A threat to the human beings

First just a quick word on today's selloff. I don't recall we have seen a one day 2% selloff for the market in the past year and probably even longer. People are just used to the one way up for too long and have forgot all the risks in chasing the market. So it is a long overdue for such a hard drop to punish the herd and I think more downside is very likely in the weeks ahead. Having said that, I think the market is extremely oversold in the very short term and I sense quite some panic we haven't seen for long time. As a contrarian I think there is a high chance for it to have a "dead cat bounce" next week. So I opened speculative trading today to bet the market will go up and the volatility will come down next week. It is just for a short term speculation. Will see how it goes. Now for today's topic.


What are the big health threats to our human beings? I guess the easy answers will be something like cancer and cardiovascular diseases as they are associated with the leading causes of deaths. Rarely people will even think about bacterial infection as there are so many antibiotics available easily accessible by patients. But this is exactly where the biggest challenge we are facing now. On one hand, since antibiotics are so widely available, there is not much profit margin as incentives for pharma companies to develop new ones. On the other hand, since antibiotics are widely abused with unnecessary treatment and uses frequently applied, we are facing shortage of effective antibiotics for increasing numbers of drug-resistant bacteria. Here is the NATURE report highlighting the severity of the issue: “The drug-resistant bacteria that pose the greatest health threats”. One common threat is from multidrug resistant Gram-negative bacteria (MDRGN bacteria) that are a type of Gram-negative bacteria with resistance to multiple antibiotics. They can cause bacteria infections that pose a serious and rapidly emerging threat for hospitalized patients and especially patients in intensive care units. Although companies engaged in developing antibiotics against MDR infections are by no means of any sort of darling for Wall Street, I think they may provide some unique investment opportunities. Achaogen (AKAO ) may be one of those that can add significant value to the human beings in fighting against the threat from the MDR infections.  

 

AKAO is a late-stage biopharmaceutical company. The Company is engaged in the discovery, development and commercialization of antibacterial treatments against multi-drug resistant (MDR) gram-negative infections. The Company is involved in researching and developing plazomicin, its lead product candidate, for the treatment of serious bacterial infections, including complicated urinary tract infection (cUTI), blood stream infections and other infections due to MDR Enterobacteriaceae, including carbapenem-resistant Enterobacteriaceae (CRE). We may expect some better days to come for AKAO pretty soon. Achaogen submitted a New Drug Application (NDA) to the Food and Drug Administration for antibiotic plazomicin in October last year. The FDA recently granted priority review status for the submission. An approval decision is expected by June 25, 2018.

 

Plazomicin targets treatment of multidrug-resistant Enterobacteriaceae bacterial infections. Patients with these infections in their bloodstreams or urinary tracts currently have limited or no treatment options available. There are at least 70,000 such patients in the U.S. diagnosed annually -- and that number is projected to double within five years. Market research firm EvaluatePharma estimates that plazomicin could generate sales of $313 million by 2022.  This is definitely not a blockbuster drug compared to other fancy drugs in IO or alike but it will be a significant boost to AKAO as it is very depressed at the moment.