Assistant Managing Editor

Advanced Life Sciences Holdings Inc. had Wednesday what Chairman and CEO Michael Flavin called "a great day," with the submission of its regulatory application for antibiotic cethromycin in community-acquired pneumonia (CAP), a potential $100 million-plus Asia-Pacific partnership deal with Wyeth and a couple of financing agreements to bolster its cash position.

With the new drug application for cethromycin, the Woodridge, Ill.-based firm became the latest firm to file for approval in the antibiotic space, an area in which regulatory changes have resulted in rejections and delays over the past two years.

Replidyne Corp.'s oral penem, faropenem, got caught in the agency's shifting requirements from noninferiority data to superiority data and was rejected in 2006 in respiratory tract infections, including CAP, while Pfizer Inc. pulled its NDA for dalbavancin in complicated skin and skin structure infections (cSSSIs) earlier this year after the FDA asked for an additional clinical trial.

Reviews are pending for South San Francisco-based Theravance Inc.'s telavancin and Basel, Switzerland-based Basilea Pharmaceutica Ltd.'s ceftobiprole, both of which received approvable letters, and for Cambridge, Mass.-based Targanta Therapeutics Corp.'s oritavancin, which has a PDUFA date of Dec. 8. All of those applications are in cSSSI.

Advanced Life Sciences might face brighter prospects, largely because it's working in the CAP space. In April, an FDA advisory panel recommended that noninferiority data be sufficient for a CAP approval, and the company has been working with the agency prior to cethromycin's submission. (See BioWorld Today, April 3, 2008.)

"The regulatory environment seemed to clear a bit with regard to community-acquired pneumonia," Flavin said. In light of that, Advanced Life Sciences opted "to get the review process under way" and meet its goal of an NDA submission by the end of the third quarter.

If approved, cethromycin would enter the CAP market, an "arena with few branded products remaining," Flavin told BioWorld Today.

"So we're moving toward an opening commercial landscape that has become weakened by emerging bacterial resistance," he said

Existing antibiotics, such as penicillin and macrolide drugs, are facing growing resistance issues, often as much as 40 percent resistance in the U.S., and upward of 70 percent to 80 percent in the Asia-Pacific region. "So there's a great opportunity for cethromycin to become a front-line" treatment, Flavin added.

In Phase III studies, once-daily oral cethromycin proved noninferior to the current CAP standard of care, a twice-daily macrolide sold under the brand Biaxin (clarithromycin) by Abbott, after seven days of treatment. But because cethromycin is designed to bind to two sites on bacterial ribosomes - existing macrolides bind only to one - it's capable of overcoming the resistance that builds up with macrolide treatment, Flavin said, adding that it also has shown slow bacterial resistance to itself.

Advanced Life Sciences intends to secure a partner for North American commercialization, as well as a partner for European distribution. Meanwhile, its deal with Madison, N.J.-based Wyeth takes care of the Asia-Pacific market.

Terms of that agreement call for Wyeth to make an up-front equity investment by purchasing common stock representing about 4.9 percent of the company's outstanding shares. Advanced Life Sciences will work with Wyeth to complete clinical trials needed for approval in the Asia-Pacific region and will be entitled to clinical, regulatory and commercial milestone payments, plus royalties. The total deal could be worth more than $100 million.

Wyeth, which already markets the anti-infectives Tygacil (tigecycline) and Zosyn (piperacillin/tazobactam), "has a very strong presence in that region of the world," Flavin said.

The deal also affords some "scientific credibility" to cethromycin and should help Advanced Life Sciences to "forge additional agreements" in the other areas.

Partnering antibiotic programs has been particularly tricky in the U.S., given the uncertainty surrounding the regulatory guidelines. In fact, failure to find a partner for its investigational antibiotic faropenem forced Louisville, Colo.-based Replidyne to return rights to that program earlier this year.

The company initially filed for approval in 2006, hoping the drug would become the first oral penem product in the multibillion-dollar respiratory tract infection market, but the application was rejected due to the agency's changed policy regarding noninferiority data. (See BioWorld Today, Oct. 24, 2006.)

"Many companies have been waiting to see what would happen," Flavin said. But with the FDA panel's April recommendation and its promising Wyeth deal, Advanced Life Sciences hopes to be more attractively positioned to find additional partners.

"Our discussions are continuing to progress," he said.

Future collaborations also would add some nondilutive financing to boost the company's balance sheet, though Advanced Life Sciences also recently helped itself in that department by securing two financing deals that could ensure that the firm has access to an additional $21 million.

The firm, which had about $9.1 million as of June 30, added $6 million in a debt financing deal, through a commitment to increase its loan facility with Leaders Bank from $4 million to $10 million, and entered a standby equity distribution agreement (SEDA) with YA Global LP to access up to $15 million over the next two years in exchange for common stock. Through the SEDA agreement, the company would be able to "draw down as needed," cash to fund operations, Flavin said.

Those financings are especially crucial "in today's challenging financial environment," he added. "But at the same time, we're also quite sensitive of building our balance sheet as nondilutively as possible." Both of those financing deals "help us to manage that dilution."

Analyst Matthew Osborne, of Lazard Capital Markets LLC, wrote in a research note that funding should provide the company with sufficient capital toward "signing a U.S. and/or EU partnership," and the company is "on track" to reaching commercial goals for cethromycin.

Shares of Advanced Life Sciences (NASDAQ:ADLS) fell 14 cents Wednesday to close at 67 cents.

Published  October 2, 2008