Good News for Cubist Pharma - Analyst Blog

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Cubist Pharmaceuticals Inc. ( CBST ) received some encouraging news recently when the US Food and Drug Administration (FDA) accepted two of the company's antibiotic candidates, CXA-201 and CB-315, as qualified infectious disease products (QIDP) under the Generating Antibiotic Incentives Now (GAIN) Act.

We note that Cubist Pharma applied to the FDA for granting QIDP designation to CXA-201 and CB-315 earlier in the year. The positive response from the US regulatory body would qualify CXA-201 and CB-315 for a five-year extension of Hatch-Waxman exclusivity (on approval), priority review and eligibility for fast-track designation.

We note that the GAIN act was signed into law by the US president in July 2012 as part of the FDA Safety and Innovation Act (FDASIA). The signing of the GAIN Act should benefit companies pursuing the development of novel antibiotics. Companies such as The Medicines Company ( MDCO ) and Optimer Pharma ( OPTR ) apart from Cubist Pharma stand to benefit from the signing of the act.

We note that CXA-201 is undergoing late-stage studies for complicated intra-abdominal infections and complicated urinary tract infections caused by gram-negative bacterial infections. The QIDP status granted by the FDA is applicable to CXA-201 being developed as a therapy for complicated intra-abdominal infections. CB-315 is undergoing phase III studies for treating patients suffering from clostridium difficile-associated diarrhea (CDAD).

Apart from CXA-201 and CB-315, CB-5945 is another interesting late-stage candidate at Cubist Pharma. CB-5945 is being developed for treating opioid-induced constipation in patients with chronic non-cancer pain.

We believe that the pipeline at Cubist Pharma has to deliver since it is currently highly dependent on Cubicin (daptomycin) for growth. Cubicin is marketed in the US and several other markets for the treatment of severe bacterial infections of the skin and bloodstream. Moreover, Entereg, which was added to Cubist Pharma's portfolio following the acquisition of Adolor Corporation, is marketed by Cubist Pharma to expedite gastrointestinal recovery following bowel resection surgery.

Furthermore, Cubist Pharma derives service revenues from its two-year agreement with Optimer for the co-promotion of Optimer's Dificid (fidaxomicin) in the US. Dificid is marketed for treating patients suffering from CDAD.

Our Recommendation

We currently have a Neutral recommendation on Cubist Pharma. The stock carries a Zacks #3 Rank (Hold rating) in the short run.



CUBIST PHARM (CBST): Free Stock Analysis Report

MEDICINES CO (MDCO): Free Stock Analysis Report

OPTIMER PHARMAC (OPTR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: CBST , GAIN , MDCO , OPTR

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