The World Needs New Antibiotics, but the Business Model Is Broken

The World Needs New Antibiotics, but the Business Model Is Broken
The World Needs New Antibiotics, but the Business Model Is Broken


New drugs to defeat “superbug” bacteria aren’t reaching patients.

The push for antibiotics to fight fast-evolving superbugs is snagging on a broken business model.

Six startups have won Food and Drug Administration approval for new antibiotics since 2017. All have filed for bankruptcy, been acquired or are shutting down. About 80% of the 300 scientists who worked at the companies have abandoned antibiotic development, according to Kevin Outterson, executive director of CARB-X, a government-funded group promoting research in the field.

“These companies are supposed to be the winners, but every one of them is an unhappy story," Outterson said.

The reason, the companies say: They couldn’t sell their lifesaving products because the system that produces drugs for cancer and Alzheimer’s disease—which counts on companies selling enough of a new treatment or charging a high enough price to reward investors and make a profit—isn’t working for antibiotics.

New antibiotics are meant to be used rarely and briefly to defeat the most pernicious infections so bacteria don’t develop resistance to them too quickly. Companies have priced them at 100 times as much as the generic antibiotics doctors have prescribed for decades that cost a few dollars per dose. Most have sold poorly.

“Antibiotics are like fire extinguishers. You really want these drugs available but you mostly don’t want to use them. That’s the paradox," said Dr. John H. Rex, an infectious-disease specialist.

Nabriva Therapeutics terminated its 60 remaining employees this year and is seeking a buyer, four years after the FDA approved its antibiotic Xenleta for pneumonia. Nabriva priced a five-day treatment of Xenleta at over $1,000. Generic antibiotics to treat people who develop pneumonia outside of hospitals typically cost under $100. Fewer than 100 of the 800 hospitals Nabriva approached bought it.

“It was all driven by cost," Nabriva’s former Chief Executive Officer Ted Schroeder said.

New antibiotics should get support similar to treatments for rare diseases, said Ryan Cirz, a co-founder of Achaogen, which filed for bankruptcy in 2019 less than a year after the FDA approved its drug Zemdri for complicated urinary tract infections.

The Orphan Drug Act of 1983 provides subsidies, tax breaks and additional years of market exclusivity to drugmakers that develop treatments for diseases affecting fewer than 200,000 people in the U.S. The legislation has supported work toward a gene therapy for Duchenne muscular dystrophy and treatment for amyotrophic lateral sclerosis. Drugs for rare diseases often cost more than $100,000 a year. Sarepta Therapeutics charges $3.2 million for the one-time muscular dystrophy treatment, Elevidys.

“People accept it. It’s all psychological," said Cirz, who now runs another antibiotic startup, Revagenix. “We’ve just gotten used to really cheap antibiotics for a really long time."

About 13,000 people in the U.S. each year develop a severe type of drug-resistant infection that Achaogen’s drug Zemdri was developed to defeat. Up to half of people hospitalized with such infections die. They are among the more than 35,000 people in the U.S. who die annually from drug-resistant bacterial or fungal infections, a toll that has risen in recent years.

The year Zemdri was approved, Achaogen spent almost $200 million on manufacturing, marketing and other costs and generated $800,000 in sales of the drug. Achaogen’s stock price fell more than 96% from approval in June 2018 to the end of the first quarter in 2019.

The U.K. in 2019 started a subscription-style model to pay drugmakers for new antibiotics based on their potential public-health value. U.S. lawmakers have considered similar legislation. Bipartisan bills reintroduced in the House and Senate in April committed $6 billion to purchase new antibiotics to treat drug-resistant infections. They haven’t received a vote.

“It sounds like the intent is to save companies but we’re really talking about trying to fix the antibiotic pipeline itself," said Dr. David Hyun, director of the Antibiotic Resistance Project at Pew Charitable Trusts.

Most large pharmaceutical companies aren’t developing antibiotics. Several have closed or divested antibiotic development programs. “There’s no profitability," Hyun said.

Entasis Therapeutics, an antibiotic developer spun out of AstraZeneca, was acquired by holding company Innoviva in 2022. Most of the scientists who worked at Entasis are no longer in antibiotic development.

“The loss of this institutional knowledge and experience is the biggest loss for the field," said Alita Miller, former head of biology for Entasis. “You can’t just start over with people out of graduate school."

After the FDA approved Paratek Pharmaceuticals’s antibiotic Nuzyra, the startup spent $130 million and made $11.5 million in sales in 2019. Paratek was sold this month to investment company Novo Holdings and private-equity firm Gurnet Point Capital.

“Ten years ago, I don’t think the market was fully aware of these challenges but the reality has hit home," said Adam Woodrow, Paratek’s chief commercial officer.

Write to Dominique Mosbergen at

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