August 27, 2018 / 9:06 PM / 3 months ago

UPDATE 1-U.S. FDA approves Tetraphase Pharma's antibiotic

(Adds comments from company, analyst)

By Saumya Joseph and Tamara Mathias

Aug 27 (Reuters) - Tetraphase Pharmaceuticals Inc said on Monday U.S. health regulators approved its drug to treat complicated intra-abdominal infections, providing a new option to combat the growing threat from treatment-resistant bacteria.

Xerava, the company's lead drug, uses a technology licensed from Harvard University that helps to "revitalize" the decades-old tetracycline class of antibiotics to overcome traditional resistance mechanisms that bacteria have developed over time.

Tetraphase, which expects to launch the drug in the United States in October, is considering a list price in the range of $200 to $300 per day, Chief Executive Officer Guy Macdonald told Reuters, noting that other recently-approved antibiotics used as a last line of treatment are priced at nearly $1,000 per day.

"We're trying to price Xerava at the lower end, so that patients can get access to the product when they need it in first or second line therapy," he said.

A committee to the European Medicines Agency recently gave a positive opinion on the drug and regulators are expected to make a final decision in a couple of months.

H.C. Wainwright analyst Ed Arce estimates that the drug will bring in peak sales of about $340 million in the United States and the European Union in 2027.

The market is worth between $400 million and $600 million in the U.S. and Europe, according to the company.

The approval comes at a time when several drugmakers are shying away from developing antibiotics as combating resistant "superbugs" become increasingly challenging.

AstraZeneca Plc and Novartis AG have exited the space, and earlier this year Allergan Plc said it was planning to sell its infectious disease unit, which includes antibiotic treatments.

"Given that a lot of these companies are looking to exit or have already recently... I don't think M&A is necessarily on the table (for Tetraphase) in the near-term," Arce told Reuters ahead of the approval.

Xerava has been approved for the treatment of complicated intra-abdominal infections in patients 18 years of age and older, the company said.

"But I think it's reasonable to assume that ...there would be some meaningful degree of off-label use as well," Arce said.

Reporting by Saumya Sibi Joseph and Tamara Mathias in Bengaluru; Editing by Sriraj Kalluvila

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