Paratek Pharmaceuticals, Inc. (NASDAQ:PRTK)

Value is attractive. 300M cash on hand (150M debt) and market cap is 300M. 50% increase in stock price is expected in 6 months.

Although the numbers of antibiotic(AB) blockbusters have dwindled, from facing patent expiry and increased competition, Omadacycline(OMC) isn’t prevailed by such elements. In a era where AB resistance has reached new heights, the rise of alternative treatments become more vital. OMC is the first of a new class known as the aminomethylcycline, which is a subclass of the tetracyclines(TTC). TTC was launched in the 1950’s and was widely used for multiple indications but became limited as strains began manifesting resistance. Two types of resistance mechanisms are on the rise for TTC: efflux and ribosomal protection. What sets TTC and OMC apart is that OMC has proven in assay to overcome both of these mechanisms. The introduction of OMC to the market will replace 1st &2nd generation TTC and retain the broad indications TTC once had.

Paratek’s p3 optic results were robust as it is shown to be NI to quinolone class, Moxifloxacin(MFA) with a 95% CI. ECR for OMC vs MFA was 81.1% vs 82.7% and for clinical success PTE-ITT population was 88.4% vs 85.2% respectively. In a PTE perspective, OMC outperformed MFA. OMC will replace quinolones for SOC in pneumonia in port risk I-IV patients, as it offers NI efficacy and superior safety. Quinolones are falling out of favor since its updated black box label that revealed potential permanent disabling of the CNS. Below I have listed the main AB classes that are used for CABP to demonstrate why physicians would prefer OMC over other classes of AB.

Aminoglycosides -
Gram Negative mostly
Black Label, ototoxicity, nephrotoxicity, neuromuscular

Chloramphenicol- black label, bone marrow suppression, irreversible aplastic anemia, toxic,
Gram positive and some gram negative

Oxazolidinone’s- gram positive & some gram negative
Narrow use | as second line for gram positive strains
Specifically, S. Aureus & S.pneumoniae
Omadacycline > linezolid in ABSSSI

Glycopeptide- gram positive only,
Narrow use for pneumonia strains
used as 2nd line , notably S.Aureus & S.pneumoniae

Tetracycline- Both gram positive&negative, rise of tetracycline resistance -resistant mechanism efflux and ribosomal protection
Lower risk of CDI with TTC regimen
Omadacycline shown effective against efflux and ribosomal protection mechanism

Sulfonamides- higher SAE, higher mortality rates vs tetracycline
No longer included in most pneumonia treatment guidelines
Both gram negative&positive

Cephalosporins- mostly gram positive, & less effective against risk II+

Quinolone- Black box label, disabling CNS, increase risk of tendonitis and tendon rupture, gram negative mostly. Falling out of favor-

Macrolide- less effective for risk II+ pneumonia. 34% resistance to s.pneumoniae strain. Mostly gram positive & some gram negative

Penicillin- was once highly used, until increased concerns for penicillin resistance against S.pneumoniae strain. Unclear consensus dosage.
Gram positive only. Less effective against risk II+

ABSSSI omadacycline>linezolid (2013 peak sales 1.4B)
Omnicycline( 750m peak sales)

OMC contains all the components of becoming the next blockbuster AB. It will be the first oral antibiotic approved within the last decade. It is active against both gram positive& negative bacteria and will be approved for 3+ indications: CUTI, CABP, and ABSSSI. The decreased popularity of the use of quinolones& aminoglycosides & the high resistance profiles for macrolides and penicillin will pave way for blockbuster OMC.