As a virus ravages the world, antibiotic makers are in disarray

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• Judy Woodruff:

  It turns out the coronavirus crisis has a menacing medical side effect that's receiving little attention thus far: the secondary bacterial infections that it causes.

  And that, in turn, raises acute economic issues that are causing a crisis in the antibiotics industry.

  Our economics correspondent, Paul Solman, has the story.

  It's part of our regular series, Making Sense.

• Paul Solman:

  How valuable was the company at its height?

• Larry Edwards:

  About $1.4 billion.

• Paul Solman:

  And today?

• Larry Edwards:

  A little over $8 million.

• Paul Solman:

  Highly touted biotech startup Tetraphase Pharmaceuticals in Watertown, Massachusetts. We first visited three years ago, reporting on the scary rise of deadly drug-resistant bacteria and fungi, so-called superbugs, which infect, according to the CDC, some three million Americans a year and kill tens of thousands of us.

  The good news, there were dozens of scientists in this lab alone working on several promising new antibiotics like Xerava, which, soon after our visit, won the gold medal for medications, FDA approval.

  Now, it may seem strange to focus on antibiotics during a viral pandemic, since antibiotics don't kills viruses.

• Woman:

  You're on the ventilator right now.

• Paul Solman:

  But many COVID-19 patients develop potentially fatal secondary bacterial infections.

  So, we returned to Tetraphase earlier this year, before masks and social distancing were mandated, to see how the antibiotics industry was progressing. The results were shocking.

  This lab is completely nonfunctioning. I notice even the dust here.

• Larry Edwards:

  Yes, we had to let all of our research go.

• Paul Solman:

  All of your research?

• Larry Edwards:

  All of our research is gone.

• Paul Solman:

  All the scientists laid off.

  Instead, CEO Larry Edwards had a skeleton staff trying to market and sell Xerava, and keep Tetraphase from going out of business, a fate that's now befallen two of the 12 companies that, over the last decade, also won FDA approval for new antibiotics.

  You were at one of those companies.

• Erin Duffy:

  I was in one of those companies, yes.

• Paul Solman:

  Erin Duffy was chief scientist at Melinta Therapeutics, translating the company's Nobel Prize-winning research…

• Narrator:

  Orbactiv prevents the cell from expanding and multiplying.

• Paul Solman:

  … into new superbug-slaying antibiotics.

• Erin Duffy:

  That company has now filed Chapter 11.

• Paul Solman:

  Was the drug that it was selling promising?

• Erin Duffy:

  We had four very promising antibiotics, all for serious infections in the hospital.

• Paul Solman:

  It simply amazed me. While antiviral research is booming, the antibiotics market is broken, at the worst possible time, says infectious disease specialist Helen Boucher.

• Helen Boucher:

  We know that, with the regular flu, influenza, our patients sometimes develop what we call secondary bacterial infections. And, in fact, when they get to us in the hospital, that's often the dire consequence, and that's how we lose patients.

• Paul Solman:

  The same is now proving true of the coronavirus pandemic.

  According to a recent paper, half of those who died from COVID-19 in China also had drug-resistant bacterial infections, and thus a further cause for concern, that, as more and more COVID patients become seriously ill, antibiotic resistance will inevitably accelerate.

• John Rex:

  Going on long enough, COVID-19 and hospital pneumonia will drive resistance.

• Paul Solman:

  Dr. John Rex is a retired pharma executive.

• John Rex:

  We're seeing people hospitalized on ventilators for extended periods of time. And that's a setting where you're going to use a lot of antibiotics.

• Paul Solman:

  You mean, because antibiotics are being used for the patients of COVID for a secondary infection or to prevent it, that means resistance building up more quickly?

• John Rex:

  Absolutely.

  Any given antibiotic, really, you could think of it as having a relatively finite lifetime. Resistance develops to everything.

• Helen Boucher:

  So, this need to have a robust and renewable pipeline of antibiotics has really never been greater.

• Paul Solman:

  Doctors like Boucher see the need all the time in their patients, like Larry Parente, heart transplant last August, followed two months later by a bacterial infection.

• Larry Parente:

  A case of klebsiella, which is one of the more highly drug-resistant organisms out there.

• Paul Solman:

  So drug-resistant, it's sometimes called a nightmare bacterium. He was treated for two weeks with intravenous ertapenem, one of the very few drugs, if not the only one, for his infection. A month later:

• Larry Parente:

  It had come back. So, what we thought was gone really was just sort of hiding. You know, if you're limited to one or two drugs, and they don't work, then what do you do? Where's your options?

• Paul Solman:

  Today, after six months of nearly continuous I.V. treatment, Parente now seems healthy, but he says:

• Larry Parente:

  This can happen to anybody. I personally know a gentleman that never got out of bed after surgery. He just literally got an infection and was gone within a week.

• Paul Solman:

  A new knee, a C-section, even a cut now puts you at risk, not to mention ventilators.

  CEO Larry Edwards cites a University of Washington study that puts the number of deaths due to drug-resistant microbes at up to 162,000 Americans a year, more than triple the CDC's estimate, suggesting hospitals may be misreporting.

• Larry Edwards:

  They will say they died due to cancer and underlying factors, where a lot of times the underlying factor is the resistant pathogen or the bacteria that's killing the patient.

• Paul Solman:

  So, why would they be misreporting it?

• Larry Edwards:

  They end up getting hit negatively on if they're showing that patients are dying due to a resistant bacterial infection, more than likely, the patient got that when they were in the hospital.

• Paul Solman:

  So, between 50,000 and 162,000 deaths a year, as things stood, before the pandemic.

  Look, an obvious takeaway from COVID-19 is that our market-driven economy didn't invest in the necessary public goods for a virus, tests, masks, ventilators, treatments.

  But we also haven't invested to counter the bacterial and fungal infections that increasingly plague us. And it's led to the predictable market outcome: The antibiotics pipeline is going bust.

• Ted Schroeder:

  This is a huge problem. And it's not getting better. It just continues to get worse.

• Paul Solman:

  Ted Schroeder is CEO of Nabriva, whose market value, its capitalization, has also cratered, despite its recently approved antibiotic.

• Ted Schroeder:

  I don't think anyone envisioned that the entire market cap of all the companies involved in this research would be half of what a single company was 2.5 years ago. That's not just a decline. That's a near collapse.

• Paul Solman:

  At a moment of arguably the most dire need.

• Man:

  And I am very sorry for your loss.

• Paul Solman:

  We will explore why in our next report.

  This is Paul Solman in Boston.