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Post by JHam on Jul 26, 2018 15:45:52 GMT
Here's one to potentially keep an eye on. Would love to hear thoughts. Paratek Pharmaceuticals (PRTK) Brief summaryParatek Pharmaceuticals, Inc. is a biopharmaceutical company focused on the development and commercialization of innovative therapies based upon its expertise in novel tetracycline chemistry. Paratek has used its expertise in biology and tetracycline chemistry to create chemically diverse and biologically distinct small molecules derived from the minocycline core structure. Paratek’s two lead product candidates are the antibacterials, omadacycline and sarecycline. Cash: $184.3M (as of mid April 2018)* Debt $60M Warrants, stock options etc: 5.9M o/s: 33.4M Market cap: $335M 80% institutional ownership. Current pps: $10.45 * Convertible debt offering in April 2018 raised $165M Near term major catalystPDUFA date under priority review estimated October 4, 2018. Advisory Committee Meeting August 8, 2018. Little greater detailPRTK has filed an NDA for one drug, omadacycline, tackling two indications, ABSSSI (acute bacterial skin and skin structure infections) and CABP (community-acquired bacterial pneumonia). Omadacycline comes in both oral capsule and IV form. This drug has undergone three P3 studies, all of them showing stellar results. They have a SPA in place and due to the need for new antibiotics have also been given priority review by the FDA. The scoopPRTK's stock has been on a steady decline over the past year. Most of this has to do with the fact that many assumed PRTK was going to get bought out by big pharma. Bloomberg even reported it here. Ultimately PRTK management has decided to go it alone commercially, which is obviously much riskier, especially for a company that has no experience bringing a drug to market. Speculation that no big pharmas matched the price they wanted. If approved, Paratek believes they will become a major player in the space, worth $9B in the US alone. They plan to go it alone in the US and license out to ex-US territories. Their recent offering gives them enough cash to launch Omadacycline, with a runway to Q1 2021. The CCO said on the Q2 call that they plan on licensing out to Europe and Japan in the near future, while also collecting milestone/royalty payments from their other drug, Sarecycline, which is licensed out to Allergan. ConsLinezolid (or generic Zyvox from Pfizer) is a similar drug and priced very low. While Omadacycline is slightly better in efficacy, a bit better with AEs, and not susceptible yet to resistances (there are currently two known resistance mechanisms to Zyvox), some feel that unless the price for Omadacycline is not similar or even less than Linezolid/Zyvox, that doctors may not prescribe it as much. As/if bondholders cash out their notes it will add dilution (up to 10M shares) to the float. ProsThere are some indications that Omadacycline treats that Zyvox does not, CAP (Community-acquired pneumonia) and MRSA (is now resistant). They have a ton of cash. Their current cash on hand ($184M) gets them to 1Q 2021, and that's before any notes are sold. Assuming all notes are sold they will have $340M in cash and only $60M in debt. Plenty of cash to launch Omadacycline and continue operations for the foreseeable future. ConclusionI think there is a good chance they get a positive recommendation for approval on August 8th. I like the risk/reward at these levels (the pps was $27 10 months ago before in became known that they were going to go it alone). Incidentally, some believe, and I do as well, that the recent convert deal was to better position themselves in buyout negotiations after FDA approval. There is a big risk that they don't get approved and/or the company has vastly overestimated the value of the drug. I'm also surprised there has not been more of a run-up to this point, seeing that the AdCom meeting is in a few weeks. So I'm not sure exactly how to play this. As someone calculated in a SA article, in the worse case scenario their two drugs combined coupled with cash on hand plus full dilution from converts plus debt, and the company is still worth at least $420M or $11 per share. And that is rock bottom in my opinion. Q1 cc transcript: seekingalpha.com/article/4171733-paratek-pharmaceuticals-prtk-ceo-michael-bigham-q1-2018-results-earnings-call-transcript?part=singleGood article on the science/expectations: seekingalpha.com/article/4153599-paratek-pharmaceuticals-realistic-case-omadacyclineGood article going in-depth about financials: seekingalpha.com/article/4164161-paratek-offers-bears-another-reason-sell |
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Post by JHam on Jul 26, 2018 15:49:47 GMT
Here is a good write up from LifeSci Capital a few months back: www.lifescicapital.com/research/442018-paratek-announces-acceptance-of-their-ndas-for-omadacycline-in-absssi-and-cabp/Paratek Pharmaceuticals (PRTK) Paratek Announces Acceptance of Their NDAs for Omadacycline in ABSSSI and CABP On April 4 th, Paratek (NasdaqGM: PRTK) announced the acceptance of their NDA filings for
intravenous and oral formulations of omadacycline. The NDAs are supported by a strong data
package from three Phase III trials with highly significant results, covering IV-to-oral use in
acute bacterial skin and skin structure infections (ABSSSI) and community-acquired bacterial
pneumonia (CABP) as well as oral-only use for ABSSSI. Paratek’s NDAs have been granted
priority review and a PDUFA date of October 2 nd, which could allow a launch in January 2019
if approved. The NDA acceptance letter indicates that no review issues have been identified
and we consider the safety and efficacy data generated in their Phase III program to be roughly
the best-case scenario. We remain highly confident of the chances for approval and a successful
commercial launch and look forward to more clarity in the upcoming Advisory Committee
meeting at a later date.
■ Looking Forward to October 2nd PDUFA Date.
Paratek sits in an incredibly strong
position and we have a great deal of confidence in the chances of omadacycline winning
approval and, in the long run, being a commercial success. We’ve learned today in the PR
announcing the acceptance that there will be an Advisory Committee meeting, which is
not a huge shock given that 1) omadacycline is a New Chemical Entity (NCE), and 2)
unexpected troubles that have befallen other antibiotics companies like the liver toxicities
that emerged in the review of Cempra’s solithromycin. However, the letter clearly indicates
that no filing or potential review issues have been identified. In addition, the Phase III
data show a favorable safety profile with no concerning signals. There was some noise
surrounding the GI-related AEs (i.e. nausea, diarrhea) in Paratek’s oral-only ABSSSI study.
We consider this a non-issue. We have talked to physicians, and they desperately need new
antibiotics that are effective. We don’t expect this to impact prescribing habits at all.
The NDAs were accepted for priority review with a PDUFA date of October 2nd, which
could pave the way for a launch in the hospital setting in January 2019, if not earlier. We
remain confident in the opportunity for omadacycline and believe that its product profile
closely aligns with the pressing needs in the field.
■ Under Promise, Over Deliver.
We think that investors may fail to appreciate how
impressive Paratek’s execution has been on completing their clinical program for
omadacycline in ABSSSI and CABP. Missing development timelines is such a common
occurrence in the world of biotech that we sometimes grow numb to it. Paratek has
consistently reported trial data ahead of schedule and even completed an additional Phase
III trial without any delay to their filing. And not because they needed to, but because it
would greatly accelerate the timeline in which they could pivot to marketing to the broader
community setting. The potential for inclusion of oral-only use in the label at the time of
commercial launch could help shape a successful launch as well as frame conversations
with potential partners. |
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Post by JHam on Jul 30, 2018 16:13:13 GMT
Just opened a medium position at $10.10.
a) They are flush with cash (runway until 2021)
b) No need for dilution in the next 2 years at least
c) Lead candidate is a new antibiotic proven to be not inferior to other antibiotics, strong efficacy data against antibiotic-resistant bacteria like Staph and MRSA, and has shown efficacy for multiple indications
d) Desperate need for new antibiotics that have efficacy against antibiotic-resistant bacteria
e) Size of the market for patients unresponsive to generic treatments for ABSSSI and CABP to total around $2.6 billion by 2028
f) Met all relevant endpoints in the SPA pivotal trial meaning high likelihood they receive a positive recommendation next Wednesday (Aug. 8th) from the Adcom committee which means...
g) High probability that they receive FDA approval (they are under priority review) in October
h) If they receive FDA approval they plan to launch in 1Q 2019
i) 80% institutional ownership
If you factor in full dilution of the converts, they would have $580M in cash compared to their current $335M market cap. So they could easily pay off the remaining $60M debt and have enough to see this drug to the market.
My biggest fear is that they don't have experience in commercialization and stumble out of the gate. Not sure if I'll still be holding at that time anyway, so I consider that a concern for later down the road. Hopefully the market does too.
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Post by JHam on Jul 30, 2018 17:59:32 GMT
Two slides from the latest corporate presentation highlighting the market potential for Omadacycline.  |
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Post by magnus123 on Jul 30, 2018 21:21:27 GMT
Thank you for presenting this comoany here, Jham. I search actually for an interesting Biotech company to invest in and this looks very interesting.
I will do some own research on this one in the coming days, so i can maybe invest some money before the Adcom meeting occurs.
I cant see any reason at first glance, why the FDA should reject the NDA.
Most likely, i will take here a small position ahead the Adcom meeting and then reevaluate.
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Post by JHam on Jul 31, 2018 1:31:16 GMT
Thank you for presenting this comoany here, Jham. I search actually for an interesting Biotech company to invest in and this looks very interesting. I will do some own research on this one in the coming days, so i can maybe invest some money before the Adcom meeting occurs. I cant see any reason at first glance, why the FDA should reject the NDA. Most likely, i will take here a small position ahead the Adcom meeting and then reevaluate. Follow me into a stock at your own risk  Seriously though, I'd love to hear some feedback and some analysis from others that confirm/challenge behind my thesis for investing. Some are concerned/confused as to why there hasn't been a run-up yet in anticipation of the August 8th Adcom meeting. I think most may want to see what the committee recommends before diving in prior to the Oct. 4th PDUFA meeting. PDUFA dates for 3 indications in October.  |
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Post by JHam on Jul 31, 2018 1:36:19 GMT
I added another lot at $10.05. We are at the 52 wk/all time lows at the moment.
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Post by magnus123 on Jul 31, 2018 6:08:54 GMT
Thank you for presenting this comoany here, Jham. I search actually for an interesting Biotech company to invest in and this looks very interesting. I will do some own research on this one in the coming days, so i can maybe invest some money before the Adcom meeting occurs. I cant see any reason at first glance, why the FDA should reject the NDA. Most likely, i will take here a small position ahead the Adcom meeting and then reevaluate. Follow me into a stock at your own risk Seriously though, I'd love to hear some feedback and some analysis from others that confirm/challenge behind my thesis for investing. Some are concerned/confused as to why there hasn't been a run-up yet in anticipation of the August 8th Adcom meeting. I think most may want to see what the committee recommends before diving in prior to the Oct. 4th PDUFA meeting. PDUFA dates for 3 indications in October. View AttachmentI dont wanna follow you, but want to invest aside you:P Seriously, Paratek looks interesting. And the not existent run-up so far before adcom meeting means nothing. I saw to many stocks that are pushed to acdom and were then destroyed. Yesterday, i bought Progenics before approval. They have fallen 16% from their last high bevore approval and didnt run up before PDUFA. It was nethertheless approved yesterday. What i like is, that Paratek is fnancially in a very strong position with their cash level. |
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Post by JHam on Jul 31, 2018 6:28:17 GMT
Follow me into a stock at your own risk Seriously though, I'd love to hear some feedback and some analysis from others that confirm/challenge behind my thesis for investing. Some are concerned/confused as to why there hasn't been a run-up yet in anticipation of the August 8th Adcom meeting. I think most may want to see what the committee recommends before diving in prior to the Oct. 4th PDUFA meeting. PDUFA dates for 3 indications in October. I dont wanna follow you, but want to invest aside you:P Seriously, Paratek looks interesting. And the not existent run-up so far before adcom meeting means nothing. I saw to many stocks that are pushed to acdom and were then destroyed. Yesterday, i bought Progenics before approval. They have fallen 16% from their last high bevore approval and didnt run up before PDUFA. It was nethertheless approved yesterday. What i like is, that Paratek is fnancially in a very strong position with their cash level. Haha! Great! It's nice to have someone beside me to go down together with  Well done getting in before the PGNX FDA approval. Agreed about PRTK's cash position. Here is the purchase agreement if you are curious or haven't gone through it already. Looking to see if there are any red flags in there: www.sec.gov/Archives/edgar/data/1178711/000156459018008769/prtk-8k_20180423.htm |
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Post by JHam on Jul 31, 2018 6:59:43 GMT
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Post by magnus123 on Jul 31, 2018 9:28:09 GMT
Haha, its always better to have someone to go down together with  Thanks, it was really a short-circuit decision on Progenics yesterday. Normally not the right way to earn money...but i was very lucky:) I will take a look on the sec filing you nentioned. |
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Post by JHam on Jul 31, 2018 14:59:53 GMT
The biggest knocks against this company/stock are that it may be a dud when it hits the market due to cheap generics, and that in general the antibiotics area has been left for dead. This could be the reason why there is a lack of run-up/enthusiasm at this point. Rather than me go into detail, for those interested, I highly recommend reading this article. Especially the comments section: seekingalpha.com/article/4091966-paratek-beware-experts |
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Post by selluwud on Jul 31, 2018 17:01:29 GMT
Thanks for bringing this one up Ham. I got a small buy in yesterday at 10.00 in hopes of a quick turn. I don't expect the product to be a run away if approved, but the pps will hopefully spike enough to make a little profit with good news. Good luck, misery loves company.
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Post by vautee on Jul 31, 2018 17:06:49 GMT
Unfortunately the antibiotic market is out of favor right now, despite the high need for new, better options. See what happened with AKAO recently.
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Post by JHam on Jul 31, 2018 17:39:54 GMT
Unfortunately the antibiotic market is out of favor right now, despite the high need for new, better options. See what happened with AKAO recently. Yes, it's hard to read about PRTK without someone bringing up AKAO and their recent issues with the mixed FDA decision. Or NBRV, which failed safety but will still file an NDA anyway. What I like about PRTK is that Omadacycline seems to have a better safety profile and can treat multiple indications. But yeah, the market doesn't seem to care about antibiotics at the moment. The lack of love for antibiotics is probably why PRTK decided to go it alone. While I think they will get approved, I also think the ultimate annual revenue for Omadacycline is somewhere between the bear number and the company's forecasted numbers. One interesting comment in the SA articles from a known scientist is that these antibiotics usually have terrible sales the first 2 years on the market. |
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Post by selluwud on Jul 31, 2018 19:08:48 GMT
Unfortunately the antibiotic market is out of favor right now, despite the high need for new, better options. See what happened with AKAO recently. Yes, it's hard to read about PRTK without someone bringing up AKAO and their recent issues with the mixed FDA decision. Or NBRV, which failed safety but will still file an NDA anyway. What I like about PRTK is that Omadacycline seems to have a better safety profile and can treat multiple indications. But yeah, the market doesn't seem to care about antibiotics at the moment. The lack of love for antibiotics is probably why PRTK decided to go it alone. While I think they will get approved, I also think the ultimate annual revenue for Omadacycline is somewhere between the bear number and the company's forecasted numbers. One interesting comment in the SA articles from a known scientist is that these antibiotics usually have terrible sales the first 2 years on the market. i'll ask my daughter, a Doctor of clinical pharmacy, for her take on it? She doses a lot of Vancomycin for most drug resistant cases. |
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Post by JHam on Aug 1, 2018 1:05:15 GMT
Yes, it's hard to read about PRTK without someone bringing up AKAO and their recent issues with the mixed FDA decision. Or NBRV, which failed safety but will still file an NDA anyway. What I like about PRTK is that Omadacycline seems to have a better safety profile and can treat multiple indications. But yeah, the market doesn't seem to care about antibiotics at the moment. The lack of love for antibiotics is probably why PRTK decided to go it alone. While I think they will get approved, I also think the ultimate annual revenue for Omadacycline is somewhere between the bear number and the company's forecasted numbers. One interesting comment in the SA articles from a known scientist is that these antibiotics usually have terrible sales the first 2 years on the market. i'll ask my daughter, a Doctor of clinical pharmacy, for her take on it? She doses a lot of Vancomycin for most drug resistant cases. Thank you! |
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Post by JHam on Aug 1, 2018 4:07:32 GMT
Yes, it's hard to read about PRTK without someone bringing up AKAO and their recent issues with the mixed FDA decision. Or NBRV, which failed safety but will still file an NDA anyway. What I like about PRTK is that Omadacycline seems to have a better safety profile and can treat multiple indications. But yeah, the market doesn't seem to care about antibiotics at the moment. The lack of love for antibiotics is probably why PRTK decided to go it alone. While I think they will get approved, I also think the ultimate annual revenue for Omadacycline is somewhere between the bear number and the company's forecasted numbers. One interesting comment in the SA articles from a known scientist is that these antibiotics usually have terrible sales the first 2 years on the market. i'll ask my daughter, a Doctor of clinical pharmacy, for her take on it? She doses a lot of Vancomycin for most drug resistant cases. selluwud, I am curious if your daughter would agree with the results from this survey conducted by Life Sci advisors. From Life Sci market study: www.lifescicapital.com/analysis/physician-survey-community-acquired-bacterial-pneumonia/"We conducted a survey on prescribing habits for community-acquired bacterial pneumonia
(CABP) in order to better understand the existing unmet needs in the space, current treatment
paradigms, and response to updated FDA guidance on the use of fluoroquinolones. We
surveyed 120 healthcare professionals, including 34 emergency medicine specialists (EMR), 28
infectious disease specialists (INF), 26 hospitalists (HOS), 16 primary care providers (PCP),
and 16 nurse practitioners (NP).
AnalystDavid Sherman, Ph.D. (AC)■ Key Results from the Survey. Below are the most important findings from our analysis of the survey data:◦ Need for Oral Drugs Targeting Drug-Resistant Pathogens – This was most frequently cited—by 43% of physicians—as thebiggest unmet need in CABP.◦ Most Important Features in Selecting an Antibiotic – The physicians cited the importance of an antibiotic being well-tolerated,having an IV-to-oral step-down, and having a low propensity to cause C. difficile infections.◦ Fluoroquinolone Use is Expected to Decrease in CABP – 56% of surveyed physicians expected to prescribe fluoroquinolonesfor CABP less often following the updated FDA guidance earlier this year.◦ Focus on Lowering Treatment Costs – Lower cost of therapy and reducing hospital stays, a major driver of treatment cost, werecommonly cited as pressing unmet needs in CABP.◦ Empiric Treatment is Standard Practice in CABP – The surveyed physicians performed cultures only roughly 40% of the timein CABP patients, highlighting the importance of empiric treatment options.Best in class? Let's take 4 important antibiotic attributes:Broad Spectrum MonotherapyIV to oral optionOnce DailyFavorable Safety and Tolerability"OMD possesses all four attributes. Penicillins, TMP-SMX and Cephalosporins possess two of these attributes (IV to oral and Favorable Safety and Tolerability). Macrolides possess three attributes (IV to oral, Once Daily, and Favorable Safety and Tolerability). Fluoroquinlones possess three attributes (all of them except Favorable Safety and Tolerability). |
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Post by JHam on Aug 1, 2018 11:26:29 GMT
After reading more about this today, the poo-pooing of antibiotics as of recent has everything to do with pricing (assuming it is a safe an efficacious drug). While old antibiotics and their generic forms may not be quite as efficacious as some of these new ones, thought among the bears is that insurers and payors won't want to pay $500M for a new drug when they can use an already proven drug for a fraction of the cost. There is more to it than that imo, as one of the benefits of Omadacyline is the ability to switch from IV to oral. The bears would argue even that is not worth the cost. I'm not so sure. I read some compelling arguments as to why it is indeed worth paying more. Nonetheless, PRTK management addressed this on the 1Q conference call:
Ami Fadia
Can I ask a follow-up question on a different topic if I may? Can you elaborate on any work or activities undergoing, with respect to some of the pricing research that you have talked about? And if you can provide us any color from your ongoing discussions with payors, that would be helpful?
Adam Woodrow
So the payor discussions have been remarkably consistent. We had about four or five discussions with payor groups now. One of the things that's a universal theme, is that in the anti-infected space, in particular with the community acquired pneumonia indication, payors don't really want to manage that too closely, which is unusual, I mean, as you are probably aware in many areas today, the payors have taken a very-very close look at launches and they are doing everything in their power to slow the decision to reimburse. That's not the case here. They have been remarkably consistent in saying that they see an unmet medical need, and they understand it and from a pricing perspective, at least in the ballparks that we are using to get them sort of directionality, they have no issues with the overall price per therapy, because there is no annuity of care here, which is one of the things in our favor.
They also fully understand the IV to oral transition, and the fact that they are actually paying less if a patient is on an oral at home, than they are for the hotel fees of staying in a hospital. And so they understand the value proposition very-very well. So we are very encouraged with those discussions so far, and don't foresee major issues, at least from a sort of commercial perspective, when it comes to pricing.
Now, actually the pricing itself, as you are probably aware, we have always given zyvox as a potential analog pre-genericization as a sort of cost therapy, and that still remains our guidance. We are actually in the middle of our pricing research at this moment, and I'd prefer to actually give you more clarity on that, as we get closer to launch, and probably straight after we have been given our label.
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Post by selluwud on Aug 1, 2018 12:07:10 GMT
i'll ask my daughter, a Doctor of clinical pharmacy, for her take on it? She doses a lot of Vancomycin for most drug resistant cases. selluwud, I am curious if your daughter would agree with the results from this survey conducted by Life Sci advisors. From Life Sci market study: www.lifescicapital.com/analysis/physician-survey-community-acquired-bacterial-pneumonia/"We conducted a survey on prescribing habits for community-acquired bacterial pneumonia
(CABP) in order to better understand the existing unmet needs in the space, current treatment
paradigms, and response to updated FDA guidance on the use of fluoroquinolones. We
surveyed 120 healthcare professionals, including 34 emergency medicine specialists (EMR), 28
infectious disease specialists (INF), 26 hospitalists (HOS), 16 primary care providers (PCP),
and 16 nurse practitioners (NP).
AnalystDavid Sherman, Ph.D. (AC)■ Key Results from the Survey. Below are the most important findings from our analysis of the survey data:◦ Need for Oral Drugs Targeting Drug-Resistant Pathogens – This was most frequently cited—by 43% of physicians—as thebiggest unmet need in CABP.◦ Most Important Features in Selecting an Antibiotic – The physicians cited the importance of an antibiotic being well-tolerated,having an IV-to-oral step-down, and having a low propensity to cause C. difficile infections.◦ Fluoroquinolone Use is Expected to Decrease in CABP – 56% of surveyed physicians expected to prescribe fluoroquinolonesfor CABP less often following the updated FDA guidance earlier this year.◦ Focus on Lowering Treatment Costs – Lower cost of therapy and reducing hospital stays, a major driver of treatment cost, werecommonly cited as pressing unmet needs in CABP.◦ Empiric Treatment is Standard Practice in CABP – The surveyed physicians performed cultures only roughly 40% of the timein CABP patients, highlighting the importance of empiric treatment options.Best in class? Let's take 4 important antibiotic attributes:Broad Spectrum MonotherapyIV to oral optionOnce DailyFavorable Safety and Tolerability"OMD possesses all four attributes. Penicillins, TMP-SMX and Cephalosporins possess two of these attributes (IV to oral and Favorable Safety and Tolerability). Macrolides possess three attributes (IV to oral, Once Daily, and Favorable Safety and Tolerability). Fluoroquinlones possess three attributes (all of them except Favorable Safety and Tolerability). I will see my daughter this evening and I will bring up this survey and see if falls within her everyday working knowledge. She's pretty sharp, her specialty is transitional care, reviewing prescribed drug guidelines with patients being released from the hospital. Insurance companies put the cost of care back on the hospitals if patients are readmitted within 30 days for the same conditions they were admitted for originally. Her documented consultations give proof that a patients failure to follow the self care dosage directions can put the cost back on the patient. Health insurance is going to be the straw that breaks the camel's back eventually. |
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Seriously though, I'd love to hear some feedback and some analysis from others that confirm/challenge behind my thesis for investing. 
