Antibiotic resistance is growing — don't delay new antibiotics

Less than 18 months ago, Iterum Therapeutics obtained FDA approval for Orlynvah, a novel antibiotic to treat urinary tract infections. For most small biotechnology companies, regulatory approval is a celebratory milestone that typically boosts share prices and makes the company more attractive as an acquisition target. But for antibiotic developers, it often marks the beginning of the end. In the months that followed, Iterum’s stock price bottomed out while the company struggled to finance the commercialization of its lone product. Its struggles culminated last month when it announced plans to wind down operations. This outcome is alarming but not surprising. The world urgently needs new antibiotics, yet the market routinely punishes companies that take on the long, risky and expensive work of developing them. Iterum is just the latest name on a growing list of antibiotic developers that have collapsed over the past decade, often shortly after achieving regulatory success. Antibiotics are among the most important classes of medicines ever developed. They cure infections and make modern medicine possible, enabling everything from chemotherapy and organ transplants to joint replacements and cesarean sections. But the drugs we rely on are steadily losing their effectiveness as bacteria evolve resistance to them. To slow this process, clinicians and hospitals are encouraged to use new antibiotics sparingly. This approach — known as antibiotic stewardship — is essential to protecting public health and preserving the effectiveness of these drugs for patients who truly need them. But stewardship comes with severe economic consequences. By design, it artificially suppresses sales. That makes it extraordinarily difficult for companies to recoup development costs, generate sustainable returns, and attract private investment. In announcing its decision to wind down, Iterum cited the high costs of commercialization and lackluster sales of Orlynvah, a formidable set of obstacles in a market where responsible use keeps revenues low and fixed costs remain high. Policymakers are aware of what is at stake, but progress has been slow. Antibiotic-resistant infections contribute to nearly 5 million deaths worldwide each year. In the United States alone, drug-resistant bacteria cause approximately 3 million infections annually and kill an estimated 35,000 people. And the financial toll is staggering — a handful of drug-resistant bacteria generate more than $4.6 billion in annual healthcare costs for the U.S. system, according to the U.S. Centers for Disease Control and Prevention. Despite the rise of antibiotic resistance, investment into the field continues to shrink, as does the number of urgently needed treatments in development. The World Health Organization recently warned that the pipeline of antibiotics faces a dual crisis: it is too thin, and it is lacking the type of innovative science required to meet the threat at hand. Replenishing the pipeline and catalyzing innovation requires significant capital, but investors are understandably disinterested in a field of medicine in which even successful companies go bankrupt. Other countries have begun responding by rethinking how antibiotics are valued and paid for. The United Kingdom has implemented a subscription model that pays companies an annual fee for access to critical antibiotics, regardless of how much the drugs are used. The European Union has agreed to a system that rewards developers of urgently needed antibiotics with a voucher extending data exclusivity — an asset that can be sold to other drugmakers. The United States, however, has yet to adopt a comparable solution. Earlier this year, a bipartisan coalition led by Reps. Buddy Carter (R-Ga.) and Scott Peters (D-Calif.) introduced the Pasteur Act, which would create a market-based incentive by awarding fixed fee contracts to developers of critically important antibiotics. The legislation aims to stimulate private investment while preserving stewardship, and it has support among doctors’ groups like the Infectious Disease Society of America and industry groups like the Biotechnology Innovation Organization. Iterum’s collapse reflects a system-level failure in which the delivery of high-quality healthcare relies on new antibiotics but their development is economically untenable. If lawmakers do not remedy this disconnect by enacting market‑based solutions, investment in these lifesaving medicines will continue to dwindle, and more antibiotic developers will head toward bankruptcy— even when they succeed in the lab. In those cases, it is patients who ultimately pay the price. Henry Skinner, Ph.D., is CEO of the AMR Action Fund, a mission-driven investment fund established to help address the global crisis of antibiotic resistance.