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Achaogen Inc (NASDAQ:AKAO) Is Running Up, Here's What's Next

Achaogen Inc (NASDAQ:AKAO) Is Running Up, Here's What's Next
Written by
Chris Sandburg
Published on
December 14, 2016
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Achaogen Inc (NASDAQ:AKAO) is running up on the back of some phase III data, currently trading at a close to 380% premium to its last week price. The data relates to an antibiotic called plazomicin – the company's lead asset in this class – and with an application for registration set for next year, has the potential to dictate Achaogen's market capitalization for the next twenty-four months.That's long term, of course. The question now, following the recent gains, is what are the chances of a near term momentum run adding strength to the just see advance?Well, we think they're pretty good.The drug, as mentioned, is called plazomicin, and it's part of a family of antibacterials called aminoglycosides. There's a drug called sisomicin, and it's one of the most commonly used antibiotics in the world. It targets gram negative infections, and it's in the same category of drugs as the just as used (but probably more well known) streptomycin. The problem is, lots of these antibiotics become less and less useful over time, as people develop resistance to them.Achaogen has taken sisomicin, added a couple of components (we don't need to get into the components for the purposes of this discussion, it's enough to say that they alter the drug significantly enough to overcome the resistance issue) and is trying to prove that the altered version is not just different enough to overcome resistance, but similar enough to target bacteria that sisomicin isn’t able to any more.So, the trial that we're looking at is targeting patients with complicated urinary tract infections and acute pyelonephritis. Urinary tract infections are exactly as they sound. Pyelonephritis is another term for a type of kidney infection. Both are extremely serious if left to develop – especially the latter – and both can be indicative of an underlying condition outside of the infection. The importance of this is that the infection generally needs to clear before the underlying condition can be treated, but in patients for which things like sisomicin don’t work, there are practically no options available.This is where plazomicin comes in to play. Achaogen put it to the test in a trial with one primary endpoint, but two separate definitions of a hit – one as determined by the European Medicines Agency (EMA) and another based on the FDA framework. The drug was up against a currently widely used SOC antibacterial agent called meropenem.Against the FDA framework, plazomicin demonstrated non-inferiority compared to meropenem. Against the EMA framework, the drug demonstrated superiority. Basically, great results.A secondary phase III looked at the drug's impact in patients with infections rooted in carbapenem-resistant Enterobacteriaceae (CRE), and again, the data was a hit. The drug put forward a lower rate of mortality or serious disease-related complications for plazomicin compared with colistin therapy. There's basically nothing physicians can do for these patients if colistin doesn’t work, and there's a massive unmet need for an alternative.So, what's all this leading to?Achaogen is set to submit an NDA to the FDA during the second half of 2017. The application will include data from both the pyelonephritis study and the CRE trial, and based on the numbers we've seen, shouldn’t have any real problem picking up an agency nod for commercialization mid 2018. The EMA application is set to hit a couple of quarters after the FDA one does, sometime early 2018. The FDA won't like us saying this, but the EMA is generally a bit quicker on its turnarounds in the antibiotics space, so approvals in both will probably hit press around a similar time.It's really all about commercialization execution now. One to watch.We will be updating our subscribers as soon as we know more. For the latest updates on AKAO, sign up below!Disclosure: We have no position in AKAO and have not been compensated for this article.

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