Years af­ter Big Phar­ma aban­doned the an­tibi­otics space, a small syn­di­cate has raised $140 mil­lion to ad­dress the loom­ing threat of an­timi­cro­bial re­sis­tance — but is it too lit­tle, too late?

Back in Ju­ly, more than 20 biotechs — in­clud­ing heavy­weight play­ers Pfiz­er, Eli Lil­ly, No­vo Nordisk, Boehringer In­gel­heim, Bay­er Phar­ma­ceu­ti­cals, Mer­ck KGaA and the Amer­i­can Mer­ck — band­ed to­geth­er to help launch the AMR Ac­tion Fund. With an ini­tial $1 bil­lion, the fund set out to bring two to four new an­tibi­otics to pa­tients by 2030.

Je­re­my Far­rar

On Thurs­day, the fund closed on an­oth­er $140 mil­lion raise from the Boehringer In­gel­heim Foun­da­tion, the Eu­ro­pean In­vest­ment Bank and the Well­come Trust — a fig­ure that pales in com­par­i­son to the tens of bil­lions of VC dol­lars spent in on­col­o­gy over the last decade.

“Sys­temic mar­ket fail­ure has left an­tibi­ot­ic in­no­va­tion starved of fi­nanc­ing, mean­ing po­ten­tial­ly life­sav­ing prod­ucts are un­able to make it to the pa­tients who need them,” Je­re­my Far­rar, di­rec­tor of the Well­come Trust, said in a state­ment, adding that the fund is on­ly “part of the so­lu­tion.”

“The AMR Ac­tion Fund is buy­ing time for the an­tibi­ot­ic pipeline. It is now up to gov­ern­ments to use this time wise­ly and take de­ci­sive ac­tion to fix the mar­ket,” Far­rar added.

It’s es­ti­mat­ed that the rise of su­per­bugs takes 700,000 lives every year, ac­cord­ing to the AMR Fund, which was launched with the help of the WHO and the In­ter­na­tion­al Fed­er­a­tion of Phar­ma­ceu­ti­cal Man­u­fac­tur­ers & As­so­ci­a­tions. By 2050, ex­perts guess an­timi­cro­bial re­sis­tance could lead to as many as 10 mil­lion deaths per year.

But de­spite the ris­ing threat, Big Phar­ma has re­treat­ed from the risky field, fraught with cheap gener­ics and poor fi­nan­cial re­turns. Many an­tibi­otics fail in de­vel­op­ment, while oth­ers “with­er on the vine” due to a lack of avail­able fund­ing. And the ones that do get ap­proved are of­ten used spar­ing­ly to pre­serve ef­fec­tive­ness and slow the de­vel­op­ment of fur­ther re­sis­tance.

No­var­tis — one of the many biotechs chip­ping in­to the AMR Fund — joined the pa­rade of big phar­mas ex­it­ing the field two years ago when it culled its an­tibac­te­r­i­al and an­tivi­ral re­search ef­forts. As­traZeneca, Sanofi and Al­ler­gan had al­ready aban­doned their own pro­grams, which, fol­lowed by a slew of bank­rupt­cies, left few oth­ers in pur­suit of a so­lu­tion to an­timi­cro­bial re­sis­tance.

“Nev­er has the threat of an­timi­cro­bial re­sis­tance been more im­me­di­ate and the need for so­lu­tions more ur­gent,” Tedros Ad­hanom Ghe­breye­sus, WHO di­rec­tor-gen­er­al, said in a Jan­u­ary 2020 state­ment.

The AMR Fund isn’t the on­ly ini­tia­tive look­ing to spur new de­vel­op­ment in the space. CARB-X launched in 2016, with the goal of pump­ing up to $480 mil­lion in­to ear­ly projects through 2022. Since its launch, CARB-X has an­nounced 78 awards worth more than $284.4 mil­lion, not count­ing po­ten­tial mile­stones.

“We need in­no­v­a­tive so­lu­tions to avert the loom­ing health cri­sis posed by AMR, which threat­ens to make even com­mon med­ical pro­ce­dures po­ten­tial­ly dead­ly,” said Christoph Boehringer, chair­man of the Boehringer In­gel­heim Foun­da­tion which con­tributed $50 mil­lion to the cause.

Isaac Ston­er, CEO at Oc­ta­gon Ther­a­peu­tics, said the fundrais­ing ef­forts are “re­al­ly in­ter­est­ing, but I have un­for­tu­nate­ly be­come a pes­simist.” He added:

This seems like a sim­i­lar mech­a­nism to the No­vo RE­PAIR fund and CARB-X. It’s a nice idea, but still a very small amount of mon­ey and doesn’t fix the ac­tu­al prob­lem. As they de­scribe them­selves, this is “buy­ing time” for re­al ac­tion. As COVID vac­cine de­vel­op­ment has shown, if gov­ern­ments sign pur­chase con­tracts around large vol­umes of these prod­ucts at guar­an­teed price points, that can re­al­ly help to stim­u­late de­vel­op­ment. But these push in­cen­tives are a bridge to nowhere, as long as the mar­ket op­por­tu­ni­ty is cou­pled to uti­liza­tion.

Ankit Ma­hade­via, founder and CEO of Spero Ther­a­peu­tics, said it’s “help­ful to see the com­mit­ment to find­ing bet­ter so­lu­tions for in­fec­tions.”

“Our re­spon­si­bil­i­ty as biotechs is to find sci­en­tif­i­cal­ly in­no­v­a­tive med­i­cines that meet true un­met needs in sus­tain­able mar­kets and the fund can help us in that mis­sion,” he con­tin­ued.

Com­par­ing the threat to the nov­el coro­n­avirus, which was “prac­ti­cal­ly un­known” un­til last year, the AMR Fund said an­timi­cro­bial re­sis­tance is “a threat we know, and we must take col­lec­tive ac­tion now.”

The Endpoints News team is continuing to track IPO filings for 2021, and we’ve designed a new tracker page for the effort.

Check it out here: Biopharma IPOs 2021 from Endpoints News

You’ll be able to find all the biotechs that have filed and priced so far this year, sortable by quarter and listed by newest first. As of the time of publishing on Feb. 25, there have already been 16 biotechs debuting on Nasdaq so far this year, with an additional four having filed their S-1 paperwork.

Back in April 2018, just before Foresite Capital unveiled its $668 million Fund IV and a strategy to focus on tech-driven life science bets, one of its portfolio companies quietly made an announcement.

Fount Therapeutics, a drug discovery outfit backed by Foresite and Eshelman Ventures, had raised $22 million in Series A cash to hatch several fledgling spinouts. “The first ‘NewCo,’ Kinnate, will be focused on developing precision oncology treatments,” read a press release.

S&P Global has taken a look at the dominant forces shaping the pharma market and come to the conclusion that there will be more downgrades than upgrades in 2021 — the 8th straight year of steady decline.

But it’s not all bad news. Some things are looking up, and there’s still plenty of money to be made in an industry that enjoys a 30% to 40% profit margin, once you factor in steep R&D expenses.