Theravance on a High

In a quantum achievement, Theravance (THRX - Analyst Report) received approval from the US Food and Drug Administration (FDA) to market its Vibativ (telavancin) for complicated skin and skin structure infections (cSSSI) caused by Gram-positive bacteria.

Vibativ, jointly developed with Japan’s Astellas Pharma, is expected to hit the US market by end of this year. While the drug will be marketed and sold by Astellas, Theravance will receive royalties on global sales. In the U.S., the company will help Astellas in marketing the drug for the first three years post approval.

Apart from cSSSI, Vibativ is also being studied for hospital-acquired pneumonia (HAP). The company has already submitted a New Drug Application (NDA) for this indication and has been assigned a Prescription Drug User Fee Act (PDUFA) date of Nov. 26.

The approval for the cSSSI indication comes after a series of delays and a long waiting period since Theravance submitted the NDA in December 2006. Despite receiving an approvable letter from the FDA in October 2007 and a favorable recommendation from the FDA advisory panel in November 2008, the final approval for the drug came after nearly three years.

Last February, the company received a complete response letter from the FDA seeking detailed information related to the treatment of cSSSI. The letter called for Risk Evaluation and Mitigation Strategy data on patients with certain renal risk factors from the cSSSI and HAP studies, revision to the draft label and a customary safety update. Theravance submitted its response in March, which the FDA subsequently accepted in April and set Sept. 16 as the PDUFA date.

Although this approval is a major achievement for Theravance, we remain concerned about competition from other drugs targeting Gram-positive bacterial infections. Vibativ will have to jostle for space against products like ViroPharma's (VPHM - Analyst Report) Vancocin, Cubist Pharmaceutical's (CBST - Snapshot Report) Cubicin, Pfizer's (PFE - Analyst Report) Zyvox and Wyeth's (WYE) Tygacil. The drug will also have to fight off competition from pipeline candidates such as Johnson & Johnson's (JNJ - Analyst Report) ceftobiprole and Forest Laboratories' (FRX - Analyst Report) ceftaroline. We estimate an initial slow sales ramp of Vibativ.