Desperate for answers to the COVID-19 pandemic, the U.S.
government has shelled out big money for a stable and reliable supply of
key drugs made on U.S. soil. For drugmakers accustomed to
offshore manufacturing in cheaper countries, does it make any sense to
onshore production to meet U.S. demand?
One company has a compelling argument, and it’s taking big risks—and government funding—to test its hypothesis.
Paratek Pharmaceuticals, maker of antibiotic Nuzyra, is kick-starting
a three-year plan to build a government-funded, second supply chain in
the U.S. in an effort to flesh out the nation’s strategic supply of
pandemic response drugs.
The U.S. government, through its Biomedical Advanced Research and
Development Authority (BARDA), has dumped more than $300 million
combined into helping Paratek build the U.S. supply line, which will
stand apart from its current manufacturing network in Europe, CEO Evan
Loh said.
It’s a gamble for BARDA but even more so for Paratek, a 22-year-old
company facing the rigorous prospect of building that supply chain from
scratch. Even with more than a quarter-billion dollars of government
money to work with, it’s a risk; Paratek has a guaranteed order for just
10,000 treatment courses of Nuzyra—a “tiny investment,” according to
Loh—and no certainty the funding will keep coming.
For Loh, however, the government’s big investment in his company is a
sign that the U.S. Department of Health and Human Services (HHS) and
BARDA are putting their money where their mouth is in creating a stable
U.S. supply of key pandemic response drugs, with lessons learned from
COVID-19.
“This is forward-thinking and pressing on the part of BARDA, and I
think you’ll see more of this,” Loh said. “This grant that came our way
may be an experiment, but I think they’re experimenting with the right
company.”
Here’s what Paratek has cut out for it in the next three years.
Starting from scratch
In December 2019, BARDA laid out a deal with Paratek that has become increasingly common during the COVID-19 pandemic.
The government
agreed
to dole out $285 million as part of BARDA’s Project BioShield
program to help the Boston-based drugmaker establish an onshore U.S.
supply chain for Nuzyra and fund the drug’s development to
treat pulmonary anthrax––an infectious disease best known in the U.S for
a series of 2001 attacks that left five Americans dead.
The five-year agreement, with could be extended to 10
years, required Paratek to direct to the Strategic National Stockpile
(SNS) 10,000 treatment courses of Nuzrya, which notched its first FDA
approvals in October 2018 to treat community-acquired bacterial pneumonia and acute bacterial skin and skin structure infections.
In return, BARDA agreed to fund Paratek’s construction of the U.S. supply chain and
back postmarketing studies of the drug to treat anthrax infection. The agency
followed up that commitment in April with an additional $20 million in funding for the company’s onshoring efforts.
More could be in the offing, too, BTIG analyst Robert Hazlett
figures. “We believe this comprehensive deal is step one of several that
could transpire from BARDA, as additional purchases for additional
indications are considered,” he said.
The road to FDA approval was a long one for Nuzyra, first
synthesized in 1996. Paratek launched two years later with the goal of
producing antibiotics to aid public health response. It’s a market
marked by failures and meager profits despite desperate demand from
federal regulators.
Loh, who made the switch to Paratek in 2014 after a stint as senior
vice president in Pfizer’s R&D group, said Paratek was burdened in
its early years with a high barrier for regulatory approval and steep
clinical and manufacturing startup costs. The company cycled through
some 20-plus phase 1 clinical trials for Nuzrya and three phase 3
trials—each at a cost of about $40 million out of pocket—all in an
attempt to enter a market that is “fragile and failing,” Loh said.
Those years in the wilderness, however, gave Paratek the opportunity
to develop a “stable and high-quality supply chain” in Europe that may
have enticed BARDA to work with the company, Loh said. Despite the
inherent risk in the government’s contract, the deal comes with
benefits for the drugmaker’s aspirations.
According to Jason Burdette, Paratek’s head of technical operations,
the drugmaker will onshore production of Nuzyra’s active
pharmaceutical ingredient (API) from U.S.-sourced raw materials. That
API will be used in intravenous and oral versions of the drugs at
facilities operating under increased BARDA security requirements. Every
facility involved will need FDA approval—and to meet its
BARDA commitments, Paratek will need those approvals within three years.
With the U.S. and EU supply chains running in tandem, Paratek will
have the necessary “speed and agility” to supply the BARDA stockpile in
case of increased demand, Burdette said, and a dual supply point will
also be a boon for the drugmaker.
“For us, we could not afford to have a fail anywhere along (our
European) supply chain,” Loh said, citing the high quality required and
middling demand for the drug in the early stages of its launch. “Our
supply chain is not the most cost-efficient today. I think it will get
more cost-efficient, but the cost efficiency comes with more volume.”
The move to build its U.S. supply will come with “incremental costs”
of doing business, including higher wages and more stringent demands
from BARDA, but Paratek is aiming to mitigate those new costs with a
more streamlined production network.
“We probably would not have been able to go to the U.S. based on the
incremental costs unless we had this public-private partnership with
BARDA,” Loh said. “That really enabled us to be able to do that, and I’m
proud to be able to do that because I don’t think there’s been any
other company that’s really made that commitment.”
Any followers?
Paratek’s gamble on government money might be a boon in the long
term, but whether any other drugmakers follow its lead and develop their
own U.S. supply lines is unknown, given the relatively high costs of
manufacturing stateside.
However, Loh argued that HHS and BARDA have shown a willingness in
recent years to make meaningful, big-dollar commitments to restock the
SNS––and that could mean more opportunities for drugmakers producing
pandemic response drugs, including those used to treat influenza and
pneumonia.
“I think that movement is coming,” Loh said. “As I talk to the
leaders at HHS, they are very consistent in terms of what they have
always said to us. They have two mantras: to protect the warfighter, and
to save lives and protect Americans.”
Examples of the government’s renewed interest in pandemic response
have been seen in a slew of major commitments BARDA has made in recent
weeks to companies supplying strategic drugs.
Earlier this week, Emergent BioSolutions
won a
$628 million deal with the government to scale production of targeted
COVID-19 vaccine candidates to make “tens to hundreds of millions” of
doses available through 2021, the CDMO said.
As part of the agreement, the government will shell out $542.7
million to reserve bulk manufacturing capacity at Emergent’s Baltimore
Bayview facility, which was constructed as part of a BARDA pandemic
preparedness contract signed in 2012. The remaining $85.5 million will
be spent expanding fill/finish capacity at two Emergent plants at Camden
in Baltimore and Rockville, Maryland.
In late May, BARDA also
floated a
four-year, $354 million contract with a fledgling company, Phlow
Corporation, to build a generic medicine and API plant in Richmond,
Virginia, and supply COVID-19 treatments produced there. That deal can
be expanded up to 10 years and a total of $812 million, making it among
the largest in BARDA’s history.
Those deals could soon become a sign of the times as the U.S.
realizes the need for a stable supply of homegrown drugs during a
pandemic. For Paratek and Loh, a renewed and lasting commitment to that
supply could be a boon in the coming years after three hard years of
work are complete.
“This is going to be a very broad-based effort to look at the SNS,
and I’m very optimistic that the current administration will continue to
support that,” Loh said.
https://www.fiercepharma.com/manufacturing/as-u-s-calls-for-stateside-manufacturing-antibiotic-maker-paratek-gambles-onshoring
