Yesterday’s failure of the Ignite 3 trial compounds the already serious concerns over Tetraphase’s eravacycline. The blow-up, concerning an IV formulation of the antibiotic, suggests pharmacokinetic problems for both this and the oral form that had flunked a separate trial last year.
But eravacycline still has a shot at US and EU approvals this year, and with Tetraphase’s valuation falling below cash investors could see the setback as a buying opportunity. They would, however, have to contend with a far smaller market opportunity than before, and problems should Tetraphase try to raise cash.
Eravacycline’s approval opportunity comes in intra-abdominal infections, where the IV form had succeeded in two studies, most recently the Ignite 4 trial last July. An EU filing was validated in August, while a US application was submitted last month, implying FDA action by September assuming an eight-month review.
Indication, not formulation?
Ignite 3 focused on urinary tract infections, and its failure mirrors that of Ignite 2, an IV–to-oral switch study. At the time Tetraphase blamed low bioavailability of the oral formulation, but yesterday’s Ignite 3 flop suggests that the problems were broader.
Stifel analysts wrote that failure of the oral and IV forms was likely due to pharmacokinetic and tissue distribution problems. On an analyst call Larry Tsai, Tetraphase’s chief medical officer, admitted: “We had expected that levels of eravacycline in the urine would be sufficiently high to treat urinary tract infections. Clearly they were not.”
He said he thought the unique in vitro potency of eravacycline would have allowed problems of low renal clearance to be overcome. However, he insisted that there was no read-through to intra-abdominal infections, so investors are being invited to believe that the problem is the indication, not eravacycline’s formulation.
“It is not uncommon for an antibiotic to be effective in one indication and not effective in another, [owing] to differences in drug concentrations at the site of infection,” said Mr Tsai.
A separate issue is the setting of percentage boundaries for the purpose of demonstrating non-inferiority in clinical trials of antibiotics. In Ignite 3 these were set at 10%, based on analysis of an earlier trial.
It will not go unnoticed that, had Tetraphase used the 12.5% margin it had applied to Ignite 4 – not to mention the 15% used by its rival Achaogen – Ignite 3 would have read out positively. Still, Ignite 4 and Achaogen’s Epic trial both yielded broadly similar data for the active and comparator arms, whereas in Ignite 3 eravacycline was clearly numerically worse.
|Selected trials of novel antibiotics|
|Antibiotic||Company||Study||Use||Comparator||Non-inferiority margin||Result in ITT population*||Trial ID|
|Plazomicin||Achaogen||Epic||cUTI||Meropenem||15.0%||3.4% worse (success)||NCT02486627|
|Omadacycline||Paratek||Optic||CABP||Moxifloxacin||10.0%||1.9% worse (success)||NCT02531438|
|Eravacycline||Tetraphase||Ignite 4||cIAI||Meropenem||12.5%||0.4% worse (success)||NCT02784704|
|Eravacycline||Tetraphase||Ignite 3||cUTI||Ertapenem||10.0%||10.5% worse (fail)||NCT03032510|
|Note: *Comparison of clinical cure rates; cUTI=complicated urinary tract infections; cIAI=complicated intra-abdominal infections; CABP=community-acquired bacterial pneumonia.|
On the analyst call Tetraphase management admitted that there was no longer a path forward in urinary tract infections. Stifel said this would remove $275m from peak sales projections, which as a result now stand at a still considerable $350m.
There are numerous problems, however, including the elimination of a potentially significant opportunity that an oral form would have given, and increasing long-term financing concerns. Tetraphase had $161m in the bank at the end of the third quarter, and expects current cash to last only until the end of 2018, so without a share price boost a deeply discounted equity raise is a risk.
After this morning’s 50% fall Tetraphase’s market cap stands at around $140m, so effectively the market is assigning zero value to the group’s pipeline. This is clearly an opportunity for anyone believing in eravacycline’s use in intra-abdominal infections, though a bet would admittedly require nerves of steel.