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Cubist sales force seen as potential boon for Merck intestinal drug

By Ransdell Pierson

Dec 9 (Reuters) - In its planned purchase of antibiotics maker Cubist Pharmaceuticals Inc, Merck & Co will gain a sales force well placed to propel its own experimental drug for an intestinal bug, C. difficile, that is a scourge among hospital patients.

Merck announced on Monday an agreement to buy Cubist for $8.4 billion, with a focus on Cubist's drugs that address the growing threat of bacteria that are resistant to conventional antibiotics.

As many as 14,000 Americans die each year from C. difficile infections, which are spread by spores in hospitals. They take root in patients who have been treated with broad-spectrum antibiotics that kill off "friendly" bacteria in the gut, allowing C. difficile bacteria to multiply.

C. difficile can cause colitis, including attacks of diarrhea and fever that can recur and are not well controlled by current treatments.

Merck's experimental drug, called MK-3415A, combines two antibodies that chew up deadly toxins produced by C. difficile. New data on its effectiveness is expected from two late-stage clinical trials in 2015.

If the data is favorable, Merck could seek approval of the drug - the first antibody treatment for bacterial toxins - by early 2016.

"This is a blockbuster market opportunity for Merck," said Kevin Kedra, an analyst for Gabelli & Co. Cubist's expertise in turning its biggest product, the antibiotic Cubicin, into a $1 billion-a-year franchise could bode well for Merck.

"Cubist is a company that built itself into an antibiotic power when bigger companies were getting out the business," Kedra said.

Adam Schechter, head of global human health at Merck, said Cubist's sales force would strengthen Merck's relationships with insurers, gastroentrologists, infectious disease doctors, hospitals and outpatient centers.

Cubist has the best-selling treatment for the condition, Dificid, but up to 15 percent of patients have relapses, sending many of them back to the hospital for retreatment. It also faces competition from far cheaper generics, including vancomycin.

If Merck's treatment is approved, it is more likely to face competition down the road from products containing human fecal matter. The "fecal transplants," which reintroduce healthy bacteria into the gastrointestinal tract, have proven extremely effective. But it could take years for a commercial version to be approved.

"Merck couldn't have a better infrastructure than Cubist to launch its drug," said Ori Hershkowitz, a Tel Aviv-based partner for Sphera Funds. "They know how to negotiate the healthcare system." (Reporting by Ransdell Pierson; Editing by Leslie Adler)