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Lower volumes, higher biotech industry costs, and the departure of big pharmaceutical companies from the field thwart development of new antibiotics.

Antibiotics have been a mainstay of western medicine for the better part of a century. And for a long time they were good business; although margins were low, volumes were sky-high. Today new molecules are harder to find, so development is much more costly. When new antibiotics are brought to market, they are used sparingly, due to awareness of overuse leading to bacterial resistance. This practice is driving volumes down.

The biotech industry climate is such that the number of big pharmaceutical companies still doing clinical research into antibiotics has dwindled to three: GlaxoSmithKline, Pfizer and Merck. Small biotech firms have tried to fill the void in the past 10 years, as fears of drug-resistant bacteria spurred early-stage financing from governments and charities. Profiting from antibiotics has proved difficult, however.

One problem is that few cases are considered suitable for novel antibiotics. American biotech firm Achaogen, for example, developed a novel antibiotic called plazomicin to treat carbapenem-resistant Enterobacteriaceae (CRE) infections. These occur infrequently, but can be deadly. The common strategy is to get new antibiotics approved for everyday ailments, while also publishing results from drug trials showing good outcomes for CRE patients. Doctors would then prescribe the new drugs off-label for CRE. A study showed that plazomicin was safer and more effective for CRE than colistin, an old, highly toxic antibiotic. Yet colistin remains in use, and plazomicin sales were anaemic. Achaogen filed for bankruptcy in April.

Wide adoption of new and novel antibiotics may be hindered by a simple lack of awareness, according to the Economist. The biotech firms selling them generally do not have the marketing budgets that big pharmaceutical companies pour into new drugs, and it takes time for new drugs to make it into clinical guidelines. Further, American hospitals tend to avoid new antibiotics because of the expense, which typically falls to them – none of which sits well with impatient biotech investors.

Bibhash Mukhopadhyay of venture capital firm New Enterprise Associates says that antibiotics that initially disappoint can become profitable eventually. This happens when doctors are trying to treat a patient infected with a type of bacteria that has not yet been pinpointed by testing. They will turn to newer antibiotics after their old standbys fail. The trouble is, many investors are unwilling to wait for such an opportunity to present itself.

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