What happens when the antibiotics market remains broken?
Companies get out of the antibiotic business – that’s what happens. The latest example
is The Medicines Company. Their anti-infectives business in 2016 consisted of
intravenous minocycline for Acinetobacter infections and oritavancin for
Gram-positive infections. In 2016 the sales
for those two products were $8.6 and $16 million respectively according to
their annual report.
The Medicines Company just saw the approval of
meropenem-vaborbactam (Vabormere) for the treatment of serious
antibiotic-resistant Gram-negative infections. In spite of this, they are
getting out of the business. Obviously, the company no longer sees a future in
the antibiotics business. This move, apparently, will help them trim their
staff from its current 400 employees down to around 90. The market greeted this news with enthusiasm.
And who can blame them?
The anti-infectives core of The Medicines Company came from
Rempex who discovered and developed Vabormere.
They have always landed on their feet in the past and I am hoping that
this will be nothing more than a speed bump for them. They have some interesting early stage
compounds in their pockets that deserve, someday, to see the light of day. But
in today’s environment – who knows?
What company will be next?
I have my eyes on Allergan. Unlike The Medicines Company, Allergan has no
antibiotic discovery effort. They have assets that they sell including Aycaz
or ceftazidime-avibactam, dalbavancin and ceftaroline in their stable. Their rights to Aycaz and ceftaroline are
limited to the North American market. In
2016 they sold around $36 million of Aycaz, $134 million of ceftaroline and $39
million of dalbavancin. This is not too bad given that two are sold only in
North America and that they all fit in the hospital antibotics market. But none
of these are blockbusters and all three together account for a tiny proportion
of their $5 billion annual revenues. Will Allergan stick with the antibiotics
they have and continue to fight it out? Or will they follow The Medicines
Company, AstraZeneca and so many others?
The problem is obvious to everyone who knows anything about
antibiotics today. The market is broken.
Compared to billion dollar sellers in the fields of diabetes, neurosciences and
cardiovascular medicine, antibiotics just don’t stack up. If we don’t fix this
broken market using a combination of push and pull
incentives (like market entry rewards), we can expect to see a parade of
companies, both large and small, exiting the field. This could be the worst exodus from the area
since the great departure during the first few years of this century. With such
an abandonment by companies, investors will quickly follow. The future of biotech, start-ups and even
academic research will all be threatened. We cannot let this happen. And we
know what to do to prevent it. Are we just going to sit on our hands and watch
while Rome burns?
No comments:
Post a Comment