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UPDATE 2-Tetraphase's antibiotic succeeds late-stage trial, shares rise
December 17, 2014 / 9:57 PM / 3 years ago

UPDATE 2-Tetraphase's antibiotic succeeds late-stage trial, shares rise

* Drug as effective as Merck's ertapenem in trial

* Company says will commercialize drug alone in U.S.

* Potential blockbuster say analysts

* Shares rise 17.5 pct in extended trading (Adds details from conference call, analyst quotes)

By Amrutha Penumudi

Dec 17 (Reuters) - Tetraphase Pharmaceuticals Inc said its antibiotic to treat complicated intra-abdominal infections was as effective as Merck & Co Inc's ertapenem in a late-stage study.

Tetraphase shares rose 17.5 percent in after-hours trading.

The drug, eravacycline, treats infections caused by gram-negative bacteria, a class of antibiotic-resistant pathogens commonly called superbugs.

Tetraphase is also testing the drug against Johnson & Johnson's levofloxacin to treat complicated urinary tract infections in another late-stage study, the results of which are expected in mid-2015.

The company said it is likely to apply for U.S. regulatory approval for eravacycline by end of next year.

If approved, the drug will compete with a slew of new superbug-fighting antibiotics, including Cubist Pharmaceuticals Inc's Zerbaxa, widely expected to get U.S. approval later this month. Actavis Plc and AstraZeneca Plc are also co-developing a drug.

However, analysts believe that there is space for more than one player in the market.

"The thing about these drugs is that its not a "one-size-fits-all" situation," Gabelli & Co analyst Kevin Kedra said. "Some drugs work better than others against certain bacteria."

Kedra said Tetraphase's drug had more convenient dosing than others, given that it needs to be taken twice a day compared with the three-times-a-day dosing for Cubist's drug.

Analysts, including Kedra and WBB Securities' Stephen Brozak, expect eravacycline to eventually rake in $1 billion in sales.

After decades of low investment in antibiotics, pharmaceutical companies are turning their attention back to this drug family due to the spread of superbugs.

The World Health Organization warned in April of "a post-antibiotic era" in which common infections would once again become killers.

Merck's offer to buy Cubist for $8.4 billion earlier this month "is good for the (antibiotic) space in general", Tetraphase CEO Guy MacDonald said, on a conference call.

MacDonald said Tetraphase was looking to commercialize eravacycline on its own in the United States and would look for partners abroad.

Tetraphase shares rose 17.5 percent to $38.99 in after-hours trading. They closed up 10.6 percent in regular trade on Wednesday on the Nasdaq, after touching a record high of $33.22 in the session. (Editing by Savio D'Souza)

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