Superbugs Win Another Round as Big Pharma Leaves Antibiotics

“Novartis pulling out makes us a little worried, because they had a relatively large pipeline” of new antibiotics, Breugelmans said. “Now it is not clear what will happen.”

Novartis, which announced its retreat from antibiotics research on Wednesday, said it’ll look for partners for its experimental drugs. If it follows recent precedent, it may wind up handing its assets to a much smaller company. As other drugmakers have exited antibiotics, they’ve hived off their assets to biotechs willing to assume a higher risk. Medicines Co. sold its portfolio to Melinta Therapeutics, Inc., while AstraZeneca spun out its research to a standalone company called Entasis Therapeutics before selling the rest of its antibiotics unit to Pfizer. Biotechs including Achaogen Inc. and Paratek Pharmaceuticals Inc. are working on their own new antibiotics too.

“Anti-infectives in the blockbuster race of Big Pharma don’t make sense,” said Werner Lanthaler, chief executive officer of Germany’s Evotec AG, which took over Sanofi’s portfolio this year. “In the commercial model of Evotec, a 200 million-euro ($234 million) product that you co-develop with someone can make sense.”

No one can make a business case for antibiotics without long-term public support, Lanthaler said.

10 Million

Faced with the prospect of drug-resistant bacteria killing 10 million people a year by 2050, according to a U.K. report, governments are considering more aid. In the U.S., Congress is considering legislation that proposes an exclusivity voucher for companies that develop badly needed new antibiotics — a voucher that can be transferred to another product or sold. And in India, where superbugs kill nearly 60,000 newborns every year, the government has provided early research funding to homegrown startups including Bugworks Research India Pvt. Ltd.

“We think the tide may be turning from a scientific, as well as a regulatory and pricing, perspective,” said Kasim Kutay, CEO of Novo Holdings A/S in Denmark, which launched a $165 million fund in February to combat antimicrobial resistance. The fund has received more than 50 investment proposals from Europe and will probably make its first investment by the end of the year, Kutay said.

Merck, the U.S. drugmaker that bought Cubist, said it’s committed to its antimicrobial research. So did Roche Holding AG, the Swiss cancer specialist, which also has a pipeline of antibiotics.

Glaxo, the biggest player in the field, said last year it would carry out a review of its cephalosporins antibiotics business and may look at selling the operations. The company says it has an experimental antibiotic in late-stage development and there’s a need for “creative ways to incentivize and reward new research and development in antibiotics.”

The departure of some big drugmakers such as Novartis “hopefully is going to add pressure to find ways to correct some market failings,” said Graham Lumsden, CEO of Motif Bio Plc, whose experimental antibiotic Iclaprim is under regulatory review in the U.S. “This is where the biotechs have to pick up the slack.”

–With assistance from Ari Altstedter and John Lauerman.

— Read To Avert Post-Antibiotic Armageddon, Pharma Must ‘Pay or Play’, on ThinkAdvisor.

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