Executive SummaryBacterial resistance to antibiotics is now both the biggest problem facing physicians today and the biggest factor driving new drug development in the antibacterial sector of the pharmaceutical market. There has been an alarming increase in the number of resistant Gram-positive organisms over the last five years, including:Staphylococcus aureus,Staphylococcus epidermidis,Enterococcus faecium,Enterococcus faecalisandStreptococcus pneumoniae. Totally new antibiotics are needed to treat organisms that are now resistant to almost all antibiotics available. Unfortunately, there are few new classes of antibiotics on the near horizon, primarily because until recently pharmaceutical companies have not had the incentive to develop them.The emergence of resistant bacterial strains re-ignited activity in the antibacterial drug discovery and development fields, which had stagnated through the late 1960s to mid-1980s. Genomics has created a fundamental paradigm shift in drug discovery. Several bacterial genomes have been fully sequenced and more will follow. Analysis of these complete genomic sequences is discovering many potential drug targets that are driving drug discovery efforts. This is conceptually different to historical antibiotic development over the last 50 years where the drug targets were discovered after the drugs had been developed. The new paradigm provides the best tactic to combat antibiotic resistance. This is mainly because the great majority of existing antibiotics address very limited molecular targets; resistance to one also results in cross-resistance to other antibiotics. Drugs with new chemical entities against new targets will likely enjoy longer product lives than the modified versions of the current antibiotics.The US market is, on average, roughly one-third the size of the worldwide market. In 2001, total antibiotic sales worldwide were $US26 billion; US sales were $US9.5 billion. By the year 2011, the worldwide market will have grown to $US32 billion, and the US market to $US12 billion. The biggest selling class of antibacterials in 2001 was the cephalosporins ($US6.7 billion worldwide), followed by penicillins ($US5.7 billion) and quinolones ($US5.7 billion). In the US market, quinolones are the biggest sellers ($US2.7 billion), followed by cephalosporins ($US2.0 billion), penicillins ($US1.8 billion) and macrolides ($US1.7 billion). By the year 2011, quinolones are anticipated to be the leading antibiotic group on a worldwide basis, with projected sales of over $US10 billion worldwide and $US5 billion in the US.Adis Business Intelligence forecasts that, in general, penicillins and cephalosporins will continue to be major players in the antibacterials marketplace, while macrolides, quinolones, and small-molecule drugs will remain moderate in their influence. One important trend is that the technologies that exist today are likely to exert the same relative influence in 10 years as they do today. Most truly novel drugs and drug classes are in early-stage development and few are likely to enter the pharmaceutical marketplace before 2011.