Eravacycline Conference Call: Unrevealing and Disappointing

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Whatever has become of investigative journalism?  All we read after the Stifel conference call (11/17/2015) is descriptive rehash of information provided by Tetraphase at the conference.  No probing questions that we thought investors would ask who just lost 80% of their money.  No signs of analytical or strategic readjustment at Tetraphase in response to the new reality which is just this: We don’t have an oral eravacycline formulation any more!

There goes the prospect of any IV/PO sequential therapy, a sine-qua-non in a competitive market, and the analysts don’t bat an eyelid.  The investor community was told that the company wants to start a new cUTI study by mid-2016, this time as a purely IV treatment without PO step-down.  This is a solution to satisfy the regulators and get you to an NDA, but it will not make eravacycline successful in the market place.  With this approach all prospects of becoming a competitive player in the large and lucrative cUTI arena are now dismal.  

There goes the prospect of any IV/PO sequential therapy, a sine-qua-non in a competitive market, and the analysts don’t bat an eyelid

The company tells us that they will be submitting more data to FDA in the hopes of getting the current program approved without further clinical data.  In other words, Tetraphase would like to find ways to have eravacycline approved for complicated intra-abdominal infection (cIAI) as a single indication with a single pivotal trial (IGNITE-1).  Fat chance!

There are now several hits that affect the revenue potential for eravacycline, and none were adequately discussed:

  • The duration of clinical development will be 2 years longer at least (assuming no new surprises!)
    • this time will be needed for execution of the new cUTI trial
    • the opportunity cost for this delay is immense (USD 500-750 mio)
  • The profit potential is severely reduced by the absence of IV/PO sequential therapy
    • this makes eravacycline much less competitive in cUTI, ABSSSI, CAP or any other f/u indication they choose to pursue
  • The additional costs of studies to produce a submission dossier:
    • the cost of a new cUTI study was quoted as USD 25-30 mio (not sure whether their quote includes internal costs)
    • the additional work required to explain the failure of IGNITE-2
    • any new formulation work to come up with a bioequivalent PO formulation
  • The loss of a competitive advantage over omadacycline:
    • After eravacycline nicely surpassed omadacycline in development, the 2 programs are now much closer together again
    • If omadacycline’s PO formulation holds up in clinical trials, then it has a much better chance to become the predominant player

We would have expected to hear about the PK profile of the IV vs the PO formulation in the cUTI trial, or about the tests that the company has done to show bioequivalence.  Why were both 200 and 250 mg PO doses considered “bioequivalent?   Both could not possibly be bioequivalent to the 1.5 mg/kg IV, even the higher 250 mg dose is borderline low for anyone but cachectic adults. How did body weight correlate with outcomes, both clinical and bacteriological? What about the urinary levels achieved with eravacycline IV and PO in IGNITE-2?  Were there any particular microbes which were inadequately covered in IGNITE-2?  We were provided with no answers.

There is a need to understand why the PO formulation failed, and/or why PK/PD modeling got it wrong.  The company ought to share their learnings with the development community at large.  Call it fault analysis or something else, just telling us that the PO formulation dragged down the efficacy seen with IV is not enough explanation.

This company needs a wake-up call from some activist investors; Tetraphase seems to have a very benevolent supervisory group.  Management is sitting cozily on their USD 223 mio, which will be melting away soon enough.  Their plan to stick with the original goal and handle the Phase 3 program without a partner stands on hollow foundations these days, we are afraid.

Someone has moved their cheese, but they may haven’t noticed yet, or perhaps it is a case of the emperor having no clothes.  What do you think?



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