Antibacterial hope lies in clever drugs for superbugs

Branded antibacterials had best beware: the antibacterial market is currently best described as saturated, highly segmented and increasingly flooded with generics. Furthermore, bacterial drug-resistance is threatening currently marketed drugs, although this represents an opportunity for the more audacious drug maker.

Branded drug makers are set for tougher times ahead as, as a consequence of a number of patent expiries and the resulting high genericization, only three branded products are forecast to feature among the top ten selling products by 2014, when the market is expected to exceed $31 billion in sales.

The first wave

The wave of patent expiries first hit GlaxoSmithKline's Augmentin (amoxicillin/clavulanic acid) in 2002, followed by Bayer's Cipro (ciprofloxacin) in 2003 and is now gaining momentum with the loss of patent protection of three blockbuster drugs in 2005: Pfizer's Zithromax (azithromycin), Roche's Rocephin (ceftriaxone) and Abbott's Biaxin (clarithromycin). In light of these events, a further increase in the use of generic antibacterials is likely, as most physicians tend to favor the use of cheaper drugs.

Indeed the past decade has witnessed an increase in the proportion of generic use in the antibacterial market, even in countries such as Italy and Spain, which are traditionally characterized by a generic-averse culture. In the US, generics accounted for 75% of all antibacterial usage by volume and 24% of sales in 2004.

Cannibalization of brand sales

GSK's former community blockbuster Augmentin is a classical example of the impact of generic incursion following patent expiry. Since the first amoxicillin/clavulanic acid generics entered the US market in 2002, Augmentin's US sales plummeted from a peak of $1.6 billion in 2001 to only $107 million in 2004, representing 93% sales erosion in only three years.

In anticipation of Augmentin's patent expiry, GSK launched two follow-up products; Augmentin ES-600 and Augmentin XR. However, although these two products partially offset the loss in Augmentin revenues, dampening the drop in sales from 93% to 68% by generating combined sales worth $505 million in 2004, GSK still registered a significant loss in antibacterial revenues.

Most products facing patent expiry treat respiratory infections, which represent approximately 80% of all community-acquired and treated infections. The consequences are increasing genericization and, consequently, a drastic loss of value, which, in turn, raises the entry barrier for new products.

For example, despite high hopes, Sanofi-Aventis' Ketek has so far failed to meet analysts' expectations. Despite its favorable clinical profile, the drug has so far only been successful in France. In fact, French Ketek sales account for 30.4% of total Ketek sales despite France representing only 6.2% of the global antibacterial market. The key underlying reason is that Ketek is regarded as a drug that offers little additional benefit over older, well-established drugs.

Although Datamonitor expects its compound annual growth rate (CAGR) between 2004 and 2014 to drop to 2.3%, down from 4.4% in the period 2000-2004, the antibacterial market still offers a few select areas of opportunity. The most notable of these is in the hospital market, where the trend is increasingly becoming 'low volume, high value'. With volume use having decreased at a rate of -2.2% in the period 2000-2004, growth in the antibacterial market has been driven solely by price increases. This, in turn, is a consequence of the increasing incidence and treatment of nosocomial infections with drug-resistant bacterial strains, and recent changes in physician prescription habits.

Resistant infection treatments: the last money-spinner?

While bacterial drug-resistance threatens already marketed drugs by limiting their spectrum of activity, it also represents a key opportunity for the development of innovative drugs with novel mechanisms of action. Common resistant pathogens causing severe nosocomial infections include Gram-positive pathogens such as the 'superbug' multidrug-resistant Staphylococcus aureus (MRSA), but also increasingly Gram-negative pathogens, for example fluoroquinolone-resistant Pseudomonas aeruginosa (FQRP).

Thus, most past and current R&D activity has focused on resistant infections. Indeed, recent drug launches including King Pharmaceuticals' Synercid (quinupristin/dalfopristin) in 1999, Pfizer's Zyxox (linezolid) in 2000 and Cubist's Cubicin (daptomycin) in 2003, are indicated primarily for the management of resistant pathogens. Similarly, most late-stage developmental drugs expected to be launched within the next few years, such as Wyeth's Tygacil (tigecycline), the glycopeptide dalbavancin (Vicuron/Pfizer) and the cephalosporin ceftobiprole (Basilea/Johnson & Johnson), are being developed mainly for the treatment of severe infections caused by MRSA.

However, while potentially lucrative, the focus on niche indications bears its own risk as drugs compete for a small market, meaning key differentiators demonstrating superiority of one drug over others are essential for a drug to be preferred over its competitors. In addition, premium pricing can only be justified if a product can demonstrate a real benefit over already available and usually lower-priced drugs. The importance of key drug attributes is illustrated by the contrasting performance of Pfizer's Zyvox versus Monarch Pharmaceuticals' Synercid, both of which are indicated for the treatment of resistant infections. While Zyvox experienced a CAGR of 85.3% between 2000 and 2004, Synercid fell by 11.1% in the same period.

Key drivers of Zyvox's rapid uptake have been its high clinical efficacy and importantly, the availability of IV/oral switch, the latter allowing for early discharge from the hospital thus reducing the overall cost of therapy. Based on its historical performance Datamonitor expects Zyvox to achieve blockbuster status by 2010.

De-escalation drives broad-spectrum agent uptake

The success of novel yet expensive drugs targeting niche indications would not have been possible had there not been a trend towards the use of powerful, preferentially broad-spectrum agents to treat severe infections. Rather than initiating therapy with milder agents, the favored approach now tends to be de-escalation, i.e. the use of a strong agent for first-line treatment and a milder agent thereafter.

"When I was training, they told you to start with the cheap and simple regimens and to escalate your treatment if you weren't getting a response. We now know that the best way to manage moderate to severe strep [throat] is to hit it hard early and then to de-escalate off the results of the microbiology," commented a UK opinion leader

In light of these findings, the antibacterial market clearly still offers attractive opportunities for audacious drug developers. However they must put innovation, efficacy and the satisfaction of pertinent clinical and increasingly social needs at the top of their agenda. The development of 'me-toos' is best left to generics manufacturers.

Related research:

- Commercial Insight: Antibacterials - Regulations, Resistance & Generics priced $15,200
- Commercial Insight: Antibacterials - Pharma Strikes Antibac priced $15,200
- Benchmarking Best Practice at Patent Expiry in the US - Maximizing Return on Investment of Late-Stage Lifecycle Management priced $7,600

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