The an­tibi­otics R&D ef­fort is bro­ken. Here's one mar­ket so­lu­tion that might fix it

Any­one even slight­ly fa­mil­iar with an­tibi­otics R&D over the last 10 years would quick­ly agree that the sys­tem is bad­ly bro­ken.

Big Phar­ma — with the ex­cep­tion of Roche — large­ly pulled out of de­vel­op­ment be­cause the mar­gins are low. The hunt now is for block­busters. There are plen­ty of cheap an­tibi­otics to cov­er most of the mar­ket; the niche for new an­tibi­otics re­mains too small to sus­tain any ma­jor ef­fort need­ed here. The lit­tle biotechs left with the li­on’s share find it’s ex­pen­sive, high­ly risky and hard to make pay. And that is not a pret­ty pic­ture.

So now gov­ern­ment of­fi­cials who have been sound­ing the alarm about the grow­ing risk of drug-re­sis­tant bac­te­ria are look­ing to change the way the mar­ket is struc­tured in or­der to lure big­ger and more am­bi­tious play­ers in­to the game.

That was clear in the UK gov­ern­ment’s re­port, out on Thurs­day, which out­lines a plan to de-cou­ple price from de­mand and shift to a more val­ue-based ap­proach, where in­sti­tu­tions pay fees based on their need for new an­tibi­otics. This is quite sim­i­lar to the li­cens­ing ap­proach that FDA com­mis­sion­er Scott Got­tlieb sug­gest­ed months ago.

While em­bed­ded in a host of sug­ges­tions re­lat­ed to on­go­ing ef­forts to bet­ter mon­i­tor and com­bat drug re­sis­tance, the UK re­port urges a new sys­tem ex­plor­ing how to:

De­vel­op and test new mod­els for na­tion­al pur­chas­ing arrange­ments that de-link the price paid for an­timi­cro­bials from the vol­umes sold, us­ing a NICE led health­care tech­nol­o­gy as­sess­ment to sup­port ro­bust stew­ard­ship.

An­a­lysts at Glob­al­Da­ta of­fered a shout-out for the move.

“The UK gov­ern­ment’s de­ci­sion to ex­plore val­ue-based pric­ing for an­tibi­otics rep­re­sents an im­por­tant step away from the tra­di­tion­al ap­proach of di­rect­ly link­ing pay­ments to sales vol­ume—a pric­ing strat­e­gy that does not work well for an­tibi­otics as it con­flicts with stew­ard­ship ef­forts and ul­ti­mate­ly dis­cour­ages the prop­er use of both new and well-es­tab­lished an­tibi­otics,” not­ed their in­fec­tion dis­ease di­rec­tor Christo­pher Pace. “From the com­mer­cial stand­point, a val­ue-based pric­ing scheme could al­so help to stim­u­late an­tibi­ot­ic R&D as com­pa­nies will be in­cen­tivized to po­si­tion prod­ucts for small­er groups of pa­tients where high un­met med­ical need ex­ists, with­out wor­ry­ing about stymieing re­turn on in­vest­ment.”

We know there’s a mas­sive and grow­ing health prob­lem, but the in­dus­try has been deaf to the five-alarm bells that have been ring­ing. And why not? Char­i­ta­ble R&D for ne­glect­ed dis­eases is a branch of re­search all to it­self, where you can choose to spend — or not — as you will. But there’s no mar­ket­ing glo­ry in it.

Some­thing has to change, and maybe gov­ern­ment of­fi­cials are fi­nal­ly find­ing a path for­ward on a crit­i­cal top­ic. Right now, there is no mar­ket so­lu­tion. 

The oth­er so­lu­tion that the UK re­port echoes is a sug­ges­tion that com­pa­nies be as­sessed a cer­tain amount that they can ei­ther spend on an­tibi­otics or pay as a fee to cov­er the ex­pens­es of those who will. We pre­fer find­ing a mar­ket so­lu­tion as the on­ly sus­tain­able way to get re­al R&D pro­grams off the ground and mov­ing fast. 

Novotech CRO Ex­pands Chi­na Team as Biotech De­mand for Clin­i­cal Tri­als In­creas­es up to 79%

An increase in demand of up to 79% for clinical trials in China has prompted Novotech the Asia-Pacific CRO to rapidly expand the China team, appointing expert local clinical executives to their Shanghai and Hong Kong offices. The company is planning to expand their team by 30% over the next quarter.

Novotech China has seen considerable demand recently which is borne out by research from GlobalData:
A global migration of clinical research is occurring from high-income countries to low and middle-income countries with emerging economies. Over the period 2017 to 2018, for example, the number of clinical trial sites opened by biotech companies in Asia-Pacific increased by 35% compared to 8% in the rest of the world, with growth as high as 79% in China.
Novotech CEO Dr John Moller said China offers the largest population in the world, rapid economic growth, and an increasing willingness by government to invest in research and development.
Novotech’s 23 years of experience working in the region means we are the ideal CRO partner for USA biotechs wanting to tap the research expertise and opportunities that China offers.
There are over 22,000 active investigators in Greater China, with about 5,000 investigators with experience on at least 3 studies (source GlobalData).

Daniel O'Day [via AP Images]

UP­DAT­ED: Gilead un­leash­es a $5B late-stage cash al­liance with Gala­pa­gos — lay­ing out O'­Day's R&D strat­e­gy

Daniel O’Day is executing his first major development deal since taking over as CEO of Gilead $GILD. And he’s going in deep to ally himself with a longstanding partner.

O’Day announced today that he is spending $5 billion in cash to add new late-stage drugs to Gilead’s pipeline, picking up rights to Galapagos’ $GLPG Phase III IPF drug GLPG1690 alongside adoption of the biotech’s Phase IIb drug GLPG1972 for osteoarthritis. And Gilead is also putting billions more on the table for milestones, gaining options for everything else in Galapagos’ pipeline, with a shot at all rights outside of Europe.

Altogether, Gilead is gaining rights to 6 clinical-stage assets, 20 preclinical programs and everything else being hatched in translation.

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Hal Bar­ron's team at GSK scores a win with pos­i­tive Ze­ju­la PhI­II front­line study — now comes the hard part

Score one for Hal Barron and the new R&D team steering GlaxoSmithKline’s pipeline.

The pharma giant reported this morning that its recently acquired PARP, Zejula (niraparib), hit the primary endpoint on progression-free survival in a frontline maintenance setting for women suffering ovarian cancer — following chemo and regardless of their BRCA status.

GSK bet $5 billion on the Tesaro buyout primarily to get this drug, drawing the shaking heads of biopharma. Why pay a big premium for a drug like this when AstraZeneca was going from strength to strength with Lynparza, ran the argument, having won a hugely important accelerated approval to jump out ahead — way ahead — of the rest of the PARP players? Lynparza — now co-owned by a powerhouse cancer team at Merck — won the first approval in frontline maintenance in ovarian cancer.

Alk­er­mes adds bipo­lar I dis­or­der to its FDA wish­list; Con­go con­firms first Ebo­la case in large city

→ An ever-ambitious Alkermes $ALKS team plans to add bipolar I disorder to its list of conditions for ALKS-3831, which it plans to pitch to the FDA in Q4. Alkermes says they were persuaded to add bipolar I disorder after a pre-NDA meeting with the agency, which came about 7 months after the biotech reported positive data for schizophrenia. The drug is a combo using olanzapine/samidorphan, which they hope will be shown to be as effective as olanzapine without the substantial increase in the risk of weight gain.

Pe­ter Kolchin­sky and Raj Shah raise a $300M fund de­vot­ed to biotech star­tups

Peter Kolchinsky and Raj Shah have another $300 million-plus to play with on the biotech venture side of their investment business. 

The two announced Monday morning that they’ve put together their first pure-play venture fund at RA Capital Management, which has been known to bet on just about every angle in healthcare investing — from rounds to follow-on investments at public companies. This new fund of theirs arrives well into a go-go era of new startup financing, with a particular focus on building new biotechs.

Boehringer buys Swiss biotech in its lat­est M&A deal, go­ing the next-gen can­cer vac­cine route

Boehringer Ingelheim has snapped up a Swiss biotech startup and added their group as a new platform for the oncology pipeline. 

The German biopharma company has bagged Geneva-based AMAL Therapeutics, paying out an unspecified upfront in a $358 million deal — cash, milestones and everything else, all in. Plus there’s 100 million euros on the line for commercial milestones.

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Ab­b­Vie beefs up the on­col­o­gy pipeline, bag­ging an up­start STING play­er with its own unique ap­proach

AbbVie isn’t letting its $63 billion buyout of Allergan stop its M&A/deals team from continuing their work.

Monday morning we learned that the pharma giant is snapping up tiny Mavupharma out of Seattle, a Frazier-backed startup that has its own unique take on STING — which is on the threshold of their first clinical trial.

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Billing it­self as the first AI biotech to launch hu­man tri­als, Re­cur­sion adds $121M C round

Billing itself as the first AI biotech with programs in the clinic, Salt Lake City-based Recursion now has a $121 million bankroll to start gathering human data to see if it’s on the right track. 

“We’re trying to build this discovery engine,” Recursion CEO Chris Gibson tells me ahead of the C round news. “We now have the first two programs in the clinic.” And that, he adds, qualifies as a first for any AI establishment “that actually have something in the clinic.”

FDA bats back As­traZeneca's SGLT di­a­betes drug for Type 1 di­a­betes — block­ing a class on safe­ty fears

The FDA has just fired its latest salvo at the SGLT class of diabetes drugs, blowing up some commercial opportunity at AstraZeneca as part of the collateral damage.

The pharma giant reported early Monday that the FDA has rejected its blockbuster drug Farxiga for Type 1 diabetes that can’t be controlled by insulin. And while the pharma giant maintained its usual grim silence in the face of a setback, this one should be easy to interpret.