Once picked as a $500M winner, bankrupt Achaogen auctions off its antibiotic for a fraction of that
Achaogen has just about wrapped up its going-out-of-business sale, with a small group of buyers from around the globe picking up its main antibiotic assets for a song. And they’re just one short telephone auction away from selling their last remaining clinical program.
Bankrupt and running out of cash $AKAO after going $186 million in the red last year, the biotech has now sold off the global rights to Zemdri (plazomicin for multidrug-resistant, gram-negative pathogens) along with its lab equipment for just $16 million. Heritage Global Partners got the lab equipment. Cipla USA got all global rights to Zemdri outside of China, while QiLu Antibiotics Pharmaceutical bagged the royalty-free China rights.
This is an antibiotic that Leerink once confidently predicted would reap $500 million a year in peak sales. In the heady days of spring, 2017, its stock reached a peak price of $27 a share. It’s virtually worthless now. The dramatic fall from market grace came as the FDA rejected the biotech’s pitch to use their antibiotic against bloodstream infections, limiting the OK to drug-resistant urinary tract infections while adding a black box warning on safety.
Once on the market, the analysts found that hospitals already had a favorite brand to turn to, and little Achaogen made little headway on its own. In foundering, the biotech offered one of the more recent cautionary examples of the hazards of antibiotic development. In a field dominated by generics, startups are finding their way blocked by established products, with little prospect for a turnaround, even though the threat of drug-resistant bacteria grows with every passing year.
Investors have not ignored the implications for the rest of the tiny operators in the field, as most of Big Pharma shuns the space.
Anyone interested in buying Achaogen’s last asset — the C-Scape program — can dial in for their last sale on Monday, June 10.
Their last 10-K notes that C-Scape is being developed for “cUTI, including pyelonephritis, caused by ESBL-producing Enterobacteriaceae. C-Scape is a b-lactam/b-lactamase inhibitor combination comprised of ceftibuten, an approved third generation cephalosporin, and clavulanate, an approved b-lactamase inhibitor. The FDA awarded Qualified Infectious Disease Product (QIDP) status to C-Scape for the treatment of cUTI in 2017. QIDP status provides incentives for the development of new antibiotics, including priority review and an extension by an additional five years of any existing non-patent market exclusivity the product may be awarded upon approval. Our C-Scape program is funded in part by a contract with BARDA for up to $18.0 million, of which $12.0 million is committed.”
What’s it worth on the market?