This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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

Tetraphase: Another Good Investment In Hot Antibiotic Market

Stocks in this article: TTPHCBSTCEMP

WATERTOWN, Mass. ( TheStreet) -- The recent buyout of Trius Therapeutics (TSRX) and Optimer Pharmaceuticals (OPTR) by Cubist Pharmaceuticals (CBST) reinforces my view that small-cap antibiotic companies make for interesting investment opportunities. Tetraphase (TTPH) is an earlier stage of clinical development than both Trius and Cempra (CEMP) (another holding of mine) but it may offer the greatest long-term upside.

Tetraphase's lead antibiotic is eravacycline, a next-generation broad spectrum tetracycline for the treatment of multi-drug resistant (MDR) gram-negative bacteria. The opportunity for a successful broad-spectrum antibiotic that is also effective against MDR gram-negative bacteria is significant. For instance, levofloxacin had peak worldwide sales of $1.5 billion, the beta-lactam market in the United States is over $1 billion, and the recently approved next generation tetracycline tigecycline (marketed by Pfizer) is already generating $450 million in sales.

While the market potential is there, eravacycline still has a ways to go. The phase III trial for the treatment of complicated inter-abdominal infections (cIAI) is scheduled to start in the third quarter with data in the first quarter of 2015. Tetraphase additionally plan on starting a phase III trial for the treatment of complicated urinary tract infections (cUTI) in the fourth quarter, which is also scheduled to read out in the first quarter of 2015.

Tetraphase's phase II trial in cIAI showed that eravacycline was non-inferior to ertapenem with about half the number of drug-related adverse events (although total adverse events were similar to the ertapenem arm.) For antibiotics, however, efficacy (or in this case non-inferiority) is a necessary but in no way sufficient condition to create a blockbuster. The drug needs to differentiate itself from competitors, particularly tigecycline. While the efficacy of the drugs is likely too close to definitively call one more effective, eravacycline appears to have a cleaner gastrointestinal (GI) adverse event profile.

It is always difficult to compare between trials (especially given the difference in size) but eravacycline appears to have a cleaner GI profile. On label, tigecycline's nausea rate is 26 percent, vomiting 18 percent. This compares to the phase II eravacycline trial in which the rate of nausea was 6.4 percent and vomiting was 3.7 percent (combined rates from the two dosing regimes.) If this profile maintains in the phase III trials, it's a clear benefit for eravacycline.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!
DOW 16,690.99 +229.67 1.40%
S&P 500 1,951.63 +24.52 1.27%
NASDAQ 4,446.6510 +63.8040 1.46%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

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