Long-term investment in R&D, financing for innovative SMEs, flexible regulatory pathways – the pandemic shows what is possible

Picture the scene: an unprecedented public health crisis pushes health systems to the brink of collapse. Economies grind to a halt as the public retreats indoors, fearing infection. Cancer patients struggle with the impossible dilemma of risking their lives by foregoing surgery or taking their chances in hospital operating theatres.

This is not the pandemic that experts warned of for years, it is the looming antimicrobial resistance (AMR) crisis that lies ahead unless action is taken. Greater public awareness, strong stewardship practices, and supports for the development of new anti-infectives are vital. Innovative small and medium-sized enterprises (SMEs), which play a central role in developing new medicines, wonder whether the COVID-19 pandemic could spark fresh thinking about AMR.

Take AiCuris, for example. As a small-sized spin-out company based in Germany, the pandemic posed plenty of new problems but also highlighted how Europe could lead the fight against AMR. On a practical level, clinical studies were disrupted, and lab equipment became scarce and more expensive, but the company coped and contributed to handling the outbreak.  

Like many SMEs, their agility served them well as they swiftly switched to teleworking and freed up lab space and staff to support coronavirus testing. As a company specialising in anti-infectives, AiCuris has also been exploring whether any of the candidate antivirals in their portfolio might help to treat COVID-19 patients.

Long-term thinking

Looking a little further down the road – as biopharma SMEs must – companies working on solutions to the AMR challenge are watching the global response to coronavirus and wondering where it marks a turning point. Some of the financing challenges facing smaller and mid-cap companies have been addressed through temporary measures and new funding mechanisms. Could this firepower be turned on AMR?

Dr Katharina Nothelfer, Grants Manager at AiCuris, says that while Europe has been supportive of early-stage companies, many biopharma firms leave Europe when they need to scale up clinical trials. ‘The timelines and costs involved in bringing a product to market mean large investments are required,’ she says. ‘In Europe, the appetite for risk has not always been there when it is needed. That is why many biopharma SMEs, often very innovative and high-risk companies, look to the US and, increasingly, to China if they reach this phase of development.’

Despite this ongoing loss of innovation potential, Europe has not always made life easy for high-risk/high potential SMEs. Access to some of the available tools – such as the European Investment Bank (EIB) and European Innovation Council (EIC) – is limited by how SMEs are defined or by unappealing interest rates.

In the face of the COVID-19 pandemic, some of these barriers have faded. The European Commission has unveiled the €9.4 billion EU4Health Programme and temporary changes to state aid rules; the EIB has radically expanded its support for SMEs; the EIC is offering new supports for high-risk SMEs with the potential to scale up internationally.

Globally, there have been encouraging signs that public funds can be used to address major public health threats. The Coalition for Epidemic Preparedness Innovations (CEPI) has harnessed billions to support coronavirus vaccine development. Relatively smaller companies, such as CureVac and Moderna, working on innovative technology platforms have benefited significantly.

Just as CEPI has played a key role in financing vaccine development, CARB-X is the go-to public funding instrument for early clinical studies in AMR. EU Member States have already contributed to CARB-X, reflecting its position as an independent global actor focused on global affordability and access.

Prevention is better than cure

AMR’s situation is quite unique. Whereas any new vaccine against SARS-CoV-2 will be in demand, the quest for new anti-infectives presents a paradox for investors: the world desperately needs new medicines but hopes not to use them. Novel antibiotics would be held in reserve as a new last line of defence for the day when resistance to existing antibiotics is ubiquitous. Public support and innovative funding programmes are the only way forward.

‘Market incentives are needed to attract investment,’ explains Dr Nothelfer. ‘Government intervention, and more active support from the EIB, can reduce the risk for private investors to deal with the specific challenges of AMR.’

Policymakers should further explore global initiatives, such as a high value ‘prize’ for bringing a new antibiotic to market. ‘A mix of incentives would be best. For example, a guaranteed market entry reward for any new antibiotic, along with tax incentives or guarantees, that help to spread the risk.’

Most of the companies actively searching for new anti-infectives have fewer than 50 employees. Largely driven by the pursuit of answers to scientific questions rather than maximising commercial return, the world may depend on smaller companies to prevent the next great public health crisis.

In an era of great uncertainty, one thing is for sure: prevention is better, faster, and cheaper, than cure.