Biotech Is Still a High Risk Proposition

For every biotech success story like Cubist, there are many less happy stories. Some experts estimate that only 10% of biotech companies will succeed. One example of the other 90% is Replidyne, of Louisville, Colorado. Replidyne started with technologies for finding new antibiotics, but then realized that it too needed a near term product to attract investor capital. They licensed an antibiotic from Glaxo Smith Kline that could only be developed as a topical product. This was not sufficient to attract investor dollars, so they then licensed in an oral antibiotic called faropenem from a Japanese pharmaceutical company, Daiichi-Suntory, now Asubio. Faropenem was like an oral version of the very active carbapenems like imipenem. It had already been tested in late stage trials by Bayer (who had licensed it previously from the Daiichi). (In fact, when I first joined Wyeth, we were just giving faropenem back to Daiichi. It is such a small world!) When Bayer abandoned antibiotics, they returned the license to the Daiichi and gave them all their data and reports. The dossier was never submitted to the FDA for approval. Replidyne carried out a reanalysis of the trial data, and, in 2005, they submitted an NDA (New Drug Application - a request for approval) to the FDA for sinusitis, bronchitis, pneumonia and skin infections including data from 11 pivotal clinical trials. The FDA rejected their application for all indications in 2007. The FDA said that for sinusitis and bronchitis they now required placebo-controlled trials and the trials submitted by Replidyne (actually performed by Bayer) were of a different design (see Chapter 4). Neither Replidyne nor Bayer had any idea that placebo-controlled trials would be required at the time. The FDA said that the data in the pneumonia package did not have enough microbiology data, and two additional studies would be required for approval in that indication. At the time, Replidyne was a publicly traded company. They did not have to finance the pivotal trials they had submitted since they had largely been carried out prior to their licensing the compound. They did have to pay for the license from Asubio, though. Replidyne had lined up Forest Pharmaceuticals in the US as a partner to sell faropenem. With the FDA response, Replidyne attempted to carry out a placebo-controlled trial of faropenem in bronchitis. They failed since physicians very simply would not enroll patients in a trial where they might get no therapy. Forest dissolved its partnership with Replidyne. Eventually, Replidyne went belly up and sold their public listing to a medical device company. Everyone working on antibiotics (essentially the entire company) was laid off. Unfortunately, this has been the more typical story for biotech in general including those companies trying to get into the antibiotics game.

The other problem in biotech working on antibiotics, just as in large pharmaceutical companies, is that of innovation. No one (almost) seems able to come up with novel therapies. If we look at the chart below, we can see that all but three of the antibiotics in late stage development or just finishing development from biotech had their origins in large pharmaceutical companies, just like daptomycin from Lilly was sold to Cubist who then developed it. In Table 6.5, the antibiotics shown in italics were actually discovered in the biotech company that developed it. All the others were discovered in large pharmaceutical companies and licensed to the biotech companies. This indicates that (1) large pharmaceutical companies do not see value in products that biotech do value and (2) that innovation in biotech has been poor in that very few products are actually discovered there.

Table 6.5 Antimicrobial compounds in development by biotech

Compound

Manufacturer

Company of origin

Status

Dalbavancin

Pfizer from Vicuron

Merrell Marion Dow

Unknown

Iclaprim

Arpida

Roche

Failed in US

Oritavancin

Targanta

Lilly

Failed in US

Telavancin

Theravance

Theravance

Approved

Ceftibiprole

Basilea-Johnson&Johnson (J&J)

Roche

Delayed in US

Cethromycin

Advanced Life Sciences

Abbott

Failed in US

Doripenem

Peninsula J&J

Shionogi

Approved

EDP-420*

Enanta

Enanta

Ph. II

Faropenem

Replidyne

Daiichi Suntory

Failed in US

Ceftaroline

Cerexa/Forest

Takeda

Submitted for

approval

NXL-104

Novexel

Aventis

Phase II

NXL-103

Novexel

Aventis

Phase II

PTK-0796

Paratek - Novartis

Paratek

Phase III

Torezolid

Trius

Dong-A

Ph. II

Radezolid

Rib-X

Rib-X

Ph II

  • EDP-420 is being developed for community-acquired pneumonia as an oral antibiotic. As such, the trial design will be virtually impossible to carry out. See Chapter 4.
  • EDP-420 is being developed for community-acquired pneumonia as an oral antibiotic. As such, the trial design will be virtually impossible to carry out. See Chapter 4.

On a more optimistic note, several biotechs are nearing Ph. II development with compounds actually innovated within their biotechs. Nabriva has a series of pleuro-mutilins ready for Ph. II trials. They are active against Gram-positive skin pathogens and both typical and atypical respiratory pathogens. Tetraphase has a lead molecule with broad-spectrum activity that comes out of a novel and exciting method of synthesis of tetracyclines also poised for Ph. II trials. Achaogen has a lead aminogly-coside that they discovered which is ready for Ph. II. Maybe innovation in biotech is going to actually produce some new antibiotics active against resistant pathogens. This would be welcome news for us all.

What about the future for antibiotics as a product for biotech companies? Not much has changed. The late stage trials, because of the ever-increasing stringency required by the FDA are becoming more and more expensive putting them farther out of the reach of biotech. Certainly, biotech companies with no source of revenue (most of them), and with only private financing (again, most of them), are not usually able to pay for such trials. They therefore either have to go to the public marketplace for such funding (the public markets have been closed to new entries for most of 2008 and 2009) or they have to sell themselves or their product to a large pharmaceutical company. But, as we've seen above, there are fewer and fewer large pharmaceutical companies extant and of those that exist, fewer are interested in antibiotics. Of those seven companies no longer pursuing antibiotics research, only one, J&J, actively acquires antibiotics from biotech. So I would say that the future of biotech developing antibiotics is at best shaky unless something changes on the funding side or the cost side. Given that 90% of biotech will fail anyway, at least according to some experts, I'm not sure that antibiotics are any more risky than any other therapeutic area in this regard.

Chapter 7

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