After the company announced top-line data from an important phase 3 trial, shares of Nabriva Therapeutics (NASDAQ:NBRV), a clinical-stage biotech focused on next-generation antibiotics, fell as much as 14% in morning trading on Monday. As of 11:20 a.m. EDT, the stock was down 9%.
Nabriva announced top-line results from its Leap 2 study today. This phase 3 trial is designed to test lead compound lefamulin as a treatment for community-acquired bacterial pneumonia (CABP) compared to the current standard-of-care treatment moxifloxacin.
Here are the key takeaways from the trial:
- Lefamulin achieved all of the Food and Drug Administration's and the European Medicines Agency's primary endpoints. Specifically, 90.8% of patients who used lefamulin showed an early clinical response (ECR) after five days of treatment. That was similar to the 90.8% ECR rate that was observed in the moxifloxacin group, even though patients in this cohort remained on the drug for seven days.
- Lefamulin was generally shown to be well tolerated by patients.
- Nabriva plans to submit the drug to the FDA for approval in the fourth quarter of this year.
Overall, this sounds like great news. So why are shares falling today?
My best guess is that traders are reacting to the difference in treatment-emergent adverse events (TEAEs) observed between the two groups. The result shows that 32.6% of patients who used lefamulin experienced a TEAE. That's a bit higher than the 25% rate that was observed in the moxifloxacin group.
What's more, it's possible that Nabriva might have to give in with pricing a bit to sell lefamulin, since its ECR rate is so similar to moxifloxacin. After all, moxifloxacin is cheap, so insurers might push back hard on pricing. If that happens, then the drug's current peak sales estimates might be too high.
Finally, while Nabriva is on track to submit the drug for approval before the end of the year, rival Paratek Pharmaceuticals has already sent its CABP drug candidate, omadacycline, in for review. Since omadacycline is expected to receive a go/no-go decision in October, Nabriva remains several months behind in the race.
In total, Nabriva's release today is being looked upon as good, but not great.
Given the growing risk posed by antibiotic-resistant bacteria, we all should be cheering for companies like Nabriva and Paratek to succeed. However, the investor in me knows that they might face an uphill battle with pricing if they can't convince insurers that their drugs make a meaningful difference in the clinic. For that reason, my plan is to continue to root for Nabriva's success from the safety of the sidelines.