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Biotechies Need to Get Serious About Antibiotics, Where There is Money to Be Made

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setbacks (Cambridge, MA-based Targanta Therapeutics comes to mind) so it could be there’s a perception out there that it’s too hard to bring antibiotics through the FDA. Or, it could be that they don’t make enough money to justify the time and expense of development.

Optimer has an opportunity to challenge both ideas. The company was founded in 1998, and had racked up a $222.8 million deficit through the end of 2010, according to its annual report. A big part of that investment went into generating data from a pair of pivotal clinical trials that enrolled more than 1,100 patients with C.difficile infections. Optimer showed in those trials that it could cure patients more than 90 percent of the time (about the same as the standard treatment, vancomycin). That was expected, but the Optimer drug, fidaxomicin, excelled by cutting the recurrence rate in half. Those are the most dangerous cases that cost the health system a lot of money, and cause doctors a lot of heartburn.

While the FDA regularly rips drug applications from makers of cancer or diabetes meds, it had nothing really harsh to say about the Optimer antibiotic in briefing documents posted online on Friday.

Optimer’s stock climbed 11 percent on that positive report. Investors are clearly wagering the firm will get an OK from the FDA panel, and the official clearance to start selling its new antibiotic in the U.S. later this year. Optimer’s market valuation has grown to $606 million as of last Friday. If the drug is approved, $250 million in peak annual worldwide sales is “easily achievable,” said Eun Yang, an analyst with Jefferies & Co., in a note to clients on Friday.

While that kind of return on investment might not do much if you’re trying to boost the bottom line at Pfizer, it’s pretty darn good if you are Optimer or any other company with a market cap of less than $1 billion. If all goes well, the Optimer drug should offer a decent return to investors and entrepreneurs, and should help make an impact against a dangerous public health threat.

Few people in biotech seem to be paying much attention, but this is shaping up to be a story of how the industry is supposed to work. The country needs a few more stories like it.

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