Antibiotic R&D Gains Traction: A Mid-Cap Company Leads The Way

By Cathy Yarbrough, Contributing Editor

The industry leader in developing antibiotics against “superbugs” and other multidrug-resistant bacteria is not a Big Pharma corporation, but Cubist Pharmaceuticals, headquartered in Lexington, MA.

Because antibiotic therapy is short-term, a company’s potential return on investment can be much higher for a chronic disease drug. However, as major pharmaceutical companies began eliminating antibiotics from their core therapeutic areas, bacteria were becoming tougher to treat with existing agents. “The world now faces a perfect storm of a declining antibiotic pipeline and a rising threat of antibiotic resistance,” said Steven Gilman, Ph.D., executive VP of R&D and CSO of Cubist.

Among the most threatening microbes are Clostridium difficile (C. difficile) and methicillin-resistant Staphylococcus aureus (MRSA), both of which are targeted by FDA-approved Cubist drugs. In addition to marketing the antibiotic Dificid for the treatment of C. difficile infection, Cubist has developed a new compound, surotomycin, against this superbug, which the CDC has labeled as the most threatening of the multidrug-resistant microbes. Surotomycin is under evaluation in Phase 3 clinical trials.

Worldwide about 2 million patients infected with the MRSA superbug have been treated with Cubist’s flagship product, Cubicin, since its FDA approval over 10 years ago. Cubicin generated $1 billion in worldwide sales in 2013. “Thanks primarily to Cubicin, Cubist’s market cap has grown from approximately $1.5 billion in 2008 to approximately $5.5 billion today,” said Gilman.

In Cubist’s pipeline are five compounds, two of which are late-stage antibiotic candidates. They are tedizolid, which tackles serious Gram-positive infections including those caused by MRSA, and ceftolozane/ tazobactam, which is designed to treat certain Gram-negative infections, such as those involved in complicated intra-abdominal and complicated urinary tract infections.

Tedizolid was developed by Trius Therapeutics, which was acquired by Cubist in 2013. Later that year, Cubist submitted an NDA (new drug application) for tedizolid to the FDA and expects a response from the agency in late June 2014.

Also in 2013, the company acquired Optimer Pharmaceuticals and its FDAapproved drug Dificid. When it was approved by FDA in 2011, Dificid was the first new drug in 25 years to treat diarrhea caused by C. difficile.

Singular Focus Promotes Acquisitions
“Unlike many companies that overdiversify, we have a singular focus, and it’s a big factor in why we’re considered the acquirer of choice for biotechs in the antibiotic space,” said Gilman. “Antibiotic development is so different from drug development in, for example, chronic disease areas such as oncology,” he added. “In antibiotics, deep knowledge is required to be able to judge what will be successful. As a result, we understand not only the risk, but, importantly, the equity, the financial value of the company or asset to investors."

In addition to the company’s in-depth knowledge of antibiotic development, Cubist’s track record of success in navigating complex regulatory landscapes and in commercializing drugs has contributed to its reputation as acquirer of choice. “With Cubicin, we have developed a commercial strategy that supports clinical benefits as well as economic benefits for the healthcare system,” Gilman said.

Like other drug developers, Cubist must demonstrate to global payers and providers that a particular new therapy provides clear clinical and economic differentiation. “Because of rising healthcare costs, pricing pressures, health technology assessments, and healthcare reform, regulatory approval no longer is the ‘end game’ for a new antibacterial therapy,” said Gilman. “Our clinical programs now include multiple health economics and outcomes parameters, such as length of stay in hospitals or readmission rates, to be able to assess overall value, not just clinical efficacy,” he said.

A Need For More R&D Spending
This year, Cubist will spend about $400 million on antibiotic R&D, “which is believed to be more than any other company in the world,” said Gilman. However, Cubist’s investment in antibiotic research is not sufficient. Industrywide investment in innovation as well as appropriate use of antibiotics in certain patient populations is required to stay ahead of the inevitable development of bacterial resistance to antibiotics. “Bacteria simply have too many mechanisms they can use to create new ways of becoming resistant,” he said.

Gilman also pointed out, “Policy makers and members of the infectious diseases community need to face the reality of rebuilding the global antibiotics pipeline head-on and ask: ‘How do we attract the kind of long-term capital that will draw small and medium-sized companies into the space?’ We think additional incentives that target pricing and reimbursement would likely work.”

Public Policy Efforts Create Incentives
Cubist engages policy leaders at all levels in the U.S. and Europe about the global antibiotic pipeline. Along with the Infectious Diseases Society of America (IDSA) and other groups, the company has called for regulatory reform to create the incentives that will persuade companies to continue their development of antibiotics against multidrug-resistant bacterial infections and, if they are not invested in antibiotics, to add it to their list of target therapeutic areas.

The public policy efforts of Cubist, IDSA, and other groups have resulted in bipartisan legislation to make antibiotic development more attractive. The legislation, the Generating Antibiotic Incentives Now (GAIN) Act, which was signed into law by President Obama in 2012, may be one reason that two pharmaceutical giants, Roche Holding AG and GlaxoSmithKline, recently initiated R&D programs focused on antibiotics.

The GAIN Act provides incentives such as priority review of NDAs, and for certain new antibiotics that are approved by the FDA, the act extends the period of market exclusivity by five years. Under the GAIN Act, specific proposed indications for tedizolid qualify for the incentives.

Additional legislation to encourage investment in antibiotic R&D also may be enacted. In December 2013, a bipartisan group of representatives introduced a bill that would build on GAIN by creating an accelerated approval pathway for antibiotics designed to treat specific patient populations. If approved by Congress and signed into law by President Obama, the Antibiotic Development to Advance Patient Treatment (ADAPT) Act would require the FDA to approve antibiotics and drugs against fungal infections for these populations based on, for example, clinical trials with fewer patients than required in conventional clinical studies.

Steven Gilman Ph.D. Executive VP of R&D and CSO of Cubist

Will Cubist’s success combined with legislative initiatives such as GAIN inspire more companies to add antibiotics against multidrug-resistant infections to their core therapeutic disease areas? As Gilman pointed out, industrywide investment in antibiotic R&D is required to stay ahead of emerging superbugs and prevent what many public health authorities fear could be a return to an era when infectious diseases will overwhelm cardiovascular diseases as our number-one killer.