Theravance/NASDAQ: THRX reported additional results from the ATLAS 1 and ATLAS 2 pivotal trials of telavancin for the treatment of complicated skin and skin structure infection (cSSSI). Both trials met their primary endpoint, demonstrating noninferiority to vancomycin, but missed the co-primary endpoint of superiority to vancomycin in the tough to treat MRSA (methicillin-resistant Staphylococcus aureus). While efficacy results for telavancin were numerically higher than for vancomycin they were not statistically superior, though a positive trend was seen. Nonetheless, these results will support the NDA submission for telavancin later this year. Furthermore, the cSSSI indication is an entry point for telavancin in the market. Hospital acquired pneumonia (HAP) is the much more significant opportunity for telavancin. The HAP market offers telavancin the opportunity to generate U.S. sales of $160 million in 2010, almost double the estimate of $85 million for the cSSSI indication. Telavancin’s activity in the lung observed so far, should allow it to penetrate the HAP market without competing with Cubicin, a competitor in the cSSSI market that is not effective for HAP. The release of top line results from the two HAP trials should happen in the first half of 2007.
Theravance has had a good run since July 2006 with its share price gaining about 30%. It appears Theravance’s momentum shows no sign of slowing down, but for those lucky investors who own shares of this company, it will not hurt to take some money off the table.
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