Question: From the Article Below, write a review of the current status of development of antibiotics." I do not have the figures!"

Article: Antibiotic discovery in the twenty-first century: current trends and future perspectives

New antibiotics are necessary to treat microbial pathogens that are becoming increasingly resistant to available treatment.

Despite the medical need, the number of newly approved drugs continues to decline. We offer an overview of the pipeline for

new antibiotics at different stages, from compounds in clinical development to newly discovered chemical classes. Consistent

with historical data, the majority of antibiotics under clinical development are natural products or derivatives thereof. However,

many of them also represent improved variants of marketed compounds, with the consequent risk of being only partially

effective against the prevailing resistance mechanisms. In the discovery arena, instead, compounds with promising activities

have been obtained from microbial sources and from chemical modification of antibiotic classes other than those in clinical use.

Furthermore, new natural product scaffolds have also been discovered by ingenious screening programs. After providing selected

examples, we offer our view on the future of antibiotic discovery.

The Journal of Antibiotics advance online publication, 16 June 2010; doi:10.1038/ja.2010.62

Keywords: antibiotics; natural products; pipeline

Medical progress in the prevention and treatment of many diseases,

which have resulted in significantly increasing life expectancy, may be

put at risk without the introduction into clinical practice of new

antibiotics effective against multidrug-resistant (MDR) pathogens.

Although most stakeholders agree that new antibiotics could tackle

this unmet medical need, opinions vary on how new antibiotics could

be discovered and brought into the market in a cost-effective manner.

1–3 Two considerations would probably meet with unanimous

consensus: the golden era of antibiotic discovery is gone and it will not

be repeated; and genomics, combinatorial chemistry and highthroughput

screening do not represent the magic bullet to fill the

pipeline with new developmental drug candidates. In this respect, it is

important to underline the contribution that natural products,

especially those of microbial origin, can provide to antibiotic discovery,

as advocated by Demain4,5 on several occasions. The decreasing

number of drugs approved for clinical use, year after year, suggests

that the ‘ailing pharmaceutical industry’ is not yet following the

‘prescription’ of Demain,6 as spelled out in 2002.

The purpose of this review is to highlight some of today’s features of

antibiotic discovery in the context of the current medical needs and

the existing pipeline of antibacterial agents in clinical development.

Our main focus will be on chemical classes that, if developed into

drugs, would be new to the clinic. However, these classes would not

necessarily be new to science. For example, a ‘look-back’ strategy was

applied to antibiotics discovered during the golden era, which were

then reexamined using contemporary tools in the light of current

medical needs.7 Although some important breakthroughs have also

been made in identifying new promising drug candidates from

synthetic origin, for reason of space, and in the spirit of the important

contributions to the field by Demain, we would limit ourselves

to antibiotics of microbial origin and their derivatives reported

since 2005.

CURRENT ANTIBIOTIC PIPELINE

Infections due to methicillin-resistant Staphylococcus aureus (MRSA),

vancomycin-resistant Enterococcus faecium (VRE) and fluoroquinolone-

resistant Pseudomonas aeruginosa are rapidly increasing in US

hospitals, and even more frightening is the recent occurrence of

panantibiotic-resistant infections, involving Acinetobacter species,

MDR P. aeruginosa and carbapenem-resistant Klebsiella species.8,9

Although antibiotic resistance continues to grow in hospitals and in

the community, involving both Gram-positive and Gram-negative

pathogens, the number of newly approved agents has been decreasing,

with only six new antibiotics approved since 2003.

In the late 90s, following the global concern regarding the rapid

increase in MRSA, many companies redirected their attention to target

Gram-positive pathogens, particularly MRSA, VRE and penicillinresistant

Streptococcus pneumoniae, as evidenced by the commercial

and clinical success of linezolid and daptomycin, the only antibiotics

belonging to new classes introduced in clinical practice since the early

1960s. However, most antibiotics currently under development for

Gram-positive infections are improved derivatives of existing drugs

(see Table 1). As vancomycin has been increasingly used for the

treatment of a wide range of infections, second-generation glycopep-

tides with improved profile over vancomycin were developed. Among

them, telavancin, a once-a-day derivative of vancomycin, was

approved by the US Food and Drug Administration (FDA) in 2009.

Oritavancin, derived from the vancomycin-related glycopeptide chloroeremomycin,

is highly active against VRE strains and shows a long

plasma half-life. However, in 2008, the FDA did not authorize its

commercialization. The long-acting glycopeptide dalbavancin, a derivative

of the teicoplanin-related glycopeptide A40926, was also not

approved by FDA, because of insufficient clinical evidence of efficacy.

If approved, dalbavancin would be the first antibiotic to be administered

once weekly.10

Resistance to methicillin in S. aureus is mediated by the production

of a penicillin-binding protein with reduced affinity for b-lactams. The

most recent cephalosporins, ceftobiprole and ceftaroline (Table 1),

have been specifically designed to enhance activity against MRSA and,

thanks to their oral availability, are particularly attractive for the

community setting. Ceftobiprole is quickly bactericidal against a wide

range of Gram-positive pathogens, including MRSA and VRE and has

been approved in Canada and Switzerland.11 However, early in 2010,

the FDA did not grant market authorization to ceftobiprole, and later

the European authority issued a negative opinion on this compound.

Ceftaroline, which is active against most Gram-positive pathogens

with the exclusion of enterococci, has completed phase III studies and

may be submitted for FDA approval.12 Both cephalosporins, however,

lose potency against MRSA compared with methicillin-susceptible

S. aureus strains. The injectable carbapenem PZ-601 has shown potent

activity against drug-resistant Gram-positive pathogens, including

MRSA, and is currently undergoing phase II studies.13

After the success of linezolid, many new oxazolidinones are being

developed for Gram-positive infections. Radezolid14 and torezolid15

are currently in phase II trials, whereas RWJ-416457 has completed the

phase I trial. Despite the fact that the use of fluoroquinolones has been

associated with increased incidence of MRSA,16 several new members

of this class are under development: delafloxacin, nemonoxacin,

zabofloxacin and WCK-771 (Table 1) are the most advanced.

The extensive use of fluoroquinolones and other wide-spectrum

antibiotics such as cephalosporins, by affecting the normal gut flora,

has led to the rapid diffusion of Clostridium difficile-associated

diarrhea, particularly in elderly and immunocompromised patients.

Difimicin, currently in phase III, and ramoplanin, with phase II

completed, are microbial products under development for prevention

and treatment of C. difficile-associated diarrhea, acting locally by

decolonizing the gut (Table 1).

Other compounds which have completed phase I clinical trials

include the oral and injectable pleuromutilin BC-3205,17 the FabI

inhibitor AFN-1252 targeting staphylococcal infections18 and the

lipopeptide friulimicin (Table 1).19

The scenario is even more disappointing for compounds targeting

Gram-negative pathogens, in which old drugs have been revamped for

new uses, and none of them has reached phase III yet (Table 1).

Ceftazidime is a marketed cephalosporin being developed in combination

with NXL104, a representative of a new class of b-lactamase

inhibitors,20 which renders cephalosporin effective against most

b-lactamase-producing enterobacteria. If approved, this combination

would be the first alternative to piperacillin/tazobactam. NXL104 is

also under investigation in combination with ceftaroline.21 CXA-101 is

a ceftazidime-like compound with improved stability against the

AmpC b-lactamase, but it shows no improvements against MDR

P. aeruginosa,22 unless administered in combination with tazobactam.

The new aminoglycoside ACHN-490, effective against pathogens

resistant to this class, has recently completed phase I.23 The new

monobactam BAL-30072, stable against metalloenzymes, is ready to

start clinical development against difficult-to-treat Gram negatives,

including Pseudomonas and Acinetobacter.24

The increasing spread of MDR Gram-negative pathogens, particularly

P. aeruginosa, Acinetobacter spp. and some Enterobacteriaceae has

renewed the interest toward narrow-spectrum compounds, to avoid

other clinical conditions associated with the use of broad-spectrum

antibiotics. However, because of a long history of success in the

empirical treatment of infections, many hospitals lack rapid and

effective tools for identifying etiological agents. This limitation poses

significant hurdles for the clinical development of narrow-spectrum

compounds.

APPROACHES LEADING TO NEW ANTIBIOTIC CLASSES

It is generally agreed that the best way to overcome the decreasing

efficacy of existing antibacterial agents is to introduce into practice

compounds belonging to classes that are new to the clinic. Microbial

sources can provide a rich reservoir of such compounds, and the

different approaches used usually aim at discovering either a novel

class or an improved variant of a poorly explored class. However,

this must be carried out in a high background of many known

compounds, some of which are encountered in random screening

programs at a relatively high frequency. Thus, the discovery of an

antibacterial agent belonging to a new chemical class or an improved

variant of an existing class is a rare event, and the approaches

described below reflect strategies designed and implemented to

capture this rare event. Appropriate strategies include retrieving

microbial strains from underexplored environments, screening new

microbial taxa, mining microbial genomes and using innovative

assays. These strategies have led to some novel chemical classes, as

illustrated in Figure 1.

As an example of the first strategy, investigation of deep-sea

sediment samples led to the discovery of abyssomicins (Figure 1),

which are polycyclic antibiotics from the new marine actinomycete

taxon Verrucosispora.25 The compounds were discovered using a simple

agar diffusion assay, which involved pursuing antibiotics the action of

which could be reverted upon addition of p-aminobenzoic acid.

Abyssomicins represent a new chemical class, and preliminary studies

indicate that they act as substrate mimics of chorismate. Interestingly,

only abyssomicin C and its atrop stereoisomer show antibiotic activity

against Gram-positive bacteria, including MDR S. aureus.26

An additional example of a new chemical class discovered by

screening new taxa is represented by thuggacins (Figure 1), which

are thiazole-containing macrolides produced by the myxobacteria

Sorangium cellulosum and Chondromyces crocatus.27 These compounds

show activity against Mycobacterium tuberculosis and their target

appears to be the electron transport chain.

Another successful approach has been exploring microbial genomes

for the presence of secondary metabolite pathways. As the corresponding

genes are organized in clusters and bioinformatic tools allow

a reasonable prediction of the pathway product, this bioactivityindependent

approach can directly target structural novelty. On a

pioneering work of this type, scientists at Ecopia Biosciences (now

Thallion Pharmaceuticals, Montreal, QC, Canada) identified ECO-

02301, a linear polyene from Streptomyces aizunensis with antifungal

activity28 and ECO-0501, a glycosidic polyketide from Amycolatopsis

orientalis with activity against Gram-positive pathogens, including

MDR isolates (Figure 1).29 In a similar approach, a novel cyclic

lipopeptide, designated orfamide (Figure 1), was identified from the

Pseudomonas fluorescens genome.30 In this case, the bioinformatic

prediction that the peptide contained four leucine residues suggested

feeding with 15N-Leu, which facilitated compound purification and

characterization. Orfamide shows a moderate antifungal activity

against amphotericin-resistant strains of Candida albicans and may

prove beneficial in agriculture and crop protection.

Another important strategy for discovering new classes of antibiotics

has been the implementation of increased-sensitivity assays in

screening programs. One such approach relied on the antisense

technology. When the level of a desired bacterial target is depleted

by overexpression of the cognate antisense mRNA, the strain becomes

hypersensitive to compounds acting on that target. By using a target

against which few compounds are known to act, the increased

sensitivity of the assay should allow the identification of compounds

routinely missed with growth inhibition assays on the wild-type

strain.31 One assay involved the FabH/FabF enzyme, required for

fatty acid biosynthesis in bacteria. Antimicrobial activities were

detected by agar diffusion in a two-plate assay, in which one plate

was inoculated with S. aureus carrying the antisense construct and the

other plate with an S. aureus control. Different inhibition halos in the

two plates indicated an increased sensitivity of the ‘antisense strain.’

After screening 4250 000 microbial product extracts, the assay led to

the identification of a new chemical class that includes platensimycin

(Figure 1), produced by Streptomyces platensis, and related compounds.

Platensimycin shows antibacterial activity against Grampositive

pathogens, including MDR strains, and was also effective in

an experimental model of infection.32

In another increased-sensitivity assay, a high-throughput screening

program was implemented to identify inhibitors of a cell-free translational

system affecting steps other than elongation. The assay made

use of a model ‘universal’ mRNA that could be translated with similar

efficiency by cell-free extracts from bacterial, yeast or mammalian cells.

The rationale behind the approach was to use a sensitive assay and to

discard frequently encountered compounds using a polyU-based assay.

This program led to the identification of GE81112 (Figure 1), a novel

tetrapeptide produced by a Streptomyces sp., which targets specifically

the 30S ribosomal subunit by interfering with fMet-tRNA binding to

the P-site.33 The compound was highly effective against a few Grampositive

and Gram-negative strains, if grown in minimal or chemically

defined medium, suggesting active uptake by the cells.34

The above examples illustrate how different approaches can lead to

novel antibiotic classes. Usually, when unexploited microbial diversity

is accessed, there is no need for specific, high-sensitivity assays.

Whichever the approach chosen, there is no guarantee of success.

The reader is referred to a recent review for suggestions on how to

increase the probabilities of success.35

IMPROVED VARIANTS FROM MICROBIAL SOURCES

New variants of known classes can be found by screening microbial

strains, by varying cultivation procedures or by manipulating the

biosynthetic pathway. There is an increasing amount of literature

related to pathway manipulation and this trend is likely to continue as

methodological advancements result in increased success rates. In

some cases, the desired variant might not be a more active compound,

but a molecule carrying functional groups suitable for further chemical

modifications. As the antibiotics in clinical use belong to a few

classes, which have been extensively explored by screening and

chemical modification, there is probably little space for finding

improved variants within those classes. We provide selected examples

of microbial strains producing improved variants of chemical classes

not yet in clinical use.

Lantibiotics, which are ribosomally synthesized peptides that

undergo posttranslational modifications to yield the active structures

containing the typical thioether-linked (methyl)lanthionines, are produced

mostly from strains belonging to the Firmicutes and, to a lesser

extent, to the Actinobacteria. Their antimicrobial activity is limited to

Gram-positive bacteria. The prototype molecule is nisin, discovered in

the 1920s and used as a food preservative for440 years.36 Lantibiotics

with antibacterial activity are divided into two classes according to

their biogenesis: lanthionine formation in class I compounds requires

two separate enzymes, a dehydratase and a cyclase, whereas a single

enzyme carries both activities for class II lantibiotics. Until recently,

the occurrence of class I compounds was limited to the Firmicutes (see

below). Although compounds from both classes exert their antimicrobial

activity by binding to Lipid II, they do so by binding to

different portions of this key peptidoglycan intermediate.

As lantibiotics bind Lipid II at a site different from that affected by

vancomycin and related glycopeptides, they are active against MDR

Gram-positive pathogens and have attracted attention as potential

drug candidates. The compound NVB302, a derivative of deoxyactagardine

B (Figure 2a) produced by a strain of Actinoplanes liguriae, is

currently a developmental candidate for the treatment of C. difficileassociated

diarrhea.37 Independently, a screening program, designed to

detect cell-wall-inhibiting compounds turned out to be very effective

in identifying lantibiotics from actinomycetes.38 It consisted of identifying

extracts active against S. aureus but inactive against isogenic

L-forms, discarding extracts the activity of which was abolished by

b-lactamases or by excess N-caproyl-D-alanyl-D-alanine. Among the

new lantibiotics identified, the most active compound was NAI-107

(Figure 2a), produced by Microbispora sp.39 This compound represents

the first example of a class I lantibiotic produced by actinomycetes. It

is currently a developmental candidate for the treatment of nosocomial

infections by Gram-positive pathogens.40 The same screening

program led to the identification of additional class I lantibiotics from

actinomycetes. Among them, the compound 97518 (Figure 2a),

structurally related to NAI-107,41 afforded improved derivatives by

chemical modification.42 Another interesting advancement in the

lantibiotic field has been the discovery of two-component lantibiotics

produced by members of the class Bacilli. The best characterized

compound is haloduracin43,44 (Figure 2a), whereas lichenicidin has

been proposed from genomic studies but has not yet confirmed by

structural elucidation.45 Although their antimicrobial activities have

not been described in detail, recent work suggests similar activities for

haloduracin and nisin.44

Thiazolylpeptides are highly modified, ribosomally synthesized

peptides that inhibit bacterial protein synthesis by affecting either

one of two targets: elongation factor Tu, as for GE2270 and related

compounds; or the loops defined by 23S rRNA and the L11 protein,

exemplified by thiostrepton. Most thiazolylpeptides show potent

activity against Gram-positive pathogens, yet their poor solubility

has limited clinical progress, and only a derivative of GE2270 has

entered clinical trials for the topical treatment of acne.46 Novel

members of this class have been described (Figure 2b): thiomuracins47

belong to the subgroup targeting EF-Tu, with an antibacterial profile

similar to GE2270; thiazomycin48 and philipimycin,49 which target the

50S subunit, show high activity against Gram-positive strains, and a

similar profile to thiostrepton.

For ribosomally synthesized peptides, such as lantibiotics and

thiopeptides, new representatives can be generated by site-directed

mutagenesis of the corresponding structural genes. Libraries of new

molecules have been obtained, many of which, as in the examples of

actagardine50 and thiocillin,51 retained antibiotic activities comparable

with those of the parent molecule.

CHEMICAL DERIVATIVES

Many papers have been published in the past 5 years reporting

chemical programs aimed at overcoming the prevailing resistance

mechanisms and/or to improve the drug profile of known microbial

products. Novel approaches included the use of new tools, such as

click chemistry and total synthesis. For the classical approach of semisynthesis,

we will limit the examples to selected compounds not yet in

clinical use.

Click chemistry is a new synthetic approach that can accelerate drug

discovery by using a few practical and reliable reactions. A ‘click’

reaction must be of wide scope, giving consistently high yields with

various starting materials; it must be easy to perform, insensitive to

oxygen or water and use only readily available reagents; finally,

reaction work-up and product isolation must be simple, without

chromatographic purification.52 As an example, this approach was

used to produce new lipophilic teicoplanin and ristocetin aglycons

with improved activity against Gram-positive bacteria, including

VRE.53 For aminoglycosides, which usually require multiple protection–

deprotection steps to selectively manipulate the desired amino

and hydroxyl groups, click chemistry allowed the transformation

of neomycin B into several novel building blocks that were used for

the specific modification of the ring systems, thus generating new

neomycin analogs the biological activity of which is currently under

investigation.54

For some low-molecular-weight compounds, total synthesis has

become available and will be useful to design preliminary SAR for new

classes of antibiotics (such as platensimycin) or to access new

derivatives for already known classes (such as tetracyclines). Indeed,

the novel scaffold and intriguing biological property of platensimycin

captured the interest of several research groups, which reported

different elegant total syntheses.55 In addition, medicinal chemistry

studies have been conducted, and the design, synthesis and biological

evaluation of several platensimycin analogs incorporating varying

degrees of molecular complexity have been reported.56–58 Preliminary

data indicate that certain modifications of the intricate cage region can

be made without detrimental effects on potency, whereas even small

modifications of the benzoic acid region result in a drastic loss of

activity (Figure 1). Another remarkable chemical improvement in the

synthesis of natural product analogs was a short and enantioselective

synthetic route to a diverse range of 6-deoxytetracycline antibiotics

(Figure 3a). This new approach targeted not a single compound but a

group of structures with the D ring as a site of structural variability.

A late-stage, diastereoselective C-ring construction was used to couple

structurally varied D-ring precursors with an AB precursor containing

much of the essential functionality for binding to the bacterial

ribosome. Results of antibacterial assays and preliminary data

obtained from a murine septicemia model show that many of the

novel tetracyclines synthesized have potent antibiotic activities. This

synthetic platform gives access to a broad range of tetracyclines that

would be inaccessible by semi-synthesis and provides a powerful

engine for the discovery of new tetracyclines.59,60

Even on larger molecules, semi-synthetic and synthetic chemistry

has been successfully applied to study and optimize lead compounds.

The lipoglycodepsipeptide ramoplanin (Figure 3b) is 2–10 times more

active than vancomycin against Gram-positive bacteria and maintains

full activity against VRE and all MRSA strains. However, its systemic

use has been prevented by its low tolerability at the injection site,

apparently related to the length of the fatty acid side chain.

To overcome this problem, the fatty acid side chain was selectively

removed and replaced with different carboxylic acids. Many derivatives

showed an antimicrobial activity similar to that of the precursor,

and a significantly improved local tolerability.61 The recently

described, fully synthetic lactam analog of ramoplanin showed the

same biological activity as the natural product. Moreover, a set of

alanine analogs, obtained by total synthesis, has provided insights into

the importance of individual amino-acid residues on ramoplanin

activity. The MICs of each alanine-containing analog parallels its

ability to bind Lipid II. Apart from positions 5, 6 and 9, which can

tolerate alanine substitutions, MICs increased 415-fold upon alanine

replacement, with dramatic effects observed for positions 4, 8, 10 and

12. The new data thus confirm the importance of the ornithine

residues at positions 4 and 10, with the latter directly involved in

target binding, most likely by ion pairing with the diphosphate of

Lipid II.62,63

The mannopeptimycins, which were originally isolated in the late

1950s from Streptomyces hygroscopicus, have been recently revived

because of their promising activity against clinically important Grampositive

pathogens, including S. pneumoniae, MRSA and VRE. They

also bind to Lipid II, but in a manner different from ramoplanin,

mersacidin and vancomycin. Multiple approaches have been used to

optimize the mannopeptimycin activity profile, including selective

chemical derivatization, precursor-directed biosynthesis and pathway

engineering. The SAR data have shown that substitution of a hydrophobic

ester group on the N-linked mannose or serine moieties

suppressed antibacterial activity, whereas hydrophobic acylation on

either of the two O-mannoses, particularly the terminal mannose,

significantly enhanced activity. AC98-6446 (Figure 3b) represents an

optimized lead obtained by adamantyl ketalization of a cyclohexyl

analog prepared by cyclohexylalanine-directed biosynthesis. AC98-

6446 showed superior antimicrobial potency and properties, both

in vitro and in vivo.7,64

Laspartomycin is active against VRE and MRSA strains. Recently,

enzymatic cleavage of its lipophilic moiety allowed the synthesis of

various acylated derivatives (Figure 3b), even if none was more potent

than the parent antibiotic.65 The cyclic heptapeptide GE23077 is a

potent and selective inhibitor of bacterial RNA polymerase

that, probably because of its hydrophilicity, is unable to cross

bacterial membranes. New derivatives obtained by modifying different

moieties were reported. Although many of them retained activity

on the enzyme, none showed a significant antibacterial activity

apart from marginal inhibition of Moraxella catarrhalis growth

(Figure 3b).66

FUTURE PERSPECTIVES

This brief and nonexhaustive excursus on the present and future

pipeline of antibacterial agents for treating human diseases provides

opportunities for additional considerations. The first is that, of the

antibiotics under clinical development (Table 1), 67% are natural

products themselves, or natural product-derived compounds, a percentage

perfectly in line with that found with exisiting drugs.67

The second consideration is that the major players in antibacterial

development are small companies, which are not deterred by the small

market size for these drugs. However, it should be noted that a

significant number of the compounds listed in Table 1 were not

discovered by small companies, but actually represent projects abandoned

by large pharmaceuticals companies. Thus, it remains to be

seen whether small biotechs will dedicate sufficient resources and be

successful in discovering and developing novel antibacterial agents.

In this relatively grim scenario, microbial products continue to

provide new chemical classes or unexpectedly active variants of

chemical classes already known to science. New technologies can

now provide access to unexplored microbial diversity or to hypersensitive

assays to detect bioactive compounds. Furthermore, the information

derived from rapidly accessing the genome of many microbial

strains can provide new routes to natural product discovery, as well as

making more effective traditional, bioassay-based screening efforts.

In our opinion, no single technology will represent the magic bullet

for antibiotic discovery, but only the painstaking integration of a

multidiscplinary team with profound knowledge of microbiology,

chemistry and bioinformatics will ultimately lead to new antibacterial

agents of medical relevance and commercial success.

06. Testing a new insect repellent. (Adapted from McClave, Benson, & Sincich, 12th edition, page 556). A study in the Journal of the American Mosquito Control Association (Mar. 1995) investigated whether a tent sprayed with a commercially available 1% permethrin formulation would protest people, both inside and outside the tent, against biting mosquitoes. Two canvas tents — one treated with permethrin, the other untreated — were position 25 meters apart on flat, dry ground in an area infested with mosquitoes. Eight people participated in the experiment, with four randomly assigned to each tent. Of the four stationed at each tent, two were randomly assigned to stay inside the tent (at opposite corners) and two to stay outside the tent (at opposite corners). During a specified 20-minute period during the night, each person kept count of the number of mosquito bites received. The goal of the study was to determine the effect of both Tent type (treated or untreated) and the Location (inside and outside) on the mean mosquito bite count.

The data for the study are shown in the table below. The summary values for the factors are given with A = Tent type and B = Location.

A1=30, A2=56, B1=27, B2=59, AB11= 11, AB12= 19, A21=16, AB22= 40

CM=924.5

Fill this table out

These are the correct answers, but I don't understand how we got this.

And now here we are…a Starbucks on nearly every corner. Even Homer Simpson had something to say about this in a recent episode! This is where I need your help. I would like you to perform a thorough analysis of the data involving the number of Starbucks locations. Our investors are interested to know about the rate of growth as well as to understand issues related to forecasting the number of Starbucks locations in the future. And specifically, we are wondering when the number of stores will reach 37,000 locations. You see, there are currently 37,000 McDonald’s restaurants worldwide, and we have set a goal to reach that number by the year 2020. Do you think we can do it?

1. identify the initial value and the growth rate of your exponential model and explain what they mean in context of Starbucks Stores. Put your explanations in a text box.
2. How well does the exponential function compare to the data from the Starbucks Company Time Line? Answer in a short paragraph in a text box.
3. Use your exponential model to predict when Starbucks will match McDonald’s for the number of locations.

a) Produce a histogram of the distribution of these prices. Comment on what this histogram reveals about the distribution. [Be sure to relate your comments to the context, and refer to the shape, center, variability, and outliers (if any).]

price

413 413 455 455 459 465 495 495 499 499 500 500 504 510 515 520 529 529 529 530 535 570 570 579 585 589 599 600 650 660 665 665 695 698 699 699 699 700 795 799 799 800 800 813 814 819 819 819 829 848 849 850 855 855 879 880 884 895 899 899 899 900 907 909 932 950 950 975 976 976 979 987 990 998 998 998 999 999 999 999 1000 1000 1000 1000 1000 1009 1019 1020 1020 1044 1045 1048 1049 1078 1080 1080 1080 1099 1099 1099 1100 1100 1139 1150 1167 1169 1169 1170 1175 1191 1198 1199 1200 1200 1200 1200 1200 1200 1200 1207 1220 1222 1250 1250 1253 1253 1253 1277 1282 1282 1285 1295 1295 1299 1325 1325 1345 1347 1360 1395 1395 1399 1399 1400 1449 1449 1450 1450 1450 1450 1450 1450 1465 1482 1485 1498 1499 1499 1499 1500 1500 1500 1500 1500 1515 1537 1539 1547 1547 1547 1550 1550 1550 1550 1551 1556 1563 1565 1568 1590 1595 1595 1599 1599 1599 1600 1600 1618 1622 1650 1650 1650 1672 1695 1698 1698 1699 1736 1754 1759 1760 1767 1780 1807 1870 1895 1979 1995

Could this be answered within excel + handwritten notes and thoroughly explained. Please and thank you

INTRODUCTION TO LINEAR CORRELATION AND REGRESSION ANALYSIS.

An economist with a major bank wants to learn, quantitatively, how much spending on luxury goods and services can be explained based on consumers’ perception about the current state of the economy and what do they expect in the near future (6 months ahead). Consumers, of all income and wealth classes, were surveyed. Every year, 1500 consumers were interviewed. The bank having all of the data from the 1500 consumers interviewed every year, computed the average level of consumer confidence (an index ranging from 0 to 100, 100 being absolutely optimistic) and computed the average dollar amount spent on luxuries annually. Below is the data shown for the last 24 years.

Date                X                     Y (in thousands of dollars)

1994                79.1                 55.6

1995                79                    54.8

1996                80.2                 55.4

1997                80.5                 55.9

1998                81.2                 56.4

1999                80.8                 57.3

2000                81.2                 57

2001                80.7                 57.5

2002                80.3                 56.9

2003                79.4                 55.8

2004                78.6                 56.1

2005                78.3                 55.7

2006                78.3                 55.7

2007                77.8                 55

2008                77.7                 54.4

2009                77.6                 54

2010                77.6                 56

2011                78.5                 56.7

2012                78.3                 56.3

2013                78.5                 57.2

2014                78.9                 57.8

2015                79.8                 58.7

2016                80.4                 59.3

2017                80.7                 59.9

Questions:

1. Do you think that measuring the level of optimism is a good predictor for trying to forecast future spending on luxury items? Explain why or why not.
2. How would you be able to improve on the model? You must provide a minimum of two specific ways to go about improving the model.
3. If the economist expects that, by year’s end, the average level of consumer confidence will hit 81.5 points, how much will be expected by consumers to spend on luxury items?

10.62 Lack of Controls over Investments. Follow the instructions preceding the case in problem 10.60. Write the audit approach section like the cases in the chapter. Rogue Trader In February 1989, 22-year-old Nicholas Leeson joined Barings Investment Bank. In 1993, he began trading on behalf of the Barings group as a “proprietary trader” on the Singapore International Monetary Exchange (SIMEX). By 1995, he had wiped out the 233-year-old bank, which had counted Queen Elizabeth as a client. He left behind liabilities totaling $1.3 billion. As a proprietary trader, Leeson was to arbitrage or take advantage of differences between the prices quoted for identical contracts on SIMEX and on other exchanges. This was supposed to be achieved by entering into matching purchase and sale contracts simultaneously to capture favorable price differences. Unfortunately, Leeson entered into very large contracts that were not matched with offsetting contracts, exposing the bank to enormous potential losses from even small market movements. These trades were hidden in a separate account: 88888. Transactions were transferred from other Barings accounts into account 88888 to artificially generate a profit for the other accounts.

During the period, Barings was reorganizing and Leeson reported to local managers in Singapore and product managers in London. Neither set of managers checked Leeson’s activities. An internal audit report had criticized the reporting structure, but its recommendations were never implemented. Funds to finance Leeson’s trades were requested from him to ostensibly fund client positions and were recorded as receivables from clients. The credit control group never reviewed the creditworthiness of the clients because they said they were never informed of the remittances. Leeson’s managers accepted reports of his profitability with admiration. They did not question the unusually large profits from his trading that would have been unlikely from an arbitrage operation.

Fill in the blank with the answer. Each answer in the list may be used more than once or not at all.

a.Separate and proportionate

b.Racketeer Influenced and Corrupt Organization Act (RICO)

c.Foreign Corrupt Practices Act

d.Fraud

e.Negligence

f.Reasonable professional care

g.Gross negligence

h.Securities Act of 1933

i.Compensatory damages

j.Damages

k.Criminal victim compensation

l.Punitive damages

m.Hochfelder

n.Ultramares

o.Privity

p.Near privity

q.Standing

r.Deposition

s.Constructive fraud

t.Breach of contract

u.Joint and severally

v.Securities Exchange Act of 1934

_____1.A federal statute used for legal action related to the initial offering of securities to the public by a company.

_____2.Absence of the level of care that an auditor owes to another party that has privity with the auditor.

_____3.Prior to SOX, the first federal statute requiring companies to have a functioning internal control system.

_____4.The federal statute that does not require the plaintiff to prove that he or she relied on the financial statements to be able to obtain a judgment against the auditor.

_____5.A case that established that fraud on the part of the auditor is required for an injured party to collect damages under 10b-5 of the 1934 Act.

_____6.Cause of action which plaintiffs without privity have not been successful at using to obtain the remedy of specific performance.

_____7.A judgment for the return of the loss the plaintiff experienced.

_____8.Liability theory that is now used for federal civil cases against accountants and auditors based on the Private Securities Litigation Reform Act of 1995.

_____9.When a state law does not specify the concept of gross negligence, this is the legal concept that is likely used.

_____10.The motivation for a plaintiff to allege gross negligence.

_____11.Can result in treble damages.

_____12.Typically requires the auditor to commit fraud before there will be a finding and judgment against the auditor.

_____13.Often a part of the process of discovery.

_____14.Requires that the offending party’s behavior must have been intentional (scienter).

‘Applecore’ is one of the leading management consultancy firms in the UK since early 2000 and they have an enviable track record among a diverse clientele across several major industries in the region. You have recently joined Applecore as a management consultant and your firm, on the basis of a good reference from another long-standing client of yours, has received a call from a large automobile manufacturer to go and meet them for discussions to explore if your firm can take up a major consultancy work for them in the background as below.

The automobile manufacturer performed extremely well since its inception in 1995 but in the last 3-4 years they have been posting continuously disappointing results owing to the increasing competition from imported brands, a somber growth of the economy and a variety of other reasons. The manufacturer realized they cannot continue with this kind of a performance for long for reasons of diminishing profitability and hence are planning to hire one of the leading management consulting firms to undertake a consultancy work in the hope that the consultancy firm would be able to do a rigorous study of their value chain and come up with feasible solutions for restoring their profitability and set them back on a promising future track.

This automobile manufacturer, new to Applecore, is assigned to you as your new client by your firm and your immediate job is to initiate the first meeting with them to understand their requirements, make an effective pitch to bag the consultancy contract in the light of stiff competition coming from other good leading consultancy firms also vying for the same contract. You are further expected to work and deliver on the project within challenging timeframes.

         In the background of the above case, answer questions 3 and 4 below:

Q1. As a management consultant, how will you go about bagging and delivering the project?

Q2. Considering the nature of the consultancy assignment that requires in-depth value analysis, what and how will you apply/use an appropriate analytical model to the client’s business?

Use the data and Excel to answer this question. It contains the United States Census Bureau’s estimates for World Population from 1950 to 2014. You will find a column of dates and a column of data on the World Population for these years. Generate the time variable t. Then run a regression with the Population data as a dependent variable and time as the dependent variable. Have Excel report the residuals.

(a) Based on the ANOVA table and t-statistics, does the regression appear significant?

(b) Calculate the Durbin-Watson Test statistic. Is there a serial correlation problem with the data? Explain.

(d) What affect might your answer in part (b) have on your conclusions in part (a)?

Thanks id advance! Will try to rate the answer ASAP. Please show your process too :)