FDA approves Cubists' drug for antibiotic-resistant bacteria

[December 22, 2014]  By Amrutha Penumudi and Rosmi Shaji

(Reuters) - Cubist Pharmaceutical Inc's drug to treat complicated urinary tract and intra-abdominal infections won U.S. approval on Friday, highlighting the regulator's interest in tackling the growing threat of the so-called superbugs.

Cubist shares were up 1.9 percent in extended trading.

The drug, Zerbaxa, treats infections caused by gram-negative bacteria — a type of antibiotic-resistant pathogens, often called superbugs.

These have been linked to 23,000 deaths and 2 million illnesses every year in the United States, and up to $20 billion in direct healthcare costs.

"The drug is also effective against pseudomonas, a difficult to treat pathogen," Cantor Fitzgerald analyst Irina Koffler told Reuters ahead of the decision.

Zerbaxa was a major driver behind Merck & Co's offer to buy Cubist for $8.4 billion earlier this month.

The approval is significant for Cubist, whose main product, Cubicin, lost patent protection earlier than expected after a federal court invalidated four of its patents.

Zerbaxa is the fourth new antibacterial drug approved by the FDA this year. The agency approved Actavis Plc's Dalvance in May, Cubists' Sivextro in June and The Medicines Co's Orbactiv in August. (http://1.usa.gov/1CeJqhC)

Cubist has earlier said it expects European approval for Zerbaxa during the second half of 2015.

Zerbaxa is expected to reach peak sales of $1.15 billion in 2023 and will be priced around $5,000-$6,000 per patient, analysts including Koffler said.

However, the drug would be used selectively at first as it will cost more, she added.

"Physicians often prefer to hold new antibiotics in reserve, using them when other options have failed," Needham analyst Alan Carr said.

Zerbaxa also faces competition from several other companies, including AstraZeneca Plc and Actavis Plc. The companies' rival drug is being reviewed by the FDA, which is expected to reach a decision in the first quarter of 2015.

Tetraphase Pharmaceuticals Inc is also developing a drug for complicated intra-abdominal infections and complicated urinary tract infection, but with a lower dosage than that of Cubists'.

(Reporting by Amrutha Penumudi and Rosmi Shaji in Bengaluru; Editing by Sriraj Kalluvila and Joyjeet Das)

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