This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Cempra's Lead Antibiotic Has Blockbuster Potential

CHAPEL HILL, NC ( TheStreet) -- Antibiotics certainly do not inspire the same excitement as oncology products and orphan disease drugs but one simply needs to look at Cubicin or Zyvox to see the right drugs can be significant winners. Cempra (CEMP - Get Report) has a potential winner in its lead antibiotic compound solithromycin.

Solithromycin is a fourth generation macrolide with intravenous and oral formulations. Cempra's initial plan is to develop the antibiotic as a treatment for community acquired bacterial pneumonia (CABP) but the company also has a grant from BARDA to extend solithromycin into bio-terror infections, pediatric and special populations (pregnant women, for instance.)

Right now, Cempra is conducting a single phase III trial for the oral formulation in CAPB, but a recent financing should provide the money necessary to start a second phase III oral-to-intravenous trial in CAPB.

The best way to think about the market potential of solithromycin is to look at Sanofi's (SNY) Ketek, a third-generation macrolide antibiotic marketed approved by the FDA in 2004. There was significant enthusiasm surrounding Ketek because it demonstrated strong efficacy against bacteria resistant to first and second generation macrolides. Early expectations had Ketek achieving peak sales of $1.5 billion in the U.S. alone.

Ketek's first year on the market was strong, with 3.3 million U.S. prescriptions generating about$193 million in sales. Safety troubles lurked under the surface, however. Ketek use was linked to liver toxicity and liver failure, which were missed prior to the drug's approval, in part, due to falsified clinical trial data. Eventually, the FDA added a black-box safety warning to the Ketek label and sales collapsed.

The Ketek story is critical for Cempra because it indicates both the market potential of solithromycin and highlights the safety risks that must be navigated. In general, solithromycin has shown strong efficacy even against the bacteria that are resistant to the first, second, and third generation macrolides. In this way, solithromycin's billion-dollar market potential is similar to what was expected from Ketek when it was approved. Of course, the real question is whether that efficacy comes with the same safety issues which derailed Ketek.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
CEMP $32.00 0.00%
AAPL $123.25 0.00%
FB $83.30 0.00%
GOOG $548.34 0.00%
TSLA $185.00 0.00%


DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs