Is Big Pharma Resistant to Antibiotics?

Lack of products in the pipeline could offer opportunity for some companies

   

A dearth of antibiotics in the pharmaceutical pipeline could threaten the health and welfare of people worldwide, but few companies are stepping in to fill the void.

Today, there are only two big pharmaceutical companies, GlaxoSmithKline (NYSE:GSK) and AstraZeneca (NYSE:AZN), with active antibiotic R&D programs, down from 20 in 1990, according to the Infectious Diseases Society of America.

New antibiotics are needed to replace those that have become resistant or useless through the evolution of drug-resistant diseases such as MRSA, an infection that preys on people in hospitals and nursing homes. So why haven’t companies put more resources into antibiotic research to come up with effective superbug treatments? Because antibiotics aren’t as profitable as medications for cancer, heart disease and high-blood pressure.

GlaxoSmithKline has two new antibiotics in the pipeline, while AstraZeneca is partnering with others. Last year, AstraZeneca licensed a new compound in development from Forest Laboratories (NYSE:FRX). The drug has shown promise against a number of infections and multi-drug-resistant pathogens, including MRSA. The company recently boosted its capabilities with a new facility in Boston, representing a $100 million investment in antibacterial research.

Sanofi (NYSE:SNY), too, recently decided to fund antibiotic research through an agreement with privately held Rib-X, based in New Haven, Conn.

Small companies also see an opportunity in the antibiotic field. Trius Therapeutics (Nasdaq:TSRX) is working on a fast-acting product for the treatment of serious gram-positive infections, including those caused by MRSA. Meanwhile, Durata Therapeutics recently initiated a Phase III study of its lead product, dalbavancin, a long-acting, intravenous drug to treat acute bacterial skin and skin-structure infections.

In May, the FDA approved Dificid (fidaxomicin), developed by San Diego-based Optimer Pharmaceuticals (Nasdaq:OPTR). It’s an orally administered medication to treat an infection that causes diarrhea and can lead to colitis and other intestinal conditions. Optimer says it’s seeking a premium for its antibiotic, with a price of $2,800 for a 10-day course of treatment, compared with the $1,000 cost of similar treatment with vancomycin. Cubist Pharmaceuticals (Nasdaq:CBST), based in Lexington, Mass., is co-promoting the drug while it develops its own antibiotics.

These companies may be able to take advantage of new rules introduced in the U.S. House of Representatives in mid-June. Under the Generating Antibiotics Incentives Now (GAIN) Act, the FDA would give priority to new antibiotics and take action on an application no longer than six months after it is submitted. The GAIN Act would also make antibiotics eligible for the FDA’s Fast Track program and extend patent exclusivity.

It’s encouraging that at least some members of private enterprise are working to avoid a health crisis that could be of epic proportions, but it’s unclear whether they – and their investors – will be rewarded commensurately.

 


Article printed from InvestorPlace Media, http://investorplace.com/2011/07/antibiotics-pharmaceuticals/.

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