David's New Book

Thursday, August 16, 2018

Investors Hate Antibiotics - With Good Reason!

Back in the mid-1990s and even beyond the tech crash of the early 2000s, an antibiotic biotech could frequently raise $50-100 million in their first investment round. This was often in the setting of only one or two preclinical assets. Well folks, those days are long gone. 

Private investors are afraid of antibiotics.  In April of this year, I had a chance to speak to several private investors - angels and venture capitalists.  These were folks who strongly believed in the necessity to pursue antibiotic research and development. But they were unanimous in noting that it was becoming more and more difficult to invest in the space.  Among their colleagues there was a clear disdain for the area.  And as I investigated further, I found that this disdain is well founded in data. 

Recent antibiotic launches have been disastrous. Avycaz, tedizolid, dalbavancin, oritavancin all had launches well under $50 million.  Melinta now sells four approved antibiotics and their total sales revenue was under $15 million. Partly as a result of these figures, the market capitalizations of publicly held antibiotic biotech companies remain in the doldrums in spite of recently approved and launched antibiotics in many cases. 

Market Caps –

Achaogen - $252MM
Tetraphase - $163MM
Nabriva - $169MM
Paratek - $319MM
Spero - $191MM
Melinta - $234MM

The dynamic leading to these market cap numbers is an interesting one. When a company goes public, it shares its own data and market projections with investors. The analysts then carry out their own market survey research to one extent or another and come to their own conclusions.  But, in fact, they generally rely heavily on the company’s own projections.  Some CEOs believe that the analysts do not have a good understanding of the antibiotic marketplace and that this leads them to go along with what the company is projecting. But the company has a vested interest in promulgating, shall we say, optimistic forecast numbers. 

An interesting dynamic can be seen with Achaogen. I have no specific information on what sales revenues Achaogen projected.  But analysts generally thought that peak year sales of plazomicin would be around $300 million including both cUTI and CRE bacteremia indications. Their stock price (figure) plummeted from $12 to $5 when they did not achieve approval for the CRE bacteremia indication even though the analysts’ own projections indicated that cUTI would account for 80% of sales revenues. Why? Was this an emotional response to disappointment? Was this a true reflection of what they considered to be an important effect on plazomicin sales? Or was this a return to reality given another impending launch of an antibiotic into a broken marketplace? Or was it all of the above? I don’t know and I haven’t inquired. 

One biotech CEO I have spoken to over the years is praying for one good, strong antibiotic launch to rejuvenate investment in the antibiotics space. I don’t think that even that will be enough at this point. Investors will consider that to be a blip in an otherwise dismal environment. Two good launches might help.  But I honestly don’t see that happening.  

In my view, our only hope for preventing a complete collapse of the antibiotic R&D space is government intervention.  (Wow!! Did I really say that?) Government will have to step in beyond their important and considerable push incentives supporting antibiotic R&D.  They will need to provide substantial pull incentives to fix the broken market. I don’t see any other solution. 

Friday, July 27, 2018

You Too, Achaogen?

I just learned that Achaogen will lay off 80 people in their research and development areas to save money. Achaogen earned its first approval, in the US, of plazomicin, an aminoglycoside antibiotic active against resistant Gram-negative pathogens.  It will probably receive approval in Europe soon. With this success, it is downsizing to focus on commercial success and sacrificing chances of following up with additional products for the antibiotic pipeline from its own R&D efforts. In their press release, the clearly cite the unfavorable commercial environment for new antibiotics as a justification for their decision.  They will continue to purse their efforts to develop a new aminoglycoside and a new, orally available B-lactam-B-lactamase inhibitor. 

Recent experience shows that all segments of the private antibiotic R&D sector are now failing. In rapid succession we have lost antibiotic research efforts in small companies like Achaogen, mid-size companies like the Medicines Company and Allergan and large companies like Novartis. All this, as Achaogen clearly notes, is due to the antibiotic market failure and society’s failure to address the problem. There is no reason to expect that Achaogen will be the last company to drop out under these circumstances. 

This will further erode investor confidence.  Any dream that many harbor of establishing public-private partnerships to further research and development of new antibiotics is crashing against the rocks of the lack of private investor interest in the current climate. 

We need to be asking our leaders (and I use the term with caution) in government what their plan is for staving off disaster. In the US, as we speak, the REVAMP bill that would provide a powerful antidote to the poisonous antibiotic market situation is languishing for lack of support in Congress.  In Europe, there is still a great deal of talk and no action. Are we waiting for the next epidemic of MRSA or VRE comes along?  Are we going to sit on our thumbs until fully resistant Gram-negative bacteria become dominant in our hospitals and nursing homes? 

A recent study from the US National Institutes of Health sounds yet another warning bell. They looked for difficult to treat cases of Gram-negative blood stream infections between 2009 and 2013.  Difficult to treat was defined as resistant to all or most of the commonly used first line antibiotics. They found that only 1% of all such infections fell into that category.  But before you accuse me of crying wolf, you need to read further. Infections caused by E. coli were the most common and the least likely to be resistant.  But infections caused by hospital and long term care pathogens like Klebsiella, Enterobacter, Acinetobacter and Pseudomonas were much more likely to be resistant. Over 18% of Acinetobacter infections were “difficult to treat.” The mortality for difficult to treat infections was 20% higher than that for more susceptible infections. While there are limitations to this retrospective study, it should remind us that without a pipeline of new antibiotics to treat resistant infections, we will continue to lose increasing numbers of patients and to spend more and more of our health care dollar trying to treat these patients rather than having the tools available to treat them effectively from the start. 

There is no excuse to further delay action to deal with the broken antibiotic marketplace and the resulting desultory state of our antibiotic pipeline.

Saturday, July 21, 2018

Everyone Hates the Pharmaceutical Industry!

I think people have good cause to hate the pharmaceutical industry. Their unreasonable prices for specialty drugs (especially in the US), their constant price increases, their political power (in the US), and their seeming disdain for the public health unless it suits their interests all make the industry, shall we say, unpopular.  When I was working at Wyeth, my biggest complaint about our marketing effort was those ads directed at consumers on television and radio. As a physician, these advertisements made my stomach turn.  I heard constant complaints by other physicians whose patients were constantly questioning them about the advertised drugs or even demanding that they be treated with those drugs.  When I inquired of our marketing colleagues, they had lots of ready-made arguments for why these advertisements were better for patients and physicians (to say nothing of Wyeth’s top line). And I have a bridge I can sell you.

Let’s try to be objective here.  Pharmaceutical companies do not exist to protect the public health and they are not charities or non-profit companies.  They exist to benefit their investors and shareholders. And, they argue, the high risk and tremendous cost ($2.6 billion and counting) of bringing a drug to market requires that they take steps to protect their bottom line. 

The industry recognizes that when they do serve the public health, it can improve their bottom line. This is clearly true for drugs that will cure hepatitis C but is manifestly not true for antibiotics.  And this brings me to the point of this short blog.

In order to incentivize the research and development of new and desperately needed antibiotics, we need to provide an attractive market for these drugs.  (See my interview with Pfizer in this regard). To do this, we will provide a prize or reward to companies who get such products approved and on the market.  This money will come from taxpayers or consumers or both.  OK.  Everyone who wants to give more money to the pharmaceutical industry raise your hands! 

And this, ladies and gentlemen, is our dilemma. If we do not fix the broken antibiotic market by providing such a prize through government action, we will run out of effective antibiotics in the next 40-50 years or so (unless we can slow the emergence of resistance further). If we do fix the market, we will be spending taxpayer or consumer money to reward an industry we hate. People in the US Congress are on a knife’s-edge here. 

I believe that if we could put this case to the population in a way that people could understand, we could go a long way to making our representatives more comfortable with this idea. We would have to deal with all the objections that we have all heard before. Why can’t the government discover and develop and commercialize antibiotics instead of the industry since we will have to pay for it anyway? Why shouldn’t we tax the industry to pay for this award? Etc., etc. 

My impression is that very few in Congress are brave enough to take the action we need to save our future. We need to clear the way for them by taking our case directly to their constituents. And we need to do this quickly and be much more effectively than we have been until now. 

Thursday, July 12, 2018

And There Goes Novartis!

News reports and personal communications from Novartis employees document that Novartis is shutting down their antibacterial and antiviral research groups.  Novartis seems to claim that this is because they have not been as productive in antibacterial research as in other areas.  While this may be true – finding new antibiotics is hard – we all know that the bigger reason is that there is no market especially when compared to oncology where Novartis has an outstanding franchise.  According to the Pew Charitable Trust, Novartis has a new monobactam in clinical development phase 2 targeting resistant Gram-negative pathogens. 

The Novartis shutdown has been a long time coming. Novartis has had a schizophrenic approach to antibiotics ever since they first established their research institute in Cambridge, MA.  They had a scientific research group, but their development and commercial groups were never happy with antibiotics. 

I don’t know what will happen to the 140 scientists and others affected by this latest catastrophe – but I wish them all well. We need their talents! 

So, among the large PhRMA players, who still has an antibiotic discovery program? Glaxo-Smith-Kline, Merck and Roche still carry out bench research to discover new antibiotics. Pfizer only has a clinical development program for antibiotics. Its probably only a matter of time for these large companies as well. 

Theoretically, any of the large pharma companies still engaged in antibiotic research or development might be available to license new antibiotics coming from biotech. But the numbers of such companies is shrinking rapidly. And biotech has struggled lately to get large pharma interested in their products.  Examples include Paratek, Achaogen and others. 

Strategically, we – society – are confused.  We keep pouring money into research carried out in small companies or academia to find new antibiotics that no one will develop or commercialize because there is no market. Ultimately, this strategy will fail unless we change course. We must fix the broken market.  Our best chance today is to support the REVAMP act now before the US congress. Call or write your representatives and get them to act before its too late!

Saturday, June 30, 2018

REVAMP - Its Here!!

And its called REVAMP (re-valuing antimicrobial products).  This bill, proposed in the US House of Representatives by Rep John Shimkus, R-Ind. and Rep Tony Cardenas, D-Calif. represents the most important advance in pull incentives since we began discussing them.  AND – its my preferred incentive – a transferable exclusivity voucher.  They express it differently – they call it an exclusivity conveyance but it adds up to the same thing. If a company gets an antibiotic approved and that new product addresses a priority medical need as determined by the CDC priority list, the company would receive up to 12 months additional exclusivity on that product. BUT – that additional exclusivity must be conveyed (transferred) to another product or products. It looks like the exclusivity could also be “conveyed” to other parties – “the holder of a conveyed exclusivity extension period may sell, exchange, convey, or hold for use, such period.” 

This incentive is extremely effective because it could be worth billions of dollars.  And, because it is transferrable between companies, it provides an incentive for investment in start-ups and biotech since large pharma will have a strong incentive to license any product that meets the CDC and HHS criteria.

There are a few conditions for the award –

§  Ensure availability of product for susceptibility device manufacturers
§  Identify, track and publicly report product resistance data and trends
§  Develop written guidelines and procedures for products appropriate use, which includes appropriate promotion practices, education, surveillance, monitoring and stewardship.
§  Develop education and communications strategies for health care professions about appropriate use
§  Submit a stewardship activity assessment to agency every two years 
§  Contribute five percent of the total value of consideration received from the conveyance to the Foundation for the National Institute of Health for early stage antimicrobial research.

The justification for the conveyance of exclusivity to products other than antibiotics is simple.  Many other therapies depend on our ability to treat infections.  Without this, the treatment of cancer, autoimmune disease including arthritis, and simple routine surgeries become much higher risk. The risk of wounds of war also would take us back to civil war days without effective antibiotics. 

The bill is limited to 10 such awards. After the fifth year post-enactment or the fifth award, whichever should come first, the GAO is to evaluate the effectiveness of the program for developing priority antimicrobials, and shall examine the indications, usage, development of resistance and overall societal value of the priority products that have received this award. 

It is impossible to judge how much this blog and your efforts contributed to this decision.  But I notice that the blog has received a large number of views from Washington and Arlington over the last several weeks.  That is very unusual and I suspect that congressional staffers are paying attention. 

Now, we must push our representatives in congress to vote for this bill! Please, once again, contact your representatives and express your strong support for this bill!  


Friday, June 15, 2018

Gottlieb and FDA to the Rescue

This week, Scott Gottieb, our FDA Commissioner, stated that he was examining, along with the Center for Medicare and Medicaid Services (CMS), a possible pull incentive for antibiotics. Specifically, he said, “It is my belief that a licensing model might offer an effective 'pull incentive' that attempts to create a predictable market for antimicrobial drugs that would meet a narrow set of critical, public health criteria.” The idea of licensing instead of paying per dose (as is done currently) would be to license the ability to use the drug for a period of time for a fixed fee. In this case, CMS would pay the license fee. This is one of several models for pull incentives that have been discussed at DRIVE-AB and in other forums. It is not my favorite. But this is remarkable in that someone at this level in this administration is even proposing any pull incentive at all. Of course, because this is CMS, the license would theoretically only cover Medicare and Medicaid recipients. So those of you not covered would still have to get say colistin for your resistant infections (LOL!).

Over 10 years ago, I worked with Dr. Gottlieb on a task force convened by the Manhattan Institute. We worked on using biomarkers and other methods to allow for regulatory approval of needed new medications prior to the time pivotal clinical data might be available. I tried to introduce such a mechanism for antibacterials and antifungals, but the absence of biomarkers for these infections made this a challenge. Our task force may have contributed to FDAs thinking about oncology and perhaps antivirals, however. My work with Dr. Gottlieb convinced me that he shared the frustrations of those working in the antibacterial area that regulatory requirements at the time were too stringent or too uncertain to sustain investment in research. Now that he is FDA’s Commissioner, I’m sure he remembers those discussions and I’m sure he has been following all of our debates around resistance, regulatory pathways and monetary incentives.

On the same front, FDA just released its Draft Guidance for the development of antibacterial and antifungal drugs for limited populations of patients with serious or life threatening conditions or LPAD. While this is a step forward in that it formalizes the existence of such a pathway, the requirements for approval have not changed beyond what has been previously stated by the FDA in their unmet needs guidance and elsewhere.

Nevertheless, Gottlieb’s statement and the LPAD draft guidance are potentially important steps in the fight against antibiotic resistance. To make these steps come to fruition, we need action. We need a clear and above all feasible regulatory pathway forward for studying infections in small populations of patients. We also need significant pull incentives now to fix the broken antibiotic marketplace.

Monday, June 11, 2018

REVIVE: open access to knowledge and resources for the antimicrobial R&D community

GUEST BLOGGERLaura Piddock - Head of Scientific Affairs, Global Research and Development Partnership (GARDP).

webinar June 13!!!

The sulphonamide drugs were first used in patients in the 1930s; this was closely followed by the development of penicillin and the ‘golden age’ of antibiotic discovery. Today, it is a very different situation with few new treatments but increasing numbers of difficult to treat drug-resistant infections. The void in discovery and development of antimicrobial drugs over the last 20 years leaves us facing a future where once treatable infections are becoming life-threatening. 

The discovery void has also created a vacuum in the experience and knowledge of researchers working on antimicrobial research and development (R&D). As an optimist, one of the exciting things I see in my role as Head of Scientific Affairs at GARDP, and Professor of Microbiology at the University of Birmingham, is the promising projects in small to medium sized biotechnology companies and academic research groups who are working to fill the gap in new antimicrobials. One of the things that attracted me to join GARDP is applying my clinical microbiology and research experience to discovery, R&D of new treatments for multi-drug resistant infections. Through GARDP’s Antimicrobial Memory Recovery and Exploratory Programme (AMREP), we aim to recover the knowledge, data, and assets of forgotten, abandoned, or withdrawn antibiotics, and to identify new treatments.

A key element of AMREP is the creation of REVIVE – an online space where researchers can share knowledge and connect with each other. I’ve been lucky enough in my career to be surrounded by, or at least have relatively, easy access to experts I can call upon for advice and support. Ironically, while technology can better connect us today, working in a research field with a steadily decreasing number of experts, can leave researchers new to antimicrobial R&D isolated. 

That’s why we’ve invited seasoned, internationally recognised experts to be part of REVIVE’s ‘match-making’ facility – supporting exchange between early career researchers and those now refocusing their research to address the AMR crisis, whether they be clinical and non-clinical researchers, with world-class experts in antimicrobial R&D. The aim is to improve, accelerate, and streamline antimicrobial drug discovery, R&D by connecting researchers directly with retired and established antimicrobial researchers and developers. 

We’re also connecting people through our webinar series – the first of which is on Wednesday 13 June. I’m delighted David Shlaes is able to join us live to share his extensive knowledge and experience on clinical development for non-developers and focus on traditional development (tiers A and B). This is the first in a series of three webinars with the following sessions discussing development of antibacterial drugs targeting specific pathogens and development of antibacterial drug enhancer combinations. If you’re not able to join us live, all our webinars will be available for you to watch free of charge on REVIVE

In addition to webinars, we’ve co-organized sessions with CARB-X at the recent ECCMID and ASM Microbe conferences. We’re also making these available on REVIVE as not everyone has the time or funding to attend these conferences. Moreover, we’re hoping to recreate part of the ‘attending conference experience’ by organizing follow-up live Q&A webinars for some of these presentations. 

As a researcher in an established academic institution, I am fortunate to have access to most scientific and medical publications. However, this is not the case for the many working in antibiotic R&D – but access to these is critical to keep our knowledge current and challenge our own thinking. With this in mind, the focus of building REVIVE’s resource library is to signpost you to free, open-access resources on antimicrobial drug discovery and development. 

GARDP’s vision through REVIVE is to give the antimicrobial R&D community a space to interact and learn from each other. We want to work with the community and grow REVIVE into a resource that meets your needs. I encourage you to explore REVIVE and send us your feedback.

I look forward to you joining us on 13 June for our webinar.