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Optimer Jumps on Dificid Approval

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Optimer plans an aggressive launch and a premium price for its hospital antibiotic.

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Optimer Pharmaceuticals' (OPTR) stock is jumping this morning after the company won US approval to sell its new drug, Dificid, for hospital infections.

The drug was approved to treat diarrhea related to the intestinal infection Clostridium difficile. Cubist Pharmaceuticals (CBST), which is developing its own treatment for the infection, will help sell the drug.

Shares of Optimer rose more than 8% to $14.07 in early morning trading Tuesday. The stock is up 24% this year. Cubist shares were little changed $38.30. The stock has risen almost 80% this year.

Optimer will price Dificid at $2,800 for a 10-day course, which is almost double the price of an existing treatment, Vancocin, CEO Pedro Lichtinger told investors on a conference call this morning. The new drug will be launched early in the third quarter, Lichtinger says.

A big part of the sales effort for Optimer and Cubist will focus on convincing doctors and hospitals that treating patients with Dificid will save money as the infections are a costly problem, Lichtinger says.

According to Optimer, Clostridium difficile, or C. difficile, is the leading cause of infections caught in community hospitals, as it has surpassed prevalence of the bug that causes most staph infections. There are about 450,000 reported hospital infections a year related to C. difficile, Lichtinger says. Optimer estimates there are at least 250,000 additional cases annually. In addition to hospitals, Optimer and Cubist will focus on senior facilities as the elderly are particularly vulnerable to infections.

In its own studies, Optimer showed Dificid was at least as effective as ViroPharma's (VPHM) Vancocin after a 10-day course. Dificid was more effective in preventing recurrence of diarrhea than Vancocin after the course of treatment, according to Optimer. Still, Vancocin is expected to get future generic competition, which will add competition for Optimer, particularly considering Dificid's big price tag.

"There is strong rationale for (Dificid) to command premium pricing," Robert W. Baird analyst Thomas Russo says in a note this morning, "but this has been a price-sensitive market, and the possibility remains for low-priced Vancocin generics" to add competition. Russo rates Optimer's stock a buy with a $16 price target.

Lichtinger says he fully expects to eventually compete with generic Vancocin and says the premium pricing of Dificid will be justified given the drug's superiority over the existing treatment.

Investor hopes for a US approval were high as a panel of government advisers unanimously endorsed the drug in April. Optimer was so confident that it would win the government backing, that it signed its sales pact with Cubist before even getting approval. (See Minyanville: Optimer Readies Launch Before Drug Is Approved).
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