Novartis Acquires Antibiotic Rights

Today, Novartis (NVS - Snapshot Report) acquired exclusive worldwide rights to PTK 0796, a broad spectrum antibiotic from a privately held company, Paratek Pharmaceuticals. The drug is meant for the treatment of infections caused by drug-resistant bacteria such as methicillin-resistant Staphylococcus aureus (MRSA) and multi-drug resistant Streptococcus pneumoniae (MDRSP). PTK 0796, being a broad spectrum antibiotic, could be used as a single agent against a range of bacteria unlike other antibiotics, which may have to be used in combination.

Although we are yet to know the exact financial terms of the deal, Novartis will be making an upfront payment to Paratek in addition to future milestone payments and royalties. Both the companies will share the costs and responsibilities related to the drug’s development. A phase III trial for the drug is being conducted for the treatment of complicated skin and skin structure infections (cSSSI).

Clinical studies conducted on more than 500 patients have shown that PTK 0796 has a favorable safety and tolerability profile. A phase II study in cSSSI found better clinical success rates for the drug compared to Pfizer’s (PFE - Analyst Report) Zyvox (98% for PTK 0796 vs 93% for Zyvox). We believe the results of the study are quite encouraging as PTK 0796 was used as a single agent, whereas Zyvox was used for Gram-positive infections only. An additional antibiotic had to be given with Zyvox for Gram-negative cases. In terms of adverse events, there was no relevant difference between the two.

The successful development of the drug should boost Novartis’ Immunology and Infectious Disease segment. The company has another drug, Cubicin (daptomycin) for the treatment of bacterial infections. There are many players targeting bacterial infections market - ViroPharma's (VPHM - Snapshot Report) Vancocin, Pfizer's 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.

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