Small companies bear large burden of developing superbug treatments – report

Companies large and small rushed in to develop COVID-19 therapies and vaccines once the pandemic took hold, motivated by government funding and the massive market potential. The picture looks different for infectious diseases that resist treatment with antibiotics, antivirals and other medicines designed to eradicate microscopic attackers.

Few large companies are in the business of inventing new antimicrobials because the return on investment is low compared with other fields of medicine, Wes Kim, senior officer at the Pew Charitable Trusts' Antibiotic Resistance Project, said in an interview. A course of antibiotics usually lasts five to seven days and the patient is cured, limiting the opportunity for recurring sales, compared with cancer medicines, which are taken over a course of weeks, months or even years.

A June 10 report by the Access to Medicine Foundation in Amsterdam found that small and medium-sized enterprises account for 75% of all late-stage research and development projects in the antimicrobial field. Smaller companies also more consistently focus on the pathogens that pose the greatest risk from resistance, the report found. Many of these smaller companies struggle to obtain enough financing to fund the entire research and development cycle, limiting the number of therapies that ultimately reach the market.

The foundation, which works with over 100 investors with $18 trillion in assets under management, produced the report to provide examples of creative financing for research and development and to highlight opportunities for investment, according to Fatema Rafiqi, research lead on antimicrobial resistance at the Access to Medicine Foundation in Amsterdam.

"We are making sure each of these investors is aware of the situation with [antimicrobial resistance] and rallying around that," Rafiqi said in an interview.

The World Health Organization has declared antimicrobial resistance one of the top 10 global public health threats. People who encounter drug-resistant superbugs often need costly and complex care. About 700,000 people die each year from drug-resistant infections, according to a 2019 report from the Center for Disease Dynamics, Economics and Policy.

"This is the slower moving pandemic," Rafiqi said.

'It's their passion'

Doctors are urged to use caution when prescribing antibiotics to avoid fueling pathogens' resistance to treatment, further limiting the potential return on investment for drug developers.

For example, Paratek Pharmaceuticals, Inc.'s Nuzyra, an antibiotic approved in the U.S. in 2018, brought in a total of €50 million in sales in 2019 and 2020, according to the Access to Medicine Foundation's report. Regeneron's cancer medicine Libtayo, which won U.S. approval at about the same time as Nuzyra, generated €461 million in the same period.

"If you ask small companies why they're still in the [antibiotics] game when the market is weak, it's for public health value," Kim said. "It's their passion."

Most of these smaller companies have yet to bring a product to market, a process that typically takes years and costs millions of dollars, and lack the resources and infrastructure to bring a drug to regulatory approval on their own, said David Hyun, project director for Pew's Antibiotic Resistance Project.

In a healthy market, a larger pharmaceutical company typically acquires innovation by buying either the experimental product or the whole company, Kim said. Even when antibiotic companies get acquired, though, they often do not command a high price. Kim noted that, even after a bidding war, La Jolla Pharmaceutical Co. purchased Tetraphase Pharmaceuticals Inc., which had a product on the market, for only $43 million.

Some companies have managed to find a partner that sees value in their antimicrobials. Cidara Therapeutics Inc., a San Diego-based company with a market value of about $105 million, partnered with Mundipharma, a private company in the U.K., to develop rezafungin to fight a fungal bloodstream infection that can affect people receiving Mundipharma treatments for cancer or HIV. The transaction, including incentives for meeting certain development goals, was valued at more than $568 million.

'Valleys of death'

Other antimicrobial developers, including Melinta Therapeutics, Inc., Juvabis GmbH, Aradigm Corp. and Achaogen Inc., have faced bankruptcy or had to significantly scale back their activity.

Such outcomes can occur when companies without a larger partner encounters what Rafiqi described as "valleys of death," when early-stage research funding runs out or when a company lacks resources to effectively market an approved drug.

To address those gaps, nonprofits and governments need to develop new financing, reimbursement and regulatory tools, Rafiqi wrote in the report.

Existing efforts to drive R&D activity include both "push" incentives to kickstart early-stage studies, which account for about 20% of the costs of drug development, and "pull" incentives that get projects through the final phase of human testing required by regulators for market approval.

But more incentives are needed. Finance ministers from the G-7 nations are also calling for proposals to strengthen market incentives for antibiotic drug development, according to a June 5 statement. The Pew Charitable Trusts support U.S. legislation that would create a program in which the government would issue contracts for high-priority antibiotics valued at $750 million to $3 billion per eligible drug. The legislation was introduced in the last Congress and may be reintroduced soon.

The COVID-19 pandemic may influence the response to antimicrobial resistance. The public-private partnerships formed to respond to COVID-19 have shown the progress that can be made in a short period of time, Hyun said.

"Our hope is that can be translated into the challenges we're facing in [the antibiotic resistance] marketplace," Hyun said.

The pandemic has also shown how opportunistic resistant infections can be, Rafiqi said, noting outbreaks of a rare fungal infection in some COVID-19 patients in India. "The rally around COVID was so much different and we need to push for that kind of rally" for new antimicrobials.