication and retained only sales in cIAI.

The firm downgraded the shares of the company from Outperform to Market Perform and lowered its price target from $24 to $2.75.

One possible reason for the negative results could be the enrollment of more cUTI pathogens than expected, for which eravacycline has been shown to be less potent relative to ertapenem, Somaiya said.

"We remain optimistic about IV eravacycline for cIAI, where we expect a positive regulatory decision in 3Q18 to support a $400-million opportunity, conservatively," the analyst said.

"Lack of insight into reasons for the trial's failure and more limited opportunity in cIAI could keep shares rangebound in the near term."

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Latest Ratings for TTPH

DateFirmActionFromTo
Sep 2018WBB SecuritiesUpgradesSpeculative BuyBuy
Aug 2018B. Riley FBRMaintainsBuyBuy
Aug 2018H.C. WainwrightMaintainsBuyBuy

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