(Bloomberg) -- The fight against life-threatening infections suffered another blow when one of the world’s biggest drugmakers waved the white flag.
Novartis AG is ending antibacterial and antiviral research to “prioritize resources,” the company said Wednesday. That comes after GlaxoSmithKline Plc put some antibiotics assets under review, Medicines Co. sold its business and Sanofi shifted its portfolio to Evotec AG. Allergan Plc said in May that it will leave the field and AstraZeneca Plc, once a leader, washed its hands of antibiotics two years ago.
The pullback revives concern about a world in which routine infections again become lethal as bugs develop resistance to existing drugs. Sales of new antibiotics are too low for big pharma to recoup its investments, and public measures to encourage more activity aren’t moving the needle.
“The market is broken,” said David Shlaes, a former pharmaceutical executive and consultant. “We’re at a point now where resistance is moving a lot faster than our ability to provide new antibiotics. This is just another in a long string of really bad news.”
The latest retreat comes after a brief period when industry leaders appeared willing to take a risk on the field. Merck & Co. spent $8.4 billion on antibiotics leader Cubist in 2014. Novartis, Glaxo and other companies pledged at the World Economic Forum in 2016 to fight the threat of drug-resistant bacteria. The U.S. government offered longer patent protection and subsidies, potentially worth hundreds of millions of dollars, to companies willing to invest.
But the new antibiotics just haven’t sold. Only five of the 16 brand-name antimicrobials approved from 2000 through last year were able to generate sales of more than $100 million annually, according to a study from Duke University’s Margolis Center for Health Policy. That’s a pittance compared with the billions of dollars for new cancer treatments.
The problem for drugmakers is that new antibiotics are usually held in reserve and are not used unless they’re needed because patients develop resistance to an older medicine. Even the most expensive antibiotics, at around $1,000 a day, are cheap compared with a cancer medicine that will be given for months instead of a few days or weeks.
Meanwhile, developing new antibiotics is becoming more expensive, said Gabrielle Breugelmans, director of research for the Access to Medicine Foundation. The roughly 275 research projects going on around the world might yield two or three medicines, she said.
“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 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.
“Anti-infectives in the blockbuster race of Big Pharma don’t make sense,” said Werner Lanthaler, chief executive officer of Germany’s Evotec, 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.
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.
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