Here's Why Tetraphase Pharmaceuticals Rose as Much as 26.8% Today

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What happened

Shares of clinical-stage biopharma Tetraphase Pharmaceuticals (NASDAQ: TTPH) soared nearly 27% today after the company announced positive top-line results for a phase 3 trial evaluating its lead product candidate, eravacycline, for treating complicated intra-abdominal infections. When administered twice daily intravenously, the novel antibiotic stacked up well against the commonly used drug meropenem, and had no adverse side effects. The trial evaluated 500 patients suffering from a broad spectrum of pathogens.

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Tetraphase Pharmaceuticals says the results will allow it to proceed with regulatory submission in the European Union in the third quarter of 2017 and the United States in the first quarter of 2018. That means the company is closer than ever to meaningful product revenue. As of 12:37 p.m. EDT, the stock had settled to a 21.1% gain.

So what

Although eravacycline didn't outperform standard antibiotic treatments such as meropenem and ertapenem, that's not the goalpost for antibiotic drug candidates. Why not? The emergence and proliferation of drug-resistant bacteria makes it crucial that healthcare providers have as many tools in their tool belts as possible. This enables two critical treatment options.

First, having multiple antibiotics that are effective allow doctors to switch treatments among different patients. That way, not everyone with a similar infection will be treated with the same exact drug, which extends the amount of time that each antibiotic will remain effective, and slows the rate of emergence of resistance.

Second, having multiple antibiotics at their disposal allows doctors to treat the same patients with multiple drugs, just in case their specific infection becomes resistant to one or more standard treatments. This provides a fail safe or two for patients with stubborn infections.

Now what

The dire state of affairs concerning antibiotic resistance makes it likely that Tetraphase Pharmaceuticals will gain approval for its lead drug candidate, which is currently being evaluated in additional phase 3 trials. Whether or not it amounts to a significant amount of revenue remains to be seen.

However, since the company has essentially no meaningful revenue streams at the moment, investors aren't being too picky. Today's news is certainly a big step in the right direction for the company and shareholders.

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Maxx Chatsko has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.