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With Prulifloxacin, an
antibiotic currently in a Phase 3 trial for the treatment of travelers’ diarrhea in
hand, Optimer Pharmaceuticals bought back the
North American rights to Difimicin also in Phase 3 trials, putting them on track
for commercialization.
Healthcare
Biotechnology
(OPTR-NASDAQ)
Optimer Pharmaceuticals, Inc.
10110 Sorrento Valley Road, Suite C
San Diego, CA 92121
Phone: 858-909-0736
John D. Prunty, C.P.A.
CFO and V.P., Finance
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
Published - April 12, 2007
BIO:
John D. Prunty, C.P.A. has served as our Chief Financial Officer and Vice President
Finance since June 2006. Before joining us, Mr. Prunty held several key positions with
Maxim Pharmaceuticals, Inc., a biopharmaceutical company, for six years, including Chief
Financial Officer, Vice President of Finance, and Corporate Secretary. Prior to his
employment at Maxim, Mr. Prunty served as Senior Director of Finance and Corporate
Controller at Gen Probe Incorporated, a manufacturer of nucleic acid tests that diagnose
human diseases, from 1997 to 2000. He also held senior management positions at I Bus,
currently known as I Bus/Phoenix, Inc., a division of Maxwell Laboratories, Inc., an
electronic device company. Mr. Prunty began his career as an auditor at Ernst & Young
LLP, an accounting firm, where he spent seven years in public accounting. He is a
certified public accountant and received a B.B.A. from the University of San Diego and an
M.S. in management from San Diego State University.
Company Profile:
Optimer Pharmaceuticals, Inc. was founded and registered as a Delaware
Corporation in 1998. The Company headquarters and R&D laboratory are located in San
Diego, California, less than ten minutes away from The Scripps Research
Institute. Optimer also has one subsidiary, Optimer Biotechnology,
Inc. located in Taipei, Taiwan. We have 39 employees, 17 of whom hold Ph.D.,
M.D. or DVM degrees.
Optimer is currently focused on discovering, developing, and commercializing
innovative anti-infective products for treating diseases that currently have no
satisfactory therapy. Our initial development efforts address products that treat
gastrointestinal infections and related diseases where current therapies have limitations,
including diminished efficacy, serious adverse side effects, drug-to-drug interactions,
difficult patient compliance and bacterial resistance. We have two late-stage
anti-infective product candidates, Difimicin and Prulifloxacin. Dificimin, our lead
product candidate, is an antibiotic currently in a Phase 3 registration trial for the
treatment of CDAD, the most common nosocomial diarrhea. Prulifloxacin is an antibiotic
currently in Phase 3 trials for the treatment of travelers' diarrhea.
The Company has also licensed technologies and therapeutic targets from The Scripps
Research Institute and The Memorial Sloan-Kettering Cancer Center. These licenses form the
core of Optimer's carbohydrate technologies.
CEOCFO: Mr. Prunty, you are with Optimer under a year;
what attracted you to the company?
Mr. Prunty: “When I looked at biotechs
in the San Diego community, I saw that Optimer was a biotech that had two product
candidates that were either in or just about to enter Phase 3 clinical trials. It also had
a great management team, scientific team, and a solid foundation with a carbohydrate based
chemistry. Therefore, I thought that as a late-stage biotech it was a great
opportunity.”
CEOCFO:
What is the vision for the company and how is it playing out?
Mr. Prunty: “The vision for Optimer
Pharmaceuticals currently is to be a biopharmaceutical company that discovers, develops
and commercializes innovative anti-infective products. Our current products address the
treatment of gastro-intestinal infections and related diseases. Other products in our
pipeline that are not in that space, we want to develop to a stage where we can then
opportunistically partner out. With our recent announcement of buying back or regaining
the North American rights to our lead product candidate, Difimicin (OPT-80) from Par
Pharmaceutical Companies, Inc. (NYSE: PRX), we now hold worldwide rights to Difimicin.
Therefore, we are on track and the last phase of what we want to be as a company is
commercialization. This gives us an opportunity to put a sales force in place in the United
States and have two products in their hands, Difimicin and Prulifloxacin (OPT-99), which
is an antibiotic currently in a Phase 3 trial for the treatment of travelers’
diarrhea.”
CEOCFO:
Would you tell us about the lead product Difimicin and how it differs from what is
available?
Mr. Prunty: “Difimicin is a
differentiated antibiotic for the treatment of Clostridium difficile-associated diarrhea
or CDAD, which is the primary cause of hospital infections and affects over 500,000 people
a year in the US alone. One of the main causes of C-difficile-associated diarrhea or CDAD
is broad spectrum antibiotic use. However, Difimicin is a narrow spectrum antibiotic, it
only effects selected gram positive organisms like C-difficile, and has a limited
disruption on the normal gut flora. When you take a broad spectrum antibiotic, it wipes
out a lot of the good bacteria in your gut and allows C-difficile to flourish, but since
Difimicin has limited disruption of that normal gut flora, we believe it will be a much
more effective treatment for CDAD. It also is bacteriacidal against C-difficile, which
means it literally kills the bacteria as opposed to just being bacteriaostatic like some
of the other products in the C-difficile space. These bacteriaostatic products just stop
the bacteria from proliferating, but do not kill it. Difimicin has other good product
profile characteristics, such as having minimal systemic exposure; the drug stays in the
gut, which for the treatment of C-difficile is where you want it. It does not get absorbed
into the bloodstream so there are low side effects; it has a much more convenient dosing
regimen, which will help with compliance as well as treatment. So far we have seen low
resistance in in-vitro challenge where we tried to see if we could develop resistance to
Difimicin and have not been successful in doing that.”
CEOCFO:
Are doctors actively looking for a better drug in this area?
Mr. Prunty: “C-difficile is a
significant concern. C-difficile is an infection where in 2002, was only infecting about
200 thousand people a year and now it is infecting well over 500 thousand people a year
and our estimates are significantly higher than that in the US. If you Google CDAD, you
would read articles about outbreaks all over the country. There is a hyper-virulent strain
of the bacteria and that strain has been found in over 23 states; BI/NAP1 is the strain.
As a result, last year C-difficile resulted in 6,700 deaths. It was the number-one
hospital infection killer in the country. It is a significant growing problem and once it
gets into a hospital, it is very difficult to eradicate; it is a spore-forming bacteria
which is the way it protects itself. It forms a spore which is a dormant state and
it cannot be killed even by our drug. Once the antibiotic is removed, these spores
flourish and come back to a bacterial state, causing problems again. Therefore, this is
significant problem recognized as such and this NAP1 strain has moved the problem from
long-term care facilities and hospitals into the community as well. It is estimated that
over 25% of the C-difficile cases are now community acquired. C-difficile is a significant
problem and doctors would be very happy for additional treatment. The only approved
treatment now is oral Vancomycin and there are some issues with that in that it could
result in Vancomycin-resisting enterococci (VRE) or bacteria that are resistant to
Vancomycin, so doctors are reluctant to use that. Another drug that is used in most of the
cases, off label is Metronidazole, but the efficacy of that has been dropping
significantly with the new hyper-viral strain of NAP1.”
CEOCFO: Why
the strategy to market on your own?
Mr. Prunty: “We are excited about the
prospects for Difimicin. We think it can meet a significant unmet need. We have our other
lead product candidate, Prulifloxacin, for which we have the US rights. Our plan is to
put a sales force in place for Prulifloxacin. By regaining the rights to Difimicin in the US,
it now allows us to put two products in the US sales force bag and leverage the asset or
that capability. Both of these products are hospital-based products, which will not
require an incredibly large sales force; this is going to be a very targeted, focused
sales force. We think a sales force between 100 and 200 sales reps in the US would be
sufficient to cover the high volume hospitals and long-term care facilities for these
products.”
CEOCFO:
Is your management team in-place for the commercialization of your products?
Mr. Prunty: “Yes the senior management
is in place. When I came on board in June of 2006, my focus had been on moving the company
from a private company to a public company. Coming on board in June, we moved straight
through that with our initial public offering that we announced on February 9th
(2007). Kevin P. Poulos joined us in July about a month after me, and Kevin is our Chief
Commercial Officer. Kevin has an extensive background; he has worked at Wyeth Healthcare
(Wyeth - NYSE: WYE), Pharmacia-Upjohn Pharmaceuticals, Rhone-Poulenc Rorer Pharmaceuticals
Inc. (subsidiary of Rhone-Poulenc S.A. – NYSE: RP), GSK and he has been involved with
some significant large antibiotics and anti-infective products where he spends most of his
career. He has launched products like Zosyn®, Zyvox® and Synercid® and Kevin will be in
charge of building our commercial team. However, we will not need to have that team
in-place until mid 2008. We will see how the trials go and have the team in-place mid
2008, maybe a little later, have them placed 3 to 6 months prior to launch.”
CEOCFO:
What are your thoughts on the enhanced role of CFO in a public entity?
Mr. Prunty: “I think the role of the
CFO at the most minimum level is compliance. Therefore, the role would be meeting your
10K, 10Q requirements, interfacing and working with media relations group to work with
investors. In addition, the CFO has to meet all the requirements of Sarbanes-Oxley and
there are a lot of requirements other than 404. Obviously, SOX 404 has been kind of a
monster and taken up a lot of time and financial resources, so that is at a minimum. What
a good CFO does is incorporate finance as a service function in all areas of the company,
whether that be manufacturing, commercialization or the research and development group.
The CFO works with them to make sure they are working efficiently and effectively moving
their areas forward to meet the objectives of the organization.”
CEOCFO:
What is the financial picture of the company today?
Mr. Prunty: “I think if we look at the
cash before the IPO, we had about $23 million that we reported as of September 30th
of 2006. We closed the IPO four months later. We raised gross proceeds in the IPO of $49
million and that was net proceeds to the company of about $44 million after underwriter
fees and expenses. Therefore, we ended the IPO with about $64 million and as part of the
regaining the rights to Difimicin, we paid Par Pharmaceutical Companies, Inc. (NYSE: PRX)
an upfront payment of $20 million, which would take us down to about $44 million in cash.
What we said is that will be enough cash to last us into mid 2008.”
CEOCFO:
What can we expect to happen in 2008?
Mr. Prunty: “At that point, there are
many things that we could do to put a commercial infrastructure in place. We could do a
subsequent offering, such as a follow on offering or another possibility would be the
partnering of Difimicin rights and we continue to talk to potential partners. Our intent
would be to at a minimum maintain co-marketing and co-promotion rights in the United
States. We are looking at talking to people about partnering Difimicin in the rest of the
world or providing worldwide rights as long as we maintain co-marketing and co-promotion
in the US. In non-core markets like Japan, we definitely will partner Difimicin.”
CEOCFO:
Why should investors be interested in Optimer Pharmaceuticals?
Mr. Prunty: “I think investors should
be interested in Optimer Pharmaceuticals because it is a late-stage story, since we have
two Phase 3 product candidates and that Difimicin meets a significant unmet medical
need.”
CEOCFO:
What doesn’t jump off the page about Optimer that people should realize?
Mr. Prunty: “Right now the focus, both
internally and in terms of being interested in Optimer, is on Difimicin, which is the lead
product candidate as well as Prulifloxacin. However, we do have a pipeline of other
product candidates and underlying that pipeline is what we call our proprietary OPopS
technology, which is a carbohydrate-based system that allows us to identify product
candidates in an effective and efficient manner. I think the value of OPopS platform is
not believe fully appreciated. However, as Difimicin and Prulifloxacin move through and
complete their Phase 3 trials, and assuming success, we file NDAs (New Drug Application)
for two products in 2008, the remainder of the pipeline will get more focus at that point
as well as the OPopS technology. I think that capability is very impressive.”
CEOCFO:
In closing, what would you like readers to remember about Optimer Pharmaceuticals?
Mr. Prunty: “I think the next 18 months
will be very exciting. We have a tremendous amount of key milestones. We will be in four
Phase 3 clinical trials in the next few months; two each for Difimicin and for
Prulifloxacin. We expect to have data on three of those trials later this year in 2007. On
the second Difimicin trial, we expect clinical results in the first half of 2008. We
expect to file the Prulifloxacin NDA in the first half of 2008, and the Difimicin NDA in
the second half of 2008. People should follow the story; we have some exciting news that
will be coming out.”
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