Priority Review for CBST's Antibiotic

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Cubist Pharmaceuticals, Inc. (CBST) announced that its candidate tedizolid phosphate (TR-701), developed for the treatment of serious gram-positive infections including the ones caused by methicillin-resistant staphylococcus aureus (:MRSA), has been granted priority review status by the U.S. Food and Drug Administration (:FDA).

The antibiotic candidate, added to Cubist Pharma’s pipeline through its acquisition of Trius Therapeutics in Sep 2013, is being developed for both intravenous and oral administration. Cubist Pharma is looking to get tedizolid phosphate approved for treating acute bacterial skin and skin structure infections (:ABSSSI). The company had submitted the new drug application (:NDA) to the FDA in Oct 2013.

The FDA reviews applications for priority review designated drugs within eight months of submission as against the usual 12 months. Consequently, a decision from the FDA is expected by Jun 20, 2014. We note that the U.S. regulatory authority generally reviews those drugs, which offer major advances in treating diseases over existing therapies, on a priority basis.

Approval was sought on the basis of encouraging data from two phase III studies (ESTABLISH 1 and 2) on the candidate for the indication. EU as well as Canadian approval of the candidate in the ABSSSI indication is expected to be sought by Jun 30, 2014.

We note that tedizolid phosphate became eligible for priority review status following its qualified infectious disease product (:QIDP) designation granted by the FDA for the ABSSSI indication earlier in the year. The QIDP designation is a part of the Generating Antibiotic Incentives Now (GAIN) Act, which falls under the 2012 FDA Safety and Innovation Act (:FDASIA).

With tedizolid phosphate being designated a QIDP, Cubist Pharma will benefit from incentives other than priority review. Tedizolid phosphate will be eligible for the FDA's "fast track" status and will enjoy an additional five years of exclusivity once it is approved. Apart from Cubist Pharma, companies such as The Medicines Company (MDCO) have also benefited from the signing of the GAIN act.

Cubist Pharma, a biopharmaceutical company, currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the biopharma space include Vanda Pharmaceuticals, Inc. (VNDA) and Jazz Pharmaceuticals (JAZZ). Both these stocks carry a Zacks Rank #1 (Strong Buy).

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