Iterum Down As Sulopenem Antibiotic Fails In Phase III Study

Shares of Iterum Therapeutics plc (NASDAQ:ITRM) crashed 35.7% on Dec 11, following the announcement of disappointing data from a phase III study evaluating its antibiotic candidate, sulopenem. The company’s shares have decreased 37.8% so far this year against the industry’s increase of 11.1%.

The late-stage study was evaluating oral and intravenous administration of the candidate in patients with complicated intra-abdominal infections (cIAI) compared to Merck’s (MRK) Invanz (ertapenem for injection). Data from the study showed that the candidate failed to meet the primary endpoint on non-inferiority of clinical response to Invanz as measured on day 28 in the micro-MITT population.

Detailed data showed that 85.5% of the micro-MITT patient population achieved a clinical response upon treatment with sulopenem compared to 90.2% for Invanz. The median difference in clinical response was -4.7% for sulopenem. We note that the FDA requires that the lower limit of the difference in the actual outcome rates be >-10% to support non-inferiority. However, the highest difference in outcomes was measured to be -10.3%. Although the study missed the primary endpoint by a very small margin, it will not be able to support an approval for sulopenem as a treatment for patients with cIAI.

However, Iterum stated in its release that imputing an outcome for the patients with missing data and the secondary supporting analyses demonstrate potential of the candidate in treating multi-drug resistant infections.

Please note that Iterum in-licensed sulopenem from Pfizer (NYSE:PFE) in 2015.

Apart from cIAI, the company is also developing sulopenem for the treatment of complicated and uncomplicated urinary tract infections (“UTI”), and complicated intra-abdominal infections. Separate phase III studies are evaluating the candidate in patients with either complicated or uncomplicated UTI. Data from these studies are expected in the first quarter of 2020. A new drug application seeking approval for sulopenem as a treatment for complicated and uncomplicated UTI is planned to be filed with the FDA in the first half of 2020, following a positive data readout. However, any setback in the UTI phase III studies will bring the share price down further.

We note that several other pharma/biotech companies are also developing candidates targeting UTI patients, including gepotidacin from GlaxoSmithKline (NYSE:GSK) , tebipenem pivoxil from Spero Therapeutics, Inc. (NASDAQ:SPRO) , delafloxacin from Melinta Therapeutics, Inc., among others. Successful development of these candidates will increase competition for the company, if sulopenem is approved for treating UTI.

Zacks Rank

Iterum currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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