Encouraging News for Cubist Pharma

Recently, Cubist Pharmaceuticals Inc. (CBST - Analyst Report) received some encouraging news when the US Food and Drug Administration (FDA) designated its antibiotic candidate CXA-201 (ceftolozane/tazobactam) as a qualified infectious disease product (QIDP), under the Generating Antibiotic Incentives Now (GAIN) Act.

The designation was granted for the hospital-acquired bacterial pneumonia (HABP)/ventilator-associated bacterial pneumonia (VABP) and complicated urinary tract infections (cUTI) indications. CXA-201 is undergoing phase III studies for the cUTI indication. The company intends to evaluate the candidate in a phase III study for treating patients suffering from VABP. The study is expected to commence in mid-2013.

With the FDA granting CXA-201 QIDP status for the above indications, the antibiotic qualifies for multiple benefits including a 5-year extension of Hatch-Waxman exclusivity (on approval) and priority review.

We note that the GAIN act was signed into law by the US president in Jul 2012 as part of the FDA Safety and Innovation Act (FDASIA). The signing of the GAIN Act should benefit companies pursuing the development of novel antibiotics. Apart from Cubist Pharma, companies such as The Medicines Company (MDCO - Analyst Report) and Optimer Pharmaceuticals (OPTR - Analyst Report) stand to benefit from the signing of the act.

Cubist Pharma received further good news when the FDA granted fast track designation to CXA-201 for the complicated intra-abdominal infections (cIAI) indication. CXA-201 is undergoing phase III studies for the cIAI indication.

Furthermore, CB-315 (another pipeline candidate at Cubist Pharma) was also granted fast track status. CB-315 is undergoing phase III studies for treating patients suffering from clostridium difficile-associated diarrhea (CDAD). We note that CXA-201 and CB-315 were granted QIDP status for the cIAI and CDAD indications, respectively, late last year.

Cubist Pharma, a biopharmaceutical company, carries a Zacks Rank #3 (Hold). Biopharma stocks, which are presently well placed, include Array Biopharma (ARRY - Snapshot Report) carrying a Zacks Rank #2.