David's New Book

Friday, March 22, 2013

Will Astra-Zeneca be Next?


The news this week is that Astra-Zeneca, as part of its downsizing effort, will cut its investment in antibiotic R&D. This has to be one of the most disappointing developments since Roche first left the field in 1999.  They will, however, continue to support their efforts in oncology.  This misguided misreading of the opportunities is yet another demonstration of the sclerotic thinking of large pharmaceutical companies.  These executives and their commercial leaders are stuck in a world that no longer exists.  What they fail to understand is that antibiotics IS the new oncology!

The regulatory world of antibiotics is changing quickly and radically.  It will now be possible to develop antibiotics more quickly and with less expense than ever before. And, developed correctly, payers are ready to pay oncology prices for new products (see this blog).  More opportunities for non-dilutive support for antibiotic R&D exist now than ever before and some of these large grants can pay for pivotal trials.  Astra-Zeneca has been the recipient of some of these grants. None of this existed 10 years ago – where the large pharma executives still seem to hiding in a time warp.

Antibiotics remain less risky and more likely to succeed once they enter development than products from almost any other therapeutic area.

And that the decision to cut antibiotics R&D is coming from Astra-Zeneca seems all the more incongruous.  Their infection development leader, John Rex, has been at the forefront of all of the discussions with regulators and with payers where these opportunities have become clear.  John has been a leader in devising the rapid development plans that could get us to oncology prices.

While one can understand the plight of large companies like Astra-Zeneca, whose big products are being rapidly eroded by generic competition, it remains hard to understand their decision making process. Although I can imagine exactly what happened.  AZ executives looked at the potential gains from oncology and cardiovascular drugs and even when adjusted for the risk of development they still dwarf gains (in the past) for antibiotics.  But of course I am sure that they did not factor in the kind of prices antibiotics will now command, they failed to account for the lower development costs they will incur and they probably underestimated the risks of their efforts in cardiovascular medicine and oncology.

At the same time, Dr. Margaret Chan and Dame Sally Davies of the WHO and England respectively, are warning about a post-antibiotic era where we will live in a world where mundane surgical care will no longer be possible without extraordinary risk in the absence of antibiotics active against resistant pathogens.  While I still believe that this is somewhat exaggerated, the loss of one of the stalwarts of antibiotic R&D over the last decade will be a tremendous blow to our efforts to avoid such a calamity.

The loss of company like Astra-Zeneca will reverberate throughout the pharmaceutical industry.  Private investment in antibiotics will plunge further in the absence of yet another potential large pharmaceutical partner for academia and biotech. Biotechs and academics with advanced projects will struggle even more to partner their late stage products that they cannot advance into pivotal trials.

It is possible that I am over-reading AZ’s statement to the press.  Perhaps spending less does not mean they are getting out of antibiotics R&D.  Maybe they will be able to continue robust discovery and development activity in spite of the cuts.  But long experience (Pfizer, J&J, Wyeth, etc, etc)  has shown that when a company says that a particular therapeutic area is no longer a high priority, it forshadows the complete amputation of that area.

I would like to remind Astra-Zeneca that if and when they consider their amputation of antibiotic R&D, that they remember that there are other good alternatives to simply cutting and burning.  There are spin offs and other out licensing opportunities that could be utilized.  Astra-Zeneca has one of the most important assets in the late stage antibiotic pipeline – avibactam. Their first priority must be to get this new product to the patients and physicians that need it.