Gormley’s take: Startups seek to conquer antibiotic market
Firms aim to capitalize on industry transformations
Startups are developing strategies to forge the uphill climb to success in the antibiotics market.
Despite the need for new medications to counter antibiotic resistance, this market presents hurdles for drugmakers. Unlike medicines for chronic illnesses such as diabetes, patients take antibiotics for a short time. And cheap generics provide serious competition to new and pricier anti-infectives.
With pharmaceutical companies pulling back from antibiotics, Food and Drug Administration commissioner Scott Gottlieb in a recent speech called for stronger incentives to invest in them. The FDA is discussing the matter with agencies such as Medicare, Mr. Gottlieb said, noting that possible new approaches include add-on payments for certain antibacterials meeting critical patient and public-health needs.
Entrepreneurs are meanwhile devising plans to navigate the market. One cause of antibiotic resistance is overuse of these drugs. Because of the difficulty of telling the difference between bacterial infections, which respond to antibiotics, and viral ones, which don’t, antibacterials are often used against viral infections. This difficulty also contributes to antibiotic underuse, in which people who should get antibiotics don’t, according to Eran Eden, chief executive of MeMed Ltd.
MeMed has developed a system called MeMed BV for distinguishing between viral and bacterial infections, and recently raised more than $70 million from investors including Ping An Voyager Fund to advance the technology.
Another company, Arixa Pharmaceuticals Inc., which disclosed an $8 million seed financing in May, is using its chemistry know-how to make an oral version of a type of drug, a betalactamase inhibitor, that historically could only be given intravenously. An oral alternative would enable patients to be treated outside the hospital.
These drugs have better economics than those confined to hospital use, partly because oral antibiotics can treat a large pool of patients who aren’t sick enough to require hospitalization, Arixa Chief Executive John Freund said.
The rise of drug-resistant bugs also means that more patients will need new antibiotics, which offsets some of the sector’s economic challenges, said Robert Armstrong, CEO of Boston Pharmaceuticals Inc., which recently acquired three anti-infective programs from Novartis AG.
“We took the long view,” Dr. Armstrong said. “We think there’s a great opportunity to help patients in this space.”