On the heels of a favorable FDA advisory panel vote on its experimental antibiotic, San Diego-based Optimer Pharmaceuticals (NASDAQ:OPTR) says today that Cubist Pharmaceuticals (NASDAQ:CBST) has agreed to help sell the drug in the U.S.

The deal calls for Lexington, MA-based Cubist to co-promote the Optimer antibiotic, fidxomicin (Dificid), for two years; the drug is under review at FDA as a potential treatment for C. difficile infections. Optimer, which is now in the process of building a sales force, has agreed to pay Cubist quarterly fees that amount to $15 million per year as well as $17.5 million in additional fees to Cubist if certain sale levels are reached during the term the deal, according to the companies.

For Cubist, this deal could give its existing U.S. sales force another product to market in addition to the company’s antibiotic daptomycin (Cubicin), which is approved for treating certain infections caused by such bugs as the notorious Methicillin-resistant Staphylococcus aureus (MRSA). Still, Optimer’s antibiotic has to pass muster with the FDA, which is expected to say by May 30 whether the drug can be marketed in the U.S. An FDA advisory panel unanimously endorsed the safety and effectiveness of the antibiotic yesterday, but the group voted 7-6 against Optimer on whether the drug reduces recurrence of “C. diff” infections. My colleague Luke Timmerman spoke to Optimer CEO Pedro Lichtinger after the FDA panel votes yesterday about the company’s plans to discuss how best to explain the benefits of the drug to doctors.

In today’s announcement about the Cubist deal, Lichtinger explained how the collaboration benefits his company as it prepares for the marketing of what could be its first approved product in the U.S.

“Cubist has a proven track record and well established relations with all stakeholders involved in the antibiotics space. We believe this collaboration will maximize the impact of and de-risk Dificid’s U.S. commercial launch, assuming approval,” said Lichtinger, in a statement. “We also believe this collaboration with Cubist will allow us to accelerate formulary adoption, expand our market reach and penetration to up to 2,000 hospitals, comprising over 90% of U.S. hospital [C. difficile infection] cases, and commit resources to long-term care facilities that comprise approximately one-third of all CDI cases. In addition, this provides the opportunity to capture the undiagnosed CDI market segment which some estimate to be as many as three million cases per year.”

Optimer says that there are an estimated 700,000 cases of “C. diff” infection in the U.S. annually. The bugs infect the inner lining of the colon and cause inflammation, diarrhea, and, in the worst of cases, death. Optimer’s drug has a novel mechanism to selectively kill “C. diff” and reduce impacts on healthy bacteria.

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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.

Pedro Lichtinger

“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 … Next Page »

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Optimer Pharmaceuticals has some bad news out today. The San Diego-based developer of antibiotics said it has halted a study of an experimental antibiotic for traveler’s diarrhea after a higher than expected rate of skin rashes. Shares of Optimer (NASDAQ: OPTR) fell more than 15 percent after the news broke.

The company made the disclosure today in an 8-K filing with the Securities and Exchange Commission. Optimer said it informed the FDA yesterday that it was halting a study that looked at interactions between prulifloxacin (Pruvel) and antacids. The rashes were “mild in severity, and required little or no treatment and all resolved completely,” the company said in the filing. Optimer is now going to investigate the cause of the rashes, and said it can’t estimate how long it might delay its new drug application for the product, which has already passed a pair of pivotal Phase III trials which didn’t show any increased rates of rashes.

This is certainly an unhappy surprise for Optimer, but it would be a stretch to call it devastating because this isn’t the company’s primary asset in development. Most of Optimer’s value is based on its lead antibiotic, fidaxomicin, for deadly “C.diff” infections that people get in the hospital. Optimer’s strategy with its second drug, which then-CEO Michael Chang explained to me in January 2009 feature story, was to create a more potent alternative to Bayer’s ciprofloxacin (Cipro). The total market up for grabs isn’t huge—an estimated $200 million. Optimer hoped to capture some of that to provide a secondary revenue stream, the company said at the time.

Both the Bayer drug and Optimer’s candidate are members of the antibiotic class known as fluoroquinolones, which are known to sometimes cause rashes, Optimer said in its statement today. You can read more about this compound’s past clinical trial results by checking a summary on the Optimer website.

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Most biotech stories in 2009 are about companies hunkering down or otherwise playing it safe with incremental advances, not people just getting started with an audacious dream. Malcolm Kendall has one of those dreams. He’s starting a company that aims to identify new targets on cells that haven’t been proven before, and create antibiotics to hit those targets. It’s all in the name of coming up with a creative way to fight dangerous pathogens that infect people in the hospital.

The new company, Indel Therapeutics, is based in Vancouver, BC, not far from where its intellectual property originated at the University of British Columbia. Kendall, a former venture capitalist with Durham, NC-based Intersouth Partners, is the CEO, and he told me the story a couple weeks back while he was fundraising in Seattle at Invest Northwest with chairman Mike Abrams, the former CEO of Vancouver, BC-based AnorMed.

Indel is trying to solve one of the problems that freaks out U.S. hospital administrators. There is growing incidence each year of nasty and sometimes deadly bacteria like MRSA or “C.Diff” plaguing U.S. hospitals. Every year, about 1.7 million people in the U.S. get hospital-acquired infections, which kill about 99,000 people a year. It costs the U.S. health system $27.5 billion annually—which is about the same amount the country spends on its entire biomedical research budget. Many of these bugs are becoming increasingly resistant to traditional antibiotics, and pharmaceutical companies have struggled to come up with anything good enough to pass muster with the FDA (see recent stumbles with new antibiotics from Theravance and Targanta Therapeutics). So Indel sees this as a pharmaceutical market that’s ready for new ideas.

“If this works, this is big,” Kendall says. “There’s a screaming need for new targets and novel compounds.”

The idea, from UBC scientist Neil Reiner (who is chair of the Indel scientific advisory board), is to look for subtle differences … Next Page »

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The concept is simple: a computer keyboard that self-sanitizes by zapping potentially deadly germs with ultraviolet light. The technology could help prevent the spread of nasty bacterial invaders like MRSA in hospitals and other institutions with shared computer facilities. That’s the idea behind Vioguard, a Bothell, WA, company co-founded by startup specialist Larry Ranta and his nephew, Craig Ranta, a former hardware engineering director at Microsoft. Larry is Vioguard’s president and CEO, while Craig is the chief technology officer.

Vioguard completed a $1 million first-round financing in January that included angel investors but no venture capitalists, Larry Ranta says. He adds that Vioguard has gotten an additional $250,000 in funding committed since then, and he’s looking to raise between $2.5 million and $3 million more by June, mostly from angel groups. He has been impressed so far with the reception he’s gotten from investors interested in Vioguard.

“This has been the easiest raise I’ve ever seen,” he says. “You show it, people get it, and it’s done. We’re doing another round now, and big players are interested. The next round will be more than we need, to get us through to full revenue. We’ve already designed the machine, so most of our cost will be sales and marketing.”

Vioguard, founded last June, now has five employees, plus six full-time contractors. Ranta has been around the block with startups for the past 25 years, usually in an advisory role—sometimes serving as a C-level executive or vice president, or providing specific help in areas like product marketing.

He seems to have hit on something big with Vioguard. Hospitals are especially motivated to rid their environments of deadly bacteria like MRSA and “C. Diff,” which are seeing fast-growing incidence. About 30 to 40 cases of C. Diff bacteria—which causes horrible and sometimes fatal cases of diarrhea—were reported per 100,000 people discharged from hospitals in 2001, and that figure tripled to about 100 cases per 100,000 discharges in 2005, according to data from the Centers for Disease Control and Prevention. Data is elusive on these kinds of bugs, because hospitals hate to admit any guilt and invite legal liability, but this is undoubtedly a growth market. (Pfizer’s anti-MRSA antibiotic, linezolid (Zyvox), topped $1 billion in worldwide sales last year.)

And hospitals know that bugs like these can spread from the hands of healthcare workers onto common areas like keyboards. What’s special about Vioguard’s patent-pending technology is … Next Page »

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Optimer Pharmaceuticals has seen its stock almost triple from its low point in the past year, and yesterday it took advantage of the rising tide. The San Diego biotech company (NASDAQ: OPTR) received commitments from investors to buy new shares and warrants that add up to a cash infusion worth $32.9 million.

The company agreed to sell about 2.8 million new shares at $10 apiece to investors, as well as some new units for a higher price of $10.93 that includes one share plus a warrant to buy a partial share in the future. Optimer didn’t say much about what it will do with the money, other than fuel its ongoing drug development programs.

The company was in a position to raise that kind of cash—without selling huge numbers of shares that might greatly dilute the value of existing ones—because it has had a string of successes in clinical trials the past six months. Optimer reported results in November from a 629-patient trial from its experimental drug for the dreaded “C. Diff” bacteria that people get in hospitals, and that causes horrific, and sometimes fatal diarrhea. The Optimer drug produced a higher rate of cures than the standard antibiotic, and was better at preventing relapses that often forces people to be re-hospitalized with tougher cases. Then last month the company followed that up with another clinical trial success for its second drug in the pipeline, a candidate for traveler’s diarrhea.

Optimer, which currently has no products on the market, had $46.5 million in cash and investments the last time it reported financials at the end of September, and it is spending $8 million to $9 million a quarter, said analyst Thomas Russo of Robert W. Baird, in a note to clients today. He expects the company will raise more money again before the end of June, and sign a partnership to help with marketing fidaxomicin (OPT-80), the drug for “C.Diff.”

“We view this transaction positively, as cash runway trumps dilution for pre-commercial stage biotechs in this environment,” Russo wrote.

Optimer shares rose 1 cent after the deal was announced, to $10.94.

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San Diego’s Optimer Pharmaceuticals had its breakout moment in November, when it showed its experimental drug could wipe out the dreaded C. Diff bacteria, a horrific, sometimes fatal form of diarrhea that people sometimes pick up in the hospital. What fewer people realize is Optimer (NASDAQ: OPTR) has another anti-diarrhea drug in the works that’s designed to stop the milder forms of diarrhea that Americans tend to get when they travel to developing countries.

Optimer’s second drug candidate is called prulifloxacin. It’s part of a class of antibiotics known as fluoroquinolones, and it is commercially available in Japan and Korea in an intravenous form. Optimer’s trick is to make it into an oral form, taken once-a-day for three straight days, which ought to stop a variety of different bugs from making people get so sick that it ruins their vacation.

People currently take Bayer’s ciprofloxacin (Cipro) for traveler’s diarrhea, but Optimer’s drug is more potent and hopes to grab much of the market share, says Optimer CEO Michael Chang. The Bayer drug is in the same class, but has to be taken twice a day for five days, which means patients find it hard to comply with the schedule, says Optimer chief commercial officer Kevin Poulos. It’s also not well-tolerated when people spend time in the sun, which can really sap the fun out of your vacation. This isn’t a huge market—about $200 million are up for grabs—but Optimer thinks it can carve out a strong niche to diversify its sources of revenue in the future, Poulos says.

“This will be the most convenient, and most potent antibiotic for infectious diarrhea approved by FDA, if it’s approved,” Poulos says. “It’s a small market compared to other indications, but the beauty of it is that it’s a market that hasn’t had a lot of attention paid to it. We consider that as an advantage. I’d rather enter a market where we have a unique advantage, instead of a market that’s crowded, like respiratory antibiotics. We feel we can get a large share in a small market, versus a small share in a bigger market.”

The drug has already passed one clinical trial it needs to include in an application for FDA approval, and it expects to get results from a second required trial before the end of March, Chang says. If that goes well, the company will file for FDA approval of prulifloxacin before the end of the year.

This drug isn’t meant to be taken as a preventive treatment; instead patients would wait until they feel a touch of diarrhea coming on, and then take the pill, Chang says. It’s supposed to work fast, so a patient could take it and have their diarrhea go away within 24 hours, he says. About 80 percent got relief from their diarrhea, compared with 40 percent who took placebo. If patients didn’t have their diarrhea improve within the first day, they were able to get a standard treatment to take care of it, Chang says.

The first trial tested the Optimer drug in Mexico and Peru, where it was largely up against E. Coli. The second trial was in India, Guatemala, and Mexico, where the drug mainly had to fight shigella, Chang says. “That way we can cover more people traveling to different parts of the world,” Chang says.

If all goes according to plan, this drug will arrive on the market about the same time in 2010 as Optimer’s other drug, OPT-80, for “C. Diff” bacteria. That drug, which still needs to pass one more clinical trial this year, was recently given the generic name of fidaxomicin. One big event on Optimer’s to-do list this year will be forming a partnership outside the U.S. to help with marketing fidaxomicin, while keeping control of it in the U.S.

“The value driver for Optimer is fidaxomicin, the ratio is about 80/20,” Chang says. “But this second drug (prulifloxacin) is going to be the best-in-class, we think, and has reasonable potential to be a good earnings contributor.”

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Of all the people I met last month on a whirlwind of meetings with San Diego biotech companies, none had more bounce in their step than the folks at Optimer Pharmaceuticals. This company passed a huge test last month that suggests it has created the first new drug in decades for a bacterial invader called Clostridium difficile, or C. Diff, which causes horrific, often fatal diarrhea.

Optimer (NASDAQ: OPTR) reached its goal in a trial of 600 patients, showing its drug was about equal to the standard antibiotic, vancomycin, at eradicating the infection, and was much better at preventing relapses. This caused its stock to double in a heartbeat. Of course, one trial of 600 patients is only part of the battle toward getting FDA approval to market the product. I got a rundown of what’s to come from Kevin Poulos, the company’s chief commercial officer, and Pamela Sears, the senior director of biology.

Before I even stirred the sugar into my coffee, Sears was bursting with enthusiasm about feedback she’s getting from doctors about the trial. “Everyone is really excited. They think it’s got potential to be a real breakthrough for the disease,” she says.

Much ink has been spilled about the emerging threat from MRSA bacterial infections in hospitals and nursing homes, but not so much about C.Diff. Data on this bug is hard to come by, likely because hospitals are reluctant to admit guilt. About 30 to 40 cases were reported per 100,000 people discharged from hospitals in 2001, and that figure tripled to about 100 cases per 100,000 discharges in 2005, according to data from the Centers for Disease Control and Prevention. The sales potential for a drug that fights C. Diff could be about $178 million in 2013, its third year on the market, according to Thomas Russo, an analyst with Robert W. Baird in Chicago.

Optimer’s findings still have to be published in more detail in a scientific paper, and physicians are surely going to comb through the company’s data carefully to see whether the drug is working across all subpopulations of patients, and against different strains of C. Diff, Sears said. The company also has to repeat the finding in one more identically-designed clinical trial of 600 patients that’s expected to produce results later in 2009. If Optimer gets positive results on that trial, it should have the data it needs to take an application to the FDA to market its first product.

This gives Optimer some time to lay the groundwork for how to make this drug into a commercial success, Poulos says. “Now the fun begins,” he says. … Next Page »

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Much has been written about Boston Scientific’s retrenching, in light of the decline in its business with stents, the tiny wire mesh devices that prop open clogged arteries. Now as Boston Scientific focuses on its core businesses, one of the units that has been spun off has a new name, Navilyst Medical. The company has 800 employees, and what its founding president calls a new focus on the opportunity for devices that can minimize infections in hospitals.

Before it had a name or logo, Navilyst officially left its parents’ nest on Valentine’s Day, when the private equity firm Avista Capital Partners paid $425 million to buy the venous access and fluid management businesses from Boston Scientific (NYSE: BSX). The divisions were projected to have $180 million in annual worldwide revenue, but not much beyond that has been said about its finances or prospects.

Here’s what I gathered yesterday from an interview with Dave McClellan, the president of Navilyst, and the former president of Boston Scientific’s oncology division. The new company is being headquartered in Marlborough, MA. The R&D, manufacturing, process engineering and other functions are in Glens Falls, NY, where about 680 of the 800 employees will be. Navilyst’s name comes from the root words “navi,” which is short for devices that navigate their way into patients arteries for IV drips or injections, combined with “-lyst,” as in catalyst for innovation, McClellan says. He didn’t want to say much about any plans for hiring or expansion, other than they will depend on how well the company performs.

McClellan repeated the word “focus” a couple of times in our conversation. He made it clear that the new organization can channel its energy and resources to the opportunities it sees with vein-access devices, instead of competing for resources with many other projects inside the larger company.

The opportunity for Navilyst is in hospitals. Anyone who remembers the fearful TV and Internet reports last year of the rise of the drug-resistant bacterium known as MRSA, and another called C. Diff, knows that hospitals are motivated to cut down on the risk of such infections. About 1.7 million people get these infections in hospitals, and almost 100,000 people die from them each year, according to the Centers for Disease Control and Prevention.

Navilyst aims to help hospitals deal with this problem through vein-access technology, which uses a pressurized safety valve that’s designed to keep blood from flowing back up into an intravenous line, an exchange of fluid that can cause infections. The products are used in hospitals routinely every day, for injecting things like chemotherapy drugs, antibiotics, or nutrient drips. Navilyst calls it the PASV Valve Technology, and the company is planning to build on the concept with new products from its internal R&D, as well as with strategic partnerships, McClellan says.

Navilyst’s main competitors are Murray Hill, NJ-based C.R. Bard (NYSE: BCR) and Queensbury, NY-based Angiodynamics (NASDAQ: ANGO). McClellan insists that his new company can go toe-to-toe with them, even without the backing of Boston Scientific. “We have the scale, we’ve got the R&D horsepower, the focus and the sales channel,” he says.

One line in yesterday’s press release from CEO Ron Sparks mentioned that the company will look very different in 2011 than it does today. I asked McClellan what that meant, and he avoided specifics. “The strategy here is to continue to identify innovative technologies that bring value to our customers. We’re not just talking about me-too products,” he said.

I guess we’ll have to wait to see specifically what he means by innovative, but my guess is Navilyst will have to make a compelling case to hospitals that its technology will decrease the risk that the next scary headlines about MRSA will emerge from their wards.

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