Erin Duffy knows firsthand what it’s like to see an antibiotics company collapse.
When she was the chief scientific officer of Melinta Therapeutics, Duffy watched the company — where she had worked for 17 years developing novel antibiotics for drug-resistant bacteria — scale back and cut its R&D program, and then ultimately go bankrupt in 2019. Several months later, Melinta was approved for a restructuring support agreement with the healthcare investment firm Deerfield Management and today exists as a private company.
The story is all-too-familiar for many in the antibiotic space. Just five of the 12 antibiotic companies that have gone public in the last decade remain active, according to a BIO report published earlier this year.
Despite those figures and her own experience in the sector, Duffy, who now serves as chief of R&D at the Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator (CARB-X), believes that many of the antibiotic companies on the market have a chance at success.
“I believe in this space,” she said. “I joined CARB-X to help little companies like ours make the best decisions they can to develop their product.”
Right now, CARB-X, the Biomedical Advanced Research and Development Authority (BARDA), AMR Action Fund and other groups have been pumping money into small antibiotics companies to keep them buoyant. And soon, government initiatives across the globe could provide alternative funding structures for antibiotic development.
In April, the U.K. launched a first-of-its-kind subscription-style payment model that offers drugmakers money upfront for approved antibiotics deemed important to public health, rather than its current volume-based payment model. The approach aims to incentivize investment in the space by providing a more reliable payout opportunity for companies who develop the drugs.
"I think a lot is coming together to make people see that it really is a matter of national security. And so hopefully that translates into some legislation."
Chief of R&D, CARB-X
Similar policies have been floated in the U.S. — both in President Biden’s Fiscal Year 2023 budget proposal and in a bipartisan congressional bill, dubbed the Pioneering Antimicrobial Subscriptions to End Up surging Resistance (PASTEUR) Act, which proposes a subscription-based funding model for antibiotics.
Here, Duffy provides insight into why this moment in the fight against antimicrobial resistance feels different, and how the PASTEUR Act could fundamentally change the antibiotics market.
This interview has been edited for style and brevity.
PHARMAVOICE: Do you think we’ll always be outrunning antibacterial resistance, or will we ever be able to outsmart it?
ERIN DUFFY: Bacterial resistance is a fact of life. We just need to keep other strategies, like bacterial vaccines, going while continuing to ensure that we have antibiotics that work and address contemporary resistance patterns.
We’re facing this problem today for a couple of reasons. I’ll frame this in a personal story. When I joined Rib-X Pharmaceuticals, now Melinta Therapeutics, it was right at the time when large pharmaceutical companies started to exit the antibiotics space. Progress in molecular biology allowed people to start looking at other therapeutic areas that were not well served: oncology, neuroscience and a lot of different areas. And the large pharmaceutical companies started going there. What came into the antibiotics space were a lot of little companies like ours.
Around 2006 or 2007, there was an antibiotic put on the market by what was then Aventis, now Sanofi, where subsequently there were case reports of idiosyncratic liver toxicity. It was a big deal because here you have an antibiotic that’s meant for community use, including in children, to be a replacement for Zithromax (a widely used antibiotic), so safety is paramount. Among other issues, Congress launched a full investigation over the FDA’s handling of the drug approval. And so for the next three or four years, the FDA became very conservative and started looking to revamp its guidelines around endpoints in clinical trials, focusing on objective endpoints rather than subjective ones like ‘physicians’ test of cure.’ That put a pause on a lot of companies developing antibiotics.
When things clarified, all of a sudden you had a bunch of antibiotics that pushed toward market but were mostly antibiotics that addressed MRSA, largely because back when they were discovered that was where resistance was concerning. In the meantime, all these other Gram-negative bugs became the focus due to brewing resistance. That's why we have these pathogens on priority lists that aren't answered yet.
I think if we get to a place where we can support the innovation and have a market that supports that, then it's about maintenance. It won’t always be about massive catch-up.
How would you describe this moment as compared to the last 10 years in antimicrobial resistance research and drug development?
Let's be honest — part of our problem is, who knows what AMR means? We have a communication problem with the general public, and that extends to our leaders in government.
I think making people recognize that antibiotic drug development is about preserving all these other major advances in modern medicine. We've spent trillions of dollars — or whatever is after trillions — on all these really neat new cancer therapies and dialysis approaches, and you name it. None of these things work without antibiotics. I think people are starting to see that, and then I think COVID-19 helped (highlight the problem). AMR is very different from COVID-19, but now people know about variants. That’s what bacterial resistance is. I think a lot is coming together to make people see that it really is a matter of national security. And so hopefully that translates into some legislation.
Would the PASTEUR Act have helped your company if it had existed back then?
I think it probably would have helped. In 2010, our company was, we thought, about to begin a phase 3 program for what was our lead asset. This was right when the FDA released new guidelines. We went out to do an IPO early in 2011 looking to raise money for that phase 3 with a clear regulatory path, and investors are looking and saying, by the time this product gets to market, there's not much patent clock left.
We knew that Congress was working on something called the GAIN Act (Generate Antibiotic Incentives Now), (which was) a push to recognize that there was this delay with a lot of programs coming forward and every year of delay was a year off a potential antibiotic’s patent clock.
What the GAIN Act did was, if you had a product that treated the pathogens of concern, and if you were targeting serious infections, then you would be eligible for five-year exclusivity on top of Hatch-Waxman, which already gave you five. So now you have 10 additional years of exclusivity. That was huge, but we knew that Congress was discussing it. It was kind of like PASTEUR right now.
We went out on the IPO roadshow. And all we could say to people was we believe they're close to passing the GAIN Act. Our IPO failed to price. I think a lot of people just said, ‘We know you believe it.’ And I think it was a month later the GAIN Act passed. So, others benefited.
Had PASTEUR happened then, we had at least two antibiotics that I think, given the unmet need and the high priority pathogens, certainly could have qualified for PASTEUR. In the end, we had four hospital-focused antibiotics, two of which were more in maintenance mode, but the integral over four of them was somewhere between $10 million and $13 million a quarter. It cost more to keep them on the market. So having the de-linkage of PASTEUR would have been outstanding.
That’s reminiscent of now, where everyone is waiting to see what will happen with PASTEUR. Do you think this situation is similar, or do you believe it is a similarly nerve-wracking time for small antibiotic companies?
It's really on both sides. The ones who are in advanced development, I think, even with BARDA support, or even with AMR Action Fund support, still know they're going to face this problem and that there isn't a way to value these appropriately. That's true today. But for the companies that we support that are much earlier, their problem is that they still need to raise money. And CARB-X pays most of the costs, but they probably want to have other programs, and they need to raise capital to support that. It's hard to get other investors. But if investors sense that there's a viable marketplace, it's a different topic.