Spero Therapeutics, headquartered in Cambridge’s Central Square neighborhood, recently announced that two government agencies would give the company up to $54.2 million to continue developing a new antibiotic for complicated urinary tract infections. The news came just days after Novartis revealed it would shut down its antibiotics unit and license out its drug candidates, including one for a complicated urinary tract infection.
Paratek, which has offices in Boston and Philadelphia, is working on new antibiotics that are similar to tetracycline. An antibody-drug conjugate against Pseudomonas from Waltham-based Visterra, which Otsuka bought for $430 million, is in the preclinical stage. Entasis Therapeutics, which also has its headquarters in Waltham, is working on antibiotics for several different infections, including gonorrhea.
These four companies are bucking a trend set by bigger players backing away from antibiotic development. Some bacteria have wised up to our old antibiotics’ tricks, but finding truly new ways to outsmart bacteria has been difficult for the last 40 years. And in a market not known for blockbusters, the financial challenges are just as daunting.
The reasons that biotech took off in Boston are the same ones behind the proliferation of antibiotics-focused companies there. The region’s biotech reputation means lots of a new antibiotics-oriented company’s potential employees already live there, for example.
“When we spun out from AstraZeneca, we were 15 employees,” said Manos Perros, Entasis’ CEO. “We have grown significantly, and the majority of the new talent has been from the area.”
There’s also lots of funding, from venture capital and from organizations like CARB-X, based at Boston University. “Something out of Boston is likely to make it through to be one of the first gram-negative antibiotic new classes in a generation,” CARB-X executive director Kevin Outterson said about drugs to treat bacteria generally more resistant to antibiotics.
Outterson may be a little biased; several of the 34 companies it has funded are based around Boston, including Entasis and Visterra. So is Spero, which received nearly $2 million from the partnership between April 2017 and April 2018. (That funding was for a different drug candidate than the one that the Biomedical Advanced Research and Development Authority and the Defense Threat Reduction Agency agreed to fund this month.)
BARDA and DTRA are funding Spero’s first carbapenem-class antibiotic for adults that can be taken as a pill, rather than delivered through an IV. Phase 1 results from a clinical trial in Australia recently showed “positive interim results,” according to a company press release. If all goes according to plan, a Phase 3 trial to show that the antibiotic works as well as an IV drug could begin later this year. The plan involves the Food and Drug Administration allowing Phase 2 data from trials done in Japan to be considered.
BARDA isn’t the only source of Spero’s funding. The company has also raised more than $74 million from its IPO in November 2017 and $97 million from venture capital firms. It announced another offering worth $75 million this month.
The company has never been profitable — and doesn’t expect to be for some time. The company’s most recent quarterly report, filed with the Securities and Exchange Commission on May 10, stated that the company anticipated that it had enough money to fund operations for at least another year but not enough to complete a Phase 3 trial for SPR994.
The BARDA agreement changed that. Spero CEO Ankit Mahadevia said the company may have enough funding to get it through the pivotal clinical trial.
Antibiotic development is fraught with challenges. Outterson admitted that “a lot” of ongoing preclinical projects will fail — and those that do succeed face a significant funding hurdle. “Spero is doing well, and a number of other companies are doing well at that game, but there are a lot of other companies out there that are hurting. If this was oncology, people would be throwing cash at these companies based on their clinical results.”
But unlike oncology, a new antibiotic isn’t guaranteed a market. A very strong market for a brand-new antibiotic might even be a worrying sign: A high demand could mean lots of people have infections that are resistant to all of our current treatments. “Because of stewardship, we’re going to take the newest, most innovative antibiotics, put it on a shelf, put them behind glass, and say break glass in case of emergency,” Outterson said.
“We can do all sorts of things with BARDA and CARB-X and whatnot to move them along, but unless the companies have a valuable market after FDA approval, it kind of kills the game.”
Kate Sheridan can be reached at kate.sheridan@statnews.com.