Pharma companies create $1bn fund to save antibiotic research

More than 20 pharma companies including GlaxoSmithKline, Novartis and Pfizer have joined forces to create a $1 billion fund to save the pipeline of antibiotics drugs, after several biotechs developing them went bankrupt. 

The International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) has launched the initiative, saying that there is “no viable market” for new antibiotics, causing R&D to dry up just as resistant strains of bacteria resistant to older drugs become more commonplace.

New antibiotics are designed to be used sparingly to reduce the likelihood of these resistant strains emerging – but this means that the revenues are not there to produce a return on the billions invested in a new drug. 

With investors uninterested in this sector of the market, biotechs developing new antibiotics are struggling: Achaogen and Aradigm went bankrupt last year. 

Tetraphase, one of the few biotechs that has managed to bring an antibiotic to market, was bought last month by La Jolla Pharmaceutical for $43 million, a tiny fraction of its $1.8 billion valuation in 2015. 

Its only product Xerava has struggled commercially because of doctors’ tendency to reserve new antibiotics for the most severe cases. 

It’s a catch-22 situation that has vexed government policy makers and industry for years, and IFPMA’s solution is the AMR Action Fund, where pharma companies will join forces with philanthropists, development banks, and other organisations to strengthen and accelerate antibiotic development. 

So far the companies involved have raised nearly $1 billion to support new research, which the fund will invest in smaller biotechs developing antibiotics that address the highest priority public health needs. 

It will also provide technical support to the biotechs, while the alliance of industry and non-stakeholders will work together to encourage governments to create market conditions that will create a sustainable investment environment. 

Companies taking part are: Almirall, Amgen, Bayer, Boehringer Ingelheim, Chugai, Daiichi Sankyo, Eisai, Eli Lilly and Company, GlaxoSmithKline, Johnson & Johnson, LEO Pharma, Lundbeck, Menarini, Merck, MSD, Novartis, Novo Nordisk, Novo Nordisk Foundation, Pfizer, Roche, Shionogi, Takeda, Teva and UCB. 

The UK government headed by David Cameron attempted to take on the issue, appointing influential economist Lord Jim O’Neill to find ways to address the lack of investment in antibiotics. 

But last autumn Lord O’Neill said there had been no firm commitment of new money from governments despite the “endless words”.