Here’s a business-section column at the New York Times on the problem of antibiotic drug discovery. To those of us following the industry, the problems of antibiotic drug discovery are big pieces of furniture that we’ve lived with all our lives; we hardly even notice if we bump into them again. You’d think that readers of the Times or other such outlets would have come across the topic a few times before, too, but there must always be a group for which it’s new, no matter how many books and newspaper articles and magazine covers and TV segments are done on it. It’s certainly important enough - there’s no doubt that we really are going to be in big trouble if we don’t keep up the arms race against the bacteria.

This piece takes the tack of “If drug discovery is actually doing OK, where are the new antibiotics?” Here’s a key section:

Antibiotics face a daunting proposition. They are not only becoming more difficult to develop, but they are also not obviously profitable. Unlike, say, cancer drugs, which can be spectacularly expensive and may need to be taken for life, antibiotics do not command top dollar from hospitals. What’s more, they tend to be prescribed for only short periods of time.

Importantly, any new breakthrough antibiotic is likely to be jealously guarded by doctors and health officials for as long as possible, and used only as a drug of last resort to prevent bacteria from developing resistance. By the time it became a mass-market drug, companies fear, it could be already off patent and subject to competition from generics that would drive its price down.

Antibiotics are not the only drugs getting the cold shoulder, however. Research on treatments to combat H.I.V./AIDS is also drying up, according to the research at Yale, mostly because the cost and time required for development are increasing. Research into new cardiovascular therapies has mostly stuck to less risky “me too” drugs.

This mixes several different issues, unfortunately, and if a reader doesn’t follow the drug industry (or medical research in general), then they may well not realize this. (And that’s the most likely sort of reader for this article - people who do follow such things have heard all of this before). The reason that cardiovascular drug research seems to have waned is that we already have a pretty good arsenal of drugs for the most common cardiovascular conditions. There are a huge number of options for managing high blood pressure, for example, and they’re mostly generic drugs by now. The same goes for lowering LDL: it’s going to be hard to beat the statins, especially generic Lipitor. But there is a new class coming along targeting PCSK9 that is going to try to do just that. This is a very hot area of drug development (as the author of the Times column could have found without much effort), although the only reason it’s so big is that PCSK9 is the only pathway known that could actually be more effective at lowering LDL than the statins. (How well it does that in the long term, and what the accompanying safety profile might be, are the subject of ongoing billion-dollar efforts). The point is, the barriers to entry in cardiovascular are, by now, rather high: a lot of good drugs are known that address a lot of the common problems. If you want to go after a new drug in the space, you need a new mechanism, like PCSK9 (and those are thin on the ground), or you need to find something that works against some of the unmet needs that people have already tried to fix and failed (such as stroke, a notorious swamp of drug development which has swallowed many large expeditions without a trace).

To be honest, HIV is a smaller-scale version of the same thing. The existing suite of therapies is large and diverse, and keeps the disease in check in huge numbers of patients. All sorts of other mechanisms have been tried as well, and found wanting in the development stage. If you want to find a new drug for HIV, you have a very high entry barrier again, because pretty most of the reasonable ways to attack the problem have already been tried. The focus now is on trying to “flush out” latent HIV from cells, which might actually lead to a cure. But no one knows yet if that’s feasible, how well it will work when it’s tried, or what the best way to do it might be. There were headlines on this just the other day.

The barriers to entry in the antibiotic field area similarly high, and that’s what this article seems to have missed completely. All the known reasonable routes of antibiotic action have been thoroughly worked over by now. As mentioned here the other day, if you just start screening your million-compound libraries against bacteria to see what kills them, you will find a vast pile of stuff that will kill your own cells, too, which is not what you want, and once you’ve cleared those out, you will find a still-pretty-vast pile of compounds that work through mechanisms that we already have antibiotics targeting. Needles in haystacks have nothing on this.

In fact, a lot of not-so-reasonable routes have been worked over, too. I keep sending people to this article, which is now seven years old and talks about research efforts even older than that. It’s the story of GlaxoSmithKline’s exhaustive antibiotics research efforts, and it also tells you how many drugs they got out of it all in the end: zip. Not a thing. From what I can see, the folks who worked on this over the last fifteen or twenty years at AstraZeneca could easily write the same sort of article - they’ve published all kinds of things against a wide variety of bacterial targets, and I don’t think any of it has led to an actual drug.

This brings up another thing mentioned in the Times column. Here’s the quote:

This is particularly striking at a time when the pharmaceutical industry is unusually optimistic about the future of medical innovation. Dr. Mikael Dolsten, who oversees worldwide research and development at Pfizer, points out that if progress in the 15 years until 2010 or so looked sluggish, it was just because it takes time to figure out how to turn breakthroughs like the map of the human genome into new drugs.

Ah, but bacterial genomes were sequenced before the human one was (and they’re more simple, at that). Keep in mind also that proof-of-concept for new targets can be easier to obtain in bacteria (if you manage to find any chemical matter, that is). I well recall talking with a bunch of people in 1997 who were poring over the sequence data for a human pathogen, fresh off the presses, and their optimism about all the targets that they were going to find in there, and the great new approaches they were going to be able to take. They tried it. None of it worked. Over and over, none of it worked. People had a head start in this area, genomically speaking, with an easier development path than many other therapeutic areas, and still nothing worked.

So while many large drug companies have exited antibiotic research over the years, not all of them did. But the ones that stayed have poured effort and money, over and over, down a large drain. Nothing has come out of the work. There are a number of smaller companies in the space as well, for whom even a small success would mean a lot, but they haven’t been having an easy time of it, either.

Now, one thing the Times article gets right is that the financial incentives for new antibiotics are a different thing entirely than the rest of the drug discovery world. Getting one of these new approaches in LDL or HIV to work would at least be highly profitable - the PCSK9 competitors certainly are working on that basis. Alzheimer’s is another good example of an area that has yielded no useful drugs whatsoever despite ferocious amounts of effort, but people keep at it because the first company to find a real Alzheimer’s drug will be very well rewarded indeed. (The Times article says that this hasn’t been researched enough, either, which makes me wonder what areas have been). But any great new antibiotic would be shelved for emergencies, and rightly so.

But that by itself is not enough to explain the shortage of those great new antibiotics. It’s everything at once: the traditional approaches are played out and the genomic-revolution stuff has been tried, so the unpromising economics makes the search for yet another approach that much harder.

Note: be sure to see the comments for perspectives from others who’ve also done antibiotic research, including some who disagree. I don’t think we’ll find anyone who says it’s easy, though, but you never know.

River in China mysteriously turns blood-red overnightEXPAND

The residents of Wenzhou, China, woke up last Thursday to discover that the inner city river had turned blood-red. Everyone is puzzled, as this has never happened before and nobody knows the cause yet. China Radio International reports:

Inspectors from the Wenzhou Environmental Protection Bureau are taking samples and analyzing the cause of the incident.

The villagers pointed out that there wasn’t a chemical plant along the upper stream.

Local residents say the river was flowing normally at 4am, but it started to redden at around 6am, and in no time at all had turned as crimson as blood.

River in China mysteriously turns blood-red overnightEXPAND

River in China mysteriously turns blood-red overnightEXPAND

River in China mysteriously turns blood-red overnightEXPAND

River in China mysteriously turns blood-red overnight

Photo:Isabella Vosmikova/HBO

In a scene from HBO’s Silicon Valley, software engineer Richard, played by Thomas Middleditch, and members of fictional startup Pied Piper’s engineering team prepare to put the final touches on their compression algorithm; the Post-It notes on the board are part of the Scrum method of product development.

HBO’s Silicon Valley, a television series heading into its second season, tells the story of Richard, a young whiz kid plunged into the wild world of Silicon Valley startups. He forms a company, Pied Piper, and pitches his technology to venture capitalists and at a startup competition even as he and his cohorts struggle to improve their product, scribbling on whiteboards during long meetings. The technology is practically a character of its own in the show.

So the creators of Silicon Valley needed to “cast” the right technology. Early on, they settled on a piece of software—a universal compression algorithm. They were looking for what venture capitalists call “deep tech,” some kind of core technology that could be part of many different kinds of products or affect multiple industries. (The original working title of the show was “Deep Tech.”) They also needed a technology whose usefulness could be easily understood by a lay audience—and compression is a simple concept to comprehend, though not always easy to execute.

The creators had already hired a tech advisor with Silicon Valley startup experience, Jonathan Dotan. But Dotan isn’t an expert in compression, and the show’s creators wanted everything technical about the show to seem as real as possible. And so Dotan turned to Google to find an expert on compression and landed on information about a class taught by Stanford professor Tsachy Weissman.

Photo: Tekla PerryStanford Professor Tsachy Weissman

Dotan sent Weissman an email, asking to chat with him about an upcoming TV series. Though Weissman often doesn’t get around to looking at unsolicited emails, he opened that one, and was immediately intrigued. He quickly tossed out a number of ideas involving genomic data compression algorithms, lossy compression, and denoising, but kept coming back to a sort of Holy Grail in the compression world—a form of lossless compression far more powerful and efficient than anything that exists today, that could work on any type of data, and could be searchable, that is, could be decompressed in small chunks.

The busy Weissman brought in Vinith Misra, a student working on his Ph.D., to flesh out the details of the fictional algorithm.

“We had to come up with an approach that isn’t possible today, but it isn’t immediately obvious that it isn’t possible,” says Misra. “That is, something that an expert would have to think about for a while before realizing that there is something wrong with it.” It would pass, he said, a Powerpoint test, that is, in a Powerpoint presentation you could convince even technically knowledgeable people that it might be theoretically possible; it’s just when you sit down to build it that you run into insurmountable problems.

Misra explained that even though the goal was to create a lossless compression algorithm, he started out by looking at lossy compression, simply because these algorithms, involving transformations performed on data, are more visually compelling when you illustrate them on a whiteboard. (Lossy compression algorithms throw out parts of the file, so the original file can only be approximately reconstructed. Lossless compression algorithms can recreate all of the information in the original file.) He came up with the idea of using lossy compression techniques to compress the original file, then calculating the difference between the approximate reconstruction and the original file and compressing that data; by combining the two pieces, you have a lossless compressor.

This type of approach can work, Misra said, but, in most cases, would not be more efficient than a standard lossless compression algorithm, because coding the error usually isn’t any easier than coding the data. On the surface, however, it’s an interesting idea, and one that can survive at least a cursory analysis.

That wasn’t the end of Misra’s work, however. Besides the original algorithm that launches the young entrepreneur, the creators of HBO Silicon Valley needed to later reveal a breakthrough improvement in that algorithm. This breakthrough fuels the plotline of the season finale, in which Pied Piper’s giant competitor Hooli reverse engineers the original algorithm and is poised to crush the startup.

The show creators had one constraint on that “breakthrough.” Somehow, the new algorithm had to connect to an elaborate joke that included the phrase “middle out.”  Misra later published a 12-page mathematical analysis of the scenario the joke sets up. (You can read the paper here, but be warned that if it were a movie it would be rated R for explicit content.)  He recently received his Ph.D. and has accepted a job in IBM’s Watson group, and has mixed feelings about the fact that this paper may turn out to be the most widely read technical document he’ll ever write.

For the breakthrough technology Misra was thinking big. “We wanted to be in the history of [data compression] giants,” he says, like Shannon, Huffman, Lempel, and Ziv.”

Shannon codes model data in a treelike structure, working from the roots to the leaves. Huffman codes, used today in media files like MP3 and JPEG, perform better by working from leaves to roots. Lempel and Ziv’s famous algorithm digests data in a stream, working from one end to another, constructing a model for the data as it progresses. Misra’s algorithm, as the HBO’s writers suggested, works from the middle of the data stream outwards, bouncing around the data to find any hidden structure and compressing it at the same time.

This kind of algorithm doesn’t exist today, but, says Weissman, it is certainly reasonable to think that someone will come up an approach to compression that will completely disrupt current standards by modeling data in new ways. Thinking about this possibility made him wonder, at least for a moment, if he should be starting a compression company like Pied Piper rather than consulting for a fictional one; but he’s tabled that idea, at least for now.

Weissman says he’s gotten all sorts of reactions from colleagues to his work on the show. There are those who believe that raising the visibility of compression technology is great for the field, and will draw more engineers to work in compression and more students to the study of information theory. And there are those who think he’s tarnished his name by associating it with a sophomoric comedy.

Misra and Weissman’s work on HBO is not over. The fictional engineers on the show will likely face new competition, and have to improve the algorithm to beat it. “Perhaps we’ll look more closely into local decodability,” Weissman said, “finding a technique in which the amount of compressed data needed to reconstruct a small chunk of the original data would be proportional to the size of the data I’m trying to retrieve.” That’s a technology that would be incredibly useful, particularly, Weissman said, in the world of genomics. Whether such schemes exist is still an open research question, but, he says, “I believe it might be possible, with little compromise on the overall compression.”

Photo: flickr/mendhak

Photo: flickr/mendhak

You know the saying “to each his own”? Well, that definitely applies to fetishes. From getting hit by by a car driven by a woman to getting turned on by photos from an online dermatology atlas, we’ve covered many case studies describing unusual sexual desires. But this one might take the cake – a description of a young man with formicophilia, which is defined as “the sexual interest in being crawled upon or nibbled by small insects, such as ants.” At last, someone who likes ants in his pants… literally!

Transcultural sexology: formicophilia, a newly named paraphilia in a young Buddhist male.

Children whose species-specific, juvenile sexual rehearsal play is thwarted or traumatized are at risk for developing a compensatory paraphilia. The case of a Buddhist male exemplifies the cross-cultural application of this principle. His syndrome, formicophilia, was endogenously generated without reference to or influence by commercial pornography. The complete causal explanation of paraphilia will require both a phylogenetic (phylismic) and an ontogenetic (life-history) component. The treatment of paraphilia may combine an antiandrogenic hormone with sexological counseling.

Staples Inc. SPLS +0.40% made the State of New York quite a promise: Buy your office supplies from us, and we’ll sell you a bunch of things for a penny apiece. This unleashed a rush on the retailer as government offices and qualifying organizations across the state gobbled up the one-cent items.

A Brooklyn charity benefiting disabled people ordered 240,000 boxes of facial tissue and 48,000 rolls of paper towels, according to documents obtained in a public-records request. Rome, N.Y., wanted 100,000 CD-Rs. A State Department of Motor Vehicles office ordered 8,000 rolls of packaging tape.

"We ordered things we didn’t even need," said Nancy Sitone, manager of office services at United Cerebral Palsy Association of Greater Suffolk Inc. "I have some products up the yin-yang."

Staples was named New York’s official office-supplies vendor in May 2013. Besides state agencies, those able to order under the contract include city halls, schools, police departments and many charities.

To win the three-year contract, Staples agreed to sell 219 popular items at a penny apiece. It hoped to turn a profit from thousands of other items that weren’t on sale.

The one-cent bargains ranged from a 12-pack of chalk with a list price of $1.01 to an $1,100 paper shredder, and included products such as a high-capacity computer flash drive and a 72-pack of C batteries.

Enter the law of supply and demand.

"People were going hog wild," said Ken Morton, purchasing manager for the Kenmore Town of Tonawanda school district near Buffalo. "It was like a gold rush."

His district in the contract’s first few months paid $254.69 for penny goods with a list-price value of $596,000, documents show. “When an invoice comes in for a truckload that says $27, you’re scratching your head in disbelief,” said Mr. Morton.

Office supply stores long have offered penny pricing on items that aren’t expected to be big sellers, said Jay Baitler, a retired Staples executive who until 2012 oversaw big commercial contracts.

But “to have it abused in this fashion is something I’m unaware of in my 40-plus years in this business,” he said. He is critical of customers buying things they didn’t need, but he also said, “I’m surprised Staples didn’t put a stop to it sooner.”

Staples delivered penny items with a list-price value of $22.3 million in the contract’s first few months, for which it was paid $9,300, documents provided by the state show. (List prices in office supplies typically are inflated; discounts from list prices are the norm.)

Staples declined to comment on its pricing strategy.

Ms. Sitone of the Cerebral Palsy Association says she thought at first the penny pricing was a mistake, but when she found out otherwise “it was a free-for-all.” The agency ordered “a thousand of everything.”

Ms. Sitone got $74,000 in one-cent items, now stored in a trailer, for less than $70, including, she says, 200 cans of Dust-Off that nobody wants, and enough pens—24,000—that “we’ll be set for life.”

Before signing the contract, seemingly incredulous state officials asked Staples to confirm “your company offered one cent ($0.01)” prices on many items and that Staples could fulfill orders at the offered prices for three years.

"We are committed to the pricing at the highest levels of Staples," a company executive replied in an email.

Two months into the contract, a senior Staples official complained in an email to John Traylor, a state official, about “excessive orders,” citing as an example the request for 240,000 boxes of Kleenex, or 5,000 cases at a penny per 48-box case.

"This order alone exceeds the capacity of 10 tractor trailers [and] has a retail value of $399,500," the executive wrote.

Arguing that demand was unreasonably above estimates, Staples never delivered the truckloads of tissues or many other orders, and blocked some items from sale.

The state “is still in active negotiations to resolve this disagreement,” a spokeswoman for New York’s Office of General Services said. “Staples did not ask for a limitation in ordering quantities,” she said, “and OGS would not have accepted such a limitation had it been made.”

Staples is “in full compliance” with the contract, a spokeswoman said.

The state spokeswoman said 56 of the penny items recently were still available. She said the state isn’t aware of any supplies being resold for a profit.

Aside from the penny items, Staples collected $8.8 million for regular-priced goods in the contract’s first few months.

The Monroe-Woodbury school district, about 50 miles north of Manhattan, was the top bargain hunter, taking delivery of $677,000 of penny items at list prices during the contract’s first few months, paying $299.15. The numbers come from spreadsheets provided by the state in response to a Freedom of Information Law request.

Sheri Patterson, finance officer at Monroe Woodbury High School, said boxes were “stacked in hallways…we didn’t have any place to keep” them.

There were surprises. Ms. Patterson thought a penny paid for a roll of paper towels—instead, it was for a 24-roll pack. The school received 53 packs, records show. “We were just wondering whose idea this was,” said Ms. Patterson, “and if they still had their job.”

Staples declined to comment on personnel matters.

A sign hangs outside a Staples store. Getty Images

The No. 1 item purchased by Attica Correctional Facility, the famous maximum-security prison, was Premium #1 Paper Clips—a half million of them. The clips came with a list price of $3,750. The prison paid $5.

"They were cheap," a prison spokeswoman said. Could they be used to jimmy jail doors? "Inmates are prohibited from having paper clips," she said.

A coveted penny item was a 64GB SanDisk flash drive, a large “thumb drive” to store or transfer data. It listed for $249.99 but recently was priced at $54.99 on Staples.com.

Customers ordered 128,978 of them in the contract’s first few months, documents show, compared with anticipated annual demand for 33. Staples delivered 1,080 in that period. Had it delivered all those ordered, it would have sold drives with a current retail value of $7.1 million for $1,290.

The state estimated there would be just 41 takers annually for the 18-sheet commercial shredders, recently priced at $599.99 on Staples.com but available under the contract for a penny.

New York customers ordered more than 6,000 in the first few months. Staples delivered 154 in that period, each costing a penny.

Five went to the home of Mary Ede, a purchasing employee with the Kenmore-Tonawanda schools who was allowed to order for her personal use. She said she gave a shredder to each of her four adult children, and kept one. Hers has since broken.

"I would have been more upset if it was the actual cost," she said. "For a penny, I’ll throw it out."

sophia-loren-phoneEditor’s note: James Altucher is an investor, programmer, author, and several-times entrepreneur. You can find him @jaltucher or his latest book is “The Power of NO!”

I spoke to the VC on Wednesday. He said he would have his decisions “fast.” He said the great thing about his VC firm (as opposed to all of those “others”) is that it has absolutely no problem making a quick decision.

“Our lawyers are all ready. The deal is boilerplate. We can send the money to you right away.”

Now it’s Friday. “Did anyone call yet?” I could ask that but I’ve already asked that five or six or 10 times. And then there was yesterday. He did say “fast,” right? I heard him say it.

“We invest in exactly this type of company,” he said as he went into the elevator. He was confident, his coat slung over his briefcase. Smiling. He was happy. Harvard and happy.

“We did it!” I thought. Finally we got funding. We have a good product. We have customers who want it. We just need that first investment.

I mean: ABC Inc got $5 million and their product is much worse than ours. It doesn’t look anything like ours. If their customers knew we existed then we would have 100 percent of the market. We would have no competition.

Did he call yet? Is it bad form if I call him now? He did say “fast”? Maybe he didn’t have the right number.

I carry my cell phone everywhere but maybe he’s trying to call the office phone. Maybe we don’t have that whole “click 1 if you want James, click 2 if you want Office Admin, etc.” hooked up yet. I don’t know. Nobody ever calls that number.

And I’m the office admin anyway. And I’m sales and I’m customer service. No matter what number he clicked it would go to me. I should have it all forwarded to my cell phone.

Is it bad if I call him? Would he think I’m desperate? He did say “fast” and that was 48 hours ago. 48 hours = slow.

Okay. I’m going to call him in five minutes. It’s not so bad to call and say “just following up.”

Or an email! I can say “just checking in.” That’s not too desperate is it? It’s not like he was about to decide “Yes” with his team and then he gets my email and say, “Wait a sec, guys. He just emailed. Let’s raise the valuation on him.”

Well, so what? What if he did raise the valuation? You know the old saying: “100 percent of nothing is worse than 1 percent of something.”

And this something is big. If that other company sold for a billion we can sell for $10 billion.

Why does everyone else have no trouble getting funding? They get all the VCs calling them and then they all split the pot five ways and they say there was so much demand that the valuation had to go up.

brad

But I actually have a product that works. And I have customers who not only want it, they are calling me saying, “when do you think you’ll finish it?” I have a real pipeline.

If I email him he might not respond. Or he probably gets too many emails. Phone call is the only thing that makes sense, right?

I hear the other day the biggest productivity hack: get this. It’s making a phone call. You just pick up the phone, check in with the guy and in three seconds you’re done.

But what if he hasn’t met with his partners yet? What if one of them got sick or died? Then I’d have to call him.

You know, I don’t even know if I want to do business with someone who says he will call fast and then makes a potential investment and then wait 48 hours. Now 50 hours. He left at noon Wednesday and now it’s 2 p.m.

And if he said “fast” and now it’s Friday at 2 p.m. in the summer and he’s probably off to the Hamptons is he really going to make me wait until Monday?

Will he really make me wait Saturday and Sunday to wait to see if I’m going to stay in business?

I should call him. But will it seem desperate? He said, “We love this space.” He used the word “love.” Do you treat the people you love this way? Make them wait all the way until Monday? Now that it’s Friday at 2 p.m. the week is pretty much over. It’s already Monday. That means “fast” went from Wednesday until Monday.

Maybe “fast” for him was just a way of saying “next week.” But in what world does “fast” mean “next week”? Not even a time lord would say “fast” is on “Monday” when it’s already Wednesday. I thought maybe we’d at least be getting paperwork by now.

Maybe “no news is good news.” Maybe they’re getting the paperwork together. “It’s boilerplate,” he said. “We just have to fill in the blanks.”

Maybe there are just filling in some blanks.

Okay, I can’t wait anymore. I should call. In one more minute he might be on his helicopter to the Hamptons. Maybe he even wants to invite me. Maybe if I call now he will invite me and we’ll talk “big picture.” How we might sell later to Google or Facebook or even IPO.

I could be rich off this! This can be game-changing. This could be generations of my family.

He did say “fast.” I don’t want to appear desperate. But maybe he’s been calling that damn office phone system! I hate that! We all have cell phones anyway.

I better call him. I could run home quickly and pack clothes for the Hamptons. I have a bathing suit somewhere. I’m sure he’s going to be really happy when he picks up the phone and hear that it’s me.

Later on we’ll joke how it’s a good thing I made this decision.

(IMAGE HAS BEEN MODIFIED)