Cubist nears another big antibiotic approval as M&A rumors simmer

Lexington, MA's Cubist Pharmaceuticals ($CBST) is inching toward its second drug approval of the year, hoping to win European and U.S. clearance for a new anti-infective as analysts wonder whether the company is in line for a Big Pharma takeout.

The European Medicines Agency has accepted Cubist's application for ceftolozane/tazobactam, a combination antibiotic designed to fight complicated urinary tract and intra-abdominal infections. That sets in motion a review process that will likely wrap up with a yes or no in the second half of next year, the company said. The FDA is already examining the combo product, promising to hand down a final decision by Dec. 21.

If all goes according to plan, the antibiotics-focused Cubist will be gearing up for another big drug launch to follow this summer's approval of Sivextro, a superbug treatment the company picked up in its $707 million deal for Trius Pharmaceuticals last year. That drug is a direct competitor to Pfizer's ($PFE) $1.4 billion-a-year Zyvox, boasting fewer side effects, less frequent dosing and shorter treatment times than its rival.

And the biotech's recent run of successes has hardly gone unnoticed, as analysts point out how well its offerings might fit in with some of the world's largest drugmakers. Pfizer, Johnson & Johnson ($JNJ) and Eli Lilly ($LLY) all have the cash and competency to make a run at Cubist, Bloomberg reported, and the biotech is priced to sell. The company commands a market cap of around $4.9 billion, but, considering the promise of its pipeline and the projected growth of its on-the-market Cubicin, that could be an under-valuation, analysts say.

Meanwhile, Cubist is all in on antibiotic R&D, planning to spend about $400 million this year alone in hopes of delivering four new treatments by 2020. Beyond ceftolozane/tazobactam and Sivextro, the company's pipeline includes therapies for hospital-acquired bacterial pneumonia, Clostridium difficile and opioid-induced constipation.

- read the release
- here's Bloomberg's story