Monday, June 21, 2010
A Drug Development Lesson - The Three Way Tug-Of-War For New Antibiotics
In the tug-of-war between development of resistance in bacterial pathogens and the effort to develop new drugs, is it fair to ask, are we running out of effective antibiotics? Are Food and Drug Administration (FDA) regulatory guidelines sufficiently clear to companies developing new drugs? The answers may be yes and no based upon recent events and our own work concerning an antibiotic business.
A recent announcement by Infectious Diseases Society of America urged for a global commitment to develop 10 new antibiotics by 2020. The plea for U.S. and global action comes in a statement—published in the April 15, 2010 issue of Clinical Infectious Diseases that outlines the dangers and recommends how to address what the World Health Organization has identified as one of the three greatest threats to human health. This announcement coincides with recent testimony by experts to the United States House of Representatives Committee on Energy and Commerce's Subcommittee on Health.
Imagine if the country was under attack from a foreign power and it was determined that a small subset of the enemy was invincible to our weapons of defense. Would we not hasten to develop more effective weapons to defeat the enemy? In fact, a representative of the Biomedical Advanced Research and Development Authority at the Department of Health and Human Services (HHS) provided testimony that likened antibiotic resistance to a bio-defense threat and suggested that the federal government should provide financial incentives to encourage companies to develop new antibiotics. Given such a threat, does it make sense to provide incentives for companies to pick up the pace in discovering and developing new drugs to combat dangerous microbes? A representative from the pharmaceutical industry described antimicrobial resistance as a crisis and charged the government to do much more in aiding drug company efforts to develop more effective antibiotics. The industry expert offered one suggestion - extend the patent term for new antibiotics.
But what about the regulations- is there sufficient incentive from a regulatory perspective to justify new investments in antibiotic drugs? The expert from HHS testified that "The lengthy drug development process means that new classes of drugs to supplement or replace current ones are still years away.” It was also noted that newer drugs are typically saved for the sickest patients, reducing their sales potential. The industry expert noted that the FDA has been inconsistent in guidance to companies regarding the extent of evidence to achieve approval of new antimicrobial drugs.
Testimony from Dr. Janet Woodcock, director of the Center for Drug Evaluation and Research at the FDA, conceded the government must do more to encourage drug companies to develop new antibiotics. "The pipeline is diminished at a time when the need could not be greater," she said. But, and with the FDA there is always a “but”, she raised the issue of lack of consensus by the scientific community concerning evidence that an antibiotic works as well or better than existing drugs, especially for the treatment of common conditions like sinus or ear infections. Woodcock stated that the FDA would publish additional guidance on testing to generate evidence for antimicrobial drug efficacy within the next six months.
Dr. Woodcock’s recent testimony provides little comfort for patients in need of more efficacious antibiotics and the companies attempting to develop the desired drugs. The fact that the FDA must make good on its promise to provide regulatory transparency to companies is exemplified by an announcement from Theravance early this year. The company stated that the FDA was not satisfied with new data on telavancin (Vibativ) as a treatment for nosocomial pneumonia (NP) and suggested additional clinical studies be conducted to achieve approval. Telavancin is a lipoglycopeptide antibiotic with a dual mechanism of action on bacterial cell wall synthesis and cell membrane function. The drug was approved in September, 2009 as an injection for the treatment of complicated or drug-resistant infections, almost three years after filing the NDA. The FDA accepted the telavancin NDA for the treatment of NP in April, 2009 but later informed the company it did not show sufficient efficacy to achieve approval. Theravance CEO Rick Winningham stated that it was unclear what additional information the FDA required to complete review of the NDA while pointing out that the studies they submitted were “the largest double blind studies ever submitted to the FDA for the evaluation of a new drug to treat NP due to gram positive organisms.” While it is likely that some physicians will prescribe telavancin for the treatment of NP off-label, lack of transparency from the FDA will prevent Theravance from realizing the full potential of the drug to treat multiple infections while delaying development of resistant organisms due to its dual mode of action.
The promised guidelines from the FDA will solve the problems, right? Not so fast there, buckaroo!
We recently conducted a valuation of an antibiotic business and concluded that the commercial prospects for drugs that treat common and rare infections are not good. Over the past several years, antibiotic patent expirations have led to a dearth of less expensive yet efficacious antibiotic drugs which contributed to a significant reduction in the overall market. Starting in 2005, patent expirations hit the industry like a plague. Successful franchises including ceftriaxone (Rocephin), clarithromycin (Biaxin) and cefepime (Maxipime) realized substantial reductions in revenue and margins as generic versions entered the market. The epidemic continues this year with the expiration of the US patent for levofloxacin (Levaquin). Datamonitor has estimated that sales of Levaquin will be reduced by half in 2011 ($0.7B vs $1.4B in 2010) and will be only $72M by 2014.
“Beyond 2010, as the market becomes more saturated, pharmaceutical companies will struggle to generate sufficient revenues to survive in the antibiotic sector. At the heart of this will be difficulties for developers to ensure that conventional antibiotics, from leading classes, generate sufficient revenues to be considered a worthwhile investment”, stated a Datamonitor report from 2006. “The marketplace is already saturated with products that are polarized between a limited number of high-yielding products, and a much greater number of products generating substantially lower revenues.” This excerpt from a 2003 Datamonitor report sounds like a fulfilled prophesy based upon our market analysis.
Patent expirations have lead to a virtual flood of generic antibiotics resulting in a third line in the tug-of-war to develop new antimicrobial drugs. Is there a solution? While a partial answer lies with the FDA relative to the height of the barriers to obtaining marketing approval, our valuation work taught us that a company developing a novel antibiotic (or any drug for that matter) should regularly check the value of their drug candidate relative to available efficacy data and current market factors. This information should be utilized in out-licensing / partnering decisions in terms of timing for when to bring in a partner as well as the type. Depending on the valuation results, it may be necessary to select a partner to participate in designing and funding the late phase trials as well as begin planning how best to market the drug within an ever rising tide of generics.
Robert Morrison, Ph.D. is Director, The Invotex Group, a specialty consulting firm that provides a range of financial and technical services to companies and academic institutions. Dr. Morrison’s practice focuses on issues associated with clinical development and intellectual property of pharmaceuticals and medical diagnostic applications.