Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Cubist Pharmaceuticals (CBST.DL), a developer of acute-care therapies for a number of indications, jumped as much as 11% after announcing positive late-stage data for its second of two trials involving ceftolozane/tazobactam, also known as CXA-201.
So what: Last month Cubist reported positive results for CXA-201's ability to treat complicated urinary-tract infection. Today's results were much of the same, with the primary endpoint in treating complicated intra-abdominal infections met. According to the press release, the antibiotic, in combination with metronidazole, was shown to be statistically non-inferior to meropenem, delivering an endpoint cure rate 26 to 30 days after the initiation of treatment. The adverse event profiles for CXA-201 and meropenem were similar as well.
So what: Things are certainly looking up for Cubist after two successful late-stage trials proving non-inferiority within a month for CXA-201. Peak sales estimates for the drug are all over the place, but could reach as high as $1 billion according to some Wall Street analysts. For me, I'd need to see a flawless launch for that to occur, but it'd also need to get a thumbs-up from the Food and Drug Administration first. Cubist shares popped after each trial, so I'd consider the effect of an approval pretty much priced in at this point in time. That doesn't mean, though, that there aren't other pipeline products that could provide a long-term positive impact on Cubist's share price (ahem, tedizolid phosphate!). Keep your eyes on Cubist.
