Forest Laboratories, Inc. (FRX) recently boosted its anti-infective portfolio by signing an agreement with biotech company, Nabriva Therapeutics, for the development of the latter’s antibacterial candidate, BC-3781.
Under the agreement, Nabriva will receive $25 million from Forest Labs. Forest Labs will finance and conduct certain development activities in the next 12 months related to BC-3781 in collaboration with Nabriva.
Over this period, Forest Labs could exercise its exclusive right to acquire Nabriva. Other details regarding the agreement were not disclosed.
BC-3781, which belongs to a novel class of antibiotics (pleuromutilins), has the potential to be developed for the treatment of acute bacterial skin and skin structure infections (:ABSSSI) as well as community acquired bacterial pneumonia (:CABP). Positive phase IIb results on the candidate were presented in 2011 for the ABSSSI indication. BC-3781 is slated to move into phase III studies in 2013.
BC-3781 should fit in well with Forest Labs’ anti-infective products. We note that Forest Labs already has a product, Teflaro, for the treatment of patients suffering from acute bacterial skin and skin structure infection and community acquired bacterial pneumonia.
Neutral on Forest Labs
We currently have a Neutral recommendation on Forest Labs, which carries a Zacks #3 Rank (short-term Hold rating). The company is facing tough times with its lead product, Lexapro, losing patent protection.
We believe that Forest will continue to seek in-licensing and acquisition deals to grow its pipeline. We expect investor focus to remain on the sales ramp of new products. Forest will be facing another patent cliff in early 2015 when Namenda will lose patent protection putting $1+ billion at risk.Read the Full Research Report on FRX
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