Antibiotic R&D is in Trouble: Here’s One Way to Fix It
Bacteria have been on Earth for more than a billion years, evolving in crafty ways to stay alive amid all kinds of threats. Only about 70 years ago, antibiotics came along and became one of the great triumphs of medicine, giving us the upper hand against infectious bugs. But the combination of government-funded research and free enterprise that once worked so well for developing new antibiotics is failing.
This story is nothing new to those who follow public health headlines. Officials sound alarms about increasing rates of infection they see with drug resistant “superbugs” like MRSA that people often get in hospitals. These tough-to-treat bugs come with all kinds of odd names—Pseudomonas aeruginosa, C. difficile, Acinetobacter, New Delhi metallo-beta-lactamase-1 (NDM-1). MRSA alone is thought to kill 19,000 people in the U.S. every year—more than die annually from a better known virus called HIV.
Despite the growing threats from these ever-evolving bugs, the pharmaceutical industry has continued to make cutbacks in antibiotic R&D for at least 20 years, as it searches for lucrative new drugs to replace its aging blockbusters in other areas. This market climate has produced only two new antibiotics approved by the FDA the past two years. And the pipeline of new antibiotics is dry. A 2011 study by the Infectious Diseases Society of America found only two intravenous antibiotics against gram-negative bacteria in mid-to-late stage clinical development with a novel way of attacking resistant bugs.
Even though a number of companies (like Pfizer) sell antibiotics and make decent money off them, there are now only three major companies left in the world with active antibiotic discovery teams. It’s hard to nail down that number for sure, but that’s according to Mike Bonney, the CEO of Lexington, MA-based antibiotic developer Cubist Pharmaceuticals (NASDAQ: CBST), who has good reason to study the competition. The three big companies left in antibiotic discovery are AstraZeneca, Novartis, and Merck, he says.
Cubist, a profitable but small company with an anti-MRSA drug called daptomycin (Cubicin), believes its 150-person antibiotic discovery team is among the largest in the world, Bonney says. There are some well-funded small companies working on antibiotics (including Tetraphase Pharmaceuticals, Achaogen, and Trius Therapeutics), and even a couple new IPO candidates Rib-X Pharmaceuticals and Durata Therapeutics.
But any way you slice it, antibiotics is an industry backwater. There’s nowhere near the intense focus of industry resources here that you see with other diseases like cancer, cardiovascular disease, or diabetes. Antibiotics just can’t compete financially with these diseases when push comes to shove at R&D portfolio review time. A good antibiotic on the market is taken for seven to 14 days, cures at least 90 percent of patients, and generates maybe $20,000 or so per patient for the company on the high end (and more likely between $2,000-$3,000). Drugs for chronic diseases can be far more lucrative, by generating recurring revenue for months or years.
“We have to provide a bit of a thumb on the scale to correct this market efficiency,” Bonney says.
There are all kinds of factors that have contributed to this emerging bacteria problem, and no one piece of legislation will fix everything. Physicians who overprescribe antibiotics have been a major contributor to the problem, and agribusiness and veterinarians have been over-pumping antibiotics into livestock to help fend off illness. Those are tough problems that need to be corralled as part of a comprehensive solution.
But developing new antibiotics, and finding ways to spur more antibiotic R&D, is also part of the equation. There is a significant new piece of legislation working through Congress now, called the Generating Antibiotic Incentives Now (GAIN) Act focused on this part. Various forms of this bill (House bill 2182) have been introduced in Congress before, but the main thing this bill would do is provide antibiotic developers an additional five years of market exclusivity for their products. Essentially, that gives a company another five years to reap sizable profits from its new antibiotics before facing competition from cheaper generics.
This is a good idea for a number of reasons. For starters, it doesn’t require our cash-strapped federal government to spend a lot of new money. And it enables companies to make more profits over the course of an antibiotic’s lifespan, which should be attractive to big companies, small companies, and venture investors who have lots of choices on where to invest.
There’s one more legislative idea making the rounds on Capitol Hill, about creating a new FDA approval pathway for certain antibiotics aimed at fighting drug-resistant “superbugs.” This idea, advanced by the Infectious Diseases Society of America, is to create a “Special Population Limited Medical Use” designation for these powerful drugs. The gist is that antibiotic developers going after certain worrisome bugs could run some basic animal tests, some small human trials suggesting effectiveness, and then get FDA approval without having to jump through more time-consuming and expensive hoops. In return for getting faster access to the market, the FDA would slap a very clear and specific label on the drug which says it should only be used in extreme cases, like when other antibiotics have already failed.
This idea strikes me as problematic, because even if the FDA writes some really tough language in its prescribing information for physicians, the FDA can’t regulate the practice of medicine, and doctors will still be free to prescribe the drugs “off-label.” And if these new antibiotics are really good, doctors will probably be inclined to use them a lot, which helps foster the development of more antibiotic resistance. If new antibiotics get overprescribed, then we’re all right back where we started, with no good answers for drug-resistant bacteria.
Talking with antibiotics entrepreneurs the past few weeks, I’ve gotten a sense that the five-year market exclusivity is what’s most interesting to them anyway. “It will make our business much more attractive to a potential partner, and much more attractive to a potential investor,” says Ron Najafi, CEO of Emeryville, CA-based NovaBay Pharmaceuticals. Dave Martin, the CEO of South San Francisco-based AvidBiotics, says that even though pharma companies have been cutting back on antibiotic work, they are interested in talking about narrowly tailored antibiotics, paired with diagnostics, that can kill specific bugs without wiping out “good” bacteria in the gut. “There is interest out there in Big Pharma in narrow-spectrum antibacterials,” Martin says.
The drug business is notoriously tough, and it’s possible this is just a down cycle in the antibiotic market, from which things will rebound. But I don’t think we can afford to wait around to see if the market will turn around in a few years. There are big risks posed to public health by these bugs, and they will get worse over time if R&D continues to be stuck in the mud.
It just makes good sense, and good public policy, to help spur antibiotic R&D. It needs to be strong and consistent—not entirely subject to the ups and downs of the market—if we’re going to stay a step ahead of bacteria that have been evolving for a billion years. If we fall behind, people could die from things we used to consider preventable.
“I want to make sure my children and grandchildren don’t have to worry about stumbling on playground and worrying about getting an infection and dying from it,” Cubist’s Bonney says. “It happened in pre-penicillin era, when people died of pretty trivial accidents.”