LEXINGTON, Mass. ( TheStreet) -- The market loves mergers and acquisition rumors and recently, investors have been chattering a lot about Cubist Pharmaceuticals (CBST) and Optimer Pharmaceuticals (OPTR).
Even before Optimer put itself up for sale earlier this year, Cubist reportedly made an unsolicited $1 billion bid for the company, according to media reports. The rationale for Cubist buying Optimer is fairly easy to understand. The companies are already partners in the co-promotion of Optimer's antibiotic Dificid. Buying Optimer would also help Cubist achieve its five-year strategic goals, one of which is to grow revenue to $2 billion annually.
That being said, I'm not sure Cubist and Optimer make a good strategic fit. For one thing, both companies are developing overlapping antibiotics. Optimer's Dificid is approved for the treatment of C. diff-associated diarrhea (CDAD), while Cubist recently announced plans to move its own C. diff antibiotic surotomycin into phase III studies. Adding Dificid might bolster Cubist revenue in the U.S. but it could also potentially make it more difficult to market surotomycin, if the drug is approved. And Optimer only has U.S. rights to Dificid, meaning Cubist would be unable to sell the drug in Europe.
Cubist may be more interested in acquiring late-stage products that do not overlap with its existing pipeline. Cempra (CEMP - Get Report) and Trius Therapeutics (TSRX) have both been mentioned as possible buyout targets for Cubist. Trius' lead antibiotic tedizolid does overlap to some extent with Cubist's biggest-selling antibiotic Cubicin in the gram-positive bacteria market, although tedizolid has the potential to be used in broader treatment settings.What has really sparked investor interest, however, is the recent Trius announcement of a new patent allowance for a "therapeutic combination of the experimental medicine tedizolid phosphate with a currently available antibiotic daptomycin."