Investing in Antibiotic-Resistant Biotech
In September of 1928, a doctor by the name of Alexander Fleming returned from summer vacation in Scotland to his London-based research lab at St. Mary's Hospital. For years, Fleming had been residing at St. Mary's in search of a chemical capable of treating bacterial infections.
At the time, bacteria was far more menacing than it is today. A simple cut or scratch could be a life-threatening ordeal, with the mortality rate of untreated skin lesions at an alarming 11% at the time.
Once infected, there was little you could do about bacteria in 1928. Sure, you could hope, rest, and pray, but ultimately it was up to your immune system to decide whether or not you were one of the unlucky ones...
If you contracted staphylococcus aureus (staph), your chances of survival were far less promising. According to research published in the Journal of Antimicrobial Chemotherapy, the mortality rate for staph at the time was ~70%.
In other words, being diagnosed staph less than 100 years ago was a near death sentence.
Needless to say, doctors like Fleming were champing at the bit to find a reliable treatment for bacterial infections. Countless lives were at stake, and only medicine could save them...
A Happy Accident
Fortunately for every person living on Earth today, what Alexander Fleming stumbled across back in September of 1928 was nothing short of a game-changer. In a completely unexpected turn of events, Fleming returned from vacation to find a mysterious bacteria-killing fungus had been growing on a collection of his Petri dishes.
By complete accident, Fleming had discovered the world's first miracle drug. The world was introduced to the life-saving medicine of antibiotics and penicillin.
As Dr. Fleming famously remarked about that day, “When I woke up just after dawn on September 28, 1928, I certainly didn’t plan to revolutionize all medicine by discovering the world’s first antibiotic, or bacteria killer. But I guess that was exactly what I did.”
Now, it should go without saying that the consequences of Fleming's discovery, accident or not, were nothing short of dramatic.
By 1944, penicillin became widely available to the public, and the mortality rate for staph infections dropped all the way down to 25% (from 70%). Likewise, the death rate from bacterial pneumonia during World War II fell to 1%, compared to 18% during World War I.
It would be impossible to put a hard number on how many lives Fleming's discovery of penicillin has saved, but we do know the figure is quite large. According to Sebastian G.B. Amyes of the University of Edinburgh in Scotland, penicillin has saved over 100 million lives from mortal bacteria infection.
With that figure in mind, it's easy to see why Fleming was knighted by King George VI in 1944 and subsequently awarded the Nobel Prize in 1945 for his discovery of penicillin.
Despite the apparent triumph, however, Alexander Fleming knew (at the time he was recognized for these honors) that his scientific victory would be short-lived. As groundbreaking as the discovery of penicillin was, it had one unintended consequence that simply couldn't be ignored.
In his 1945 Nobel Prize acceptance speech, Fleming gave a stark warning regarding this very consequence. He cautioned listeners that, with the wide-scale availability of antibiotics, “ignorant men” could soon give rise to antibiotic-resistant disease strains, or what we know today as “superbugs.”
Here's a piece of that warning:
Here is a hypothetical illustration. Mr. X. has a sore throat. He buys some penicillin and gives himself, not enough to kill the streptococci but enough to educate them to resist penicillin. He then infects his wife. Mrs. X gets pneumonia and is treated with penicillin. As the streptococci are now resistant to penicillin the treatment fails. Mrs. X dies. Who is primarily responsible for Mrs. X’s death? Why Mr. X whose negligent use of penicillin changed the nature of the microbe.
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Rise of the Superbug
As it turns out, Fleming was unfortunately right. Within just one decade, penicillin-resistant bacteria began running rampant, and the mortality rate of infections spiked toward previous levels.
In fact, by the mid 1950s, penicillin had already lost half of its effectiveness, and new drugs were needed to treat bacterial infections.
The trouble, of course, is that these drugs would soon suffer the same fate as penicillin. Each time a new antibiotic was introduced, a new, highly resistant superbug would emerge, and mortality rates would rise again.
This ongoing push and pull between antibiotics and antibiotic-resistant bacteria is expressed quite clearly in the figure below. It shows us the rise and fall of antibiotics including penicillin, methicillin, and vancomycin over the last 80 years.
Credit: Journal of Antimicrobial Chemotherapy
For nearly 100 years, researchers have been able to keep bacteria in check by discovering new classes of antibiotics and introducing them when necessary. This ebb and flow works quite well, but only so long as we can find antibiotics that do their job.
Unfortunately, though, according the World Health Organization, the last discovery of a distinct antibiotic class occurred in 1987, nearly 30 years ago. In other words, we've likely already discovered the last line of defense.
Things get particularly concerning when you look at the drastic decline of NDAs (New Drug Applications) for antibiotics since the early '80s. The simple reality is that we're running out of new treatments, as superbugs continue to advance past each line of antibiotics.
Today, antibiotic resistance causes at least 50,000 deaths each year in Europe and the United States. According to the “Review on Antimicrobial Resistance,” if left unchecked, these superbugs could rise more than 10-fold and kill 300 million by 2050.
Now, that may seem like a long way from today, but in the grand scheme of things, this is happening quite quickly. Here are just a few facts to give you a scope of the situation:
- In 2014, there were ~450,000 new cases of multi-drug-resistant tuberculosis (MDR-TB).
- Extensively drug-resistant tuberculosis (XDR-TB) has been identified in 92 countries.
- Full resistance to last-resort treatments for gonorrhea and TB have now been reported in over 10 countries, many with advanced health care systems such as Australia, Canada, France, Sweden, and Britain.
- Nearly 2 million Americans become infected with antibacterial-resistant pathogens each year, and 23,000 die as a direct result.
- The cost to the U.S. health care system is $34 billion each year and more than 8 million additional hospital days.
Of course, while these facts are especially concerning, it's also true that with every crisis, there tends to be an opportunity.
In the case of antibiotic-resistant superbugs, that opportunity comes in the form of biotech, specifically firms stepping outside traditional methods of treatment for bacterial infections.
The reality is that we're entering into what the World Health Organization calls a "post-antibiotic era" and will soon need to tap into new forms of treatment.
Specifically, we need new treatments that can kill bacteria without giving rise to resistant strains. The last thing we want is a repeat of the false (or at least temporary) miracle that was penicillin.
Until next time,
Jason Stutman is Wealth Daily's senior technology analyst and editor of investment advisory newsletters Technology and Opportunity and The Cutting Edge. His strategy for building winning portfolios is simple: Buy the disruptor, sell the disrupted.
Covering the broad sector of technology and occasionally dabbling in the political sphere, Jason has written hundreds of articles spanning topics from consumer electronics and development stage biotechnology to political forecasting and social commentary.
Outside the office Jason is a lover of science fiction and the outdoors, and an amateur squash player at best. He writes through the lens of a futurist, free market advocate, and fiscal conservative. Jason currently hails from Baltimore, Maryland, with roots in the great state of New York.
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