San Diego-based Optimer Pharmaceuticals has spent more than $200 million and a dozen years of effort to get to the point where it can ask the FDA to clear its first product for sale on the U.S. market. And that’s the position Optimer finds itself in now.
Optimer (NASDAQ: OPTR) is announcing today that it has completed its new drug application filed with the FDA, which asks regulators to approve fidaxomicin as a new treatment for a dangerous bacterial infection known as Clostridium difficile, or “C.diff” for short. This particularly nasty bug causes awful diarrhea, the kind that can lead to severe dehydration, inflammation of the colon, hospitalization, and even death. The company is seeking a faster-than-usual six-month regulatory review, instead of the usual 10-month period, which the FDA sometimes provides for potentially lifesaving new therapies.
If the FDA clears this new therapy for sale, it would become Optimer’s first marketed product and the first new therapy for this dangerous hospital-based infection in about 25 years. C.diff, a hardy bug that lurks in hard-to-reach surfaces at hospitals and nursing homes, is estimated to kill between 15,000 and 30,000 people in the U.S. each year, many of them elderly. The disease, which is hard to diagnose properly, is currently treated with a common generic drug called metronidazole or an oral form of vancomycin (Vancocin) from Exton, PA-based Viropharma (NASDAQ: VPHM). Optimer’s application to the FDA is based on clinical trials that show it is about equal to vancomycin at killing the bug initially, but that its real advantage is in reducing the rate of recurrences, particularly in vulnerable subpopulations like the elderly, those taking other antibiotics, and in patients with weakened immune systems.
“When I was getting started at Pfizer, all the managers who joined when they were younger had a dream to bring to the market highly effective products that will benefit patients. That dream has stayed with me,” says Pedro Lichtinger, Optimer’s CEO. “When I retired from Pfizer, what I saw in Optimer was an opportunity to make a major advancement in medicine, that was at the same time cost-effective and would do a lot of good for thousands of patients.”
Partly because this disease doesn’t generate many scary headlines, Optimer tends to keep a pretty low profile. But the data to support its application looks like a pretty solid bet. It reached its primary goal in a pivotal clinical trial of about 600 patients in November 2008, and then confirmed the results with another 535-patient study that generated results in February. The most recent trial found that 91.7 percent of patients on the Optimer drug were considered clinically cured, compared with 90.6 percent on standard vancomycin. About 12.8 percent of patients on the Optimer drug had a recurrence, compared with 25.3 percent in the control group. The new drug was considered well-tolerated, Optimer has said.
What’s interesting about this drug scientifically is that it’s tailored to deal with one of the big public health problems in the U.S. today—antibiotic resistence. The Optimer drug is what’s known as a “narrow spectrum” antibiotic, meaning that it is specifically designed to kill C.diff bacteria, and not wipe out all kinds of other bacteria in the body. Many public health officials want physicians to have access to “broad spectrum” antibiotics that can kill nasty infections even when a doctor doesn’t have a diagnosis nailed down, but overuse of those potent weapons has contributed to the rise of multi-drug resistant bacteria that really freak out docs. So if a doctor really knows that he or she is dealing with a case of C.diff, then it would stand to reason that a “narrow spectrum” antibiotic like Optimer’s would be the best choice for limiting collateral damage.
The challenge at Optimer will be in raising awareness among physicians about its drug, and in encouraging them to adopt a new standard of care, Lichtinger says. The company is asking the FDA to clear its product to treat and prevent all cases of C.diff infection, and it will seek out specific language to show its advantages in preventing recurrences among the most vulnerable populations, Lichtinger says. Doctors currently think about which treatment to choose based on whether the infection is classified as mild, moderate, or severe. Optimer’s hope is to encourage doctors to think differently, and to prescribe based on a patient’s likelihood of suffering a costly and more difficult recurrence, he says.
Pricing will be a key factor in how well this drug gets adopted by the medical establishment. The current standard of care is metronidazole, a cheap generic. Optimer’s drug will certainly be priced much higher than that, and will be priced at a premium to the brand-name competitor from Viropharma, Lichtinger says. He wouldn’t be more specific on price, saying the company is still studying the market, although he said it will be priced in line with the value it delivers to the healthcare system.
Optimer doesn’t have a partner, and it plans to initially try to tackle this market alone, with its own U.S. sales force, Lichtinger says. It’s manageable for a small company, given that C.diff tends to be concentrated in hospitals, with about three-fourths of cases coming from about 1,000 hospitals and clinics, he says.
While Optimer hasn’t yet said what it plans to charge for fidaxomicin, analysts are already penciling out the market potential. Eun Yang, an analyst with Jefferies & Co, estimates the drug will cost $1,500 per treatment, which could create a U.S. market worth $410 million to $440 million a year. She projects about $150 million in U.S. sales of the new drug in 2015, according to note to clients published on Nov. 18.
“Given fidaxomicin’s superior efficacy (vs. Vancocin), we see low regulatory risks and our modest sales projections as achievable,” Yang wrote.
While there’s obviously a ton of work to do with the FDA, and insurers, Lichtinger was clearly in a pretty good mood when we spoke yesterday. He joined the company back in May, after a long career at Pfizer, where he ended up as president of the company’s primary care business. His experience is in commercialization, exactly the phase of the game that Optimer is just now about to enter.
“It’s a great moment for our company,” Lichtinger says.