Wedbush Downgrades Tetraphase Pharmaceuticals (TTPH) to Neutral
Wedbush downgraded Tetraphase Pharmaceuticals (NASDAQ: TTPH) from Outperform to Neutral with a price target of $11.00 after Eravacyline failed to demonstrate non-inferiority to levofloxacin in its IV to oral stepdown study in complicated urinary tract infections for the FDA or EMA endpoints despite superiority in quinolone resistant pathogens.
The analyst notes details were lacking on reason for failure at this time. "We believe some possibilities for the failed study are patient to patient variability in the oral dose, site bias, varying levofloxacin resistance rates by geography, differences in rates of IV to oral stepdown or discontinuations between the two arms. We await further analysis to better understand where eravacycline fell short."
The analyst notes a flexible FDA may provide a path. "With the IGNITE-1 abdominal (cIAI) study demonstrating a benefit of eravacycline consistent with its Phase II study in cIAI, Tetraphase has a base to support the IV formulation of eravacycline; in our view, there is potential that these data could be supplemented by some data from IGNITE-2. As a reminder, Avycaz was approved for limited populations on two Phase II studies with a safety database of fewer than 300 patients. However, to be conservative, we assume another study will be needed for approval and push back launch to 2H18; we see a faster path to market as upside to our estimates."
Further the analyst noted abdominal market provides a niche, but we are cautious on the size of the opportunity.
The firm's $11 price target is based on a sum-of-the parts analysis of eravacycline revenues and cash which we estimate at ~$220M.
Analyst Heather Behanna commented, "
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Shares of Tetraphase Pharmaceuticals closed at $44.78 yesterday.