White House Budget To Support Biotech Rally
On Tuesday, the White House announced that Obama’s 2016 budget will include a hefty investment in antibiotic-resistant bacteria.
The President’s plan includes about $1.2 billion worth of funding for research to combat drug-resistant bacteria strains, something President Obama says has become one of the world’s most important public health issues.
What Does This Mean For Biotech?
The race is on for the development of new antibiotics in a field that seemed to be all but abandoned just a few years ago. The new funding means companies who are working to develop new antibiotics could be handsomely rewarded.
Who’s In
Achaogen Inc. (NASDAQ: AKAO) is a small biotech company that is currently developing a treatment for a resistant bacteria that stems from hospital-borne pneumonia called MDR CRE. The Center for Disease Control and Prevention has already highlighted this germ as a public heath threat and called for aggressive action against it.
Enanta Pharmaceuticals, Inc. (NASDAQ: ENTA) is a company whose primary revenue comes from Hepatitis C treatments, but has focused its research and development capabilities on drug resistant bacteria.
The company is developing bicyclolides to treat resistant strains, which Enanta claims will take decades to become ineffective against bacterial infections.
Related Link: 3 Biotech IPOs Debuting This Week
Large pharmaceutical companies like Actavis PLC (NYSE: ACT) and Merck & Co., Inc. (NYSE: MRK) began their own ventures into antibiotic research though strategic acquisitions in 2014.
Merck is set to pay $8.4 billion in order to acquire Cubist, a smaller company whose focus has been on antibiotics. Actavis took a similar path, snapping up Forest Laboratories for $25 billion and Durata Therapeutics for more than $800 million.
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