Merck Snaps Up Cubist: Will 2015 Be The Antibiotics Renaissance?
By Anna Rose Welch, Editorial & Community Director, Advancing RNA
2014 was a big year for acquisitions. We saw Actavis snap up Forest Labs and Allergan. Bayer beat out Reckitt-Benckiser for Merck’s consumer care business. And based on the endless media coverage, I’m sure no one in the industry could forget Pfizer’s relentless pursuit of AstraZeneca, along with the AbbVie/Shire success-turned-debacle following changes to tax regulations.
However, two other 2014 acquisitions suggest to me that Big Pharma might be planning to tackle an increasingly urgent unmet health need in 2015. In early October, Actavis once again made the news for its acquisition of Durata, the maker of the recently-FDA approved antibiotic for acute bacterial skin and skin structure infections (ABSSSI), Dalvance. Two short months later, an even bigger player, Merck, announced it too would be jumping further into the antibiotics ring by acquiring the biopharmaceutical firm Cubist for $9.5 billion.
Over the past year, there were 3 antibiotics approved by the FDA for acute bacterial skin and skin structure infections (ABSSSI): Durata’s Dalvance, The Medicines Company’s Orbactiv, and Cubist’s Sivextro. Even more recently, Cubist got its second nod from the FDA for Zerbaxa, a ceftolozane/tazobactam combination indicated for complicated intra-abdominal infections (cIAIs) and complicated urinary tract infections (cUTIs).
More work in the antibiotics space can’t come soon enough, given some of the recent figures making the news. Fortune reported a few weeks ago that antibiotic-resistant infections are poised to cost the global economy upwards of $100 trillion by 2050, especially if the market for antibiotic creation continues as slowly as it has to date. Indeed, the World Health Organization has even begun using the phrase “post-antibiotic era”— a phrase that could’ve been pulled from any of the recent movies depicting dystopic societies.
How have we as an industry ended up here? Low ROI from antibiotics is a pretty big factor for most players in the market. In July, Reuters put together an article highlighting some of the reasons the market has been slow ushering in new antibiotics. It’s not like Big Pharma has been completely absent from the space. GSK, Roche, Merck, and Johnson & Johnson have teams devoted to the antibiotics field. However, Reuters homed in particularly on the smaller firm Cubist, maker of Cubicin, which is expected to cross the billion dollar value threshold in 2015.
Throwing Merck into the equation with Cubist should only serve as wake up call for Big Pharma. Merck hinted in 2013 that it was planning on focusing more on acute hospital care treatments — a division that was garnering more revenue for the company in 2014, according to Bidness Etc. For fiscal year 2013, Merck saw its infectious disease treatments division rake in $5.2 billion in revenue. Now that Merck is snapping up Cubist, there’s been some chatter that 2015 could be the start of an “antibiotic renaissance.”
There have been discussions about how to light a fire under the industry to encourage the development of new resistance-fighting antibiotics. Reuters highlights several options, including prize-giving and extending patents for antibiotics. But even though the industry has become more serious about collaboration and open innovation, pharma still remains highly competitive. While the solutions proposed by Reuters are worth their own fair share of weight, I’m betting the splash created from a company as big as Merck leaping into the antibiotics space will be enough to lure some other brave big players out into the battlefield as well.