David's New Book

Sunday, September 11, 2011

BARDA "Pushes" the Envelope

In several previous blogs, I noted how important funding Phase III trials would be to incentivize the industry to work on new antibiotics.  I had criticized BARDA specifically stating that they excluded Phase III funding from eligibility for support.  They then wrote to me indicating that was not true and that they did not exclude phase III support from funding, but they also admitted that, at least up until that point, no applicant had been funded for phase III.  I corrected my blog with a follow-up comment.

Now, the proof is in the pudding.  A recent press release shows that GSK has received a grant of up to $94MM to fund development of a broad spectrum antibacterial compound under a new program aimed at just such a public health need at BARDA.  This funding includes support for phase III trials in intraabdominal infections.  In their press release, BARDA specifically requests additional applications under this program.  You can access the application instructions through this link.  Of course, not everyone has an antibiotic in their back pocket that might qualify for such support – but there are definitely a few out there.

I believe that this is a major breakthrough in our ability to incentivize industry, large and small and academia.  The lack of support for phase III trials has constituted a major roadblock, especially for small companies that are privately funded through venture capital.  The venture investors cannot afford the costs of phase III.  Thus those companies have always been dependent on either large pharma (deep pockets) partners or on the public markets.  The availability of BARDA support for phase III opens up a number of new opportunities for such small companies. Academia would also be able to benefit from such support.

In addition, such funding constitutes an incentive for large pharma (like GSK) where phase III contributes heavily on the negative side of the NPV ledger.  Funding for these trials will clearly improve the NPV calculation for large companies.  Will this be enough for large companies?  I think it will help those companies like GSK, who are already committed to the area.  It will provide a way for them to stay in at a time when the environment otherwise might not be favorable.  But I doubt that, by itself, such funding will be enough to entice those companies that have abandoned antibiotic R&D to re-commit the resources required. For those companies, the pull incentive, such as some sort of guaranteed market post approval would also be required. 

Nevertheless, the inclusion of phase III support in BARDA funding is an important step forward.

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