April 16, 2019
2 min read

Achaogen, maker of newly approved Zemdri, files for bankruptcy

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Achaogen, maker of the antibiotic Zemdri, announced that it has filed for chapter 11 bankruptcy protection in Delaware and is seeking authorization to pursue an auction and sale.

The company said it has filed “a series of motions ... seeking to ensure the continuation of normal operations during this process” and that is had secured a $25 million loan to fund operations through the auction and sale, providing “sufficient liquidity to continue to meet its operational and financial obligations to patients, physicians, suppliers and employees.”

“The Achaogen board of directors and management team have thoroughly assessed our strategic options and financial situation and unanimously agree that this structured sale process represents the best possible solution for the company,” Achaogen CEO Blake Wise said in a statement. “We continue to believe Zemdri (plazomicin) has the potential to be a valuable component of a portfolio of anti-infective or hospital products and an important lifesaving medicine for patients.”

The FDA approved plazomicin last June to treat complicated UTIs, including pyelonephritis, caused by certain Enterobacteriaceae in adult patients who have limited or no alternative treatment options. It declined to approve the antibiotic for bloodstream infections, saying there was not substantial evidence that it was effective against them.

In July, Achaogen announced that it was laying off approximately 80 employees — around 28% of its workforce — to focus on the launch of plazomicin. The once-daily aminoglycoside has microbiological activity against gram-negative pathogens and is administered once daily as an IV infusion.

In a statement, the Infectious Diseases Society of America said plazomicin has “critical value to patients and to public health” and called Achaogen’s bankruptcy filing “the most recent consequence of the steep economic challenges facing antibiotic research and development.”

“The closing of one of the few remaining small antibiotics companies underscores the need for immediate steps to ensure the innovation and availability of effective infection-fighting drugs,” the IDSA said.

“Achaogen ... like other recently closed antibiotics companies, could not make a sufficient return on its investment because antibiotics are used infrequently and for short durations while new antibiotics are held in reserve to protect their effectiveness. The closing of Achaogen further decreases the likelihood that investors will risk supporting antibiotic research and development, in spite of the immediate and pressing need for these drugs.”

Click here to read Infectious Disease News’ recent cover story on the challenges facing the antimicrobial market. – by Gerard Gallagher

Disclosure: Wise is CEO of Achaogen.