Optimer's Dificlir Cleared in EU - Analyst Blog

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Optimer Pharmaceuticals, Inc. ( OPTR ) and partner Astellas Pharma recently announced that their antibiotic Dificlir received approval in the European Union ( EU ), not belying expectations. The European Medicines Agency (EMA) cleared Dificlir for the treatment of clostridium difficile-associated diarrhea (CDAD) also known as clostridium difficile infection ( CDI ). CDAD is the most common nosocomial or hospital-acquired diarrhea and is a significant malaise in hospitals and nursing home facilities. The EU approval does not surprise us since in September this year Dificlir received a positive opinion from the Committee for Medicinal Products for Human Use ( CHMP ) of the EMA.

Dificlir is already marketed as Dificid in the US for CDAD in partnership with Cubist Pharmaceuticals, Inc. ( CBST ). The European regulatory body's decision was based on data from two late stage studies which showed that Dificlir was non-inferior to ViroPharma 's ( VPHM ) Vancocin (the only other approved antibiotic for the treatment of CDI). The studies showed that Dificlir achieved clinical cure in a comparable number of patients as Vancocin at the end of 10 days of treatment. In addition, data showed that Dificlir led to a statistically lower CDI recurrence rate over Vancocin through 30 days post treatment. Similar to the US, the Dificlir label will also include superior recurrence benefits than Vancocin.  We believe this will give a fillip to Dificlir sales marking a clear differentiation from existing options.

Optimer has an exclusive collaboration and license agreement with Astellas Pharma for the development and commercialization of Dificlir in Europe and certain other countries in the Middle East, Africa and Commonwealth of Independent States ( CIS ).


We remind investors that Optimer is entitled to receive 40 million euros on approval of Dificlir and another 10 million euros on commercial launch of the drug which could result in increased cash flows for the company. Optimer is also entitled to receive other milestone payments as well as high-teens to low-20% royalties on ex-US sales from Astellas.

Our Recommendation

We currently have a Neutral recommendation on Optimer. The stock carries a Zacks #3 Rank (short-term "Hold" rating).

We are encouraged by the EU approval of Dificlir as well as the strong launch of Dificid in the US. Dificid scores better than currently available treatment options on many parameters. Particularly, we believe the inclusion of superior recurrence benefits over Vancocin in the product label will provide valuable benefit and help Dificid/Dificlir sales. Dificid is the first drug to be approved in almost 25 years for the treatment of CDAD and thus targets a market with significant unmet need. However, we prefer to stay on the sidelines until we gain more visibility on the commercial launch of the drug. Moreover, Optimer is highly dependent on Dificid for its success. Following termination of development of Pruvel, the company hardly has anything in its pipeline. Consequently, if Dificid fails to impress, the company will have little to fall back on. Moreover, the huge up-tick in SG&A expenses concerns us.


 
CUBIST PHARM ( CBST ): Free Stock Analysis Report
 
OPTIMER PHARMAC (OPTR): Free Stock Analysis Report
 
VIROPHARMA (VPHM): 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 , CDI , CHMP , CIS , EU

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