Cubist (CBST) makes Cubicin which is an effective treatment for MRSA. MRSA is an awful, highly infectious infection contracted in hospitals. It is not airborne, you must touch it, or be touched by it.
Traditional treatment for MRSA has been Vancomycin. Vanco, as it is known, dominates the treatment but Cubicin has been making great penetration of the Vanco market. Revenues for Cubist were $295A last year and estimates are $420mm and $575mm (company guidance of $520mm to $540mm) for the next two years. Concensus EPS estimates are $1.30 and $1.70.
Cubicin has treated over 640,000 patients for a 10% market share.
In the company’s January conference call they suggested that Cubicin was headed to $1 billion in revs.
Last week, as our son recovered from surgery, I asked the head nurse if he had been tested for infection. Yes, she replied, for MRSA (negative). When I asked about MRSA treatment she said she had never heard of cubicin, only Vanco.
Yesterday, Teva Pharmaceuticals notified Cubist that Teva was going to file for a generic version of Cubicin.
Shares of Cubist fell 15% yesterday and are down another 3.7% this morning. I’d bet it has more to fall.
CBST is currently a one-trick pony: cubicin. They may be able to expedite a couple of drugs under development but not much can be expected before mid-2010.
