Many antibiotics are no longer effective. Every year, an estimated 33,000 people die from resistant agents in the EU. More and more multiresistant strains arise across the globe and the list of last resort antibiotics gets smaller, which is why the United Nations has named antibiotic resistance the "biggest and most urgent global health threat." As such, there is a high need for novel treatments, but innovations are only slowly reaching the market. In addition, more and more large pharmaceutical companies have left the field. The reasons are manifold and all end in the fact that, given the current market conditions, the commercial benefit is low.
1) Medicines for chronic diseases such as cancer, rheumatism and high blood pressure promise much higher turnovers compared to low-priced antibiotics given to patients with infections that are treated for about a week and are cured,
2) as the low-hanging fruit has been reaped, research for novel approaches against (resistant) germs is more complex and cost intensive, and,
3) reimbursement settings for antibiotics rely on low prices given the high number of generic products that are on the market today and their extensive use in daily clinical routines such as hip or knee implants, which makes changes to this system a complex issue for policy makers and payers.
The BIO-Europe® 2019 panel, “Workable business models for AMR innovations,” moderated by Sandra Wirsching, Managing Editor at BIOCOM AG, discussed exactly this question, “Why should companies invest in R&D to provide innovative solutions tackling AMR when there is no viable business case behind it?” One way out could be the development of new business models and collaborations.
Panelists Michel de Baar, Executive Director Business Development Europe at MSD; Yann Ferrisse, Head of Business Development at GARDP; Cyrille Kuhn, Head of RBB US at Boehringer Ingelheim; Diego Tonelli, Investment Economist at EIB; and Holger Zimmermann, CEO of AiCuris Anti-infective Cures, each had their own take on the answers.
Michel de Baar of MSD explains why his company is still in the field: “It is the high medical need that drives our activities.” As a big pharmaceutical company with many complementary products, MSD sees the potential of innovative antibiotics. However, MSD does not focus on niche indications but targets systemically available antibiotics with a medium to broad spectrum. Regarding partnerships, MSD is not part of large public-private partnerships such as the Innovative Medicines Initiative of the European Commission. “We at MSD are more focused on the traditional forms of collaborative research with academic and industry partners where we can utilize the complementary expertise of our partners and our own experience to drive innovation.”
It is a waste of money if we only PUSH R&D activities but do not care for market PULL mechanisms.
Holger Zimmermann of AiCuris, a Bayer spin-out with a long tradition in anti-infectives including antibiotics, believes in cooperation. “It is naïve to believe we can do it all on our own.” Beside its own inhouse research, AiCuris also builds on collaborations with industrial partners where it can leverage its expansive expertise in anti-infectives and clinical development as seen in the recent cooperation with Lysando on the joint development of Artilysin®s. In addition, the company has a broad network of academic and public collaborations. However, for AiCuris’ CEO, public funding and public collaboration cannot be the end of the story. Public funding is important and AiCuris also continuously applies for it, but Zimmermann strongly believes that push incentives are only one aspect. “It is a waste of money if we only push R&D activities but do not care for the market side. We can put as much money as needed into a project—but if there is no one to pay for the product and ‘pull’ the market we are going to run into big problems!”
Boehringer Ingelheim (BI)’s “Research Beyond Borders (RBB)” initiative integrates both internal and external insights and opportunities, and explores new models for collaboration, to bring together the talents and capabilities of inhouse scientists with the strengths of scientists from around the world. This model focuses on working together with academic institutions and biotechnology companies. “The goal is to bring in and to benefit from the flexibility of smaller organizations and to pave the way for our own research organization to invest in promising projects,” said Cyrille Kuhn, Head of RBB US at BI.
Being a private entity, RBB has more time for the development of specific projects. “We have decent time to make our decisions on the project we want to further develop. We go all in if we decide to go with a certain partner. By pushing our research and trying to find a product that really makes a difference we hope that we can change the market and influence the payers to reimburse products as they should be.” Under the umbrella of the RBB, BI aims at taking an agnostic approach in the anti-infective space to modalities from small molecules to phage derived proteins. Ultimately RBB's goal is to explore new and disruptive ideas and technologies across the entire research spectrum.
With pharma companies leaving the antibiotics space, we also lose all their knowledge.
Initiated by the World Health Organization (WHO) and the Drugs for Neglected Disease initiative (DNDi) in 2016, the Global Antibiotic Research and Development Partnership (GARDP) is a not-for-profit R&D organization that is focused on co-developing and co-delivering new or improved antibiotic treatments. Yann Ferrisse of GARDP pointed out that as of today there are only 40 antibiotics under clinical development in comparison to approximately 3,000 drug candidates in the field of immuno-oncology. “We need new forms of cooperation and initiatives that are able to push the development of new and innovative products in the field of AMR. To drive innovation and to help restore the balance, GARDP created the ‘5by25’ initiative—five new treatments to address antibiotic resistant infections by 2025.”
In parallel, GARDP helps companies developing their products by sharing knowledge. “Together with the pharma companies leaving the field we also lose all their experience. To help close this gap, GARDP provides training and webinars and also has developed a network of clinical trial centers in low- to medium-income countries to accelerate clinical development and ensure that clinical trials conducted, e.g., in India, can be used by all regulatory authorities worldwide.” Besides this, in the long run GARDP also aims at providing sustainable market access of the new antibiotics in low- to medium-income countries. “Every country has its own market dynamics and conditions. We try to find the best way to commercialize a product in every single country. This could be a group purchasing organization (GPO), international product marketing agency or distributors. The strategies in the different countries can serve as market access proxies for other companies.”
Zimmermann believes that these kinds of entities could help build up knowledge that can help other companies profit. However, he also pointed out that knowledge sharing, educating and building new infrastructure is nice but at the end could also be problematic for commercial companies. “As a commercial company you want to run a project as quickly as possible and you need to carefully balance what is really needed and beneficial. Some of these funding vehicles have too many aspects and requirements that need to be fulfilled. This often conflicts with the need to complete a project in the most efficient way and so, these kinds of funding vehicles lose attractiveness.”
De Baar also does not believe that public funding is necessarily THE strategy going forward, as there also has to be a plan and a strategy to recreate and prepare the market. “We all remember the company Achaogen. The company was 80–90% publicly funded but finally failed despite having an approved antibiotic product because at the end there was no market for it. Innovation needs to come from the national payers like the changes we have seen with the UK and the US reimbursement policies.”
Public funding mostly supports research and early stage development given easy risk diversification through high numbers of projects.
Most funding initiatives including the publicly-funded European Joint Programming Initiative on Antimicrobial Resistance (JPI AMR), or the private Novo REPAIR Impact Fund, established in February 2018 by Novo Holdings and commissioned by the Novo Nordisk Foundation, as well as the international public-private initiative Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator (CARB-X), only invest in the discovery and early-stage development of therapies. However, when it comes to later stage clinical development, smaller pharmaceutical or biotechnology companies normally partner with big pharma to finance the cost of intensive trials and profit from the experience in the regulatory approval process and commercialization. Now that larger pharmaceutical companies in this field are rare, companies with antibiotics in late-stage clinical development are facing a major investment gap.
The European Investment Bank (EIB) together with the World Health Organization (WHO) are currently discussing the establishment of a new financing instrument addressing late-stage clinical development in AMR. Diego Tonelli from EIB introduced this new healthcare impact fund during the panel. “This novel investment fund will have a size of €500 million with first closing and €1 billion with final closing planned for 2020. It will not only invest in late-stage drug development and vaccines but also in diagnostics and tools for infection prevention and control addressing the WHO priority list of bacteria for which new antibiotics are urgently needed.”
Investing in late-stage products is risky given pricing concerns, and risk diversification is not easy considering the limited number of suitable programs. “This fund does not answer the pull mechanism aspect of this discussion," said Tonelli. However, EIB is closely observing initiatives focused on strengthening market conditions for antibiotics, such as the UK and Sweden, which are currently discussing pull initiatives. Tonelli believes that by financing new mechanisms of action and new chemical classes through the new fund, "we are able to raise attention particularly in the case of pull mechanisms as those will be the ones that might help generate the terms.”
To sum it all up, the panelists agreed that there is no one solution to fit all. To win the fight against AMR, all parties involved need to work closely together and the instruments being used need to be diverse. Push-mechanisms supporting scientific breakthroughs and innovations in research, public research grants, investment funds as well as venture capital and other financing instruments are as important as pull mechanisms including IP vouchers to reward the development of an antimicrobial. With the extension of marketing exclusivity related to another product, market entry awards and the restructuring of reimbursement systems need to be reconceived to ensure appropriate pricing.
AMR is not only a national threat but a rising global crisis and so the solutions must also be met with global diversity. In light of the danger and high number of patients suffering from multidrug-resistant germs who cannot currently be helped, the question arises as to how much time we have left to discuss solutions before we are simply overrun by reality.
It's about time—so let's get started!
Continue the conversation at Biotech Showcase™, the investor conference that drives the future of drug development, taking place January 13–15, 2020, in San Fransisco, California.