Introduction
Nabriva Therapeutics PLC (NBRV, Financial) is developing a novel first-in-class antibiotic for community-acquired bacterial pneumonia. Acute bacterial skin and skin structure infections (ABSSSI) is a secondary use it is aiming for. Let’s look at Nabriva’s investment case considering Paratek Pharmaceutical Inc.'s (PRTK, Financial) compound, omadacycline, also targets these indications.
Nabriva’s lead compound
Nabriva Therapeutics’ lead product candidate, lefamulin, is a novel semi-synthetic pleuromutilin antibiotic with the potential to become the first pleuromutilin antibiotic for intravenous and oral administration in humans.
Lefamulin has a new mechanism of action with four distinctive binding sites in the highly-conserved core of the ribosomal peptidyl transferase center. It targets anti-bacterial spectrum against respiratory pathogens (gram-positive, gram-negative and atypical bacteria).
Based on in vitro studies, it has low propensity for development of bacterial resistance and lack of cross resistance with other antibiotic classes.
Lefamulin needs to have two positive phase three studies to meet the requirements set by the Food and Drug Administration:
LEAP 1:
- Evaluate the efficacy and safety of IV to oral forms of lefamulin in adult patients with moderate to severe CABP, compared lefamulin to moxifloxacin with or without adjunctive linezolid.
LEAP 2:
- Evaluated the efficacy and safety of oral administration of lefamulin compared to oral moxifloxacin in patients with moderate CABP.
The LEAP 1 study had a larger number of sick patients than LEAP 2 due to PORT inclusion criteria.
The LEAP 1 study met its primary endpoint of non-inferiority (no worse than) to moxifloxacin, for early clinical response assessed 72 to 120 hours following the initiation of therapy in the intent-to-treat population. Specifically, the ECR rates were 87.3% for lefamulin and 90.2% for moxifloxacin with or without linezolid. Likewise, the safety profiles (source LEAP 1 top-line results) between the study arms were similar, with less treatment emergent gastrointestinal side effects and less diarrhea in lefamulin patients. This, of course, is positive.
The company completed the enrollment of the LEAP 2 study in December and anticipates reporting the top-line clinical results in the spring of 2018.
About CABP
CABP is a leading cause of infectious deaths and hospitalization in the United States. It is a significant driver of hospital readmissions and costs. Based on the National Hospital Ambulatory Medical Care Survey and 2013 data from the Healthcare Cost and Utilization Project, it is estimated that more than 5 million adults are treated annually for CABP in the U.S. Approximately 3.1 million of these patients sought treatment in a hospital setting, where most are then treated with in-patient IV and oral antibiotics or out-patient oral antibiotics prescribed for use following hospital discharge.
In 2013, records show approximately 150 people died every day in the U.S. due to CABP. Despite a broad armamentarium of antimicrobials available to treat the disease, pneumonia remains the seventh leading cause of death in America. Accordingly, there is a need for new antibiotics that can fight pneumonia.
Nabriva CEO Dr. Colin Bloom claims that due to the drug's "flexible dosing and targeted spectrum of activity against the pathogens most commonly associated with CABP, including multidrug-resistant strains, we believe that lefamulin is well-suited to be a first-line empiric mono-therapy.”
I do not believe the drug will become a first-line treatment, at least not right away. It may gain more popularity as doctors become more familiar with it. Until then, they will use the cheap generic antibiotics. However, lefamulin may be used as a first-line therapy for patients who who cannot tolerate the existing treatments.
LEAP 2 study’s chance of success
The major risk with Nabriva is whether the LEAP 2 study will be successful. A negative result will be detrimental for the company. In LEAP 1, lefamulin showed non-inferiority compared to the combination of Moxifloxacin with or without adjunctive linezolid. It’s always encouraging when a mono-therapy can compete against a combination therapy. In the LEAP 2 study, the lefamulin mono-therapy is being compared to Moxifloxacin mono-therapy and has to show non-inferiority.
In the LEAP 1 study, approximately 40% of patients took an oral therapy. On average, patients took the tablet for more than three out of the recommended seven days (total duration of therapy). Hence, there’s some data from the oral use in the LEAP 1 study.
The non-inferiority margin is also lower in the LEAP 2 study (10% compared to 12.5% in LEAP 1 – but only in the U.S.; in Europe, the non-inferiority margin is identical in both trials). Thus, the bar for success is higher in the LEAP 2 study.
Lefamulin requires a very high plasma concentration to kill the pathogen H. influenzae. It was achieved in the IV formulation, as all patients were cured in the LEAP 1 study. Now, the concern is whether the oral formulation can reach the blood (systemic) concentration needed to kill the bacteria in the LEAP 2 study.
What about Paratek’s omadacycline?
Paratek's drug has a couple of advantages over lefamulin.
- First, omadacycline already has positive phase three studies in both ABSSSI and CABP. Nabriva has not yet initiated its ABSSSI Phase 3 study. It is also important to mention that ABSSSI is a crowded market, so CABP has a better market opportunity.
- Omadacycline is broad-spectrum, like lefamulin, and can be switched from IV to oral.
- Paratek is a year ahead of Nabriva. It has already submitted its New Drug Application for omadacycline. Approval is expected in October.
However, the major issue with omadacycline is its gastrointestinal side effects, which can work against it. We still need to see what the side effects for lefamulin are in the oral setting to make a proper comparison to omadacycline.
The case for investment
According to the World Health Organization, antibiotic resistance issues are one of the biggest threats to global health, food security and development today. In the U.S. alone, over 2 million people are infected annually with bacteria that are resistant to antibiotics. Of this number, over 23,000 people die as a result.
As mentioned, pneumonia remains the seventh leading cause of death in the United States. Thus, there’s always a need for new antibiotics to fight bacteria resistance. As a result, I think there is a market for both lefamulin and omadacycline.
Overall, Paratek’s advantage is reflected in its market cap. Paratek’s market cap is twice that of Nabriva ($430 million versus $215 million). Both companies are highly undervalued considering their market opportunity. Paratek is the safer investment, but a positive LEAP 2 study will boost Nabriva's share price. Ultimately, Nabriva could have a bigger return on investment.
In addition, Nabriva executives showed confidence in the future of their product and company when the CEO, chief financial officer and chief commercial officer bought shares recently. This isn’t necessarily an indication for success, but a positive sign for the company.
Final thoughts
I will take a small position in Nabriva since I anticipate a run-up toward the LEAP 2 study read out. But I won’t hold it over the announcement of the study's results. It is a binary event that I want to avoid. I will get in again if the study results are positive and after the secondary offering in the second half of 2018.
Disclosure: No position in Paratak.Ă‚
