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Optimer Pharmaceuticals Inc. Reports Operating Results (10-K)

March 10, 2011 | About:

Optimer Pharmaceuticals Inc. (OPTR) filed Annual Report for the period ended 2010-12-31.

Optimer Pharmaceuticals Inc. has a market cap of $537.4 million; its shares were traded at around $11.87 with and P/S ratio of 601.9. Optimer Pharmaceuticals Inc. had an annual average earning growth of 19.2% over the past 5 years.

Highlight of Business Operations:

We previously acquired exclusive rights to OPT-822/821, a combination of a novel carbohydrate-based cancer immunotherapy together with an adjuvant, which we licensed from Memorial Sloan-Kettering Cancer Center, or MSKCC. In October 2009, we assigned to our subsidiary, Optimer Biotechnology, Inc., or OBI, certain of our patent rights and know-how related to OPT-822/821 and also assigned to OBI our rights and obligations under a related license agreement with MSKCC. In April 2010, OBI filed an investigational new drug application, or IND, in Taiwan for OPT-822/821, and in January 2011, OBI initiated a Phase 2/3 clinical trial for the treatment of metastatic breast cancer which it intends to conduct in Taiwan, South Korea, Hong-Kong and Singapore. Other potential indications for OPT-822/821 are being evaluated. We have the right to receive up to $10 million from OBI in future milestone payments related to the development of OPT-822/821 as well as royalties on net sales of this product candidate. In February 2011, pursuant to an amendment to an October 2009 financing agreement, OBI sold newly-issued shares of its common stock for gross proceeds of approximately 462.0 million New Taiwan Dollars (approximately $15.5 million based on then- current exchange rates). We purchased 277.2 million New Taiwan Dollars (approximately $9.3 million based on then-current exchange rates) of the shares issued in the financing, such that we currently maintain a 60% equity interest in OBI.

The anti-infective market is one of the largest therapeutic categories worldwide. According to IMS Health, the combined market for prescription antibacterial drugs in 2009 was reported to be $39.7 billion worldwide. The largest antibacterial sales per region were: North America ($11.1 billion), Europe ($10.5 billion), Asia Pacific ($12.7 billion), and others ($5.4 billion). The market for anti-infective products is generally divided into two categories, nosocomial infections and community-acquired infections, which represent approximately 30% and 70% of the anti-infectives market, respectively. According to the U.S. Centers for Disease Control and Prevention, or CDC, approximately two million nosocomial infections occur annually in the United States and these infections can increase the average length of hospital stays by seven to nine days. Approximately four million nosocomial infections occur annually in Europe, three million in North America, two million in South America and two million in East Asia (excluding China). Nosocomial infections are costly to address, with an estimated annual aggregate healthcare cost in the United States and the United Kingdom of approximately $4.5 billion and $1.9 billion, respectively. In addition, in the United States, nosocomial infections cause approximately 100,000 deaths annually, making them one of the five leading causes of death in the United States. We believe that bacterial infections, especially infections caused by difficult-to-treat, drug resistant bacteria, cause or contribute to a majority of these deaths.

Generally, CDI results in longer hospital stays and increases average patient cost which is often not reimbursed to the hospital. In more complicated cases of CDI, hospitalization may be prolonged by up to two weeks. A recent analysis suggests that patients with CDI have their hospital stay extended by at least 3 days compared with patients without the infection, with the incremental cost of approximately $13,700 per patient. The total annual costs associated with hospital cases of CDI in United States are estimated at $3.2 billion. According to the data presented at the 2006 ICAAC, CDI results in an estimated increase in average patient cost of over $6,000 per patient in the United Kingdom and the total projected annual cost for treating the disease in Europe is approximately $3.8 billion.

· Cost effectiveness as a result of lower rates of recurrence, VRE colonization and complications in high risk sub-populations. For example, in an analysis of Medicare claims during 2007 and 2008, the cost of a CDI recurrence was estimated at between $10,100 to $34,000 and thus fidaxomicin has the potential to provide a significant cost advantage based upon the 47% reduction in recurrence versus oral vancomycin in our two Phase 3 studies;

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