Although various government incentives have been introduced in the past few years to encourage and support more research and development designed to accelerate the discovery of new antibiotics, they, in themselves, have not been enough.

The disturbing fact is that antimicrobial resistance (AMR) is outpacing the current drug arsenal available to keep it in check and, what's even worse, the current reimbursement environment tends to work against the use of innovative drugs that are being approved for treating drug-resistant infections.

A concrete example of the divide between antibiotics R&D and market forces occurred earlier this year when antibiotics innovator Achaogen Inc. fell victim of this mismatch and filed for Chapter 11 bankruptcy nine months after the U.S. launch of its new antibiotic, Zemdri (plazomicin). (See BioWorld, April 29, 2019.)

Zemdri is used for complex urinary tract infections and carbapenem-resistant Enterobacteriaceae. As such, it is a much-needed new treatment, which should be on hand when existing antibiotics are no longer effective.

Achaogen's fate may not be an isolated example, with several other small biotech antibiotic innovators noting in their financial reports that cash resources will fuel their product programs for one year or less.

Clock is ticking

Immediate action is required to ensure biotech companies are rewarded for their investments and the antimicrobials product pipeline remains primed.

This is why prominent scientists, public policy experts and biotech leaders have teamed up to form Working to Fight AMR, a coalition that aims to raise public awareness of the growing threat posed by antimicrobial resistance. The project of the Biotechnology Innovation Organization (BIO), will push for U.S. policies that catalyze the creation of new antimicrobials.

There is no time to waste, Greg Frank, BIO's director of infectious disease policy, told BioWorld. He cited a recent report that found bacteria and fungi that are resistant to antimicrobials kill as many as 162,000 Americans each year, making antimicrobial resistance the third-leading cause of death in the country. Even more chilling is the fact that absent new, more effective antibiotics, the global death toll could rise to 10 million annually by 2050.

Frank, who is heading up the Working to Fight AMR campaign, is hoping that the U.S. government signals that it is indeed serious about addressing the problem. It is hoping to build on the recent positive initiative of the CMS Inpatient Prospective Payment System rule for the coming fiscal year that will raise reimbursements for novel antibiotics. One of the campaign's two main activities is to get behind the DISARM (Developing an Innovative Strategy for Antimicrobial Resistant Microorganisms) Act introduced in June, which is proposing to make changes to the way Medicare reimburses hospitals for certain antibiotics.

In essence, Frank explained, DISARM is proposing qualifying antimicrobial products be paid for separately rather than being included in a bundle of reimbursed costs. "Hospitals will be 'made whole' for innovative antibiotics use and remove the need for electing cheaper products to save costs."

In addition, the bill pairs payments with strong stewardship requirements. In order to receive reimbursement for higher priced products, under DISARM, hospitals would have to opt into the CDC's National Healthcare Safety Network AMR Resistance Module that tracks resistance in antibiotics use.

More than reimbursement

The coalition recognizes that, while important, reimbursements for novel antibiotics alone will not be enough to drive new R&D investment but will be important to preserve progress on the products that are already in the pipeline.

This is why, Frank said, it has a second initiative that is working on developing a return on investment for a company's products that would, using careful stewardship, be used less frequently in hospital settings. Volume of products sold, the traditional way biotech companies become profitable, would be taken out of the equation.

This "pull" incentive, would reward companies for successful FDA approval of innovative new antibiotics that meet critical public health needs. The payment would likely be made in installments and tied to various conditions. "However, the coalition is still working on developing this idea further with a broader coalition of stakeholders," Frank said.

Public companies

The public companies involved in developing antibiotics and related products will certainly welcome the new proposed initiatives if they come to pass. They will also be thankful for the upswing in their fortunes on the capital markets in September after their share values have been under pressure for much of the year.

Despite encouraging progress with their leading compounds, the group of publicly listed companies in this area have not performed well, with an almost 37% drop in the valuation of the BioWorld Infectious Disease index since January. Thanks to an increase in business activity and positive news flow, the index has increased 11% so far this month. (See BioWorld Infectious Disease index, below.)

Leading the charge so far this month is Paratek Pharmaceuticals Inc., whose share value (NASDAQ:PRTK) has jumped almost 50%. The company's lead commercial product, Nuzyra (omadacycline), is a once-daily oral and intravenous antibiotic for the treatment of adults with community-acquired bacterial pneumonia and acute bacterial skin and skin structure infections. The company is also studying the drug as a treatment of urinary tract infections.

Shares of Dublin-based Nabriva Therapeutics plc (NASDAQ:NBRV) have also pushed 26% higher. Late last month, the company received the green light from the FDA for NDAs for both I.V. and oral formulations of lefamulin, a semisynthetic antibiotic for the treatment of community-acquired bacterial pneumonia (CABP) it will market as Xenleta. It's the first pleuromutilin for systemic use in humans to win FDA approval, leading the first new class of antibiotics for CABP in almost 20 years. (See BioWorld, Aug. 20, 2019.)

Xenleta will have a wholesale acquisition price of $205 per I.V. patient treatment day and $275 per oral patient treatment day. Recommended dosing calls for 150 mg of lefamulin every 12 hours by I.V. over five to seven days, or 600 mg orally every 12 hours, with the option to switch from I.V. to oral delivery every 12 hours to complete the treatment course.

As a result of the approval, Nabriva earned a $5 million milestone payment under its licensing agreement with Sinovant Sciences Ltd., of Shanghai, which has an exclusive license to develop and commercialize lefamulin in the greater China region. Under its license agreement, Nabriva is eligible for up to approximately $85 million in additional milestone payments tied to the successful completion of certain regulatory and commercial milestones related to lefamulin for CABP. In addition, it will be eligible to receive low double-digit royalties on sales, if any, in greater China.

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