In an Oct. 3 research note, analyst Ed Arce reported the FDA approved two of Paratek Pharmaceuticals Inc.'s (PRTK:NASDAQ) therapies, Seysara and Nusyra, on Oct. 1 and Oct. 2, respectively.
As expected, Arce noted, Nusyra was approved as treatment for both community-acquired bacterial pneumonia and acute bacterial skin and skin structure infections (ABSSSI).
For both conditions, Nusyra may be given on an intravenous-to-oral basis, a 200 mg intravenous infusion first as a loading dose on day one, followed by 300 mg by mouth a day for seven to 14 days. The single intravenous administration is "an incremental positive" over the two to three days of infusion required in the pivotal trials, Arce pointed out.
For ABSSSI, an all-oral regimen is allowed, consisting of a loading dose of 450 mg once on the first and second days, followed by 300 mg per day. Because the dosing is all by mouth for this indication, Nusyra is more likely to be widely adopted.
In either indication, patients must fast for four hours before and two hours after taking a tablet, which Arce described as "one slight surprise to us."
Paratek intends to announce the price of Nusyra in Q4/18 and commercially launch the therapeutic in Q1/19. H.C. Wainwright estimates that sales of the drug will reach a peak of $1.75 billion.
The other drug, Seysara (saracycline), was approved for the treatment of inflammatory lesions resulting from non-nodular, moderate to severe acne vulgaris in 9-plus year olds, relayed Arce. Almirall, which owns the rights to Seysara, expects to commercially launch it in January 2019 and eventually reach peak annual sales of an estimated $150–200 million.
Paratek is entitled to receive from Almirall royalties on U.S. net sales, in addition to the $12 million approval milestone payment now due.
Arce reiterated his firm's Buy rating and $55 per share price target on Paratek. The target reflects more than fivebagger return potential, as the stock is currently trading at around $9.24 per share.
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Disclosures from H.C. Wainwright & Co., Paratek Pharmaceuticals Inc., First Take, Oct. 3, 2018
I, Ed Arce, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst’s household has a financial interest in the securities of Paratek Pharmaceuticals, Inc. (including, without limitation, any option, right, warrant, future, long or short position).
As of September 30, 2018 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Paratek Pharmaceuticals, Inc., Spero Therapeutics, Inc.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The Firm or its affiliates did not receive compensation from Paratek Pharmaceuticals, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
The Firm does not make a market in Paratek Pharmaceuticals, Inc. as of the date of this research report.
