Why Achaogen Failed: Unit Economics | Startup Autopsy
$260M
Raised
17y
Time to collapse
// startup autopsy
Achaogen
Achaogen spent 15 years developing a new antibiotic, won FDA approval in June 2018 — and filed for Chapter 7 bankruptcy in April 2019, just 10 months after approval, because hospital purchasing refused to pay for its drug.
Evaluating only Achaogen’s profile at its peak — without knowing the outcome — the model ranked Unit economics as the #1 likely cause. That’s exactly how it died.
Key Events Timeline
FOUNDING
Achaogen founded
DOWN ROUND
Down round or bridge financing
SHUTDOWN
Bankruptcy: Achaogen ceases operations
Full Analysis
Free · no account needed
Documented cause
Achaogen developed plazomicin (Zemdri) to treat drug-resistant bacterial infections. The FDA approved it in June 2018. However, hospital infection committees refused to add it to formularies because it targeted a narrow indication — carbapenem-resistant Enterobacteriaceae — for which most hospitals had few patients. The drug generated almost no revenue. Achaogen filed for Chapter 7 in April 2019 and liquidated entirely.
Lesson
“Antibiotics for rare resistant infections solve a public health need but not a commercial one — hospital formulary gatekeepers will not pay premium prices for drugs they will prescribe a dozen times per year.”