Tetraphase antibiotic may reach up to $700 million in annual sales: CEO

By Bill Berkrot

NEW YORK (Reuters) – Tetraphase Pharmaceuticals Inc Chief Executive Guy Macdonald said annual sales of the company’s lead experimental antibiotic for serious bacterial infections could climb as high as $700 million if approved.

The antibiotic, eravacycline, is being studied in a pivotal 450-patient Phase III trial for intra-abdominal infections. Tetraphase expects to have the data in the fourth quarter after which it will apply for U.S. approval that could come in 2018.

“The FDA has been very supportive of getting new antibiotics approved, so clearly we have a fast-track agreement with them once we get the positive data,” Macdonald told Reuters.

He said he believes eravacycline could garner annual sales that would take it at least halfway to blockbuster status.

“If you have a successful gram negative drug like eravacycline, you’re looking at somewhere in the $500-to-$700-million range. I think that’s certainly reachable,” Macdonald said.

Eravacycline is a synthetic tetracycline derivative for drug-resistant bacterial infections administered intravenously in hospital.

The company is also enrolling for a 1,000-patient eravacycline trial in complicated urinary tract infections.

Tetraphase is developing the drug with the help of a $80 million grant from the Biomedical Advanced Research and Development Authority (BARDA), a division of the U.S. Department of Health and Human Services. It currently has enough funding to take it through the second half of 2018, the CEO said.

Antibiotic resistance and the emergence of so-called super bugs, caused by widespread antibiotic overuse and the ability of bacteria to evolve, is seen as a global health threat.

The U.S. government has been very helpful in funding for new antibiotics, Macdonald said.

In September, Medicines Co and Roche received significant funding from BARDA to help develop antibiotics.

Many major drugmakers abandoned antibiotic development because they are not nearly as profitable as other medicines, such as cancer drugs, and marketing them aggressively would likely only exacerbate the overuse problem.

Tetraphase expects to also apply for European approval late this year, and hopes to find a partner to sell the drug outside the United States.

“We can do it in the U.S. on our own,” Macdonald said.

“For us to be able to provide the growth we need and keep our investor base happy, that’s a much better business model to do it ourselves,” he added. “If you want to commercialize it worldwide, we’re not capable of doing that.”

The 75-employee company with a market value under $200 million will build a small sales force for eravacycline, Macdonald said.

Tetraphase already has someone with commercial experience from Merck & Co and Cubist to oversee the eravacycline launch, once approved.

“We just need the data,” Macdonald said.

(Reporting by Bill Berkrot, editing by G Crosse)