A Pipeline Story
In our latest issue of Wong’s BioTech Stock Report, we focused on five biotech companies that have been able to weather the summer’s doldrums because of the depth of their pipeline, and key products that address markets with unmet needs. With promising pipelines and near-term catalysts, we envision these companies’ stock prices will appreciate in the next 6-12 months.
For example, Theravance (NASDAQ: THRX). Theravance’s key product is Telavancin which is structurally similar to vancomycin, a potent and widely used antibiotic. But Telavancin has an additional, novel mechanism of action: causes leakage of intracellular elements. This additional mechanism of action contributes to bactericidal (rapidly kills bacteria) activity compared to the primarily bacteriostatic (inhibits bacteria from spreading) activity of vancomycin. For Telavancin, this improvement provides a less frequent dosing, once-per-day vs. twice per-day, and may help inhibit the development of bacterial resistance.
Telavancin is in Phase III development and has fast-track status for the treatment of complicated skin and skin structure infections (cSSSI) along with hospital acquired pneumonia (HAP). Telavancin’s activity in the lung should allow it to penetrate the HAP market without competing with Cubist’s (NASDAQ: CBST) Cubicin, a likely key competitor in the cSSSI market that is not effective in HAP. In Phase III trials, Telavancin is being tested for non-inferiority to standard therapy as the primary endpoint, and superiority to vancomycin in MRSA (methicillin-resistant S. aureus) infections as a secondary endpoint. While Telavancin’s greatest potential is in cSSSI and HAP indications to demonstrate non-inferiority to standard therapy (the standard endpoint in antibiotic clinical trials) in Gram positive infections, Theravance is also going after superiority of Telavancin over vancomycin in MRSA infections. A claim of superiority could give a significant competitive advantage once the drug is on the market. Data should be available from the Phase III telavancin studies in cSSSIs in the third quarter of 2006 with the potential of a year end NDA submission to the FDA. For HAP, patient enrollment is anticipated to be completed in the fourth quarter of 2006.
A growing product pipeline, potentially limited development and marketing expenses, and late-stage products with significant sales potential and favorable economics, make Theravance a unique and attractive investment opportunity. To read more about Theravance and the other four companies, subscribe to Wong’s BioTech Stock Report.
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