Susquehanna Initiates Coverage on Optimer Pharmaceuticals (OPTR) with a Neutral

September 5, 2008 9:10 AM EDT

Susquehanna initiates coverage on Optimer Pharmaceuticals (Nasdaq: OPTR) with a Neutral.

Susquehanna analyst says, "Optimer has two late-stage anti-infective drugs in Phase III clinical trials, one for Clostridium Difficile Associated Disease (CDAD) and the other for Traveler's Diarrhea (TD). The mid- and early stage programs are well-diversified, comprising drugs in Phase II/Phase III for breast cancer and in pre-clinical studies for osteoarthritis and respiratory tract infections. The challenge for Optimer, however, will be to generate sufficient revenue from OPT-80 and prulifloxacin, presuming FDA approval, which is a significant hurdle in itself. The markets for both drugs pose substantial headwinds in that 1) generic vancomycin, which could emerge as early as late 2008, will erode branded market share for Vancocin (the only FDA approved drug for CDAD), and thus, by corollary, impinge upon OPT-80 sales as a high margin product; and 2) the competitive landscape for TD is intense, and carving out market share for another TD drug will present a significant challenge. Given this outlook, our product models and valuation supports a fair value in the neighborhood of current trading levels."

Optimer Pharmaceuticals, Inc. (Optimer) is a biopharmaceutical company focused on discovering, developing and commercializing anti-infective products.

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