September 7, 2010 / 4:11 PM / 7 years ago

UPDATE 4-U.S. FDA panel backs Forest antibiotic for 2 uses

* Panel favors ceftaroline for pneumonia, skin infections

* FDA usually clears drugs with advisory panel support

* Company expects FDA decision by year-end (Adds company comment on timing, details on current drug sales)

By Lisa Richwine

GAITHERSBURG, Md., Sept 7 (Reuters) - Forest Laboratories Inc FRX.N won a U.S. panel's unanimous support on Tuesday for a new antibiotic to treat pneumonia and skin infections, an endorsement that moves the drug closer to approval.

The ceftaroline antibiotic is one of six medicines the mid-sized drugmaker is counting on to replace expected revenue losses from coming patent expirations on two major drugs.

A committee of Food and Drug Administration advisers unanimously said ceftaroline was safe and effective for treating bacterial pneumonia acquired outside a hospital setting and for fighting serious skin infections.

Several panelists said the decision was easy as the company provided solid evidence the drug worked with few risks.

"I think we do have a pretty good agent here and look forward to using it," said panel member Diane Cappelletty, associate professor of pharmacy practice at the University of Toledo in Ohio.

The FDA usually approves medicines that win support from advisory panels. Analysts expect nearly $361 million in sales in 2014 for ceftaroline, according to Thomson Reuters forecasts.

Jeffries & Co analyst Corey Davis said annual sales could reach $500 million if ceftaroline captures 20 percent of the pneumonia and skin market Forest is targeting. Adding unapproved uses and sales of two follow-up products "could easily make this a billion-dollar franchise eventually," Davis said.

J.P. Morgan analyst Chris Schott, in a research note, predicted a "slow launch" for ceftaroline, reaching close to $400 million by fiscal 2016.

Forest said it expected FDA action on the drug during the fourth quarter of this year.

The antibiotic is one of six medicines in late-stage development that Forest says will more than replace revenue that will be lost from patent expirations in the coming years on flagship antidepressant, Lexapro, and Alzheimer's treatment Namenda. The two drugs combined generate about $3 billion a year.

Forest reported overall net revenue of nearly $4.2 billion for the fiscal year ended March 31.

Ceftaroline is an intravenous antibiotic that is part of the family known as cephalosporins, a group of drugs that have been used for decades.

Many once-treatable infections have grown resistant to older antibiotics and can become life-threatening. Doctors have been pushing for new options.

Ceftaroline was designed for use in hospitals to fight severe cases of pneumonia and serious skin infections, including methicillin-resistant Staphylococcus aureus (MRSA), a growing public health threat.

Forest said company studies showed the drug worked as well as older antibiotics and FDA reviewers and the panelists agreed. Some panel members said there were signs ceftaroline worked better than the comparison drugs.

The most common possible side effects from ceftaroline include diarrhea, headache, nausea and insomnia.

Forest obtained ceftaroline with its 2007 purchase of privately held biotech company Cerexa Inc. Anglo-Swedish drugmaker AstraZeneca Plc (AZN.L) is co-developing the drug in markets outside the United States, Canada and Japan. Takeda Pharmaceutical Co Ltd (4502.T) holds the rights in Japan.

Forest shares dropped 0.1 percent to close at $29.45 on the New York Stock Exchange, slightly less than the 0.4 percent fall in the ARCA Pharmaceutical Index .DRG. (Reporting by Lisa Richwine; editing by Steve Orlofsky, Carol Bishopric and Andre Grenon)

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