Collaboration is key to funding and delivering AMR solutions from early-stage research to commercial viability.
Despite early stage research successes, uncertain financial returns mean that solutions to combat antimicrobial resistance (AMR) are not commercially viable. However, collaborations between the private and public sectors are changing the current funding model.
How is Australian AMR research funded?
AMR is accelerating worldwide. The rise in AMR is largely caused by decades of overuse of antibiotics in human health and animal agriculture. The problem is exacerbated by poor waste management during antibiotic production and use.
“Battling AMR is a big challenge that a lot of countries and researchers are very focused on,” says Dr Elaine Stead, a former biochemist and entrepreneur and now principal at venture capital firm Main Sequence. This is because AMR poses a major risk to our public health and financial assets. Already, more than 1.2 million deaths are caused by AMR each year.1 The cumulative cost of AMR to the world economy is expected to be above US$40 trillion by 2050.
In Australia, much of the early stage research and development takes place at universities and medical research institutions. The Australian Government, through the National Health and Medical Research Council, funds AMR projects, contributing about $82 million between 2017 and 2019.
Do the funding models in Australia need to change?
Incentives for early stage research into AMR are already a focus in Australia. But even when early stage research is successful, it still takes novel, innovative funding models to pull new AMR solutions through the development pipeline to commercialisation.
“The bit that perhaps Australia has not been as strong at in the past is translating that early stage knowledge into commercial and public impact,” says Dr Stead.
Pharmaceutical companies and private investors have shied away from funding research and development into combating AMR. This is because currently the potential revenue that a company can expect from a novel antibiotic does not reflect the public health value of it or the financial investments poured into research and development.
Reimbursement decisions for new pharmaceuticals in Australia are based on their value for money rather than the value they may bring to society, so do not easily accommodate new antibiotics.
In its most recent AMR strategy the Australian Government concedes that more innovative ways are needed to encourage the discovery and development of new AMR solutions. This includes establishing alternative funding models such as public-private partnerships.
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VC firms bridge the gap between early stage discoveries and commercialisation. They contribute not only money but also know-how of what is required to turn a novel innovation into an actual product or service
Dr Elaine Stead
What is the potential role of venture capital?
Compared with scientific research, it takes a different skillset to translate early stage discoveries into commercially viable products. What’s needed is a good understanding of the clinical development process, entrepreneurship and access to investment.
Venture capital firms bridge this gap between early stage discoveries and commercialisation. “They contribute not only money but also know-how of what is required to turn a novel innovation into an actual product or service,” says Dr Stead.
Yet in Australia venture capital firms are reluctant to take up the baton of AMR research, because the financial risks are still high.
Public-private co-funding partnership can help, by sharing the risk and cost of low returns on investment. CUREator, by the venture capital firm Brandon BioCatalyst, is a biotechnology incubator that provides a home for early stage discoveries. CUREator was set up in 2021 with $40 million in funding from the Federal Government and has received $6 million from the CSIRO. So far, funding of up to $500,000 per project for technologies to combat AMR has been provided.
What more can be done?
There are approaches being developed overseas that Australia can continue to learn from.
The UK Government is testing a funding model that doesn’t make payments to antibiotics manufacturers based on the amount of antibiotics that are sold once they are brought to market. The National Health Service instead makes fixed yearly payments to manufacturers regardless of how much their antibiotics are being used. The incentive is known as the ‘Netflix model’ because of the similarity to a subscription-based model.
The Investor Action on AMR (IAAMR) in the UK is a collaboration between the investor network FAIRR, the UK Government and the Access to Medicine Foundation. As of August 2024, more than twenty global investors with more than US$12 trillion combined assets have already joined the IAAMR and are looking for investment opportunities in AMR solutions. Using their collective voice and influence gives these investors greater leverage than going it alone.
- Antimicrobial Resistance Collaborators. Global burden of bacterial antimicrobial resistance in 2019: a systematic analysis. Lancet 2022; 399(10325): 629-55. ↩︎
Anja Becher is a Sydney-based freelance medical writer. She has more than 20 years’ experience writing across a wide range of health topics, including cardiovascular and respiratory medicine, metabolic diseases, gastroenterology and oncology.
