I am moving my blog

 You can find archived articles and new blogs on davidshlaes.substack.com.  Blogger has just become too restrictive. I apologize for any inconvenience. 

Antibiotic Biotech Execs Share Their Concerns

 Since the vast majority of products in the antibiotic pipeline, from early discovery through late-stage clinical development, comes from biotech, According to the 2021 WHO analysis, 84% of pre-clinical antibacterial projects come from companies with under 50 employees. 79% of clinical stage (phase I and beyond) come from biotech. Given these observations, I thought it would be worth exploring the health of antibiotic biotech in today's depressing environment. Originally, one of the questions I wanted to explore was the effect of rising interest rates on their ability to raise funds. To do this, I discussed the situation with a number of biotech executives including CEOs and CMOs.  My original question rapidly became irrelevant. (Since some executives asked to remain nameless, I am keeping everyone anonymous). 

 

Everyone agreed that the availability of funds to support discovery research and early clinical development has improved enormously over the past decade. CARB-X, Novo, Beam, NIH and others were cited as examples of sources of non-dilutive funding for their companies. One executive lamented that several products that could be clinically very useful failed to attract funding from these sources because they were insufficiently “novel.” 

 

The unanimous opinion was that the space is collapsing slowly but surely from the commercial end backwards.  One executive described his company as a “tale of two cities.” While funding for early-stage products was available, once projects attained late development stage, it was more and more difficult to obtain support. All were extremely appreciative of the efforts of BARDA in this regard.  The AMR Action Fund was established in 2020 with a goal of investing $1B in the clinical development of needed new antibiotics during the decade. So far, it has invested in three biotechs, VenatoRx, Adaptive Phage Therapeutics and Bioversys but the amount of funding seemingly remains secret. Some executives were skeptical of the efforts of the AMR Action Fund and complained about the speed of their response.  (AMR Action Fund did not reply to my inquiries).  Private investors will simply not touch the tremendous expense of late-stage development knowing that their financial return might not occur for 10 years or more if at all assuming the product is approved. “Why would I spend $200M to have a successful asset that the market is literally valuing at $20M at best?”

 

From another executive - “I have to confess that I have given up on reflecting on those things. Time is for action, from where I stand. No choice but to dedicate 150% of my time to saving my company. And I mean finding money wherever it can be found, tap into government subsidies, get creative and think outside of the AMR community box.  We are not succeeding as a community, so we'll need to find solutions elsewhere. That's how cynical and slightly desperate I am being right now.”

 

And another - “It’s a national security risk now given the bankruptcies and company/product failures in the sector.  The total absence of a regulatory or legislative 'fix' is also a major factor……we have learned nothing about pandemic preparedness writ large.   The next pandemic will be bacterial and we do not have solutions- the pre-penicillin era is here today!”

 

The antibiotic biotech executives expressed a level of frustration and desperation that I have not heard before and that you generally do not hear in public forums. For clinical stage antibiotic biotechs, regulatory approval, instead of being an exciting and celebratory accomplishment, becomes the beginning of the end.  Bankruptcy looms driven by the expense of supporting a newly approved product including post-approval regulatory requirements, manufacturing and marketing in the face of a fatally broken market.   While I’m not ready to agree that the antibiotic era has already drawn to a close, I do agree that this is the likely conclusion if nothing is done to address the antibiotic market. The end of antibiotics starts and ends with the market. All the regulatory reform in the world (as much as it might be needed) will not change that. And, sadly, I find I share the pessimism and frustration of these antibiotic company executives in that I do not see the US or Europe providing a solution to the dead market anytime soon. 

 

 

The Fate of Another Antibiotic Biotech - Nabriva

 Last week, a small, publicly held antibiotic biotech, Nabriva, announced that they would wind down their operations. Everyone still there lost their jobs. This occurred just a few years after getting approval for Lefamulin, an antibiotic available both orally and by injection that was active against MRSA and, mostly, shared no cross resistance with other antibiotics. Was this the inevitable result of a biotech with another drug that did not meet medical needs, or one that followed a deluded strategy, or is this just another tale of a broken antibiotic market?  Whatever the cause, this is another blow to the world of antibiotic R&D.

 

I have personal history with Nabriva that I would like to share with you. When I left Idenix (an antiviral biotech) in 2005, had no idea what I would be doing next. We sold our house in the Boston area and moved to France while I tried to formulate a plan. Shortly after our move, I received a call from a member of the board of Idenix asking if I could look at a plan to spin out an antibiotic biotech from Sandoz in Vienna. I agreed and my consulting business was born. This small group within Sandoz was mainly working on trying to identify a pleuromutilin compound that would be safe and effective for use in humans.  These compounds had been used in animals for decades, but always remained too toxic for human use. The Sandoz group had made hundreds of compounds some of which even had drug-like properties and were potent antimicrobials. I helped this group spin out.  The company was named Nabriva and remained located in Vienna. 

 

During the discovery process, we learned that these compounds suffered from problems of solubility, bioavailability, cardiotoxicity (prolonged QT) and spectrum. The first compound that went into development was BC3205. It was active against community respiratory pathogens and staphylococci including MRSA. The problem was that it had highly variable oral bioavailability and caused prolongation of QT (cardiotox).  That was not a good combination. The team quickly searched through their database of compounds and identified BC3781 that had even better antimicrobial potency, was more soluble and had a lower propensity for cardiotoxicity. This backup compound became Lefamulin. 

 

During my later consulting years, Nabriva debated their development strategy for Lefamulin. They were comparing it to linezolid. Linezolid, an oxazolidinone, was famous for its anti-MRSA activity and oral bioavailability – that filled a huge unmet medical need at the time. But Nabriva noted, surprisingly, that linezolid was used mostly for patients with pneumonia.  They also observed that there were many many more pneumonia patients treated with antibiotics than those with typical staphylococcal infections. They decided that they would go after that population rather than the staph infection market.  As I saw it, the problem was that the pneumonia market was satisfied and saturated with existing compounds and that any new entry would struggle for market share. I was almost alone in opposing this strategy and was overruled.

 

So, yes, I still think Nabriva was misguided in their strategy. I still think Lefamulin could be a useful alternative to other anti-staphylococcal treatments – but its really too late now to go back. A recent conversation with an old friend in the infectious diseases world reminded me that some of these biotechs deserve their fate. If that is the case for Nabriva, its still sad and it still will provide another nail in the coffin of antibiotic R&D funding. Many will see this as more evidence that no good deed shall go unpunished and that antibiotic R&D is to be avoided at all costs even if this may not really be correct in the case of Nabriva.