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Why Biotechs are Losing the Antibiotic War


6/21/2013 12:18:23 PM

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Why Biotechs are Losing the Antibiotic War</b> Deadly Bacteria Is a Global Crisis: Brad Spellberg
Source: George S. Mack of The Life Sciences Report (6/20/13)

http://www.thelifesciencesreport.com/pub/na/15386

Antibiotic-resistant bacteria, like the proverbial time bomb, are poised to wreak infectious havoc on a worldwide scale. Brad Spellberg, associate professor of medicine at the Los Angeles Biomedical Research Institute and the Harbor-UCLA Medical Center, is committed to defusing the bomb with the development of new antibiotics and creative platforms. He believes investigators must look at alternative ways to deal with bad bugs, perhaps by neutralizing their toxic effects rather than killing them. In this interview with The Life Sciences Report, Spellberg explores this critical issue and names four companies with novel technologies that address this looming global crisis.

The Life Sciences Report: The first thing I want to ask is if you believe it's a hopeful sign that young physicians are less likely to prescribe antibiotics, especially at the patient's request? Isn't that a sign that residents and fellows are being trained with increasing awareness of bacterial resistance, an issue that is so important to you?

Brad J. Spellberg: I have not seen data to suggest that there is a generational effect. I think we are doing a better of job of talking about it than 20 or 30 years ago, when a large segment of the medical community thought that the problem was solved and we could just move on. There is still a huge amount of room for improvement. I see young physicians, old physicians, all physicians—and, frankly, even I have done it out of fear—prescribing antibiotics for infections that are highly unlikely to be bacterial all the time. Prescribing antibiotics for viral infections is certainly inappropriate. The other thing physicians do all the time—and there is absolutely no generational effect in my experience—is treat patients very broadly when narrow spectrum therapy is needed. They also treat for far longer than is needed. Both of these practices are inappropriate.

TLSR: Brad, your book, Rising Plague: The Global Threat from Deadly Bacteria and Our Dwindling Arsenal to Fight Them, was published in September 2009. We know there is a threat of pandemic, but what do you mean by dwindling arsenal? Are you talking about a lack of will or desire to tackle this problem? Why is the arsenal dwindling?

BJS: The dwindling arsenal specifically refers to the collapse of the antibiotic research and development (R&D) pipeline. We have what has been accurately termed on Capitol Hill a market failure of antibiotics. The traditional capitalistic market has not supported antibiotic trials. It has collapsed. There are a couple of companies left, but most pharmas have gotten out of the business. The root causes of the collapse include a lack of awareness. We need to take action in other areas, such as pulling antibiotics out of animal feed, but raising awareness about what's going on is also necessary.

We also have a regulatory problem, in which the U.S. Food and Drug Administration (FDA) has been overtly hostile to new antibiotic development. There are economic problems too. Antibiotics don't make enough money to justify economic investment by companies that need to make a profit. Pharmaceutical companies are in business to make money, and it is not realistic to expect them to take a loss for the public good—which suggests that we need a new economic model. We either need incentives to change the economic realities so that antibiotics become a better investment for companies pursuing profits, or we need a defense contractor-like model—a public-private partnership model—whereby we defray some of the costs and risks of developing antibiotic molecules. The public needs these drugs, even if companies aren't going to make a lot of money off of them.

TLSR: What about the Generating Antibiotic Incentives Now (GAIN) Act of 2011, designed to hasten development and approval of new antibiotics? The idea was to prod the FDA into getting antibiotics through the regulatory cycle. Is it working?

BJS: GAIN was signed into law last year (2012). It is an economic incentive, and provides a five-year data-exclusivity extension to new antibiotics so that companies have more time to make money off the drugs before they go generic.

Frankly, the bipartisan passage of GAIN was a huge triumph and a signal that Congress understands there is a problem. But GAIN was not strong enough to make pharmaceutical companies come back to the field. A five-year data-exclusivity extension, which is not the same as a patent extension, does not provide economic incentives to large companies. The only companies that will benefit are those with products that have gone off patent or are about to go off patent. It gives these companies an alternative form of exclusivity to prevent generic competition that is not dependent on a patent. If a company has a lot of patent time left on a molecule, GAIN is not going to give it any additional revenue.

There were other incentives in the bill, such as priority review for important molecules, but that is of minimal value in my opinion. GAIN did not do very much to make the FDA change. The only FDA change was to require the agency to develop guidance to get critically needed antibiotics developed. That did prod the FDA a little bit. It was already working on guidelines, albeit at a slow pace. But GAIN has not changed the philosophy of the FDA. GAIN was primarily an economic incentive and not a regulatory reform bill.

Let me add one thing. We need to thank Phil Gingrey (R-GA), the congressperson who spearheaded the charge to get GAIN passed. Gingrey is a physician, and he understands at a core level the critical problem posed by not developing new antibiotics and by not having them when they are needed. My understanding is that he intends to bring up follow-on legislation that will be more focused on the FDA.

TLSR: Antibiotic developers worry that if the FDA approves a drug, there's a chance the agency may hold it—put it on the shelf—for second- or third-line therapy, to prevent premature formation of resistant strains of bacteria. The former CEO of Optimer Pharmaceuticals Inc. (OPTR:NASDAQ) told me in 2008, while his Clostridium difficile (C. difficile, C. diff) drug Dificid (fidaxomicin) was in development, that this scenario was his nightmare. Do developers still worry that their antibiotics are going to be relegated to a second- or third-line therapy?

BJS: Well, the short answer to the last part of your question is yes. They should worry, and we should too. I'll come back to that specifically, but you said a couple of things that make my blood boil a little bit.

First of all, the FDA has no authority to determine what standard antibiotic use should be. It cannot say, "We're going to approve this drug, but it can only be used as a second-line or third-line therapy." Decisions about how drugs are to be used and where are made by market forces, unmet medical needs and physician leadership.

It's hard for me to hear Optimer complain. The reason Optimer's drug is not first-line is because the company priced it astronomically high. If Optimer wanted its drug to be used first-line, it should have come out with a different price. A lot of physicians—key opinion leaders—have told the company this. It's difficult for me to imagine a circumstance that would make fidaxomicin first-line, given its pricing structure.

TLSR: Doesn't this antibiotic crisis cry out for a Manhattan Project, where we don't worry so much about the return on investment or the cost of developing new platforms?

BJS: Yes, it does. There are three primary ways to think about changing the traditional return-on-investment proposition for antibiotics.

The first thing we need—and this would be in the best interest of the public, not specifically in the best interest of companies—is to move toward the public-private partnership model. The era of public-private partnerships is already upon us. We have government agencies that are funded and empowered to invest in the development of critically needed molecules. Just a couple of weeks ago GlaxoSmithKline (GSK:NYSE), in partnership with a federal agency called Biomedical Advanced Research and Development Authority (BARDA), announced a $200 million ($200M) investment in developing a platform of antibiotics—not just one antibiotic—to address antibiotic resistance and bioterrorism. BARDA has decided to move away from putting money into a single molecule program that could fail at any time. The idea is to put that money into a series of compounds, so that if one or two of them fail, there are still others that can be developed. I think this platform concept is the future.

A second way to address the issue is with pricing. Fidaxomicin, which we have spoken about, is not a good example of how pricing should be addressed. In a for-profit, capitalistic society, if a company wants to charge a high fee for a drug to justify its development, then the drug needs to hit an unmet need. It can't be yet another skin- and soft-tissue infection drug, when we already have 20 of those. You need to go after lethal infections, where there is virtually nothing available as treatment.

That gets to these two proposals, one from the Infectious Diseases Society of America (IDSA), called the Limited Population Antibacterial Drug (LPAD) approval mechanism, and one from the trade organization Pharmaceutical Research and Manufacturers of America (PhRMA). The proposals are essentially identical and suggest a new approval pathway for high priority antibacterial drugs. They say the FDA should be empowered to approve drugs that treat lethal infections where limited alternative therapies are available based on very small clinical development programs—perhaps with as few as 30–50 patients exposed to the drug in phase 3—but with a post-marketing requirement for ongoing safety assessments. A drug approved through that process would, of course, get a very restrictive label because it's been approved after only a very small number of patients have been exposed, and would be used against only highly resistant pathogens. If you get into a population with an infectio n that is 50% fatal or higher and you've got the new drug—well, you're in the realm of oncology-type drugs, where you can start justifying pricing like that of fidaxomicin, or even more. You have to hit a true unmeet need. You need to go after an indication that's lethal and for which there is limited alternative therapy.

The third option would be to create other kinds of incentives, the way GAIN has attempted to, using tax write-offs and patent or data extensions. Frankly, the third option is probably the least effective. The first two—the public-private partnerships and changing the pricing structure so that companies stop focusing on large indications and start focusing on smaller indications, addressing unmeet needs—are more effective ways to change the net present value calculation of antibiotics.

TLSR: You said you thought the platform idea is the future. We used to think in terms of a new platform taking 25 years to develop from inception to therapies that are approved and on the market. Certainly, we need to develop new technologies to circumvent resistance to bacteria, which only has to produce a single, small gene mutation—one altered protein synthesis—to render ineffective an antibiotic that cost a billion dollars to develop. With high-throughput screening and in silico development capabilities, will we be able to develop products from new platforms in a shorter period—15–20 years? Is this something that's going to happen?

BJS: I think our experiences in high-throughput screening and the genetic revolution have had no impact. In fact, if you read the literature from the head of GSK's antibacterial discovery performance unit, David Payne, as well as others, companies have learned that heavy investment in genomics technology to develop targeted drug discoveries for antibiotics in the 1990s failed. They've had to go back to traditional methods.

There is a scientific challenge because the low-hanging fruit has been plucked. The therapies that were easier to discover through high-throughput screenings have already been discovered. When researchers do the screens, they keep discovering the same stuff over and over. Companies have dealt with this reality by increasingly outsourcing the discovery component. Even companies that are still in the game, like GSK and AstraZeneca Plc (AZN:NYSE), which do have internal R&D components, are increasingly in-licensing products. They figure, "If we're not paying for the internal discovery, we can sift through a lot more chaff to find the wheat. We can sift through hundreds of small companies and labs to cherry-pick the therapies we like." The smaller companies and labs will have paid for and taken the risks in the discovery phase. The unfortunate reality is that, as a result of this trend, highly sophisticated, well-developed, multidisciplinary scientific teams at big companies have been dismantled in favor of the in-licensing approach.

TLSR: Let me pick your brain for a minute with regard to new antibiotic technologies. What are they? Who's developing them?

BJS: Well, there are a few new technologies in the pipeline, and more at the preclinical and phase 1 stages. There are a variety of types. I'm not going to talk about molecules targeted to gram-positive bacteria—there's no point to that, since there's not much unmet need there. We have lots of antibiotics for gram-positive bacteria. The real resistance problem right now is among gram-negative bacteria. There are four gram-negative-targeted compounds in phase 2 and in phase 3 that I could speak to.

Cubist Pharmaceuticals Inc. (CBST:NASDAQ) has an advanced-generation cephalosporin, a ceftolozane-tazobactam (CXA-201) combination, in phase 3 trials now. The drug has good activity against multidrug-resistant Pseudomonas aeruginosa and is being developed as a first-line intravenous treatment for serious gram-negative infections.

AstraZeneca and Forest Laboratories Inc. (FRX:NYSE) are collaborating on a novel beta-lactamase inhibitor, avibactam (NXL 104), which is being combined with the broad-spectrum antibiotic ceftazidime to overcome resistant bugs. The product is in phase 3 and is intended for serious gram-negative infections including complicated intra-abdominal infections (cIAI) and complicated urinary tract infections (cUTI).

Achaogen Inc. (private) has a next-generation aminoglycoside, plazomicin (ACHN-490), which has completed phase 2 and has demonstrated efficacy against systemic infections caused by multidrug-resistant gram-negative bacteria such as Klebsiella pneumoniae and Escherichia coli (E.coli), as well as gram-positive Staphylococcus aureus (methicillin-resistant S. aureus [MRSA]).

Tetraphase Pharmaceuticals Inc. (TTPH:NASDAQ) has a novel, next-generation, fully synthetic tetracycline called eravacycline, which has completed phase 2 trials. It is being tested in cIAIs and cUTIs.

That's a brief summary of the advanced gram-negative pipeline right now.

TLSR: Brad, you are on the scientific advisory board of Synthetic Biologics Inc. (SYN:NYSE.MKT). This company is attacking the bacterial toxins rather than the bacteria themselves. I'm thinking of the company's oral enzyme for C. difficile and the antibody for Bordetella pertussis (whooping cough). How important are these going to be? Are they solutions?

BJS: These are some really cool ideas. The reason I like them so much is that while we certainly need to develop new antibiotics, we also need to take the pressure off antibiotics by finding alternative ways to deal with infections.

The C. diff molecule, SYN-004, is not an antitoxin. The reason people get C. diff infection is that we give them antibiotics, which kill off the friendly bacteria in the gut. That makes room for opportunistic C. diff bacteria to take hold and start causing problems. The cool idea here is that Synthetic Biologics' enzyme destroys antibiotics in the gut. It does not get into systemic circulation, so the antibiotic can do its thing, treating the infection systemically. The enzyme prevents the antibiotic from causing the friendly fire injury in the gut.

TLSR: How far is this program from becoming a marketed product?

BJS: It has been through phase 1. A close relative was previously developed in phase 2. So the company needs to do more clinical development. The enzyme will not be available next year—it's going to take some years, depending on how long it takes to complete phase 2 and phase 3.

TLSR: Is SYN-004 proposed to be given with antibiotics, after antibiotics or before antibiotics?

BJS: Most likely the enzyme will be given with the antibiotic. This will come out at the clinical trials. The company will also need to find a patient population that is at high risk for C. diff infection to show a reduction of infection in the experimental arm versus the control arm, with enough events to determine statistical significance. The population of patients selected will have to have a combination of age, background, medical problems and existing antibiotic therapy that is optimal. The idea is that if a physician starts a patient on a cephalosporin, that patient is going to be at risk for C. diff infection. If the patient is given the Synthetic Biologics' enzyme with the cephalosporin, it will protect the gut against the cephalosporin.

TLSR: What about the antibody, SYN-005, for pertussis?

BJS: The general idea is that the damage from pertussis is, as you said, from the toxin. The problem is that a physician can give antibiotics and can kill the bacteria, but the toxin has already been elaborated and caused damage to epithelial cells. The idea would be to focus on neutralizing the toxin that causes this illness, rather than on killing the bacteria.

TLSR: This sounds like forward thinking—really outside the box.

BJS: Yes. The reason I like the idea is it gets to this broader concept: Maybe we don't always need to kill the bug to treat the infection. AstraZeneca's head of infection, John Rex, says something that I love. Resistance, he says, happens because we're trying to kill the bugs, but the bugs don't want to die. If you don't want to cause resistance, don't kill the bug. Maybe you use small molecules or biologics to change the way the bug interacts with the host.

That makes so much sense when you think about it. The antitoxin idea is one example, but future ideas could involve stopping bacteria from triggering inflammation, since that's what causes the signs and symptoms of infection. Then physicians could allow the host immune system to gradually clear the bacteria over time. If we're not trying to kill the bacteria, there's no selective pressure that would drive resistance and therefore change the way bacteria interacts with the host. I think these kinds of ideas are going to come to the fore over the coming one to two decades.

TLSR: This has been fascinating, Brad. It was so nice meeting you.

BJS: Thanks. Nice to meet you, too.

Brad J. Spellberg, M.D., is associate professor of medicine at the David Geffen School of Medicine at the University of California, Los Angeles, and the Harbor-UCLA Medical Center, and the Los Angeles Biomedical Research Institute. He is also the associate medical director for inpatient services, and an associate program director for the Internal Medicine Residency Training Program at Harbor-UCLA Medical Center. He received his bachelor's degree in molecular cell biology-immunology in 1994 from the University of California, Berkeley. He then attended medical school at the Geffen School of Medicine at UCLA, where he received numerous academic honors, including serving as the UCLA AOA Chapter co-president and winning the prestigious Stafford Warren award for top academic performance in his graduating class. Spellberg completed his re sidency in internal medicine and subspecialty fellowship in infectious diseases at Harbor-UCLA Medical Center, where he received the department of medicine Subspecialty Fellow of the Year award. Spellberg serves on the scientific advisory board of Synthetic Biologics Inc.

Want to read more Life Sciences Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

DISCLOSURE:
1) George S. Mack conducted this interview for The Life Sciences Report and provides services to The Life Sciences Report as an independent contractor. He or his family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Life Sciences Report:Synthetic Biologics Inc. Streetwise Reports does not accept stock in exchange for its services or as sponsorship payment.
3) Brad Spellberg: I or my family own shares of the following companies mentioned in this interview: Synthetic Biologics Inc. My research institute has received within the past year payments from companies mentioned in this story, including research grants or contracts from Cubist Pharmaceuticals Inc. and consulting fees from GlaxoSmithKline. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts' statements without their consent.
5) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer.
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