Why Tetraphase Pharmaceuticals Is Getting Cut in Half

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Tetraphase Pharmaceuticals Inc. (NASDAQ: TTPH) saw its shares get cut in half on Wednesday after the firm provided an update on its late-stage clinical trial for the treatment of complicated urinary tract infections. Specifically, the Phase 3 trial compared eravacycline to ertapenem for the treatment of patients with such infections. Unfortunately, the results did not live up to expectations.

The study failed to meet the co-primary efficacy endpoints of responder rate (a combination of clinical cure and microbiological success) in the microbiological intent-to-treat (micro-ITT) population at the end-of-IV (EOI) treatment visit and at the test-of-cure (TOC) visit, which were evaluated using a 10% non-inferiority margin. Eravacycline was well tolerated in the trial, with a safety profile consistent with prior studies.

Responder rates in the micro-ITT population at the EOI visit were 84.8% and 94.8% for eravacycline and ertapenem, respectively. Responder rates at the TOC visit were 68.5% and 74.9% for eravacycline and ertapenem, respectively.

Despite the poor results from this study, the company still intends to move forward with its New Drug Application (NDA) and its Marketing Authorization Application (MAA) in Europe, both of which are currently under review.

Guy Macdonald, president and chief executive of Tetraphase, commented:

We are surprised and obviously very disappointed that the IGNITE3 trial did not achieve its co-primary endpoints and are fully analyzing the data to understand this outcome. Independent of this outcome, we continue to move forward with our registration strategy for eravacycline in complicated intra-abdominal infections (cIAI).  We currently have an NDA under review with the FDA as well as an MAA under review by the EMA in Europe, which are based on the positive outcomes demonstrating high cure rates and favorable tolerability in the IGNITE1 and IGNITE4 phase 3 clinical trials of IV eravacycline in cIAI. We are actively preparing for the commercialization of eravacycline as a treatment in cIAI in both the U.S. and in Europe, assuming regulatory approvals.

Shares of Tetraphase traded down more than 56% early Wednesday to $2.37, with a consensus analyst price target of $15.33 and a 52-week range of $4.91 to $6.97.