Market Dynamics and Financial Trajectory of Plazomicin Sulfate
Introduction
Plazomicin sulfate, marketed under the brand name Zemdri, is a next-generation aminoglycoside antibiotic developed by Achaogen for the treatment of complicated urinary tract infections (cUTIs), including pyelonephritis. Despite its clinical significance, the drug's market and financial trajectory have been marked by significant challenges.
Clinical Significance and Approval
Plazomicin sulfate was approved by the FDA on June 28, 2018, for use in adult patients with cUTIs and limited or no alternative treatment options. It is designed to evade clinically relevant aminoglycoside-modifying enzymes, making it effective against carbapenem-resistant (CRE) and extended-spectrum beta-lactamase (ESBL) producing Enterobacteriaceae[1][4].
Market Challenges
Despite its approval, plazomicin faced substantial market challenges. The approved indication was limited to cUTIs in patients with limited or no treatment options, which restricted its market potential. Efforts to generate data in highly resistant pathogens, such as those producing 16S rRNA methyltransferases, were halted due to futility after enrolling only 39 patients out of approximately 2,000 screened[2].
Financial Struggles of Achaogen
Achaogen, the biotech company behind plazomicin, raised close to $800 million in funding but ultimately faced financial demise. The company declared bankruptcy in 2019, just a few months after the FDA approval of plazomicin. The rights to plazomicin were subsequently sold at auction for $16 million to Cipla USA and Sihuan Pharmaceutical (China)[2][4].
Post-Approval Costs and Revenue
The costs of keeping a drug on the market are substantial. Estimates based on the Achaogen experience suggest that post-approval costs, including manufacturing, pharmacovigilance, pediatric development, and other commitments, can amount to approximately $350 million over the first 10 years after approval. However, the revenues generated by plazomicin were insufficient to cover these costs, given its limited market scope and the need to reserve it for small patient populations[2].
Financial Viability and SME Challenges
Small and Medium-sized Enterprises (SMEs) like Achaogen face significant financial challenges in bringing new antibiotics to market. The development and approval costs for antibiotics are high, often ranging between $500-600 million. SMEs lack the financial, scientific, and technical resources to survive the commercialization cash flow drought, highlighting the need for incentive payments and delinked reimbursement models to restore industry and financial investor confidence[2][3].
Global Availability
Plazomicin currently has limited availability in the US and India, with a global named patient access program in place. Despite the European Medicines Agency (EMA) offering to approve it, Cipla, the new owner, declined due to financial concerns[2].
Impact on Antibiotic Development
The failure of plazomicin to achieve commercial success has broader implications for the antibiotic development ecosystem. It underscores the need for innovative financial models, such as subscription payment models proposed by initiatives like the PASTEUR Act, to support the development and commercialization of new antibiotics[3].
Comparative Market Performance
In comparison to other therapeutic areas, antibiotics like plazomicin generate significantly lower revenues. While oncology drugs can achieve cumulative sales of over $1 billion in the first nine quarters after launch, antibiotics typically see much lower sales, often in the range of $40-60 million over the same period[3].
Expert Insights
The financial post-mortem of Achaogen and plazomicin highlights the critical need for structural changes in the antibiotic development and commercialization process. As noted by experts, "SMEs need incentive payments structured to enable them to survive the commercialisation cashflow drought," and there is a pressing need for "delinked reimbursement models" to support the development of new antibiotics[2].
Key Statistics
- Development Costs: $500-600 million for bringing a new antibiotic to market[2][3].
- Post-Approval Costs: Approximately $350 million over the first 10 years[2].
- Revenue: Cumulative sales of $40-60 million in the first nine quarters for top-ranking antibiotics, compared to over $1 billion for oncology drugs[3].
- Funding Raised: Achaogen raised close to $800 million but sold plazomicin rights for $16 million[2].
Conclusion
The market dynamics and financial trajectory of plazomicin sulfate are marked by significant challenges, from limited market scope and high development costs to post-approval financial burdens. The story of plazomicin serves as a cautionary tale for the broader antibiotic development ecosystem, emphasizing the need for innovative financial models and support mechanisms to ensure the viability of SMEs in this critical therapeutic area.
Key Takeaways
- Limited Market Scope: Plazomicin's approved indication is restricted to cUTIs with limited or no alternative treatment options.
- High Development and Post-Approval Costs: Costs range from $500-600 million for development and approximately $350 million for post-approval commitments.
- Financial Struggles: Achaogen's bankruptcy and the subsequent sale of plazomicin rights highlight the financial challenges faced by SMEs.
- Global Availability: Limited availability in the US and India, with a global named patient access program.
- Need for Innovative Financial Models: Delinked reimbursement models and incentive payments are necessary to support antibiotic development.
FAQs
Q: What is plazomicin sulfate used for?
A: Plazomicin sulfate is used to treat complicated urinary tract infections (cUTIs), including pyelonephritis, in adult patients with limited or no alternative treatment options[1][4].
Q: Why did Achaogen declare bankruptcy despite FDA approval of plazomicin?
A: Achaogen faced significant financial challenges due to the high development and post-approval costs of plazomicin, coupled with limited market scope and revenue[2][4].
Q: What are the post-approval costs associated with plazomicin?
A: The post-approval costs for plazomicin are estimated to be around $350 million over the first 10 years, including costs for manufacturing, pharmacovigilance, and pediatric development[2].
Q: How does the revenue of plazomicin compare to other therapeutic areas?
A: Plazomicin generates significantly lower revenues compared to oncology drugs, with cumulative sales in the range of $40-60 million in the first nine quarters after launch[3].
Q: What financial models are proposed to support antibiotic development?
A: Delinked reimbursement models and incentive payments are proposed to support SMEs in the antibiotic development ecosystem[2][3].
Sources
- DrugBank Online - Plazomicin sulfate.
- AMR Solutions - Plazomicin (Achaogen) financial post-mortem.
- ASPE - Antimicrobial drugs market returns analysis.
- Wikipedia - Plazomicin.
- AdisInsight - Plazomicin - Cipla.
