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Cubist Pharmaceuticals, Inc. (CBST - Analyst Report) recently inked a deal with Japanese company Astellas Pharma Inc. (ALPMY) to acquire the remaining rights of ceftolozane from the latter. Ceftolozane is the key component of Cubist Pharma's antibiotic candidate CXA-201 (ceftolozane/tazobactam).  

Following the new agreement, Cubist Pharma gained the rights to develop and market CXA-201 in certain Asia-Pacific and Middle East countries. Cubist Pharma now has global rights pertaining to CXA-201.

As per the terms of the new agreement, Cubist Pharma will make an upfront payment of $25 million to Astellas Pharma. Cubist Pharma intends to make the payment through its available cash balance.

CXA-201 was added to Cubist Pharma’s pipeline following its acquisition of Calixa Therapeutics, Inc. in 2009. CXA-201 is one of the most interesting candidates in Cubist Pharma’s pipeline. The candidate is undergoing phase III studies in the complicated intra-abdominal infections (cIAI) and complicated urinary tract infections (cUTI) indications.

Cubist Pharma expects to report top-line data from the studies in the second half of 2013. The company intends to seek US approval for both indications (cUTI and cIAI) within approximately 6 months of reporting top-line data from both the phase III studies.

Cubist Pharma also intends to evaluate CXA-201 in a phase III study for treating patients suffering from nosocomial pneumonia. The study is expected to commence in mid-2013.

The US Food and Drug Administration (FDA) has already provided QIDP (qualified infectious disease product) status to CXA-201 for all the above indications. 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.

Cubist Pharma, a biopharmaceutical company, carries a Zacks Rank #3 (Hold). Biopharma stocks such as Array Biopharma (ARRY - Snapshot Report) and Kythera Biopharmaceuticals, Inc. (KYTH - Snapshot Report) are comparatively well placed and carry a Zacks Rank #2 (Buy).

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