Susquehanna Initiates Coverage on Targanta Therapeutics (TARG) with a Neutral

September 5, 2008 9:14 AM EDT

Susquehanna initiates coverage on Targanta Therapeutics (Nasdaq: TARG) with a Neutral.

Susquehanna analyst says, "Targanta Therapeutics is a pure-play antibiotic company with virtually all of its value tied to the pending approval and commercialization of the antibiotic, oritavancin. This late-stage drug candidate, currently under review at the FDA for complicated skin and skin structure infections (cSSSI), has a PDUFA date of December 8, 2008. The increasing incidence of methicillin-resistant staphylococcus aureus (MRSA) has driven the successful launches of Pfizer's (NYSE: PFE)Zyvox, Cubists's (Nasdaq: CBST) Cubicin, and Wyeth's (NYSE: WYE) Tygacil, but also leaves ample room for other branded products due to the increasing ineffectiveness of the current standard of care, vancomycin...While we believe oritavancin's clinical data justifies approval, we have concerns that two Phase III trials, one run at a 15% non-inferiority margin and the second at 10%, may not be enough for the agency, at least on the first go-round this December. While we are hopeful that oritavancin will not be delayed, we acknowledge that we have no special insight into the outcome on the PDUFA date given the uncertainties at the FDA, and, as such, we are Neutral on the stock until we have greater clarity on the regulatory pathway of the oritavancin NDA."

Targanta Therapeutics Corporation (Targanta) is a biopharmaceutical company focused on the development and commercialization of antibiotics for infections treated or acquired in hospitals and other institutional settings. [SM]

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