In starved antibiotic field, Melinta soars as FDA grants speedy drug review
Such is the state of affairs in antibiotic land that the FDA agreeing to priority review an application to expand the use of an antibiotic can rocket up a stock more than two-fold.
On Wednesday, Melinta Therapeutics said its approved antibiotic Baxdela had been granted priority review for use in community-acquired bacterial pneumonia (CAPB). The FDA is expected to make its decision by October 24. Shares of the Connecticut drugmaker $MLNT catapulted, closing up nearly 224% at $6.41.
“We view this move as overdone, given Baxdela approval and launch in CABP by ’20 should have been largely baked-in and therefore is a non-catalyst. Furthermore, CABP contribution to sales is expected to be modest and unable to offset flat revs in the approved ABSSSI indication,” Jefferies analyst David Hoang wrote in a note.
Melinta’s shares were unsurprisingly down about 12% at $5.64 before the bell on Thursday.
Seventeen years in the making, in 2017 Baxdela secured approval for adults with acute bacterial skin and skin structure infections (ABSSSI) on the basis of data showed it was safe and effective against both gram-positive and gram-negative pathogens, including MRSA.
On Wednesday, Hoang forecast peak US Baxdela sales at $133 million in 2028 — estimating ABSSSI will bring in $122 million, while CABP will reap a modest $11 million.
After getting Baxdela across the finish line, Melinta went shopping in 2017 — merging with a troubled antibiotic company Cempra and dropping $270 million for the antibiotic assets of The Medicines Company $MDCO. Reminiscent of the struggle faced by its peers in the field, in late November 2018 Melinta said it was shuttering its headquarters and cutting jobs as underwhelming sales and higher-than-expected costs forced its hand.
As superbugs flourish, the industry players contributing to the arsenal of antimicrobials are fast dwindling. Drugmakers are enticed by greener pastures, compared to the long arduous path to antibiotic approval that offers little financial gain as treatments must be priced cheaply, and often lose potency over time as microbes grow resistant to them. For one of the biggest threats to global health, the lion’s share of antibiotic development is taking place in a handful of labs of small biopharma companies as their larger counterparts focus on more lucrative endeavors.
Existing incentives to entice antibiotic R&D in the United States are too feeble to fix this ‘broken system’ critics have argued. Other parts of the world, such as the UK, are considering different approaches to reinvigorate antibiotic R&D. A UK government report published earlier this year outlined a plan to de-couple price from demand and shift to a more value-based approach that would compel institutions to pay fees based on their need for new antibiotics, akin to a licensing approach that former FDA commissioner Scott Gottlieb threw his support behind.
Social image: Jacquelyn Martin, AP Images