Why We Think Investing in Antibiotics Makes Sense

9/14/10

In 20-plus years treating people with infectious disease, Dr. Gavin McLeod has seen plenty of patients with HIV, transplants or cancer, hospitalized from respiratory distress caused by a secondary infection from a virus or bacteria. Sometimes McLeod or his Stamford (Connecticut) Hospital colleagues could diagnose the problem: perhaps it was cytomegalovirus, a common secondary infection among immune compromised patients, adenovirus or a strain of herpes.

Far too often, he said, he has had to tell a patient’s family that there is nothing that can be done because there are no drugs for the particular infection.

The idea of a broad spectrum antiviral or antibiotic to combat any of the viruses and bacterial infections that hospitalize approximately 250,000 immune compromised patients annually, killing an estimated 15 percent of them, “would be a miracle,” said McLeod, a clinical professor of medicine at Columbia University. That miracle drug, he said, would be in the form of a once-daily pill, as easy for his patients to take as an aspirin. For unconscious, hospitalized patients, it would be an intravenous drug.

While they wait for that miracle drug, clinicians must treat secondary infections in the immune compromised with antivirals or antibiotics that often have problems with toxicity, complicated delivery, or drug resistance.

“There are a lot of viral infections that are very important but for which we don’t have effective drugs, including drug resistant influenza and a lot of viruses that effect immuno-suppressed and transplant patients,” said Dr. Douglas Richman, an infectious disease expert at University of California San Diego. The problem, Richman said, is that the need for these therapies does not represent a market size large enough to convince Big Pharma that it is worth making the investment.

Meanwhile, the evolution of both viruses and bacteria that cause them to become drug resistant, coupled with an increasingly tough regulatory climate, drives away investors.

Canaan Partners is one of the few venture capital firms that has invested strategically across this market. We see antiviral and antibacterial related companies as good investments on multiple fronts. There are significant unmet medical needs—if you do the work and prove you have a better drug in a category in which pharma may not be investing, there will be a path to commercialization.

Next, the regulatory environment favors the development of important new drugs that affect life-threatening illnesses.

Further, Canaan’s target patient—a hospital patient in need of life saving therapies—enhances the likelihood that additional investors (including pharma) will see an opportunity to recoup their investment, and therefore find the product worthy of funding through late stage development.

An example … Next Page »

Dr. Stephen Bloch is a general partner with Canaan Partners. He is a former practicing radiologist turned entrepreneur, turned venture capitalist. Follow @

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  • marshall sterman

    Stephen- E-mail me or give me a call at 781 389-9703 and I’ll give you an investment idea that speaks to a broader “fix” for getting MRSA out of the way and allowing treatment with generic drugs.