Forest's antibiotic looks value for money as filing approaches

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Forest Laboratories reported positive phase III results from the final set of trials of its most valuable pipeline asset on Friday, the broad spectrum cephalosporin antibiotic ceftaroline; encouraging news for the product which will be filed with US regulators by the end of the year.

Although four successful pivotal trials have now been completed, in complicated skin and skin structure infections (cSSSI) and now community-acquired bacterial pneumonia (CAP), the FDA’s disappointing track record with new antibiotics in the last year will be tempering hopes for a swift approval. This is a shame, because analysts believe the drug’s potential certainly justifies the $480m Forest paid for it a little over two years ago, and the sooner a return on that investment is made the better.

Forest gained ceftaroline though the January 2007 acquisition of privately-owned Cerexa. As well as ceftaroline, which was about to enter phase III, Cerexa had another pre-clinical injectable antibiotic called ME1036, which is now in phase I.

Analysts have pencilled in sales of $240m for ceftaroline, or PPI-0903, by 2014. Based on that consensus the product has a value of $600m, according to EvaluatePharma’s NPV Analyzer, well above the purchase price of Cerexa.

Rising value?

The new clinical data could certainly prompt upgrades and boost the value of the drug further. Ceftaroline was found to be statistically non-inferior to ceftriaxone, a widely used and generically available cephalosporin, in both CAP trials. The integrated clinical cure rates were 84.3% and 77.7% respectively. Adverse event rate and discontinuations were similar between each group.

The drug will be filed in both cSSSI and CAP, and its progress in front of regulators, given the abject failure of other promising looking candidates last year, will be closely watched (Therapeutic focus - recent antibiotic setbacks disappointing for already slow field, November 27, 2008).

Encouragingly, all trials were successful using a 10% non-inferiority margin, which the FDA has now deemed acceptable for both indications.

Plus, for cSSSI an important measure is the proportion of patients with severe infections. In Forest’s trials over 30% had an MRSA infection, and the clinical cure rate was 93.3% for this group. This will hopefully be enough, however this section of the data will be closely scrutinised, and has derailed a number of antibiotics recently.

For a drug that wants to get the anti-MRSA claim on its label, regulators are demanding sufficient evidence of efficacy in hard-to-treat cases, as Targanta Therapeutics found with oritavancin, now owned by The Medicines Company, which was knocked back late last year (Targanta takes on a challenge and vows to continue with oritavancin, December 10, 2008).

Ceftaroline has fast track designation for the treatment of cSSSI caused by MRSA, so there is a good chance the filing will be granted a priority review. This could mean a decision mid-2010.

Advisory panel?

An advisory panel called to assess the drug could delay the decision, but whether this will take place is uncertain. Although the regulator asked its experts to assess three new antibiotics last year; oritavancin, televancin and iclaprim, none of which were subsequently approved, it scrapped plans for a review of Basilea’s ceftobiprole, a new cephalosporin like ceftaroline. Ceftabirpole, or Zevtera, also has not yet been approved, but because of data integrity issues rather than doubts about safety or efficacy.

Therefore few conclusions could be drawn should a panel be called to assess ceftaroline, other than increasing the likelihood of a potential delay whilst experts are gathered.

With Forest facing their precipitous patent cliff in 2012 when Lexapro goes off patent, a swift approval process would be helpful. However, recent experience with the FDA suggests that investors should be expecting hold ups.

Still, if all does go well, ceftaroline will be entering a much less crowded field than was anticipated this time last year. The product certainly has the potential to offer investors a growth story to focus on.

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