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Biopharma Releases New Antibiotic in the US for Complicated UTIs
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A LifeSci Capital report reviewed why uptake of a drug that targets complicated urinary tract infections could be significant and swift.

In a July 20 research note, analyst David Sherman with LifeSci Capital reported that Achaogen Inc. (AKAO:NASDAQ) launched Zemdri (plazomicin) in the United States for treatment of complicated urinary tract infections (cUTI), including pyelonephritis.

Sherman provided the following reasons for why plazomicin could be well received by the health care industry.

1. The timing of the drug hitting the market is favorable. Existing treatments for cUTI have become less effective due to the continuing rise of pathogens becoming drug-resistant, which is a mounting concern. This has increased costs for hospitals and payers. It has led physicians to more often rely on prescribing colistin, "an antibiotic with serious toxicity and tolerability concerns," and carbapenems, "which are becoming less effective due to increasing rates of resistance," described Sherman.

With plazomicin, doctors now have a new treatment option for patients with a suspected or proven multidrug-resistant cUTI. Sherman explained that "this is a meaningful improvement for the field, due to the drug's ability to overcome aminoglycoside-modifying enzymes as well as its activity against extended spectrum beta lactamase-producing bacteria and carbapenem-resistant pathogens."

2. Opportunities exist for plazomicin to be used off label. Physicians likely will use the drug for life-threatening bloodstream infections, given the unmet need due to the paucity of safe, effective options and given the antibiotic's "strong microbiological data," Sherman noted. Because of the serious nature of these infections, chances are low of formularies disallowing and not paying for the use of plazomicin in this way.

3. The formulation and drug delivery of plazomicin, once daily for 30 minutes intravenously, could allow for it to be administered on an outpatient basis. This means patients could be discharged from the hospital earlier, thereby reducing costs.

4. Achaogen's support to hospitals surrounding plazomicin could lead them to quickly include it in their formularies. The company will help facilities set up "susceptibility testing and therapeutic drug monitoring assays for plazomicin," Sherman wrote. Additionally, it will "inform them of plazomicin's profile, aid in building the infrastructure to support plazomicin use and provide reimbursement support across multiple settings of care." All of these efforts should ultimately help drive sales.

About plazomicin, Sherman concluded, "We expect broad inclusion on hospital formularies and anticipate extensive off-label use, given the pressing unmet needs in treating carbapenem-resistant Enterobacteriaceae and other serious multi-drug resistant infections."

LifeSci Capital does not have a rating or target price on Achaogen. The company's current share price is $7.33.


1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from LifeSci Capital, Achaogen, July 20, 2018

Analyst Certification: The research analyst denoted by an "AC" on the cover of this report certifies (or, where multiple research analysts are primarily responsible for this report, the research analyst denoted by an "AC" on the cover or within the document individually certifies), with respect to each security or subject company that the research analyst covers in this research, that: (1) all of the views expressed in this report accurately reflect his or her personal views about any and all of the subject securities or subject companies, and (2) no part of any of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report.

This research contains the views, opinions and recommendations of LifeSci Capital, LLC (“LSC”) research analysts. LifeSci Advisors, LLC, an affiliate of LSC under common control with LSC (the “Affiliate”) has provided non-investment banking securities-related services, non-securities services, and other products or services other than investment banking services to the subject company and received compensation for such services within the past 12 months. In connection with those services, LSC is paid a monthly payment of $1,000 from the Affiliate for preparing and distributing research pertaining to each subject company under contract with the Affiliate. The subject company of this report is covered by this arrangement between LSC and the Affiliate, and LSC has therefore indirectly received compensation from the subject company for publishing this report. No explicit or implicit promises of favorable research coverage have been made to the subject company by LSC or the Affiliate. Neither LSC nor the Affiliate has promised any specific research content as an inducement for the receipt of business or compensation. Additionally, LSC expects to receive or intends to seek compensation for investment banking services from the subject company in the next three months. LSC (or an affiliate) has also provided non-investment banking securities-related services, non-securities services, and other products or services other than investment banking services to the subject company and received compensation for such services within the past 12 months. LSC does not make a market in the securities of the subject company.

Neither the research analyst(s), a member of the research analyst’s household, nor any individual directly involved in the preparation of this report, has a financial interest in the securities of the subject company. Neither LSC nor any of its affiliates beneficially own 1% or more of any class of common equity securities of the subject company

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