Why Is Antibiotic Development In The U.S. Disappearing?

Over the last 20 years, the antibiotic industry has been a difficult one for drug developers.

GROWTH, UNCERTAINTY, AND PROGRESS

Paratek flourished in the first 10 years of its existence. The Boston-based company has been performing drug development for 25 years. Randy Brenner, chief development and regulatory officer for Paratek, notes those early years were spent identifying candidates to bring forward into clinical development. That is also when the company began to move its flagship product forward. That treatment, NUZYRA (omadacycline), has now been marketed for two indications and is in clinical testing for more. It is a once-daily antibiotic oral and IV for the treatment of adults with community-acquired bacterial pneumonia and acute bacterial skin and skin structure infections.

“We were growing at that time and were able to take our treatment into Phase 3 development,” says Brenner. “Then, we hit a wall and had to pause development efforts for a long period of time. The challenges we faced were primarily regulatory uncertainty and had to do with changing FDA guidelines on endpoints and how clinical trials were designed.”

In 2009, Paratek began working in partnership with Novartis to develop NUZYRA. The partnership was intended to assist Paratek with development activities and divert some of the cost of the Phase 3 trial. Unfortunately, because of uncertainty around FDA regulations, Novartis decided to cease development efforts on antibiotics just two years into that partnership, and Paratek became the sole owner of the asset

“We were a small company, and the end of that partnership meant we were suddenly struggling to raise money,” notes Brenner. “It was a tough time for us, as we watched the company shrink from 150 people to less than 10. It was not until 2013 that the FDA finally provided some clarity on antibiotic trials and endpoints.”

GAIN ACT BRINGS HOPE

Although the clarity was needed and appreciated, it did not make Paratek’s development efforts any easier. The endpoints selected by the regulator were quite different from the ones in place in Europe. Different endpoints in the U.S. and Europe only served to add complexity to Paratek’s trials. Europe is still interested in a patient’s ultimate cure at the end of treatment. FDA has now switched to measuring an early clinical response two to three days after a patient receives antibiotic therapy. Different endpoints require different statistical analyses and often require larger numbers of patients.

The years 2011 to 2013 were a challenging time for Paratek. Still, the company had reasons to be hopeful. First, it knew it had an effective treatment, despite the regulatory uncertainty. Phase 1 and Phase 2 trials demonstrated the safety and efficacy of its treatment.

At the time, the Hatch-Waxman Act provided a five-year exclusivity period for drugs that qualified as a new chemical entity (NCE). But in 2012, The GAIN Act was passed. That new law added an additional five years of market exclusivity to qualified infectious disease products. The act was designed to encourage pharmaceutical research into antibiotic development and was good news for NUZYRA and Paratek.

To move NUZYRA forward, Paratek reached an agreement with the FDA on what Brenner calls a 1+1 strategy. Historically, the FDA required two studies for an antibiotic in each indication. Under the agreement, Paratek could perform a single study in two different indications (skin infection and pneumonia). This development would save the company a lot of time and streamline costs, and Brenner describes it as a milestone for the company.

In just five years, Paratek would complete several Phase 1 and 2 clinical trials, three large pivotal Phase 3 clinical studies, receive FDA approval, and launch NUZYRA commercially in the United States.

A BIG PHARMA EXODUS

Unfortunately, for other smaller pharma companies involved in antibiotic development, the damage had already been done. According to Brenner, four small companies that formed around the same time as Paratek also struggled. After receiving FDA approval for their agents, two went bankrupt, a third was acquired for pennies on the dollar, and the fourth is fighting to survive. The FDA’s delay in publishing guidance, coupled with the high development costs and the lack of “blockbuster drug” potential due to commercial market place dynamics, also caused other Big Pharma companies to join Novartis in exiting antibiotics. Pfizer, AstraZeneca, Johnson & Johnson, and GlaxoSmithKline have since left the arena. The situation provided Paratek with incentives to continue its work.

“When a pharma company goes bankrupt or abandons antibiotics, it represents treatments that will never get into the hands of patients,” says Brenner. “Some of those small companies were in the commercial phase or ready to enter Phase 2 and Phase 3 trials but did not make it because they were unable to secure investor funding. The dynamics of this sector continue to present challenges to drug sponsors, as investors worry about the ability of new antibiotic treatments to achieve market success.”

The only Big Pharma company still pursuing antibiotics is Merck, which is a result of the company’s $8.4 billion acquisition of Cubist in 2014.

“As the world struggles to deal with the COVID-19 pandemic, it’s important to consider that the next public health crisis could result from a bacterial infection,” says Brenner. “If that happens, solutions will be placed in the hands of a limited number of small antibiotic companies. That crisis will be theirs to solve.”

In the last few years, five new antibiotic products have received FDA approval. That development is good news for patients. But if drugs are getting approved, why are antibiotic companies filing for bankruptcy?

AN UNSUSTAINABLE DEVELOPMENT PATH

Although the industry has seen new approvals for antibiotics, the development path for companies in the industry remains challenging. Most of the antibiotics being used in hospitals and clinics today have been in existence for more than 20 years. They have resistance rates that range from 30 to 50 percent. Therefore, if three patients check into a hospital with the same infection and receive the same antibiotic, it will be effective in at least one of them.

Another problem is acceptance and use of a drug once it receives FDA approval. “If we look at oncology, when a new treatment is approved, every oncologist is quick to use it,” notes Brenner. “They want new options, and they want to use the best and most advanced products on the market. When a new product comes out, the old ones are left behind. With antibiotics, the exact opposite is true.”

Existing antibiotics are trusted by physicians. Since they are generic, they are also less expensive. Hospitals often receive a fixed sum from payers, and treatment for patient infections are wrapped into this fixed sum. Therefore, less expensive and often ineffective treatments are used first, while newer and more expensive treatments are held in reserve for use only as a last resort.

“It’s odd to see that dynamic play out in the only therapeutic class that truly cures a patient,” says Brenner. “Antibiotics get rid of infections and cure patients in about a week. Not many treatments can say that. Yet new treatments are shelved and used on only the most severe patient populations. That translates into a commercial dynamic where the companies producing these treatments will not see a return on investment for many years.”

Brenner notes this is why an antibiotic company can go bankrupt in the years following its drug’s approval. It’s a very difficult road.

NUMEROUS CLINICAL HURDLES

All clinical trials present challenges to drug developers, but in antibiotics, many seem to be almost insurmountable. One major hurdle is locating patients to participate in a trial. In some countries, if a patient goes into a hospital or clinic with pneumonia symptoms, standard of care requires that they are immediately treated with an antibiotic. As soon as that happens, they are no longer eligible to participate in a clinical trial for potential new antibiotics because prior antibiotic treatment is prohibited. Paratek has spoken to the FDA about relaxing that requirement, but thus far the regulator has noted that the purity of understanding a new product’s impact on a disease is more important than being able to enroll patients in all countries.

Simply finding sites willing to participate in a trial is also difficult. Most treatment centers are hesitant to try a new treatment, preferring instead to treat patients who present with an infection with the generic drugs they have used for years. For a recent trial, Paratek reached out to 675 sites and were immediately declined by 500 of them.

Microbiology labs are needed to grow cultures, and that adds additional cost to the trials. Since pneumonia tends to be seasonal, starting in the fall and extending through the winter months, recruiting is limited in certain areas of the country and during certain months when the illness is present. That necessitates conducting trials outside the U.S., further driving up the cost and creating logistical challenges. Antibiotic trials also have to be conducted against a standard of care rather than a placebo, and that standard of care also will vary across countries, further increasing the complexity of studies.

Despite these challenges, Paratek now has more than 100 employees and has added an external sales organization. NUZYRA is on track to have one of the most successful antibiotics launches in the last decade. Sales this year — NUZYRA’s second year on the market — are expected to grow significantly. In addition, Paratek has meaningfully extended its cash runway thanks in part to the company’s recent agreement with BARDA (Biomedical Advanced Research and Development Authority) worth up to an estimated $285 million over the initial five years.