Cubist Pharma buys out antibiotic partner Astellas for $25M-plus

Lexington, MA-based Cubist Pharmaceuticals has bought out Astellas' rights to ceftolozane, putting up $25 million in cash for an antibiotic that has demonstrated some promising outcomes in clinical studies. The deal, which covers milestones that will now be paid out of prospective royalties, gives Cubist global rights to a new antibiotic that will likely soon be under regulatory review. Cubist acquired the therapy in its $402 million buyout of Calixa back in late 2009, which included $92.5 million in cash, primarily built around the antibiotic.

Cubist shares ($CBST) were down slightly in mid-morning trading.

Ceftolozane in combination with tazobactam--also known as CXA-201--is being studied in an ambitious Phase III program for complicated intra-abdominal infections and complicated urinary tract infections (cUTI) caused by certain Gram-negative bacteria, including those caused by multi-drug resistant Pseudomonas aeruginosa. The top-line results are expected in the second half of this year, with a regulatory filing coming within 6 months of that--provided it's positive. Cubist also plans to launch Phase III studies in nosocomial pneumonia around mid-year.

Cubist CEO Michael Bonney--Courtesy of Cubist

"Today's agreement underscores our belief that ceftolozane/tazobactam has the potential to be an important therapy to combat certain serious Gram-negative bacterial infections," said Cubist CEO Michael Bonney. "With ownership of the global rights to ceftolozane/tazobactam, Cubist is well positioned to continue advancing this promising product candidate and capture the drug's full potential around the world, if it is approved."

Cubist has been bullish about ceftolozane ever since it acquired Calixa, a virtual San Diego biotech that had a staff of only 7. Initially Bonney told reporters that an NDA should arrive in 2013, though Cubist appears to be slightly off that schedule. The deal today covered Astellas's rights to certain Asian and Middle Eastern markets.

- here's the press release