Leerink starts Achaogen at outperform

Leerink initiated coverage of Achaogen (NASDAQ:AKAO) with an “outperform” rating and $21 price target. The shares were changing hands at $13.90 in afternoon trading on Jan. 4.

Achaogen is developing lead product, plazomicin, a novel aminoglycoside antibiotic for which positive Phase 3 data were recently generated in complicated urinary tract infection and carbapenem-resistant enterobacteriaceae (CRE).

“While the slow pace of (most) recent antibiotic launches has disappointed investors, we believe the level of unmet need presented by CRE – combined with clinical/microbiological superiority data for plazomicin – may drive relatively faster uptake, as was recently observed with the robust launch of Allergan’s Avycaz,” writes analyst Paul Mattels.

The CDC has defined CRE as an “urgent” threat, the most serious categorization available, “rendering us optimistic that antibiotic stewardship (the reservation of new drugs for last-line) will not represent a major headwind for plazomicin, given the impetus to treat CRE aggressively,” he added.

Mr. Mattels said Achaogen plans to present full Phase 3 data in the first half this year and file an NDA in the second half, which, if successful, sets up a U.S. launch in 2018. 


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