Question-And-Answer Session
Operator
(Operator Instructions) And your first question comes from the line of Louise Chen. Please proceed.
Louise Chen
I had a few. First one on Carbavance, I was wondering, in addition to the efficacy competitive advantage, what else do you see as competitive advantages for this product versus those on the market? Is there a dosing convenience? Is there potentially an oral step down option? And then the second question I had was how much it will cost you to build out your antibiotics franchise? Now that it looks like that you are going to go it alone versus partner with somebody? And then on Minocin, how much are the sales currently? Is there a sales, are there any sales reps in place that sell the product? And then in terms of the IV product, what do you think, that could increase the sales to, given the improved formulation? Thank you.
Clive Meanwell
Thank you so much Louise. We’ll certainly plough through those three questions as best we can. First of all, I’m going to turn it over to Mike Dudley to cover the first of your points. I will speak myself a bit about building out the franchise and the options we still have in front of us and then perhaps I’ll ask Dan to talk a little bit about where Minocin is today and where we think it can go. So Mike, would you want to take first question?
Mike Dudley
Sure.
Clive Meanwell
Clinical advantages and perhaps the economic advantages, other advantages, I will cover that.
Mike Dudley
So you asked about sort of the advantages of Carbavance compared to others. I think the other part of this is we showed information about the efficacy as it relates to studies in animals as well as in-vitro efficacy. But a big part of this is, of course in the serious infections is safety within these patients. And so many of the drugs that are frequently used now to treat these organisms have toxicities associated with them. Those are associated with mortality and morbidity and can run up to the cost of a hospital treatment course within these patients as well.
The other thing that we’re doing also with Carbavance is that we at Rempex had really leveraged a scientific tool known as PKPD, which really then allow us then two dose this in a way that will allow us to maximize the efficacy of this drug and minimize any of the safety disadvantages that might occur with any drugs that might be encumbered upon them as well. So as I mentioned there, before basing this with a carbapenem antibiotic really is a considerable advantage compared to many of the other drugs that are used in the clinic right now with respect to safety.
Louise Chen
And Dan do you want to talk a little bit about with Minocin?
Dan Burgess
So Minocin is kind of a unique case where it’s an old drug as you are probably aware, that was actually pulled through the market years ago for just lack of commercial success, because at the time acinetobacter was not a big problem. It was actually brought back on the market at the request of the defense department back in 2009 because of major problems they were having with acinetobacter in troops. And as a result of the company that held the oral rights to Minocycline for dermatology purposes essentially supplied it on as needed basis but never really promoted it. We recognized the unique opportunity in acinetobacter, and acquire the product about a year ago. We have been looking for the right partner to help us launch that product and we think The Medicines Company is absolutely the right partner for that.
It is also an ideal partner product, if you will for both Oritavancin initially and then particularly for Carbavance, because in many cases, when you are in the ICU setting, you are dealing with mixed infections including infections like KPC as well as acinetobacter and cocktail therapy is increasingly common. There is also data out there that suggests that Minocycline is synergistic with carbapenem and so the combinations here we think can be quite powerful.
So while the sales today are only on the order of $ 1 million, really no one knows it’s out there. And so a big part of what we’ll be doing going forward is introducing this product to the clinical community and we think the new formulation will also be a big advantage in that as we go forward as well.
Clive Meanwell
I would add to that Louis, that that allows us to take a gradual buildup of a relatively modest set of resources in 2014 to support the educational work and the access to Minocin. That will allow us to work with healthcare professionals on real problems, not theoretical problems. And we’re very excited by that opportunity as we prepare ourselves for the Oritavancin launch.
Now the bigger question you asked, of course is what are our other options? As far as we’re concerned, all our options remain open for how we build a front line organization. Clearly we have a very strong commitment to the U.S. and Europe and it’s likely that over time we will build what we hope will become one of the leading frontline organizations in anti-infective care.
However, we certainly don’t rule out getting help along the way. At very least in Asia and Latin America we will need help and certainly in the U.S. and Europe, I don’t rule out the possibility of co-promotion or other perhaps not permanent but types of arrangements, which allow us to leverage the presence of others in this market already.
So to me, linking up with Rempex in this way provides us with enormous opportunities and if anything likely opens up, even further opportunities in how we choose to build a front line organization. But let me put it very clearly, I did in New York, we’re in infectious disease in the hospital and we’re here to stay and we’re going to make a win of it. And what you need for that is you need great products and great people and this transaction has overnight created a team that I think, when you looked at our team and Rempex team, which has those great people but also has an amazing portfolio and that’s what I am excited about.
Operator
And your next question comes from the line of Joseph Schwartz. Please proceed.
Joseph Schwartz
I was wondering if you could talk a little bit about the Phase 3 plans. You said two modestly sized studies. Are these non-inferiority studies? What would you be using as the comparator, et cetera?
Clive Meanwell
I’m going to ask Jeff Loutit to take that one.
Jeff Loutit
So we have had discussions with both the FDA and the EmA, specifically around the design of those two trials. One will be a large Phase 3 non-inferiority trial in subjects with complicated gram-retraction infections. Comparator is still under some discussion at the moment, but it will be a standard drug that’s commonly used to treat those infections. The other trial which I think holds a lot of interest to both clinicians and regulators is a trial specifically in subjects with carbapenem resistant antibacterial ACI organisms. And that will be across several different indications, in providing high quality data in a relatively small number of subjects with excellent PK and PKPD data around the treatment of those patients.
So as Clive, Dan and Mike all said, this is a relatively modest program, which would give us approval for the treatment of serious gram-negative infections where options are limited.
Clive Meanwell
I think — Joe as you know we’re not shy about Phase 3 clinical trial programs. We know how to do them and linking up with the experts of Rempex, we feel we can do this very efficiently. As we look at the plans that the team has put together, I’m very impressed with the focus and ability to move with sort of raised precision on these resistant organisms and I’m very impressed with the dialogs with the agencies who have really started to think very carefully about how to do these kinds of trials more cleverly and I think that is very, very promising. So as a Phase 3 trial aficionado if you like, I like very much what I’m saying here.
Joseph Schwartz
Sure. And is part of that efficiency due to the targeting of patients with certain resistant profiles? Can you talk about how the resistance profile may compare to other drugs like Ceftolazane, Tazobactam, what resistance have you been able to overcome and then also through your experiments what resistance, what mutations have you been able to induce that, undermined the efficacy of our drug?
Clive Meanwell
I think that’s two part piece. I’ll answer the clinical piece and I’ll hand it over to Mike to talk about the preclinical side of things. Specifically as I mentioned, the trial, the smaller trial and subjects with CRE organisms, that will be really the focus. If you think about what physicians are struggling with at the moment is how to treat these KPC organisms or CRE organisms. So providing them data in subjects that all patients have those organisms I think will be a very powerful to them. So, it really will be a very focused trial, specifically in those subjects.
And now I’ll hand it over to Mike to talk about the preclinical side.
Mike Dudley
Yes. It’s Mike Dudley. So, I think you asked a couple of questions, one about the sort of the comparative spectrums say with the drug like Ceftolazane, Tazobactam and then you asked about also resistance mechanisms as well and I’ll tackle the second part of that first. As you know, when you’re developing these drugs, you lean on them very hard in a laboratory to try to see if you can induce mutations that result in resistance particularly to a new class of beta lactamase inhibitor. We’ve done those experiments and you don’t see any resistance to the beta lactamase or changes in the beta lactamase following exposure to RPX7009 in those experiments, either in-vitro or in-vivo as well.
So, it looks like RPX7009 is particularly very active against the KPC enzyme. It acts kinetically like an irreversible inhibitor of that enzyme and hence is able to inhibit pretty much permanently after the exposure. The other question you asked about was particularly how this stakes up against other agents and we’ve provided an example of studies in slide deck and it was discussed earlier.
Specifically, about Ceftolazane and Tazobactam, I think there is a couple of issues. Ceftolazane of course is cephalosporin antibiotic that it comes from a generation of drugs that are not only susceptible to KPC but also to those extended spectrum beta lactamases that took out drugs like Rocephin and so it has an impact in the 80s and 90s.
Tazobactam is a beta lactamase inhibitor. It’s an older generation beta lactamase inhibitor, does not have very potent activity at all against the KPC enzyme and so this combination does not have any activity against KPC producing strains. Where I think Ceftolazane seems to have some potential usefulness of course is against Pseudomonas and the studies to date showed that about 50% of those strains that would be resistant to say Ceftazidime would be susceptible to Ceftolazane. But we’ve profiled and others well, profiled Carbavance against that and other combination products and we’re very confident that Carbavance stacks up very, very favorably compared to them.
Clive Meanwell
And Joe, it’s Clive again. Just want to stress situating our work with the Rempex team obviously. Here we have in our own shop Greg Mullick [ph] who — I think he even did his PhD on gram-negative bacteria and Matt Wikler who has been with us now for a while, led a deep dive on this science with some world class external experts and really asked the questions in a fairly profound way and I think the way Mike and the team put it up, an organized information, it was very clear to us that the scientific profile, the biological and microbiological profile of these compounds are absolutely extraordinary.
Operator
And you next question comes from the line of David Amsellem [ph]. Please proceed.
Traver Davis
Just quickly Traver Davis on for David. Just quickly on the transaction and then Carbavance advancing studies next year, how should we be thinking about R&D spend for next year and even do you have any color how we should think about it for 2015, 2016?
Clive Meanwell
We’ll be giving a full range of guidance, as you would anticipate with our first quarter — full year results. That would be at our conference call in February. Obviously, I think at this stage of this transaction we can get the short term immediate impact that I think [indiscernible] gave earlier but for the time being we’re not in a position to give much more long term guidance. We want to see where 2013 comes out.
I would say in general as a Company we’ve stated and I don’t think that changes substantially here that we think spending 20% of net revenue is a lot of money. We’re going to have a very attractively growing top line. So, I think there is more than enough space if you like in our P&L over the coming years to fund any and all of these exciting programs as they come forward. So, watch this space. I apologize we can’t give too much guidance today but we will do over the coming 60 or 90 days.
Traver Davis
And just a quick follow-up on that. I know, obviously you don’t want to give too much detail on that cost related to the studies yet, but should we be thinking about the cost of the two studies for Carbavance, sort of being similar to what we saw for Oritavancin? I know, you’re saying that these are modestly sized studies. So how should we think about the spend Carbavance viz-a-viz what we saw for Oritavancin?
Clive Meanwell
It is just sort of commencing on this, because obviously this is a big drug of thinking. Obviously, we have Jeff Loutit, who is an expert on running clinical trials and we have our own Matt Wikler, and they have been talking about this. How do you guys see I mean — with Oritavancin med we got through that fairly efficiently, Jeff, I don’t know what you’re thinking in terms of — is it about 1000 patients, 10,000 patients? What’s the order of magnitude for Phase 3 that we can provide?
Jeff Loutit
Yes. Actually, the size of the safety data based we’ve agreed to with the agency is around 600 subjects for the Carbavance program, which is obviously smaller than the Oritavancin program.
Matt Wikler
Right, yes. And the FDA has made it clear — and is clearly indicated in many public forums that they are looking for more efficiently to develop drugs, which would allow pharmaceutical companies to get products out to patients who really need these new therapies for gram-negatives more efficiently. And clearly a decreased sized program such as this sense, we will provide the adequate safety data which the agency requires and also the way that the program is designed. We’ll give this specific data on patients with these specific types of resistant organism where there is most need for patients and we’ll therefore provide both clinicians and the regulatory agencies with the data they need to help them make these decisions.
Operator
And your next question comes from the line of Adnan Butt. Please proceed.
Adnan Butt
Some questions on Carbavance. First, I’ll start with can you say a bit more about the antibacterial activity for Carbavance? You mentioned being able to going into Phase 3. Is that based on in-vitro data? How much Phase 1 data have you shared with the agencies? How much more you need to do before the Phase 3 trials are finalized basically?
Clive Meanwell
Adnan, thank you. We’re going to get Mike to tackle that one.
Mike Dudley
Yes, good. So let me sort of address the spectrum of activities. So carbapenem antibiotics and particularly the carbapenem antibiotics that are used in the treatment of suspected or documented serious gram-negative infections have broad activity against aerobic gram-negative rods such as Enterobacteriaceae, so E. coli, Klebsiella, Enterobacter are all within the spectrum of those agents. Pseudomonas aeruginosa and Acinetobacter are as well. So very broad spectrum activity against gram-negative organisms. Again that’s why these have been the go two agents for suspected gram-negative sepsis within patients.
I would also add that carbapenems are also very active against anaerobic bacteria, gram-negative anaerobic bacteria. So unlike many of the other products that are in this space right now, one does not have to add a specific anti-anaerobic drug when treating patients that might have mixed infections that maybe coming from the peritoneum as well.
So I think the spectrum of activity is very broad for a carbapenem and what the beta-lactamase inhibitor is doing of course is overcoming the resistance mechanism which is the problematic mechanism in the U.S., as well as worldwide predominately is due to this KPC enzyme.
So we’re restoring the usefulness of this drug against those resistance mechanisms. The other thing that we do of course is that we’re maximizing a tool known as PKPD in a way that we will be doing this agent, which will allow us then to provide coverage against, not only of course by reversing resistance mechanism but we will be able to cover for example Pseudomonas Acinetobacter, that would be in fact considered resistant to existing marketed carbapenem drugs right now.
Jeff Loutit
And just in follow-up to that around the Phase 1 program, it’s a very robust Phase 1 program. Well over 100 subjects have been dosed with either RPX7009 alone or in combination with the carbapenem.
Clive Meanwell
And from that perspective Adnan, without adding any scientific information beyond what Jeff and team talked about, as we went through this, we were able to look at the Phase 1 data the team had developed from it. It was quite hot off the press, and I think we were extremely impressed Matt with the quality of the data and the adverse event profiles and the PK combination of the BLI plus the carbapenem. It looks to be a great match to us. Is that Matt?
Matt Wikler
Yes. The PK data actually was right on what we expected, actually quite predictable. We obviously knew a lot about the carbapenem it’s combined and looking at the carbapenem, plus the beta-lactamase inhibitor actually, we’re very happy to see that the pharmacokinetic profiles match up very nicely which is important to a combination drug. And the pharmacokinetics did not change for the carbapenem, with the addition of beta-lactamase inhibitor which is very important and clearly had all the safety data, had laboratory tests and this was well designed and we saw no surprises in the data and therefore made us feel very comfortable not moving forward with the acquisition.
Adnan Butt
Let me just ask scientist team, when would you like to publish these data? When do you think they are going to come forth in the public domain in a peer review kind of set up?
Mike Dudley
Yes. So we’re presently planning to show some of the Phase 1 data for the beta lactamase inhibitor at the European Infectious Disease meetings that would be coming up in the spring of next year and so we’ll be presenting the Phase 1 data there and then at ICAC at the upcoming fall infectious disease meetings, we’ll have a very full exposition of a lot of the data that we generate in Phase 1 in addition to some other pre-clinical data.
Clive Meanwell
Are there any other follow ups Adnan?
Adnan Butt
Yes, just one follow up. So you touched on safety a bit, but is there any specific safety signal that you would look out for this drug or drug class? And then secondly, how much more do you need to do before you can initiate Phase 3 trials? Do you have everything in hand or are you scheduling discussions with the FDA at this time?
Clive Meanwell
Carbapenem as you know are a very safe class of beta lactamase antibiotics. So there are no specific safety signals associated with the Carbapenems. With respect to RPX7009, as Mike mentioned the pre-clinical profile is very clean and in fact when we looked at the clinical studies, then subjects who received RPX7009 alone or in combination with the Carbapenem, the objective is the study was are we changing the known and very safe profile of the Carbapenem when we add RPX7009 and the answer is no. So very good safety profile.
We do plan a couple of more Phase 1 studies; one in subjects with renal insufficiency; the other in subjects to look at the penetration to lung and epithelial lining fluid. But those are really to help us with including criteria in the Phase 3 program and not gateways necessarily to the actually starting the registration trials.
Adnan Butt
One more question please. So for Carbapenem anything in the pipeline, do you know if there is anything that would target Group 3 beta lactamase?
Clive Meanwell
Adnan you didn’t quite come through clearly, could you repeat this?
Adnan Butt
Anything in the preclinical pipeline that might be targeting Group 3 beta lactamase?
Mike Dudley
So are you — in group 3 are referring to metallo beta-lactamases?
Adnan Butt
Yes I am.
Mike Dudley
So the metallo beta-lactamases are group B beta-lactamases such as NDM1 and VIM so forth, are largely problems that are outside the United States right now, in Europe and also in some areas of Asia such as Pakistan and India and so forth. So those are follow on programs, which I introduced at the very end. We have programs that are addressing those enzyme producing organisms. We’re doing it in a couple of different ways, through combining our beta lactamase inhibitors with molecules specifically that are not susceptible at degradation.
But also as I pointed out, with this new class of beta lactamase inhibitor we have actually discovered compounds now that are capable of inhibiting the so called Class A and Class C enzymes as well as Class B metallo beta-lactamases as well. And so we see that those types of products would come along behind that, because you are always having to think ahead of what you will see in the epidemiology, both in United States as well as worldwide.
Clive Meanwell
I think Adnan we were also impressed with the possibility of an orally deliverable inhibitor. I don’t know Mike if you want to comment on that, because that would be a total game changer I think.
Mike Dudley
Yes. We agree and the fluoroquinolones class of course was quite revolutionary in the ability, if we allow clinicians to really switch patients from IV therapy to oral therapy within the hospital and send them home. But we’ve lost that ability and the hospital now because of antimicrobial resistance to fluoroquinolone agents, which in many centers is now north of 50% to 60%.
So this would be a combination product, our class of beta-lactamases inhibitor can be made orally bi-available. Some of these compounds in fact are intrinsically orally bi-available or through simple pro-drug manipulation, which is a technique that chemists use to be able to make drugs orally bi-available. We have compounds now that we believe, that could be a clinical candidate very quickly within an IV oral agent that will be useful for this IV oral switch therapy within the hospital but then of course for treating patients that are perhaps in institutional cares, where IV therapy is impossible.
Adnan Butt
If I can get a commercial question in please, it has broad spectrum coverage but also has activity against multi-drug resistant organism potentially. So how would you expect use to be taken up. Is the space known for empiric use or do you expect patients to be identified? How do you see this drug getting to patients?
Clive Meanwell
Well it’s very interesting to me; that commercial question is really a clinical question at heart. So when you start to mouth why and who will get the drug, the first thing is I think as a firm our policy, and this is not just mother and apple pie for us, is we want the right patients to get the drug. We don’t want too many patients to get the drug. We want the right patients to get the drug. And so either Mike or Jeff, do you want to comment on this? How, who needs these drugs and who doesn’t need these drugs. And lets talk about it, because that Adnan I think is how you shape the market model.
Jeff Loutit
Well, let me respond, then Mike you can jump in. So physicians are often driven by their biomed that they are working in. So if you are a physician in an intensive care unit that has a significant percentage of the CRE organisms, so maybe above 10% to 15%, you’re going to want to consider using a drug like Carbavance empirically, because the mortality in these gram-negative infections, particularly if you don’t get the antimicrobial right in the first 48 hours is very high. So getting that antimicrobial therapy right in the first treatment is very important.
So 10% to 15% is often sort of the cut off that physicians will start to use the drug like Carbavance empirically. Prior to that they may get used to just as Clive said in subjects who actually have the organism identified. And if you go to — so there are obviously variations across the country. If you go to a hospital in Wyoming there may be no CRE in this drug — would not be a drug that they would need. But if you go to almost every large hospital in New York, there is a very high percentage of the Klebsiella pneumonia, which have expressed the KPC gene and were resistant, you would want to use a drug like this empirically right now.
Matt Wikler
Yes, I mean. It’s really and I agree with everything Jeff said. It’s really a matter of playing the odds and if you know you have resistance range in a hospital which, and all large hospitals do — antibiograms they know the resistance patterns. If you have resistance in your hospital, you have a sick patient, and you know you have to put them on appropriate therapy within the first 24 to 48 hours, are you going to use a drug empirically in order to make certain, that you cover this enough? You are going to use the best drug you can get because you don’t really have the luxury of playing games and trying something that’s not the best drug, in the event you may be wrong because it would be too late potentially for the patient to have a successful outcome.
Clive Meanwell
Couple of other points that’s just coming up.
Mike Dudley
This is Mike Dudley. I think one of the things that I think we were very impressed with in our discussions with Medicines Company is sort of the commitment of the company to try to work with clinicians and hospitals to resolve problems. And with antimicrobial resistance in hospitals, there has been a tremendous movement of what’s known as antibiotics stewardship or antibiotic management to really help to optimize antimicrobial therapy and to really use as was mentioned here the right drug in the right patient as well. And so we certainly believe that that’s one of the real attractions of working with Medicines Company, is having that type of commitment and really helping them identify then and solve these problems with the tools that have been developed at Rempex.
Clive Meanwell
And Dan I think you will go next.
Jeff Loutit
Yes, just one last point. I think, one thing is a little bit different about the gram-negative space is it’s unlike, for example the Mercer space there is not a good generic alternative in the gram-negative space, and so if you’ve got an issue, you have to go to the new proprietary agent essentially. So it really does make a big difference in this space versus the gram-positive space.
Clive Meanwell
And to any of you, I mean, I had the impression that this space is considerably larger than the Mercer space. Do you want to comment on that?
Mike Dudley
Yes, it’s about twice the size of the Mercer space, if you look at hospital though.
Operator
And your next question comes from the line of Cory Kasimov, please proceed.
Unidentified Analyst
This is actually Whitney on for Cory this morning. So relative to the Minocin kind of more official or more robust launch, should we sort of expect that in the near-term or would you be sort of just maintaining supply of the current formulation and then waiting for the new formulation to kind of launch it more robustly?
Clive Meanwell
That’s a great question, Whitney, thank you. I think that we’re going to — I have been talking around here the last few days about a White Club service. I think that hospitals who are managing acinetobacter are in need of guidance and support as well as just a drug in a box. And I think what we’d like to do with our colleagues Rempex is to make sure we set up the necessary information channels, we have the right education platform, we have the right personal contact to those who are dealing with these very difficult patients.
And we can build all that up slowly with the team here, and with our field based team as we begin to put it together. I think, as we then introduce the new formulation, I think, we’ll probably turn the flame up in terms of resources adding around that because we believe it will be a much easier drug to use, a somewhat safer drug in terms of patient tolerance, and that will be the time to turn up the flame. And that will be the time when of course our resources are coming on board for Oritavancin. So that whatever that frontline organization looks like — and we add certain amount — late 2014s of the big surge, at the earliest then we will have a group of people with two important stories to tell, not just one, and whether we choose to do that that with a third party partner or not, we can all address that later. But for the time being we are going to start what I will call the White Club service for Minocin IV.
Unidentified Analyst
Got it, that’s helpful. And then on Carbavance, you sort of mentioned some, I guess, differences in toxin kind of, ramping cost with some of the other drugs. Will you will be looking at pharmacoeconomic data in the Phase 3 trial that might be further differentiating on top of the efficacy and safety.
Clive Meanwell
You must have heard me on calls before. We always look at pharmacoeconomics. We think it’s the fundamental driver of healthcare today. We’ve thought that for the last 15 years. One of the things I love about this portfolio is not only does it potentially saves lives, not only just potentially alleviates suffering, but it also has huge potential to improve the economics of healthcare in leading hospitals, as well as smaller hospitals. So yes, we’ll be very focused on that right from the get go, as indeed the team in San Diego already has been.
Operator
And your next question come from the line of Umer Raffat. Please proceed.
Umer Raffat
So I am one hour into reading about gram-negative. So my questions will be very basic. Please bear with me on these; very quick ones but a few of them. So number one why RPX7009 only being developed in combination with the Carbapenem. And secondly what do we know about hepatic talks with biopenem? And the third one what is the mid 50 values for Carbavance in Pseudomonas versus Enterobacteriaceae? And finally I had an epidemiology question I can follow up with.
Clive Meanwell
For an hours’ worth of reading, that’s pretty damn good, I got to tell you. You are way out of my pay grade already. So let me hand that over to Mike.
Mike Dudley
Good job there. So let me try to take these if I miss some those as they came by, feel free to fire back here as well. So one of the — you asked about the question about why is RPX7009 only being developed with a Carbapenem I believe. And I think the short answer is that the current regulatory environment has been one where combination products are developed together. So two drugs being developed together as a single drug. So I pointed out the examples of Ceftolazane, Tazobactam and Minocycline [indiscernible] as well.
Now in doing that and developing in this program, we selected the Carbapenem for the reasons that I mentioned before as to sort of be the anchor for this beta-lactamase inhibitor combination. And it’s very important I think as Matt mentioned there is that one wants to match the pharmacological properties of your partner beta lactamase inhibitor with your partner beta lactam. And so therefore RPX7009 was really designed to be used with a Carbapenem antibiotic, as opposed to other beta lactamase antibiotics.
I would add that is in fact what you are asking is exactly what we’re doing with these follow on products where we’re looking then at combinations of newer beta lactamase inhibitors in combination then with other beta lactamase, which in this case would not necessarily be a Carbapenem, but perhaps might be a drug with a differentiated profile against other pathogens as well.
Secondly, you asked about a partner Carbapenem. We have evaluated a couple of different Carbapenem partners, because as I mentioned we designed RPX7009 to work with several different Carbapenems. Biopenem is one of those compounds that has been evaluated both pre-clinically as well as within the clinic as well. We’re leaning actually away from Biopenem presently now and we’ll go forward with a really best in class Carbapenem in our clinical trials going forward.
The third question I think that you asked about was around MIC90 for Pseudomonas and so forth as well. One of the things that we’ll be talking about going forward is how we’ll be dosing the Carbapenem and as you know, potency is only one leg of the stool that describes the usefulness of a drug in the treatment of infections.
The other part of that is the pharmacokinetics and dosage regiment and what we refer to as PKPD and we’ll be rolling out data showing that with the dosage regiments that we’ll be using at Carbavance, that we’ll be able to cover organisms that are current resistant to current Carbapenems in the clinic according to their FDA and CLSI breakpoints, we’ll be able to treat those organisms with Carbavance. I think I hit them all?
Umer Raffat
Yes great, and then my follow up was on the epidemiology side. So outside of any outbreaks how many Carbapenem resistant cases do we see in U.S. every year? And what percentage of those cases are KPC based resistant?
Mike Dudley
So that is a question that one always wants to know and I think order for me to really answer that question, I have to sort of explain that KPC production or Carbapenem producing organisms are not reportable cases, believe it or not. So the way that we actually track resistance particularly in the early stages is to sort of setting all types of sites. And what I mean by that is that state health departments will often times detect or have strains sent to them that often times demonstrates these very stain’s susceptibility profiles within the hospital.
So what we can really do is we can often times really estimate this based upon what we see relative to other organisms, such as ESPLs. And some of the recent data that CDC has placed for us is that the ratio between a Cephalosporin resistant organism and a Carbapenem resistant organism is now narrowing. So it’s only a ratio now of around 3:1. And if you look at that ratio 10 years ago, it was probably over 10 to 20:1 as well. So the epidemiology and all the trend lines which we try to show you there are showing very similar prosperities to what we see ESPLs. 25 years ago, if you ask me that questions ESPLs were very uncommon in many hospitals. Now many institutions now are reporting 40% to 60%. If you are Europe basically 100% of many of institutions in large European cities are now resistant to Cephalosporin.
So the trend lines are all there, that the resistance is spreading. And an important point I think that Dan also I think mentioned and alluded to is that because these are serious infections, because if you get antibiotic therapy wrong in very ill patients, the mortality rate is very, very high. And so once you’re actually incidence of resistance is north of say 10% to 15%, you don’t want to be wrong because if you don’t give an active antibiotic against these very ill patients, the mortality rate is very, very high. And so you can talk about what’s the significant number, the threshold for how physicians and hospitals behave differently is really only around 10% to 15% resistance.
Operator
And your next question comes from the line of Jason Kantor. Please proceed.
Jason Kantor
So a couple of questions on Carbavance. Will you take at SPA for this Phase 3 program and it wasn’t clear from what you were saying about your CRE study. Will this be comparator study? Will you actually get some sort of comparative clinical data and so what kind of end points will you be looking at?
Clive Meanwell
It’s Clive. I think the second part of the question came over clearly but the thing you said at the beginning where you said something about the FDA, can you repeat.
Jason Kantor
Are you planning to get an SPA?
Clive Meanwell
Yes, sure. Jeff?
Jeff Loutit
Yes. We’ve obviously had a lot of discussion about whether that would be appropriate or not. And in general in this area of changing regulatory environment, the FDA has steered us away from going through a SPA just because it locks them into a more conservative approach and so we think it makes much more sense not to enter into a SPA with these programs.
I think your second question was related to a comparator. So, in the CRE specific trials, so yes we will have a comparator on. As I mentioned, that trial will be relatively small, compared to a standard non-priority [ph] trial but we will have comparator arm and we looking at descriptive statistics, comparing the data between arms.
Dan Burgess
The challenge of course as there is no agent but it’s approved for use against CRE and so we’ll have to be whatever their best cocktail therapy. That’s part of the challenge here and any trail design and frankly is one of the reasons the FDA is being so flexible here is because you can’t put a comparator in there that you’re going to be comfortable.
Mike Dudley
And I think the other point this too is that these are not powered statistically, like what you’ve been used to seeing for other types of drugs and again that’s rooted in the idea that these need to be doable trials. There is no comparator that is a standard that you can really do this, on which to power these types of things. And so these are — these types of trials and these are the types of studies draw your attention to some of the recent European guidance that has recently have been published, the final guidance for developing antimicrobials for these programs that are directed against these pathogens that are discussed and FDA and EmA are very much aligned in terms of their thinking, in terms of how to approach these types of products and these types of infections.
Jason Kantor
And Mike, if I may, you’ve been involved in a lot of industry reforms and industry academic and regulatory collaborative discussions. I think we’re all very impressed with the enthusiasm and leadership that we’re seeing out of both the European and the U.S. regulatory groups. Is it something that can be turned into practical advantage for everybody or is it little bit, well we got to go this way. I mean are people enthusiastic about it or are they just sort of, well we have to.
Mike Dudley
I think that Ed Cox [ph] says, has who heads up the office of antimicrobial products at FDA has summarized is that that the FDA recognizes that in the past where insisting on a high degree of certainty — they recognized that they drove a lot of industry out of this area in terms of discovery. Rempex has been one of the few companies in the United States that’s been engaged in antimicrobial research and development and as Dr. Woodcock [ph] has stated a few years ago at a bookings forum is the FDA recognized that they really needed to reboot antimicrobial development and regulatory science that associated with that and then we think that we’ve been fortunate with our program to be really well poised with the spectrum that Carbavance has to really take advantage of these types of programs that are going to accelerate the availability of these drugs very soon to patients.
But also more importantly is that we would foresee that in the future that additional trails, more traditional trials, if you will that would be done on the back end of this in the post approval area, which would then garner additional indications and more widespread use, which we would anticipate with increasing resistance that would be taking place in more patient populations.
Clive Meanwell
That’s great and I think I can echo from The Medicines Company side, our experience with the Oritavancin program, and SPA wasn’t a good idea there either because we were in such close dialogue with the agency, and they were very helpful, and I agree with the team that it’s not necessary here either and in fact may even inhibit some creativity as you see that. So Jason I hope that.
Jason Kantor
Yes, that was helpful. If I could just ask a follow-up here. So if you reduce your activity in CRE, what is your update — your antibiotic would be basically reserved only for that, given the way that these docs tend to deal with drugs that they have for the most resistant and then Clive are you planning to provide detailed estimates for these new products that you have for other products in your pipeline as we look to your guidance in 2014?
Dan Burgess
Why don’t we talk about the clinical questions again. I think it comes back to — some other things that you said earlier but those we can emphasize at or.
Clive Meanwell
I think it comes back to what we discussed earlier, which is the antibiotics stewardship. So every new antibiotic now falls under antibiotic stewardship because of the concerns about broadly use of drugs and resistance development, and that’s sort of why we are where we are, and the problem with resistance at the moment.
So all drugs will be under the stewardship group, but I think it comes back to the issue that we’re going to be talked about that; if you do not have any problem with CRE in your hospital, there is not a need for a drug like Carbavance. If you do have a problem with CRE in your hospital, then obviously you can use it in two ways, you can use it in those patients who you know an organism, have the organism, but importantly, as you have a higher percentage of those strains, you’re going to want to use it empirically. So in that setting this stewardship program may well say, this ICU who has more than 10% incidents of CRE is able to use Carbavance empirically, and I think that that’s how all new antibiotics are being looked that and cared for at this time.
Mike Dudley
This is Mike Dudley. I think I would like underscore also something that Dan said earlier. So if you’re going to talk about reserving something, that implies that you have an alternative and the problem here is we do not have suitable alternatives. The point that FDA makes, the point that we make here is that these are drugs for patients for which the existing choices are either limited i.e., because of resistance or inappropriate. So for example, the last thing that you want to be using in a patient who has had a renal transplant that now has a resistant infection due to carbapenem-resistant infection is Colistin, which is a highly nephrotoxic drug as that makes it difficult.
So there are no really other alternatives which allow you to consider these reserved. When I was wandering in hospital wards a couple of decades ago, carbapenem antibiotics were reserved, if you will because we could use cephalosporin antibiotics. That doesn’t occur anymore because how we’ve lost those classes of drugs, and we expect that to happen in the ensuing years with carbapenems.
Clive Meanwell
Jason you’ve known us long time. Look in time and time again, again and again in acute intensive care medicine, which is what we’re really talking about here; this is not an ear infection, we’re talking about. We have the issue of time. If you don’t get patients moving in the right direction the first few hours of therapy, you’re screwed and you won’t get a second shot with a 20%, 30% even 40% mortality rate in young otherwise healthy people even, not just even compromised but also in some others. There just isn’t the time to ditch around with cheap drugs because you think you can get away with it then we’ll see what happen tomorrow. Patient may not have tomorrow. So that’s what the team’s really stressing.
And I think that’s based on your second point, which is how do you make a sale forecast or something like this. So the short answer is you figure out what the value is. And this is a brand new world anti-infective therapy. I grew up selling Rocephin at Roche and doing trials and doing regulatory work, where our aim was to get as broad a label as we possibly could in as many countries as we possibly could as fast as we possibly we could and I think we did a fairly good job with Rocephin.
But here it’s different world now where you’re looking for right patient, the right time, but the value you create for that patient and for that hospital is enormous. I mean it’s huge, off the chart. And so then you start to ask the question, how should you price these products? You should price them less than the value you create. Well, if they value created is enormous, then you have a quite bit of, should we say flexibility on pricing. And then the third component is well volume, what patients are getting appropriately treated. That [indiscernible]. So I think this area we believe is going to evolve into very different kinds of market models and we’re looking forward to that.
Operator
And you next question comes from the line of Joel Beatty. Please proceed.
Joel Beatty
My first question just to clarify, does this mean that partnering for the launch of Oritavancin is off the table? And then also will you still be looking for additional acquisitions going forward and how does today’s acquisition affect your interest and ability to make additional acquisitions?
Clive Meanwell
On the Oritavancin side, I think I may have mentioned this earlier. We don’t think this changed our commercial strategic choices at all. At some point we need to create a very capable frontline organization and we want to drive the strategy but this doesn’t prevent us, this isn’t saying we’re never going to partner anywhere in the world. Certainly Latin America and Asia we need to partner and then in some parts of Europe, U.S we may still partner. It depends on the nature of the launch we finally believe we need to pull off. So I don’t think either Dan or I feel particularly strongly about one frontline model over another as long as it’s really a smart one. So we’ll work it through and I think as we see more and more data, as we see how the FDA is going to handle the oritavancin, as we see how Minocin shapes up, as we see how Carbavance moves forward, I think it becomes easier to design the right frontline. Joe, could you help me with the second part of your question, I lost it?
Joel Beatty
Sure, about your interest and ability for additional acquisitions after this one.
Clive Meanwell
Yes, I think that our job as a company is to create a portfolio that can create the most value possible for our customers, and when we do that, we obviously create the most value possible for our shareholders. So, the answer is, we’re going to keep looking. Obviously we’re not an infinitely large company. We have to be extremely selective. I think in the anti-infective space we’ve been very, very thoughtful and looked at a lot of opportunities but I think this one stood out, I’d say like a beacon honestly.
So yes, we’ll keep looking and by the way in the anti-infective space, we now have an extremely energized and even better team than we had before. So there’s lots of ideas around this table I can tell you for new things. So I wouldn’t rule out the possibility of further opportunity assessments. Who knows, whether they lead to deals, you never know, but we’ll keep looking because we think it’s an important area.
Operator
And your next question comes from the line of Steve Burn, please proceed.
Steve Burn
I was hoping I could drill into the mechanism here a bit. Maybe this is a question for Mike. As these pathogens have evolved resistance for beta lactamases, is it fair to say that the pathogens that have a carbapenemase enzyme also have a cephalosporinase and therefore if your beta lactamase inhibitor is effective in KPC organisms, it’s also effective in ESPLs but the reverse is not true.
Mike Dudley
That’s a great question. So the first part of that is that yes KPC rarely actually swims alone. It’s often times in Enterobacteriaceae that already have ESPLs, what we could refer to as penicillinases and cephalosporinases as well. And so your, if you are to use a beta lactamase inhibitor, say with a cephalosporin, that beta lactamase inhibitor has to be inhibiting cephalosporinases as well as the carbapenemases as well.
And it’s actually for that reason why we actually chose with the first clinical candidate from this series to actually go with the carbapenem, because carbapenems I think as you recognize are not affected by cephalosporinases and so when you’re asking a beta lactamase inhibitor to be inhibiting both cephalosporinases as well as KPC, that puts a high degree of burden in terms of the amount of drug that you need to have. There have been observations already with some of the other combination products using cephalosporin bases, with those beta lactamase inhibitors of actually resistance occurring, because it’s not difficult to imagine this multi front enzymatic war that you’re fighting here by asking your beta lactamase inhibitor to inhibit all those.
So that’s the reason why we started with a carbapenem antibiotic, because essentially then all of the energy on the beta lactamase inhibitor could be really directed towards the carbapenemase and we didn’t have to worry about inhibiting cephalosporinases in that setting. Does that make sense?
Steve Burn
Yes it does, and by extension would the metallos also be additive to this group so that if you had a beta lactamase inhibitor that was effective in say the NDM 1, that it would also be effective in these earlier generations of resistance mechanisms.
Mike Dudley
Yes, so again with the compounds that we have been working with right now, the current leads, they’re predominantly really carbapenamase inhibitors. So we would see the example compound that I showed you in the, at the end of the slides that I discussed, would be best to be used in combination with a Carbapenem because the current compounds that we have right now, that are really directed against both the metallo as well as the serine carbapenemases would be best of course to be paired up with a carbapenem. That’s not to say though that we have other programs and as we explore that space there may be other combinations that one could see, that would involve using drugs beyond carbapenems as part of that. For example you might imagine also as we have looked at, of using monobactam antibiotics as part of these combinations, because monobactams of course are intrinsically stable to the metallo beta lactamases.
Steve Burn
Okay and then I have one question on Minocin, given it’s an old drug, is the development of a new formulation intended to give you additional patent protection, assuming there’s no barrier to a generic version but does the new formulation also have some meaningful clinical benefits, or is it mostly an IP issue?
Mike Dudley
I think it has clear clinical benefits than carry with it IP extension that we think can be quite significant. And so we think we can build a franchise around Minocin that will be long lasting, and then we think the new formulation will have some important benefits, particularly in the patient population we’re going to be looking at in terms of fluid volume and a variety of other, things that we think in this particular patient population’s going to be very important and the new formulation does that in a way that the existing formulation cannot.
Clive Meanwell
And Steve, it’s Clive. I think that it’s probably known but Minocin is not available in Europe at all yet. And so it would be a new product for Europe which I think is very important.
I think that that brings to the end, I think we have no more questions. If I may just check with you operator that you’re not seeing any further.
Operator
And there are no further questions in the queue at this time.
Clive Meanwell
Thank you very much. I’d like to thank everybody for your interest in The Medicines Company and our announcement about joining with our colleagues from Rempex today. We look forward to continued activity in December. There’s a number of investor conferences, including today and reporting continued progress in the fourth quarter and beyond. Thanks very much for your attendance everybody.
Operator
Ladies and gentlemen, that concludes the presentation for today’s conference. You may now all disconnect and have a wonderful day.