10/13/2021- Entasis Therapeutics (ETTX) is a development stage pharmaceutical company which specializes in antibiotics and currently has 4 novel drugs in their pipeline. Two of their drugs are in Phase 1 and the other two are currently in Phase 3 with results expected late 2021 or early 2022.

Sulbactam-Durlobactam is a semi- novel treatment for multi-drug resistant Acinetobacter Baumannii currently in Phase 3. Sulbactam has long been a go to drug for this type of infection but it is only available in the USA as ampicillin-sulbactam so we are forced to give high doses of ampicillin which are not needed and increase GI side effects. Furthermore, Acinetobacter has growing resistance to sulbactam, reducing opportunity to use it. Entasis restores sensitivity to sulbactam by adding their novel beta-lactamase inhibitor, Durlobactam. They are studying this combo for use against carbapenem resistant Acinetobacter Baumannii (CRAB). A multi drug resistant form of Acinetobacter that often requires the use of Colistin. Colistin is a highly toxic and difficult to dose antibiotic.

Entasis estimates the market for Sulbactam-Durlobactam at $1 billion per year but this assumes it will be reserved for CRAB. I believe it will be used more broadly. Acinetobacter is unique in its susceptibility to sulbactam. Sulbactam does not act as an antibiotic against any other organisms. If the price is reasonable, I can envision carbapenems being reserved for other gram negative infections and use Sulbactam-Durlobactam as standard of care for Acinetobacter infections. Only time will tell.

Their other Phase 3 product is Zoliflodacin, a novel topoisomerase inhibitor being studied as an oral treatment for gonorrhea. Zoliflodacin is not chemically related to the other known topoisomerase inhibiters,  fluoroquinolones. Zoliflodacin maintains its activity against gonorrhea even when gonorrhea is resistant to fluoroquinolones. It remains to be seen if Zoliflodacin has the same toxicities as fluoroquinolones such as neurotoxicity and connective tissue toxicity.

Entasis also has an oral treatment for ESBL & CRE UTI in Phase 1. The product is a combination of cefpodoxime and Entasis’s novel orally active beta-lactamase inhibitor. ESBL & CRE UTIs typically must be treated with IV antibiotics. The Entasis product would be a strong competitor with Spero Therapeutic’s (SPRO) Tebipenem.

Lastly, Entasis has a novel antibiotic that targets penicillin binding proteins but does not have a beta-lactam ring. Beta-lactams (e.g. Penicillins, cephalosporins, carbapenems) have long been a drug of choice when an organism is susceptible because attacking the cell wall via penicillin binding proteins is a very effective mechanism for killing bacteria. The Entasis product, ETX0462, attacks this target but lacks a beta-lactam ring. This means it escapes the most common mechanism of bacterial resistance, production of beta-lactamases which break apart beta-lactam antibiotics.

Currently ETTX has a market cap of $160 million dollars, if even one of its drugs is a success, I believe the company is significantly undervalued. With 2 drugs in Phase 3, a catalyst is likely imminent. This company is currently flying under the radar and is the highest conviction stock in my portfolio.

Disclosure: I am currently long ETTX and will continue to accumulate shares until catalysts from Phase 3 trials.