Pharmas to invest $1 billion in biotechs to fight AMR as bridge to market reforms
AMR Action Fund pushing antibiotic development but pull mechanisms needed urgently
Twenty-three pharmas have banded together to create a $1 billion fund to provide bridges from Phase II to approval for biotechs trying to advance products that combat antimicrobial resistance.
The AMR Action Fund will be a bridge to nowhere unless solutions are implemented for market failures that have bankrupted public biotechs with approved antibiotics and starved the sector of VC funding.
The companies and institutions that are creating the fund are acutely aware of the need to match the “push” incentive they are creating with “pull” mechanisms to reward companies for developing products aimed at preserving society’s ability to defeat bacterial pathogens.
“The fund will buy time to change the policy environment,” David Ricks, chairman and CEO of Eli Lilly and Co. (NYSE:LLY), said at a press conference announcing the fund’s launch. “Without this fund, ideas will wither on the vine and we will have lost an opportunity to invest in a new generation of antibiotics.”
The fund is intended to “sustain the fragile antibiotic pipeline,” but it “will only work if key governments, including the U.S., make the necessary reforms to create a sustainable market,” added Ken Frazier, chairman and CEO of Merck & Co. Inc. (NYSE:MRK).
The AMR Fund, which plans to take equity stakes in about 15 biotechs, could serve as a source of essential capital to sustain a corner of the biopharma universe that contains insufficient returns to attract investors.
At the same time, the companies that are creating the fund believe that their willingness to put skin in the game and to lobby will activate governments to enact policies that substitute for missing market incentives.
“Going forward the capacity to develop