Investing In Big Pharma May Be Key To Find Antibacterial-Resistance Treatments

On Jan 20, 2023

By tapping into Big Pharma, you may have a safety net for investing in antibiotic-resistance treatments that could stem a coming pandemic.

Each year 2.8 million Americans contract an infection that is resistant to antibiotics, according to the Centers for Disease Control (CDC). Of those, 35,000 die.

Worldwide, 700,000 people die from such infections annually, reports the World Health Organization (WHO). In addition, antibacterial-resistant infection deaths could reach 10 million a year by 2050, according to a United Nations-sanctioned study.

Life-Saving Breakthrough

Prior to the discovery of penicillin in 1928, the average life span was 47 years, according to the National Library of Medicine. However, by the middle of the 20th century, antibiotics were in wide use. Consequently, infectious diseases were no longer the leading cause of death in the United States and the average life expectancy rose to 78.8 years.

Revenge of the Bacteria

To combat antibiotics, bacteria began to evolve. Microbes developed resistance to antibiotics that had previously neutralized them.

Antibiotics kill bacteria by adhering to the germ’s cell wall and then penetrating it. However, bacteria have adapted to prevent antibiotics from doing their job.

“Bacteria can also achieve resistance by producing proteins that inactivate or modify the antibiotic, so it no longer binds to the bacteria. Or the target protein is mutated so the antibiotic can no longer bind to it,” Biochemist Gerry Wright recently told Propakistani.

Covid Set-back

Antibacterial resistance has been on the rise for decades. However, the focus required to combat Covid-19 took attention away from developing antibacterial resistance treatments, according to a CDC special report.

“The COVID-19 pandemic has unmistakably shown us that antimicrobial resistance will not stop if we let down our guard; there is no time to waste,” said Michael Craig, MPP, Director of CDC’s Antibiotic Resistance Coordination & Strategy Unit. “The best way to avert a pandemic caused by an antimicrobial-resistant pathogen is to identify gaps and invest in prevention to keep our nation safe.”

Since 2010 the FDA has only approved 17 new antibiotics.

Investing In Antibiotic-Resistance Treatments

With so many alarm bells being sounded by the medical community, you might expect a lot of investment opportunities. You would be wrong. That is because many large investors do not see a profit in antibiotic resistance treatments.

The net present value (NPV) of an antibiotic is minus $50 million, according to a report by the London-based Office of Health Economics. By contrast, musculoskeletal drugs have an estimated NPV of over $1.15 billion.

Invest in Investors

Several biotech companies working on antibiotic resistance treatments have gone broke. As a result, the safest investment option might be to put your money in big drug companies investing in smaller antibiotic resistance businesses.

In 2020, some of the largest pharmaceutical companies joined to form the ARM Action Fund. With $1 billion to get started, the fund is investing in small and mid-cap privately held companies that are developing antibiotic-resistant treatments.

Some of the companies backing the ARM Action Fund include Lilly (LLY), Pfizer (PFE), Merck (MRK), and Novo Nordisk (NVO).

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