AKAO 2017 Annual Report

21 Thermo Fisher. If we terminate the Assay Agreement without cause or Thermo Fisher terminates the Assay Agreement for cause prior to the payment of all milestone payments, we must pay to Thermo Fisher a sum equal to the amount that would have been due if the next applicable milestone had been achieved, provided that no payment will be due if we terminate the agreement at will in connection with the failure to obtain or maintain regulatory approval for plazomicin. If, within two years following the termination of the Assay Agreement by us at will or by Thermo Fisher for cause, we decide to develop and commercialize plazomicin, subject to certain conditions and limitations, we and Thermo Fisher are required to use good faith efforts to negotiate an agreement for the continued development, manufacture, supply and sale of the assay by Thermo Fisher on commercially reasonable terms, but we would have no duty to enter into any new agreement with Thermo Fisher and we would not be prohibited from negotiating or entering into an agreement with a third party for the development, manufacture, supply or sale of any assay. Competition The pharmaceutical industry is very competitive and subject to rapid and significant innovation. Our potential competitors include major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical and generic drug companies, universities, and other research institutions. Many of our competitors have greater financial resources, as well as larger research and development staff and more experienced marketing and manufacturing organizations. As a result, these companies may obtain regulatory approval more rapidly than we are able to and may be more effective in selling and marketing their products. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Our competitors may succeed in developing, acquiring or licensing technologies and drug products that are superior to, or more effectively marketed than, plazomicin or any other drug candidate that we are currently developing or that we may develop, which could render our products obsolete and noncompetitive. The competition in the antibiotics market is intense. Our goal is to establish plazomicin as a leader in the treatment of serious bacterial infections due to MDR Enterobacteriaceae, including CRE. Our clinical development program supports plazomicin’s differentiated profile from both approved and development-stage antibacterials by focusing on the treatment of serious bacterial infections due to MDR Enterobacteriaceae in patients with limited or no alternative treatment options, including patients with cUTI or AP. If approved, plazomicin will face competition from commercially available antibiotics such as tigecycline, which is marketed by Pfizer as Tygacil®, ceftazidime- avibactam, which is marketed in the United States by Allergan plc as Avycaz™, meropenem-vaborbactam which is marketed by Melinta Therapeutics as Vabomere™, and other aminoglycosides that are generically available (e.g., gentamicin, amikacin, tobramycin), and polymyxins that are generically available (colistin and polymyxin B). In addition, if approved, plazomicin may face additional competition from antibiotics currently in clinical development. We are aware of other antibiotics currently in development. Allergan plc and Pfizer Inc. continue development of ceftazidime/avibactam (already marketed in the United States) and ceftaroline/avibactam for pneumonia and complicated urinary and intra-abdominal infections. Tetraphase Pharmaceuticals, Inc. is developing eravacycline for cUTI and intra-abdominal infections, though eravacycline failed to meet its primary endpoint in a recently completed Phase 3 trial in cUTI. Merck & Co., Inc. is developing relebactam + imipenem/cilastatin for complicated urinary and intra-abdominal infections and pneumonia. Pfizer and Allergan are developing aztreonam- avibactam for certain life-threatening infections caused by MDR strains, including infections due to metallo-â- lactamase producing gram-negative pathogens. Zavante Therapeutics, Inc. is developing ZTI-01 for cUTI and Shionogi is developing cefiderocol for carbapenem-resistant gram-negative pathogens. If approved, we believe that plazomicin would compete effectively against both marketed and known pipeline competitors based on the following: • Potent in vitro and in vivo activity in nonclinical studies against MDR Enterobacteriaceae, including CRE; • Activity in the presence of a range of resistance mechanisms, including most aminoglycoside modifying enzymes, fluoroquinolone target site mutations, extended-spectrum -lactamases, and carbapenemases; • Demonstration of similar efficacy to levofloxacin and acceptable safety in a Phase 2 clinical trial in patients with cUTI infections caused primarily by non-resistant Enterobacteriaceae;