Over the past couple of years, we have been bombarded by bad news vis-à-vis world health issues. The number of outbreaks of different diseases around the world that are resistant to antibiotics is rising. Recently, there has been a return of the avian flu in Asia, rising polio infections, multi-drug resistant tuberculosis, HIV, and K. pneumonia. In the US alone, germs that are resistant to one or more drugs kill roughly 100,000 hospital patients a year.

Only last week, H5N1 bird flu resurfaced in China for the first time in 18 months. This summer, the UN warned of a potential resurgence of H5N1 due to indications that a mutant strain may be spreading in Asia. There is additional concern that H5N1 could become pathogenic between humans. Scientists, for instance, have developed a man-made form of the flu.

Simultaneously, the rate of investment by big pharma in both vaccines and antiviral drugs has plummeted. From 2003 to 2007, the FDA approved 5 antibacterial drugs. Since 2008, only 2 new drugs have been approved.

Where's the good news you ask? Due to the increase in drug-resistant diseases worldwide, new, innovative therapies are evolving along with an increase in antibiotic drug investment. Bacteriophage therapy is a group of viruses that infect and kill bacteria. Although there have been no large clinical trials to test the efficacy of phage therapy yet, research continues because of the rise of antibiotic resistance. Originally discovered in 1915 in the former Soviet Republic of Georgia, phage therapy is gaining momentum in Europe, particularly in Israel. In the U.S., AmpliPhi (OTC: APHB, $.12) is the first company to demonstrate clinical efficacy of phage technology in a controlled clinical trial.

In addition, there is a growing movement to incentivize drug companies to invest in new antibiotics. Congress is considering a new bill, Generating Antibiotic Incentives Now (GAIN), which includes, among other things, a provision for patent extensions. It would also direct the Food and Drug Administration to streamline its process for approving new antibiotics. The Infectious Diseases Society of America (IDSA) is also recommending public-private research partnerships whereby government and private industry share the cost of research to find new antibiotics.

Finally, pressure will continue for new antibiotics as drug resistance continues to rise. Among the large pharma companies with active research programs are GlaxoSmithKline (GSK), AstraZeneca (AZN) and Roche Holdings (ROG). AstraZeneca, for instance, has two antibiotics for hospital-acquired infections, including a carbapenem anti-bacterial which is effective against multi-drug resistant bacteria. AZN is also boosting investment in antibiotics as evidenced by their proposed new research facility in Boston.

Written by Rob Brown