The nature the Presidential Election this time is weighing on investors’ chests and minds and mood and decisions. The stocks are typically reflecting investors’ inability to reason or make rational selection. Many are waiting for the election results to see whether they sell their portfolios or add to them. Negativity is the outcome fuelled by pessimism and by the simultaneous surfacing of articles and biographies of high ranking officials – all point to that political games are dominating every aspect of our lives, including the directions of our stocks’ moves.
The good news is that after sitting in the Oval Office, the newly elected President will have no time left to focus on any of the stuff discussed or promised during the election campaign.
We are optimistic.
Real Life
Cempra (CEMP) has News
Cempra (CEMP), whose stock’s 52-week high was over $34 is now trading at less than $7. The stock had closed on Friday trading at $7.55, opened today trading at $8.60 on good news announcing that the FDA Antimicrobial Drugs Advisory Committee (AMDAC) voted (7-6) that efficacy of Cempra’s lead antibiotic drug solithromycin outweighs the risks when the antibiotic is used to treat community-acquired bacterial pneumonia (CABP). It did not take long in the morning for the stock to experience a selloff of the stock in a rallying market day.
Why?
Investors realized that the advisory committee’s members have voted on three different aspects of the drug, the first, which we mentioned above was about the risk and the reward of using the drug on community-acquired bacterial pneumonia (CABP) patients; the second was about the evidence of efficacy of the antibiotic in treating CABP. The vote was in favor of the drug as the committee members voted unanimously (13-0) that there was substantial evidence of the efficacy of solithromycin in treating CABP. The third voting was on the product’s risk of liver toxicity and the members of the FDA Committee voted (12-1) that the risk of hepatotoxicity with solithromycin had not been adequately characterized. The members discussed a variety of potential approaches to further characterize the existing liver safety information on solithromycin.
The target date for the FDA to take action under the Prescription Drug User Fee Act (PDUFA) is December 27 and 28, 2016 for the oral and IV filings, respectively.
Prohost Observations
It is no secret anymore that antibiotic resistance is a big threat that is growing in alarming rates. In the U.S. alone, pneumonia is the leading cause of death due to infectious disease and rates of pneumococcal resistance to current marketed products regarding CABP exceeds 50 percent.
From the voting and the comments of the FDA Antimicrobial Drugs Advisory Committee (AMDAC), we can conclude that Cempra’s antibiotic solithromycin has the potential to offer the clinicians an important new treatment option for Community-acquired bacterial pneumonia (CABP), which is badly needed. In this regard it important to note the committee’s conviction that the drug is effective is clearly demonstrated in their unanimous voting (13-0) that there was a substantial evidence of the efficacy of solithromycin in treating CABP.
This is not all. Solithromycin is found also to be potent against most macrolide-resistant CABP pathogens. Moreover, studies demonstrate that Solithromycin is also potent against S. pneumoniae as well as against community-acquired methicillin resistant S. aureus (CA-MRSA), streptococci, haemophilus, enterococci, Mycobacterium avium and in animal models of malaria. Furthermore, the drug has demonstrated activity against atypical bacteria, such as legionella, chlamydia, mycoplasma, ureaplasma, gonococci and other organisms that cause genitourinary tract infections.
Important to note that Solithromycin is found to be eight to 16 times more potent thanazithromycin against many bacteria, including azithromycin-resistant strains. According to the firm, Solithromycin Activity against resistant strains is driven by its ability to interact with three sites on the bacterial ribosome, compared to the single binding site of first and second generation macrolides.
Will the FDA approve Solithromycin?
Knowing in fact that the FDA is not bound by the Advisory Committee’s guidance, but takes its advice into consideration when reviewing investigational medicines, we, like everybody else cannot read the FDA mind as the decision makers of the regulatory agency discuss and debate drugs for approval or rejection behind closed doors.
The verdict will depend on whether the FDA decision makers will come out of their debate agreeing on the Committee’s statement that solithromycin’s benefit outweighs the risks in the treatment of community-acquired bacterial pneumonia (CABP).
What about the liver toxicity?
AMDAC has voted 12-1 that the risk of hepatotoxicity with solithromycin had not been adequately characterized. The AMDAC Committee discussed a variety of potential approaches to further characterize the existing liver safety information on solithromycin.
All drugs have side effects with some of them life-threatening. Characterizing the organ toxicity and putting a strategy for mitigating the life-threatening effects opens the door to FDA approval in case the drug demonstrates efficacy and can act as a last resort when existing drugs stop working. Solithromycin has demonstrated efficacy in treating community-acquired bacterial pneumonia. There are examples of approvals of toxic antibiotics that the regulatory agency have granted them approvals when the developers put strategies that enable mitigating the toxicity.
An Example of an Approved Toxic Antibiotic
Theravance Biopharma
VIBATIV
Theravance Biopharma (TBPH) is one of Prohost picks. Its antibiotic Vibativ has been granted approval in spite of its kidney toxicity because the firm has put a successful toxicity mitigating strategy. Like Cempra’s drug solithromycin, Vibativ has proven effective in treating bacterial infection resistant to existing antibiotics. Vibativ, though, is indicated for other infections, including hospital-acquired pneumonia (HABP) and ventilator-associated bacterial pneumonia ((VABP) caused by susceptible isolates of staphylococcus aureus (including methicillin-susceptible and -resistant isolates). The product is also indicated for complicated skin and skin structure infections (cSSSI) caused by susceptible isolates of many Gram-positive microorganisms, in addition to Staphylococcus aureus.
Vibativ toxicity differs than Cempra’s Solithromycin toxicity as it is known to affect the kidneys, not the liver. So, the mitigation strategy consisted of the following decisions:
– In patients with pre-existing moderate/severe renal impairment Vibativ should be considered only when the benefit to the patient outweighs the risk.
– Monitoring renal function in all patients receiving Vibativ prior to initiation of treatment, during treatment, and at the end of treatment. If renal function decreases, the benefit of continuing Vibativ versus discontinuing it and initiating therapy with an alternative agent should be assessed.
– In elderly patients, care should be taken in dose selection.
– Women of childbearing potential should have a serum pregnancy test prior to administration of Vibativ.
– Avoiding using Vibativ during pregnancy unless the potential benefit to the patient outweighs the potential risk to the fetus. If not already pregnant, women of childbearing potential should use effective contraception during Vibativ treatment.
Another Vibativ adverse event is prolonging the QTc interval.
– Use of Vibativ should be avoided in patients with congenital long QT syndrome, known prolongation of the QTc interval, uncompensated heart failure, or severe left ventricular hypertrophy.
– Caution is warranted when prescribing Vibativ to patients taking drugs known to prolong the QT interval.
And more….
Having taken these precautionary measures, the regulatory agencies have granted theravance Biopharm’s drug Vibativ marketing approvals.
So what is the possible verdict regarding Cempra’s drug approval?
We have tendency to believe that the FDA will approve solithromycin for community acquired bacterial pneumonia. Our prediction is based on the fact that the drug is effective in treating the primary CABP Streptococcus pneumonia that are resistant to currently-approved macrolides, which, unfortunately, are still the most commonly prescribed antibacterial class of drugs for CABP in both hospital and community settings.
So, the time has come to find a new antibiotic for Community-acquired bacterial pneumonia. Solithromycin has proven effective and Cempra is working closely with the FDA, probably on mitigating the liver toxicity and following the Committee’s suggestions on the characterization of solithromycin hepatotoxicity.
ABOUT CEMPRA
Founded in 2006 and is headquartered in Chapel Hill, N.C. Cempra is a clinical-stage pharmaceutical company focused on developing antibiotics to meet critical medical needs in the treatment of bacterial infectious diseases.
Cempra has two lead product candidates in advanced clinical development:
1. Solithromycin: This antibiotic which has been evaluated in two Phase 3 clinical trials for community-acquired bacterial pneumonia (CABP) and has applications for approval for both intravenous and oral capsule formulations have been accepted for review by the FDA and the EMA. The product is licensed to Toyama Chemical Co., Ltd., a subsidiary of FUJIFILM Holdings Corporation, for certain exclusive rights in Japan.
Solithromycin is also in a Phase 3 clinical trial for uncomplicated urogenital urethritis caused by Neisseria gonorrhoeae or chlamydia. Cempra is contracted with BARDA for the development of solithromycin for pediatric use.
Three formulations, intravenous, oral capsules and a suspension formulation are in a Phase 1b trial in children from birth to 17 years of age.
2. Fusidic acid is being developed for acute bacterial skin and skin structure infections (ABSSSI) and is also in an exploratory study for chronic oral treatment of refractory infections in bones and joints.
Cempra has also synthesized novel macrolides for non-antibiotic uses for the potential treatment of chronic inflammatory diseases, endocrine diseases and gastric motility disorders.
For additional information about Cempra please visit www.cempra.com.
CEMP 52-week range is $6.60 – $34.24. The stock was trading today at almost the bottom of this range. After market hours, it gained $0.20 to close at $7.05. The stock is among those stocks that that tumbled since the forth quarter of 2015. In case the drug will be granted approval, investors who would buy at today’s price will make significant profits. Some investors will prefer to buy only after the approval, if any. They will make less profit than those who would buy now. With a little bit of chance, though, helped by negative investors who might continue to wage attacks on the firm and its management, those who decide to buy the stock following the drug’s approval if any, will have the opportunity to make substantial profit with no risk.
Which way do you prefer?
Prohost Forward-Looking: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our ‘opinions’ and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.
News & Comments
November 7, 2016
Cempra Stock has Been Cremated. Will Today’s Good News Resurrect It?
The nature the Presidential Election this time is weighing on investors’ chests and minds and mood and decisions. The stocks are typically reflecting investors’ inability to reason or make rational selection. Many are waiting for the election results to see whether they sell their portfolios or add to them. Negativity is the outcome fuelled by pessimism and by the simultaneous surfacing of articles and biographies of high ranking officials – all point to that political games are dominating every aspect of our lives, including the directions of our stocks’ moves.
The good news is that after sitting in the Oval Office, the newly elected President will have no time left to focus on any of the stuff discussed or promised during the election campaign.
We are optimistic.
Real Life
Cempra (CEMP) has News
Cempra (CEMP), whose stock’s 52-week high was over $34 is now trading at less than $7. The stock had closed on Friday trading at $7.55, opened today trading at $8.60 on good news announcing that the FDA Antimicrobial Drugs Advisory Committee (AMDAC) voted (7-6) that efficacy of Cempra’s lead antibiotic drug solithromycin outweighs the risks when the antibiotic is used to treat community-acquired bacterial pneumonia (CABP). It did not take long in the morning for the stock to experience a selloff of the stock in a rallying market day.
Why?
Investors realized that the advisory committee’s members have voted on three different aspects of the drug, the first, which we mentioned above was about the risk and the reward of using the drug on community-acquired bacterial pneumonia (CABP) patients; the second was about the evidence of efficacy of the antibiotic in treating CABP. The vote was in favor of the drug as the committee members voted unanimously (13-0) that there was substantial evidence of the efficacy of solithromycin in treating CABP. The third voting was on the product’s risk of liver toxicity and the members of the FDA Committee voted (12-1) that the risk of hepatotoxicity with solithromycin had not been adequately characterized. The members discussed a variety of potential approaches to further characterize the existing liver safety information on solithromycin.
The target date for the FDA to take action under the Prescription Drug User Fee Act (PDUFA) is December 27 and 28, 2016 for the oral and IV filings, respectively.
Prohost Observations
It is no secret anymore that antibiotic resistance is a big threat that is growing in alarming rates. In the U.S. alone, pneumonia is the leading cause of death due to infectious disease and rates of pneumococcal resistance to current marketed products regarding CABP exceeds 50 percent.
From the voting and the comments of the FDA Antimicrobial Drugs Advisory Committee (AMDAC), we can conclude that Cempra’s antibiotic solithromycin has the potential to offer the clinicians an important new treatment option for Community-acquired bacterial pneumonia (CABP), which is badly needed. In this regard it important to note the committee’s conviction that the drug is effective is clearly demonstrated in their unanimous voting (13-0) that there was a substantial evidence of the efficacy of solithromycin in treating CABP.
This is not all. Solithromycin is found also to be potent against most macrolide-resistant CABP pathogens. Moreover, studies demonstrate that Solithromycin is also potent against S. pneumoniae as well as against community-acquired methicillin resistant S. aureus (CA-MRSA), streptococci, haemophilus, enterococci, Mycobacterium avium and in animal models of malaria. Furthermore, the drug has demonstrated activity against atypical bacteria, such as legionella, chlamydia, mycoplasma, ureaplasma, gonococci and other organisms that cause genitourinary tract infections.
Important to note that Solithromycin is found to be eight to 16 times more potent thanazithromycin against many bacteria, including azithromycin-resistant strains. According to the firm, Solithromycin Activity against resistant strains is driven by its ability to interact with three sites on the bacterial ribosome, compared to the single binding site of first and second generation macrolides.
Will the FDA approve Solithromycin?
Knowing in fact that the FDA is not bound by the Advisory Committee’s guidance, but takes its advice into consideration when reviewing investigational medicines, we, like everybody else cannot read the FDA mind as the decision makers of the regulatory agency discuss and debate drugs for approval or rejection behind closed doors.
The verdict will depend on whether the FDA decision makers will come out of their debate agreeing on the Committee’s statement that solithromycin’s benefit outweighs the risks in the treatment of community-acquired bacterial pneumonia (CABP).
What about the liver toxicity?
AMDAC has voted 12-1 that the risk of hepatotoxicity with solithromycin had not been adequately characterized. The AMDAC Committee discussed a variety of potential approaches to further characterize the existing liver safety information on solithromycin.
All drugs have side effects with some of them life-threatening. Characterizing the organ toxicity and putting a strategy for mitigating the life-threatening effects opens the door to FDA approval in case the drug demonstrates efficacy and can act as a last resort when existing drugs stop working. Solithromycin has demonstrated efficacy in treating community-acquired bacterial pneumonia. There are examples of approvals of toxic antibiotics that the regulatory agency have granted them approvals when the developers put strategies that enable mitigating the toxicity.
An Example of an Approved Toxic Antibiotic
Theravance Biopharma
VIBATIV
Theravance Biopharma (TBPH) is one of Prohost picks. Its antibiotic Vibativ has been granted approval in spite of its kidney toxicity because the firm has put a successful toxicity mitigating strategy. Like Cempra’s drug solithromycin, Vibativ has proven effective in treating bacterial infection resistant to existing antibiotics. Vibativ, though, is indicated for other infections, including hospital-acquired pneumonia (HABP) and ventilator-associated bacterial pneumonia ((VABP) caused by susceptible isolates of staphylococcus aureus (including methicillin-susceptible and -resistant isolates). The product is also indicated for complicated skin and skin structure infections (cSSSI) caused by susceptible isolates of many Gram-positive microorganisms, in addition to Staphylococcus aureus.
Vibativ toxicity differs than Cempra’s Solithromycin toxicity as it is known to affect the kidneys, not the liver. So, the mitigation strategy consisted of the following decisions:
– In patients with pre-existing moderate/severe renal impairment Vibativ should be considered only when the benefit to the patient outweighs the risk.
– Monitoring renal function in all patients receiving Vibativ prior to initiation of treatment, during treatment, and at the end of treatment. If renal function decreases, the benefit of continuing Vibativ versus discontinuing it and initiating therapy with an alternative agent should be assessed.
– In elderly patients, care should be taken in dose selection.
– Women of childbearing potential should have a serum pregnancy test prior to administration of Vibativ.
– Avoiding using Vibativ during pregnancy unless the potential benefit to the patient outweighs the potential risk to the fetus. If not already pregnant, women of childbearing potential should use effective contraception during Vibativ treatment.
Another Vibativ adverse event is prolonging the QTc interval.
– Use of Vibativ should be avoided in patients with congenital long QT syndrome, known prolongation of the QTc interval, uncompensated heart failure, or severe left ventricular hypertrophy.
– Caution is warranted when prescribing Vibativ to patients taking drugs known to prolong the QT interval.
And more….
Having taken these precautionary measures, the regulatory agencies have granted theravance Biopharm’s drug Vibativ marketing approvals.
So what is the possible verdict regarding Cempra’s drug approval?
We have tendency to believe that the FDA will approve solithromycin for community acquired bacterial pneumonia. Our prediction is based on the fact that the drug is effective in treating the primary CABP Streptococcus pneumonia that are resistant to currently-approved macrolides, which, unfortunately, are still the most commonly prescribed antibacterial class of drugs for CABP in both hospital and community settings.
So, the time has come to find a new antibiotic for Community-acquired bacterial pneumonia. Solithromycin has proven effective and Cempra is working closely with the FDA, probably on mitigating the liver toxicity and following the Committee’s suggestions on the characterization of solithromycin hepatotoxicity.
ABOUT CEMPRA
Founded in 2006 and is headquartered in Chapel Hill, N.C. Cempra is a clinical-stage pharmaceutical company focused on developing antibiotics to meet critical medical needs in the treatment of bacterial infectious diseases.
Cempra has two lead product candidates in advanced clinical development:
1. Solithromycin: This antibiotic which has been evaluated in two Phase 3 clinical trials for community-acquired bacterial pneumonia (CABP) and has applications for approval for both intravenous and oral capsule formulations have been accepted for review by the FDA and the EMA. The product is licensed to Toyama Chemical Co., Ltd., a subsidiary of FUJIFILM Holdings Corporation, for certain exclusive rights in Japan.
Solithromycin is also in a Phase 3 clinical trial for uncomplicated urogenital urethritis caused by Neisseria gonorrhoeae or chlamydia. Cempra is contracted with BARDA for the development of solithromycin for pediatric use.
Three formulations, intravenous, oral capsules and a suspension formulation are in a Phase 1b trial in children from birth to 17 years of age.
2. Fusidic acid is being developed for acute bacterial skin and skin structure infections (ABSSSI) and is also in an exploratory study for chronic oral treatment of refractory infections in bones and joints.
Cempra has also synthesized novel macrolides for non-antibiotic uses for the potential treatment of chronic inflammatory diseases, endocrine diseases and gastric motility disorders.
For additional information about Cempra please visit www.cempra.com.
CEMP 52-week range is $6.60 – $34.24. The stock was trading today at almost the bottom of this range. After market hours, it gained $0.20 to close at $7.05. The stock is among those stocks that that tumbled since the forth quarter of 2015. In case the drug will be granted approval, investors who would buy at today’s price will make significant profits. Some investors will prefer to buy only after the approval, if any. They will make less profit than those who would buy now. With a little bit of chance, though, helped by negative investors who might continue to wage attacks on the firm and its management, those who decide to buy the stock following the drug’s approval if any, will have the opportunity to make substantial profit with no risk.
Which way do you prefer?
Prohost Forward-Looking: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our ‘opinions’ and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.
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