Cempra/Toyama Ink Deal

Zacks

Cempra, Inc. (CEMP) recently entered into an exclusive license and development agreement with a Japanese company, Toyama Chemical Co., Ltd., a subsidiary of FUJIFILM Holdings (FUJIY) for an antibiotic candidate, solithromycin (formerly known as CEM -101).

As per the terms of the agreement, Cempra has licensed Toyama Chemical exclusive rights to develop and market solithromycin in Japan in exchange of an upfront payment of $10 million and milestone payments up to $60 million, depending on the achievement of certain targets. Cempra will also be eligible to receive tiered royalties on net sales of solithromycin in Japan.

We note that solithromycin is in development for community-acquired bacterial pneumonia (:CABP) and gonorrhea. Currently a phase III trial is ongoing evaluating the use of oral solithromycin in moderate-to-moderately severe CABP. Cempra expects to release top-line results from the phase III trial in the first half of 2014.

In the phase II trials evaluating oral solithromycin for CABP, the candidate demonstrated encouraging efficacy and tolerability profile. In the phase I dose-escalation studies in healthy volunteers solithromycin was found to be safe and well tolerated.

The company is also planning to initiate an intravenous-to-oral solithromycin phase III trial in CABP patients in the second half of 2013.

Cempra carries a Zacks Rank #3 (Hold). Other stocks with a favorable Zacks Rank include Alkermes (ALKS) and Cubist Pharmaceuticals Inc. (CBST). While Alkermes carries a Zacks Rank #1 (Strong Buy), Cubist Pharma carry a Zacks Rank #2.

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