Achaogen [$AKAO] is planning to release top-line Phase 3 data for their drug Plazomicin sometime before the end of 2016. Plazo is a new antibiotic designed to fight drug-resistant infections. Achaogen has been developing Plazomicin for a long time, and it’s good to finally see this drug getting closer to release.
The bottom line is that Plazomicin appears to be very effective and the safety data so far looks good. The biggest safety risks for most of these drugs are kidney toxicity and hearing damage. In the Phase 1 safety trials, there was no evidence of any kidney issues, which is good. A different study used monkeys to see if Plazo would work against a biological weapon, and there were no serious kidney issues in that study either.
AKAO might face some initial hurdles in making Plazomicin the standard of care, but I expect a Phase 3 pass and successful new drug application.
Plazomicin is Effective
There’s no doubt as to Plazomicin’s effectiveness. The drug works like crazy, against both regular and drug-resistant infections. This chart is comparing the effectiveness of Plazo and Levofloxacin in treating complicated UTIs. Levofloxacin is one of the most common antibiotics for treating complicated UTIs.
As you can see, Plazomicin is at least as effective as Levofloxacin against regular infections.
This next chart is comparing Plazomicin against a bunch of other drugs for drug-resistant bacteria. As you can see, it takes a lot less Plazo to beat the bacteria, and some of the drugs don’t even treat the bacteria at all. I’ve also circled the biggest competitor, Colistin. One of the Phase 3 trials pitted Plazomicin against Colistin, head-to-head, so it will be interesting to see what happens there.
Plazomicin is Probably Safe
Like I mentioned earlier, the biggest risk with Plazomicin is going to be kidney issues. I am hopeful on this front for two reasons. First, in the Phase 1 trials there were no severe kidney issues with Plazo. The authors had actually concluded that there were no effects at all, but I suppose I’m a little more cautious. A few of the participants had slightly elevated creatinine in their blood, which might mean that the kidneys were not filtering quite as much. No subject went outside of the “normal” range for creatinine, but there were definitely some trends in that direction. Even so, though, any potential issues were not serious.
The second reason I’m optimistic is the monkey study. The researchers dosed the monkeys with Plazomicin pretty heavily, and they didn’t see any serious kidney issues there either. A monkey study by itself doesn’t mean anything, but it’s nice to see a high-dose study alongside the (comparatively light) Phase 1 safety studies.
Achaogen has about $61 million in cash or cash-equivalents on hand, which is more than enough to get them through the rest of the development period for Plazomicin. I expect that part of the reason they have more cash than is normal for a small-cap biotech is that a lot of the Plazo research ($124 million worth) has been funded by DARPA’s less-cool biologically-focused little brother, BARDA.
AKAO does estimate that they will need to put some serious sales efforts into making the drug commercially successful. I agree with that assessment. The problem with being a drug for special cases is that you don’t get used very often. However, antibiotic-resistant drugs are getting more and more press time. Five years ago, was anybody worried about MRSA? As the spectre of antibiotic-resistant drugs looms, Plazo and drugs like it will become more and more valuable. In fact, there are no drugs currently approved to treat the kind of infections Plazomicin is supposed to treat.
As always, there might be an unforeseen event which causes this drug (and this company) to tank. A serious safety issue with kidney toxicity might do it, for example. That’s the nature of investing — if it was sure money, it’d be called “working.” As it stands right now, though, I predict some good top-line data before the end of the year.
The company hopes for a New Drug Application (NDA) by mid-to-late 2017.
Prediction: Phase 3 Pass
Reasonable safety data and a very effective action make me think Plazomicin is a good bet for a Phase 3 pass.