Optimer Pharmaceuticals, Inc. ( OPTR - Analyst Report ) recently announced impressive fourth quarter preliminary sales of its sole marketed drug Dificid (fidaxomicin), the antibiotic sold in the US for the treatment of clostridium difficile-associated diarrhea (CDAD), also known as clostridium difficile infection (CDI).

Dificid grossed $12.2 million in the fourth quarter of 2011, almost flat with $12.1 million of gross revenue generated in the third quarter. Beyond the obvious numbers, revenues were actually up sequentially as the third quarter figure included $5.1 million in inventory stocking by Optimer's wholesalers. Optimer recognizes Dificid revenue on delivery to wholesalers. In the five and a half months since launch in US in mid-July, Dificid has generated total revenue of $24.4 million from the drug. The shipments at the wholesale level were up almost 87% from the sequentially preceding quarter. Inventory levels also declined sequentially by $1.1 million which we believe will benefit future sales of Dificid.

Optimer is looking to expand the Dificid label and plans to evaluate the prophylactic use of Dificid in patients undergoing bone marrow transplantation who are at the risk of CDAD. It also sees opportunity for Dificid use in other transplant patients and certain sub-populations of cancer patients with CDAD.

Dificid was approved to be marketed as Dificlir in the European Union (EU) in December 2011. Dificlir will be launched in EU by partner Astellas Pharma soon. We remind investors that Optimer is entitled to receive 40 million euros on approval of Dificlir and another 10 million euros on commercial launch of the drug which could result in increased cash flows for the company. In the US, Optimer has an exclusive two-year co-promotion agreement with Cubist Pharmaceuticals ( CBST - Analyst Report ) .

Our Recommendation

We currently have a Neutral recommendation on Optimer. The stock carries a Zacks #3 Rank (short-term “Hold” rating).

We are encouraged by the impressive performance of Dificid in the US as well as the EU approval of Dificlir. Dificid scores better than currently available treatment options on many parameters. Particularly, we believe the inclusion of superior recurrence benefits over ViroPharma’s ( VPHM - Snapshot Report ) Vancocin (the only other FDA approved antibiotic for the treatment of clostridium difficile infection) in the product label will provide valuable benefit and help Dificid/Dificlir sales. Dificid is the first drug to be approved in almost 25 years for the treatment of CDAD and thus targets a market with significant unmet need. However, we prefer to stay on the sidelines until we gain more visibility on the commercial launch of the drug. Moreover, Optimer is highly dependent on Dificid for its success. Following termination of development of Pruvel, the company hardly has anything in its pipeline. Consequently, if Dificid fails to impress, the company will have little to fall back on.