[Ip-health] Stat+ (Pharmalot) - WHO advisor says an antimicrobial fund can help a market that 'need to be fixed'
thiru at keionline.org
Tue Feb 11 23:31:32 PST 2020
WHO adviser says an antimicrobial fund can help a market that ‘needs to be
By ED SILVERMAN @Pharmalot
FEBRUARY 11, 2020
Over the past month, the World Health Organization and the Access to
Medicines Foundation issued reports bemoaning an overall lack of private
investment and innovation in antibiotic development, especially novel
antimicrobials needed to overcome pathogens that are resistant to existing
treatments. Toward that end, the WHO has been working for the past few
months with the European Investment Bank to create an investment fund with
up to $1 billion to finance antimicrobials that have new mechanisms of
action. The effort is still getting organized and may not debut for several
months, but WHO and EIB officials are hopeful it will yield at least 10
useful medications. We spoke with Peter Beyer, a senior advisor in the WHO
antimicrobial resistance division, about the progress. This is an edited
version of our conversation.
Pharmalot: Where did the impetus for this fund come from?
Beyer: Unfortunately, there’s not enough investment in antimicrobials and
the market needs to be fixed. Look at Melinta Therapeutics, which went
bankrupt recently, and this was not the first. We’re not going to solve the
fundamental problem at the moment, which is that companies go to market
(with an antibiotic) but aren’t generating enough revenue to survive.
So the fear right now is that unless something happens relatively fast,
we’ll lose more small companies. But the question became what can we do in
the short term to save small companies that are carrying the pipeline? And
what can we do, as partners, to change things? The biggest gap we see is in
helping Phase 2 and Phase 3 development. We can identify what is needed,
but we can’t change the market by ourselves. So we started to work with the
EIB, which has experience organizing the EU Malaria Fund, and Lions Head
Global Partners to build a financial model.
Pharmalot: Why pursue a fund, though?
Beyer: It’s buying us needed time. And a larger scale should be helpful
because this sort of initiative is not going to have a very dramatic impact
if we go country by country. Convincing governments to change their system
— like the U.K., which is running a pilot to pay for antimicrobial
development — will take a year or more. And then it must be evaluated and
maybe market expectations will be better in three years, but nothing will
have changed in other big European markets. And I don’t think a big market
entry reward is going to be created, at least not a global one in the next
one or two years.
Pharmalot: So what’s the focus?
Beyer: We looked at numbers to see costs for each clinical phase, the
attrition rates, and expectations about earnings in the market. And we’ve
discussed this with a lot of different experts, including companies and
CarbX (a public-private partnership created four years ago to help smaller
companies get antibiotics into clinical trials). A key question is how
risky is it? That’s what the bankers and investors want to know.
Pharmalot: Well, will the fund be open only to smaller, riskier companies?
Because you singled them out as the most troubled.
Beyer: No, it’s not limited to small companies, but it will bring in new
money in R&D that can help small companies. And the backing will help
companies to finance penetration of the market. But a GlaxoSmithKline
(GSK), for instance, would be perfectly eligible under such a fund,
although they would have money of their own to invest in a project.
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Pharmalot: And how will the fund be organized?
Beyer: What the WHO would do, our role, would be help to them actually
decide in which projects to invest that can make a difference in public
health. We would tell the fund where to invest. We would not have a role in
managing the fund. We’re not financial people. In the malaria fund, we’ve
had a similar role. We can rate each antibiotic in development according to
whether it’s innovative, for instance.
Pharmalot: Where is the money supposed to come from?
Beyer: Basically, the EIB will administer a credit line, or loans. They’ve
already set up a malaria fund and the idea is to do something similar, but
it would be dedicated to financing companies, small or big, that develop
new antibiotics. The loans would be made for investment in Phase 3 or Phase
3 products. And the loan would have to be paid back. But we know, of
course, that a majority will not be successful. So it’s a relatively risky
There are still discussions on a technical level and discussions on a
political level. But we would need investors to go into this. The bank is
speaking with possible investors, including public investors and
semi-public investors. But the minimum target we’re talking about is $500
million in order to have a diverse portfolio. Below that, you can’t spread
the risk to enough projects.
Note: A source familiar with the EIB, who asked not to be named, told us
that the governance structure is still being explored, but that the loans
would be akin to venture debt and that repayments could, for instance, take
the form of royalties based on sales. In order to recoup this kind of
investment, the EIB expects that a time horizon of 10 to 15 years may be
About the Author
Pharmalot Columnist, Senior Writer
Ed covers the pharmaceutical industry.
ed.silverman at statnews.com
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