I think we need to be doing more research here similar to the holders over at RAC. They discuss industry merger & acquisitions to try determine a value for RAC. There have been pre-clinical stage acquisitions as well for large premiums in the order of 282%.
We all need to understand that RCE treatments will either be successful or they will be a failure. That's just how it is in this industry.
Based on the information at hand RCE treatments currently have a small probability of being successful. However, similar chemicals were successful for animal treatments in the past via Chemeq increasing the likelihood of success in humans.
In trying to value RCE we need to determine the potential addressable market. My research indicates that the Antibiotic Resistance market will be worth $15.7B by 2025 growing at 5.6% CAGR. Approximately 45% market share or $7B of the pie will go to new treatment types such as RCE. With RCE having patent protection they will capture the bulk of this 45% market share so it is at least a $5B opportunity for RCE.
CSL revenue is about $12B thus RCE has the potential to become about 42% the MC of CSL. CSL has about $122B MC x 42% = $51B MC RCE potential if successful. The current $168M MC represents 3.3% of the RCE potential MC. If successful this is they type of MC to expect & if not it will be worth nil. Potential return is in excess of x303 thus every $10k invested has the potential to become just over $3M.
There numerous major players that would be interested in acquiring RCE so the return realized may actually be less than x303.
Industry Insights
The global antibiotic resistance market size was valued at USD 7.81 billion in 2017. It is anticipated to register a CAGR of 5.6% from 2018 to 2025. High burden of antibiotic-resistant infections and emergence of multi-drug resistant pathogens have been augmenting the market.
Pharmaceutical companies, such as GlaxoSmithKline, Johnson & Johnson, Novartis, and Sanofi, are at the forefront of the global pharmaceutical industry but are less actively involved in clinical development of antibiotics. Majority of large pharmaceutical companies find the market lucrative enough due to relatively slower growth in revenues for marketed drugs and lower return on investments. For instance, Novartis recently canceled all plans to continue with R&D for its antibacterial drugs.
On the other hand, there are several biotech companies including Melinta Therapeutics, Achaogen, and Nabriva Therapeutics that have undertaken the challenge of developing therapies for antibiotic resistance. Involvement of international organizations serves as a catalyst in developed markets. Funding bodies such as BARDA are supporting biotech companies with financial support to complete early stage development of their novel therapies for antibiotic resistant infections.
Manufacturers seek the Qualified Infectious Disease Product (QIDP) designation, which expedites the clinical review process and extends exclusivity period for new generation antibiotics of strong therapeutic value. The QIDP designation was introduced under the Generating Antibiotic Incentives Now (GAIN) Act, passed in 2012 as an extension to the U.S. Food and Drug Administration Safety and Innovation Act. The legislation aims to promote the development of new therapies for growing burden and severity of antibiotic-resistant infections.Drug Class Insights
Based on drug class, the market has been segmented into oxazolidinones, lipoglycopeptides, tetracyclines, cephalosporins, combination therapies, and others, which includes miscellaneous drug classes. Lipoglycopeptides are likely to command 17.0% of the overall market revenue by 2025.
Regional Insights
North America was the largest region in terms of revenue in 2017. Numerous drug launches in the market and high treatment cost are supplementing the growth of the regional market. The U.S. will be a key revenue contributor in the region during the forecast period as guidelines, such as those defined by IDSA for the treatment of CDI, are promoting the use of novel therapies.Europe was the second largest regional market in the global arena in 2017, supported largely by growing number of antibiotic-resistant infections. Among the OECD countries, Greece, Italy, and Portugal were ranked as the top 3 consumers of antibiotics in the world, contributing to increased antibiotic resistance in the region.Antibiotic resistance Market Share Insights
Some of the key players in the market are Pfizer, Merck, Allergan, and Melinta Therapeutics. This market has fewer pharmaceutical companies entering the space, while the number of biotech companies such as Achaogen and Nabriva Therapeutics is higher.Large pharmaceutical companies are acquiring smaller entrants with novel antibiotics. The trend is expected to shape the future of the market. For instance, Pfizer acquired Astra Zeneca’s marketed drugs, Zavicefta and Zinforo, and late stage antibiotics, ATM-AVI, resulting in an expanded portfolio of antibiotics. In addition, companies in the market target for higher market share through indication extension and geographic expansion strategies.
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