Targanta-Cubist Rivalry Brews on FDA Review of Targanta Drug
Targanta Therapeutics’ stock has made gains since the FDA yesterday posted a favorable review of Targanta antibiotic oritavancin to treat certain skin infections—the latest development in the intrastate rivalry between the Cambridge, MA-based biotech firm (NASDAQ:TARG) and Cubist Pharmaceuticals (NASDAQ:CBST), headquartered in Lexington, MA.
As Luke reported last month, an FDA advisory committee is scheduled to meet tomorrow to review Targanta’s application for approval of oritavancin as a treatment for complicated skin infections caused by antibiotic-resistant bacteria including notorious MRSA. Yesterday the agency posted a lengthy briefing on the drug, saying it was as effective and safe as the standard treatment, vancomycin.
Targanta’s stock opened at $10 per share today, up 47 percent from its $6.82 opening price yesterday. The stock had settled to around $8.37 per share early this afternoon.
Targanta’s oritavancin would compete directly with Cubist’s daptomycin (Cubicin) if approved. But that fact doesn’t seem to have Cubist investors too worried—the firm’s stock price has been relatively stable, given the already volatile stock market, opening at $23.50 this morning, down just 5 percent from its $24.82 start on Monday.
Indeed, Alan Carr, an analyst at Needham & Company, sent a note to investors this morning to maintain a “buy” rating on Cubist’s stock, saying: “While a meeting favorable to [oritavancin and three other antibiotics up for review] may have a negative impact on [Cubist] shares in the short-term, we do not believe their potential approval is likely to meaningfully impact [daptomycin] sales for several years going forward.”
A bit of inside gossip on the Cubist-Targanta rivalry: Targanta CEO Mark Leuchtenberger and Cubist chief executive Michael Bonney were once colleagues at Cambridge, MA-based biotech powerhouse Biogen Idec (NASDAQ:BIIB)—and Leuchtenberger told me earlier this year that he feels like his company must match wits with Bonney and Co. over at Cubist.
The FDA, which is expected to take action on Targanta’s bid for approval by Dec. 8, isn’t obligated to approve drugs based on recommendations of its advisory committees, but the agency often does.