Several months after a splashy announcement, an ambitious pharmaceutical industry venture to tackle antibiotic resistance has hired its first chief executive officer and received $140 million in additional funding commitments.
The AMR Action Fund, which was organized with $1 billion in pledged funds from nearly two dozen drug makers, tapped Henry Skinner, a venture capitalist and the former head of Novartis (NVS) Venture Funds, to pilot the project. The goal is to acquire or invest in small companies that can develop two to four novel antibiotics by 2030 and replenish the global supply chain with needed treatments.
“The value proposition is broken. The pipeline is not as robust as it should be and the access to capital to is extremely constrained, which is our job to fix,” said Skinner, a trained microbiologist who until recently, was a senior vice president for venture investments at Tekla Capital Management, which runs funds that invest in health care and life sciences.
“This is the right thing at the right time and gives us four to five years for policy makers to make their own adjustments to reinvigorate the market,” he continued. “Although $1 billion seems like a lot of money — and it is — moving drugs forward is not inexpensive. In the absence of this [fund], a lot of drugs won’t get developed at all. I look at this as a bridge investment in the infrastructure of antibiotics.”
His arrival marks the first tangible step the for-profit fund has taken since last July, when some of the industry’s biggest names — including Merck, Pfizer, GlaxoSmithKline, Novartis, Takeda, and Eli Lilly, among others — agreed to invest. The Wellcome Trust, the European Investment Bank, and the Boehringer Ingelheim Foundation pledged the newest infusion of $140 million.
The fund is being launched as antimicrobial resistance claims more lives. An estimated 35,000 people die of antibiotic-resistant infections in the U.S. each year, for instance, according to data from the Centers for Disease Control and Prevention. A 2016 report by a project funded by the U.K. government called the Review on Antimicrobial Resistance forecast that drug-resistant infections may kill up to 10 million people a year by 2050.
Over the past decade, though, several large drug makers left the market and, more recently, some small players have withdrawn or failed. Between 200 and 300 very small companies worldwide now do the vast majority of research work, said Kevin Outterson, who heads CARB-X, a public-private partnership that was formed in 2016 and is the major global funder of early-stage antibiotic development.
The overall number of antibiotics being developed has increased only marginally in the past three years and just nine of these medicines are considered novel, most of which are being pursued by small and medium-sized companies with fewer resources than global drug makers, according to a report issued last year by the Access to Medicine Foundation.
Of three dozen companies with antibiotics in clinical development, only one ranks among the top 50 drug makers by sales, according to a recent report by Pew Charitable Trusts. More than 95% of the products in development today are being studied by small companies rather than the large drug makers that once dominated the field, and nearly 75% of the companies do not have a product on the market.
And still another report issued last year by the World Health Organization bemoaned an overall lack of private investment and innovation in antibiotic development. Of 50 pipeline products identified by the WHO, 32 targeted priority pathogens, but the agency found that most have only limited benefits when compared to existing antibiotics.
The issue, meanwhile, has taken on greater urgency, since the emergence of the Covid-19 pandemic.
In parts of Europe, between 79% and 96% of those taking antibiotics reported not having been infected with Covid-19, but took antibiotics inappropriately, believing they would prevent infection, according to WHO data released last November. Evidence indicates that up to 15% of severely affected Covid-19 patients develop bacterial co-infection and could need antibiotics, whereas 75% actually receive them.
Despite that urgency, the industry venture is seen as only one piece in a challenging puzzle, according to Wes Kim, senior officer in the antibiotic resistance project at Pew Trust Charitable Trusts. “They recognize this fund alone will not solve the market issues,” he said. “It’s certainly welcome, but it’s more of a bridge fund until Congress takes broader action.”
Indeed, in the U.S., small biotechs and policy experts have rallied around two forms of legislation, although both will have to be re-introduced.
One is known as the Pasteur Act, which would establish a subscription-style business model to offer upfront payments to drug makers in exchange for unlimited access to their antibiotics. The idea is to enable drug companies to recover their costs and make an appropriate profit without having to sell large volumes of antibiotics. Last year, the U.K. government launched a pilot project using this approach.
The other legislation is called the Disarm Act and would create a separate payment for qualifying innovative antibiotics and allow for higher Medicare reimbursement to hospitals. The goal is to eliminate incentives for hospitals to use the least expensive antibiotic available because they will not be reimbursed above a ceiling set for treatment.