AKAO 2017 Annual Report

86 The CARE study was a Phase 3 resistant pathogen trial designed to evaluate the efficacy and safety of plazomicin in patients with serious bacterial infections due to CRE. The CARE trial enrolled 69 patients, comprised of 39 patients enrolled in Cohort 1, comparing plazomicin to colistin-based therapy in patients with BSI or pneumonia due to CRE, and 30 patients in Cohort 2, a single arm cohort of plazomicin treatment in patients with serious infections due to CRE who were not eligible for Cohort 1. In Cohort 1 of the CARE trial, a lower rate of mortality at Day 28 or serious disease-related complications was observed for plazomicin compared with colistin therapy. The safety profile of plazomicin was favorable to that of colistin in critically ill patients in the CARE trial. According to government agencies and physician groups, including the CDC, the Infectious Disease Society of America, and the WHO, one of the greatest needs for new antibiotics is to treat MDR Enterobacteriaceae, including ESBL producing isolates and CRE. CRE leads to mortality rates of up to 50% in patients with BSI. We estimate that there were approximately 180,000 cases of CRE infections in the United States and five major markets in the EU in 2016 including France, Germany, Italy, Spain and the United Kingdom, which we refer to as the EU 5. Based on the significant increase in resistance rates in recent years, we anticipate CRE will continue to spread and remain a major health problem. Governments, in collaboration with the private sector, have begun to respond by advancing regulatory reform and economic incentives to spur development of new antibiotics. Plazomicin is a novel intravenous aminoglycoside antibiotic. Aminoglycosides have been used successfully for the treatment of serious infections for more than 50 years. However, clinical resistance to currently marketed aminoglycosides has increasingly limited their utility. We developed plazomicin by chemically modifying sisomicin, a naturally occurring aminoglycoside, in order to overcome common aminoglycoside resistance mechanisms. In MDR Enterobacteriaceae, including ESBL-producing isolates and CRE, plazomicin remains active where most other antibiotics, including commercially available aminoglycosides, have limited potency due to resistance. We also recently announced positive Phase 1 top-line results for our orally-administered antibacterial candidate, C-Scape, which is a combination of ceftibuten, an approved third generation cephalosporin, and clavulanate, an approved -lactamase inhibitor. We believe that C-Scape has the potential to address a serious unmet need for an effective oral treatment for patients with cUTI, including AP, caused by ESBL-producing Enterobacteriaceae. The Phase 1 top-line results demonstrated that, in healthy subjects, C-Scape was well tolerated across all doses studied, with no drug-drug interactions observed between the previously approved compounds when dosed in combination. These results are supportive of further evaluation and we currently plan to initiate a single pivotal Phase 3 study in patients with cUTI, including AP, who are suitable for treatment with oral antibiotics, in 2018. Our C-Scape program is funded in part by a contract with the Biomedical Advanced Research and Development Authority (“BARDA”) for up to $18.0 million, of which $12.0 million is committed. The C-Scape drug combination was granted QIDP designation by the FDA for the treatment of cUTI, including AP, in January 2017. We currently plan to leverage a 505(b)(2) regulatory path to support the potential initiation of a single pivotal phase 3 trial in 2018. Our research and development pipeline includes small molecule and antibody programs that target gram- negative pathogens as well as other disease areas. These programs include our collaboration with the Bill & Melinda Gates Foundation which provides for up to $20.5 million in grant funding and equity investments, of which $13.2 million in funding has been provided, to further develop our antibody platform and discover monoclonal antibody candidates against gram-negative bacteria, including those that cause neonatal sepsis. Critical Accounting Policies and Use of Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements, as well as the reported expenses incurred during the respective reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that the accounting policies discussed below are most critical to