If you think things are getting more expensive, it may not be your imagination. The Tufts Center for the Study of Drug Development has announced that the average cost of developing a new biotechnology product is $1.2 billion (yes, that's with a "B").

Tufts study said the $1.2 billion estimate reflects the costs of drugs that fail in testing and the time costs associated with bringing a new biopharmaceutical to market. Of this amount, capitalized out-of-pocket preclinical cost totaled $615 million, while similar clinical period cost totaled $626 million. A new biotech product took 97.7 months on average to wend its way through clinical development and regulatory review, about eight percent longer than for pharmaceuticals, according to the Tufts CSDD analysis.

Among the cost challenges faced for biotech drugs are safety concerns, which have made regulators more cautious about the drugs they approve. According to study, only 58 new drugs in 2002-04 received marketing approval from the U.S. Food and Drug Administration (FDA), a 47% drop from the peak of 110 new drugs in the 1996-98 period.

Interestingly, the study found that drug sponsors who make more extensive use of Contract Research Organizations (CROs) tend to complete projects faster, while maintaining quality comparable to submissions involving minimal use of CROs. In addition, projects involving high CRO usage typically are submitted more than 30 days closer to the projected FDA submission date than low CRO usage projects. Tufts CSDD estimates that $5.5 billion, or 15%, of global drug development spending, excluding pass-through fees (e.g., central lab costs and investigator grants), went to contract clinical services in 2004. This compares to 12% in 2001.

Closely tied to the cost estimates is a study showing that the cost per patient of running Phase 3 clinical studies of new pharmaceuticals now exceeds $26,000, on average according to a report “Clinical Operations: Accelerating Trials, Allocating Resources and Measuring Performance”, published by Cutting Edge Information. The survey data reveal that Phase 3 studies are the most costly as measured on a per-patient basis. Phase 2 trials are comparatively cheaper, with the average per-patient cost at just over $19,300 per patient. Phase 1 trials, which test drugs’ safety on a smaller number of patients, are even less expensive at about $15,700 per patient.

Decision Resources, Inc., one of the world’s leading research and advisory firms for pharmaceutical and healthcare issues, came out with a press release today announcing that that Neurochem’s Alzhemed (tramiprosate) and Myriad Genetics’ Flurizan (R-flurbiprofen) will account for nearly 60% of the market to treat Alzheimer’s disease by 2015. Both drugs have shown promise in early clinical development, and will be the first treatments for Alzheimer’s disease that modify the course of the disease. Both agents will reach the U.S. market in 2008 and the European market by 2010.

Alzheimer’s disease is a progressive, neurodegenerative disease characterized by significant loss of function in more than one cognitive domain including memory, reasoning, and judgment. In the United States, France, Germany, Italy, Spain, the United Kingdom, and Japan, prevalent cases numbered more than 5.7 million in 2005.

The new Pharmacor report entitled Alzheimer’s Disease predicts that Alzhemed and Flurizan will account for 46% and 13% of sales, respectively, in the major pharmaceutical markets in 2015. The report also measures the extent to which upcoming patent expiries will reduce the market shares of the current mainstay classes of drugs used to treat Alzheimer’s disease-acetylcholinesterase inhibitors (AChEIs) and N-methyl-aspartate (NMDA) receptor antagonists. Drugs in these classes include Eisai/Pfizer’s donepezil, Novartis/Sigma-Tau/Esteve’s rivastigmine, Merz’s Axura, and Lundbeck’s Ebixa.

It is well-known that AChEIs and NMDAs merely stabilize or moderatly delay the cognitive decline that Alzheimer’s disease patients experience. What these type of agents cannot do is to modify the disease state. According to Kate Hohenberg, director at Decision Resources, Inc. “the need for more effective drugs for Alzheimer’s disease is so crucial that any agents that receive regulatory approval will capture market share. Alzhemed and Flurizan will likely show variable efficacy, but they will still capture a significant portion of the market to treat Alzheimer’s disease.”

It is still likely that the traditional acetylcholinesterase inhibitors (AChEIs) will continue to dominate the Alzheimer's disease market for the next several years, with Eisai/Pfizer's Aricept (donepezil) retaining a leadership position, and, to a lesser extent, Novartis's Exelon (rivastigmine). However, sales of these drugs will decline because of the expiration of their patents. All agents in this class will lose patent protection by 2013.

And in what used to be a very radical theory regarding causation and linkage to Alzheimer’s, clinical trials now under way are testing the theory that the cause of Alzheimer's disease is linked to diabetes. The trials are looking at whether the diabetes drug Avandia can slow or stop the progression of Alzheimer's disease. Preliminary trials suggest that it can -- at least in patients who do not carry the ApoE4 gene linked to earlier and faster-progressing Alzheimer's disease.

According to Allen D. Roses, the theory behind the treatment predicts that the same processes that underlie diabetes also underlie Alzheimer's disease and that a number of researchers find similarities between the metabolism of diabetes and the metabolism of Alzheimer's disease.

Roses, now senior vice president for genetics research at GlaxoSmithKline, and Ann M. Saunders, PhD -- his research partner and wife -- describe the theory in detail in the April 2006 issue of Alzheimer's & Dementia: The Journal of the Alzheimer's Association.

Roses isn't the only Alzheimer's researcher to back this controversial theory. But he's among the most distinguished. In the early 1990s, Roses and colleagues were the first to link the ApoE4 gene to early-onset Alzheimer's disease.

"We discovered that the ApoE gene is significantly associated with the common form of Alzheimer's disease," Roses says. "What wasn't known is how it was operating in the brain. Over several years, we were doing experiments to see what the different forms of ApoE -- ApoE4, ApoE3, and ApoE2 -- were doing to metabolism in animals. We found a change in sugar utilization."

The body has intricate, interconnected systems for controlling how its main fuel -- sugar -- is burned. In diabetes, the system is terribly out of whack, Roses states. [And,] it's also out of whack in Alzheimer's disease. He points to imaging studies showing that the brains of people who carry the ApoE4 gene have a lowered sugar-burning "thermostat."

Roses reports that small clinical trials show that Avandia slightly improved mental function in patients with mild-to-moderate Alzheimer's disease. But it only seems to work in patients who don't carry the ApoE4 gene. Roses says the FDA has already approved a large-scale clinical trial of Avandia in genetically screened patients with Alzheimer's disease. Until the results of this trial are known -- and the results are years away -- Roses strongly warns people not to try using Avandia as an Alzheimer's treatment.

It will be interetsing to follow these new leads for Alzheimer’s drugs and whether or not there will actually be a drug presecribed for those who have a genetic predisposition to the disease in order to prevent or lessen its onset.

(SOURCES: Roses, A.D. and Saunders, A.M. Alzheimer's & Dementia: The Journal of the Alzheimer's Association, April 2006; vol 2: pp 59-70. Risner, M.E. The Pharmacogenomics Journal, Jan. 31, 2006, advance online edition. Allen D. Roses, MD, senior vice president for genetics research, GlaxoSmithKline. Bill Theis, PhD, vice president for medical and scientific affairs, Alzheimer's Association, Chicago.)

GTC Biotherapeutics, a company specializing in the development of therapeutics derived from transgenic animals, has reason to be optimistic. Investing 20 years in the business of developing transgenically derived treatments, the company suffered a recent setback in February when European officials denied approval of a transgenically produced drug. However, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency recently reversed the decision-- recommending approval of the injectable antithrombin drug produced by transgenic goats.

The drug is ATryn, a recombinant form of antithrombin that has been purified from the milk of genetically altered goats. Antithrombin is a protein in human plasma that has anticoagulant and anti-inflammatory properties. A relatively small percentage of the population is deficient in antithrombin-- the disease affecting about one in 3,000 to 5,000 people. The purified protein used for treatment is currently only available from donated human blood. If approved, ATryn will supplement this limited supply, the potential market a modest, but significant, $50 million.

Part of the controversy surrounding the use of antithrombin derived from transgenic animals is the risk of improper separation of proteins harvested from the milk, which could result in human exposure to animal proteins that could result in adverse effects on those receiving the treatment.

A final decision for the therapy should be issued within three months. If approved, the decision could open the door to a more affordable source of protein drugs that are currently unavailable or too expensive to manufacture.

GTC Biotherapeutics is involved in the development, production, and commercialization of therapeutic proteins through transgenic animal technology. In addition to ATryn, GTC has in development a recombinant human alpha-1 antitrypsin, a recombinant human albumin, a CD137 antibody to stimulate the immune system as a potential treatment for solid tumors, and a malaria vaccine.

In Falker-Gunter Falkner et al. v. Inglis et al. (Fed. Cir. 2006, 05-1324), on appeal from the USPTO Board of Patent Appeals and Interferences, the U.S. Court of Appeals for the Federal Circuit set out some guidelines on the adequacy of written description and enablement in biotech cases. The Federal Circuit held that:

(1) examples are not necessary to support the adequacy of a written description;

(2) the written description standard may be met (as it is here) even where actual reduction to practice of an invention is absent; and

(3) there is no per se rule that an adequate written description of an invention that involves a biological macromolecule must contain a recitation of known structure.

There was an interference between U.S. Patent No. 5,770,212 (“the Falkner ‘212 patent) and Inglis et al., U.S. Application Serial No. 08/459,040 (“the Inglis ‘040 application”) and the Board held that Falkner could not antedate Inglis’ priority date.

Claim 29 of the Inglis ‘040 application reads:

A vaccine comprising a pharmaceutically acceptable excipient and an effective immunizing amount of a mutant virus, wherein said mutant virus is a mutant poxvirus and has a genome which has an inactivating mutation in a viral gene, said viral gene being essential for the production of infectious new virus particles, wherein said mutant virus is able to cause production of infectious new virus particles in a complementing host cell gene expressing a gene which complements said essential viral gene, but is unable to cause production of infectious new virus particles when said mutant virus infects a host cell other than a complementing host cell; for prophylactic or therapeutic use in generating an immune response in a subject.

Claim 1 of the Falkner ‘212 patent reads:

A vaccine comprising (a) a defective poxvirus that lacks a function imparted by an essential region of its parental poxvirus, wherein (i) said defective poxvirus comprises a DNA polynucleotide encoding an antigen and said DNA polynucleotide is under transcriptional control of a promoter, and (ii) the function can be complemented by a complementing source; and (b) a pharmaceutically acceptable carrier.

The inventors discovered a way of making vaccines safer by deleting or inactivating an essential, rather than an inessential, gene from the viral vector’s genome, while at the same time solving the production problem by growing the vaccines in cells that were complementarily modified to produce the absent essential viral gene product “on behalf of” the vector virus. Thus, the modified vector virus could be readily grown in these complementarily-modified cells, but not in other cells, such as those of an inoculee.

Falkner argued that the claims in Inglis’s ‘040 application were unpatentable because they failed to meet the written description requirement of 35 U.S.C. § 112 because (1) the specification did not identify any essential genes in poxvirus or describe the inactivation of such genes, (2) vaccines based on vaccinia (a type of poxvirus) had not yet been produced, and (3) the bulk of the Inglis specification was directed not to poxviruses but to herpesviruses. Falkner also argued that Inglis did not sufficiently describe and enable the claims in question and that without the benefit of these applications, Inglis would be unable to establish constructive reduction to practice earlier than Falkner.

The Federal Circuit laid out the requirements for enablement and written description as follows:

1. Examples Are Not Required

A claim will not be invalidated on section 112 grounds simply because the embodiments of the specification do not contain examples explicitly covering the full scope of the claim language. That is because the patent specification is written for a person of skill in the art, and such a person comes to the patent with the knowledge of what has come before. Placed in that context, it is unnecessary to spell out every detail of the invention in the specification; only enough must be included to convince a person of skill in the art that the inventor possessed the invention and to enable such a person to make and use the invention without undue experimentation.

2. Actual Reduction to Practice Is Not Required

As we explained in Capon v. Eshhar, “[t]he ‘written description’ requirement implements the principle that a patent must describe the technology that is sought to be patented; the requirement serves both to satisfy the inventor’s obligation to disclose the technologic knowledge upon which the patent is based, and to demonstrate that the patentee was in possession of the invention that is claimed.” 418 F.3d 1349, 1357 (Fed. Cir. 2005). The Board was correct, however, not to view as dispositive that Inglis had not actually produced a poxvirus vaccine, because an actual reduction to practice is not required for written description. See Univ. of Rochester v. G.D. Searle & Co., 358 F.3d 916, 926 (Fed. Cir. 2004) (“We of course do not mean to suggest that the written description requirement can be satisfied only by providing a description of an actual reduction to practice. Constructive reduction to practice is an established method of disclosure . . . .”). Rochester, moreover, is consistent with Supreme Court precedent. In the context of interpreting 35 U.S.C. § 102(b), the Court held that “[t]he word ‘invention’ must refer to a concept that is complete, rather than merely one that is ‘substantially complete.’” Pfaff v. Wells Elecs., 525 U.S. 55, 66 (1998). It then proceeded to make clear that although “reduction to practice ordinarily provides the best evidence that an invention is complete. . . . it does not follow that proof of reduction to practice is necessary in every case.” Id. (emphasis added). Thus, to the extent that written description requires a showing of “possession of the invention,” Capon, 418 F.3d at 1357 (emphasis added), Pfaff makes clear that an invention can be “complete” even where an actual reduction to practice is absent. The logical predicate of “possession” is, of course, “completeness.”

3. Recitation of Known Structure Is Not Required

The descriptive text needed to meet these requirements varies with the nature and scope of the invention at issue, and with the scientific and technologic knowledge already in existence. The law must be applied to each invention that enters the patent process, for each patented advance is novel in relation to the state of the science. Since the law is applied to each invention in view of the state of relevant knowledge, its application will vary with differences in the state of knowledge in the field and differences in the predictability of the science.

Indeed, a requirement that patentees recite known DNA structures, if one existed, would serve no goal of the written description requirement. It would neither enforce the quid pro quo between the patentee and the public by forcing the disclosure of new information, nor would it be necessary to demonstrate to a person of ordinary skill in the art that the patentee was in possession of the claimed invention. As we stated in Capon, “[t]he ‘written description’ requirement states that the patentee must describe the invention; it does not state that every invention must be described in the same way. As each field evolves, the balance also evolves between what is known and what is added by each inventive contribution.” Id. at 1358. Indeed, the forced recitation of known sequences in patent disclosures would only add unnecessary bulk to the specification. Accordingly we hold that where, as in this case, accessible literature sources clearly provided, as of the relevant date, genes and their nucleotide sequences (here “essential genes”), satisfaction of the written description requirement does not require either the recitation or incorporation by reference14 (where permitted) of such genes and sequences.

The Boston Globe recently ran an article that nanotechnology is about to be the next big thing in bioscience. Although nanotechnology has had a lot of ups and downs in its enthusiam in the marketplace, it's still remains mostly a laboratory study subject. Now, nanotech seems staged to make huge leaps in medical treatment, so some say.

Nanotechnology is the understanding and control of matter at dimensions of roughly 1 to 100 nanometers, where unique phenomena enable novel applications. Encompassing nanoscale science, engineering and technology, nanotechnology involves imaging, measuring, modeling, and manipulating matter at this length scale. At the nanoscale, the physical, chemical, and biological properties of materials differ in fundamental and valuable ways from the properties of individual atoms and molecules or bulk matter.

Nanotechnology could introduce whole new classes of materials and products but could also present tough challenges to regulatory agencies. The National Science Foundation predicts that the global marketplace for goods and services using nanotechnologies will grow to $1 trillion by 2015, and there are already over 500 products being sold that claim they are made with nanoscale or engineered nanomaterials. These include products like self-cleaning windows, automobile paint, sunscreens, and tennis rackets. In the future, a marriage of nano and biotechnology will likely create a whole new generation of drugs, biomedical devices, and other products.

Nanomedicine has been defined as the monitoring, repair, construction and control of human biological systems at the molecular level, using engineered nanodevices and nanostructures. Current applications of nanotechnology in medicine involve engineered molecules to develop drugs, drug delivery techniques, diagnostics, medical devices and enhanced gene therapy and tissue engineering procedures. "Nanosizing" is a term developed in the pharmaceutical industry to describe how some previously approved products with particle sizes greater than 100 nm are being produced with smaller particle sizes, in order to change certain physical and performance characteristics, such as pharmacokinetic profile (i.e. the rate and extent of absorption and clearance from the body). To date, the FDA has no knowledge of reports of adverse reactions related to the "nano" size of resorbable drug or medical device products.

Not everyone is thrilled. A coalition of consumer and environmental groups petitioned the FDA to increase its regulation of nanoparticle-containing sunscreens and cosmetics and recall some products. Among the FDA-regulated products being sold are sunscreens containing titanium dioxide or zinc oxide nanoparticles (which offer strong ultraviolet protection while remaining colorless) and cosmetics with nanoscale liposomes. A number of animal studies have shown that at least some nanoparticles can penetrate cells and tissues, migrate through the body and brain and cause biochemical damage. But whether these pose health risks remains largely unknown, pending completion of long-range studies recently begun by the FDA and other agencies. The FDA has six months to respond to the petition.

The FDA has not established its own formal definition for nanotech, though the agency participated in the development of the NNI definition of "nanotechnology." Using that definition, nanotechnology relevant to the FDA might include research and technology development that both satisfies the NNI definition and relates to a product regulated by FDA.

However, the FDA only regulates certain categories of products. Though existing requirements may be adequate for most nanotechnology products, many of the nanotechnology products will be Combination Products (i.e., drug-device, drug-biologic, or device-biologic products). The current policy regarding combination products helps prevent duplication of effort and a protracted approval process. If the product meets the definition of a combination product, it will be assigned to an Agency center that will have primary jurisdiction for its regulation. The assignment of a lead center is based upon a determination of the primary mode of action (PMOA) of the combination product. For example, if the PMOA of a combination product is that of a biological product, then the combination product would be assigned to the Agency component responsible for premarket review of that biological product.

FDA published a proposed rule defining the primary mode of action of a combination product. The proposed rule defines primary mode of action as "the single mode of action of a combination product that provides the most important therapeutic action of the combination product." In some cases, neither the FDA nor the sponsor can determine the most important therapeutic action at the time a request is submitted. A combination product may also have two independent modes of action, neither of which is subordinate to the other. Depending upon the type of combination product, approval, clearance or licensure may be obtained through submission of a single marketing application, or through separate marketing applications for the individual constituent parts of the combination product. For most combination products, a single marketing applicition is sufficient for the product’s approval, clearance or licensure.

However, nanotech is better known to the public for its potential to run amuck like in the the "gray goo" (or "global ecophagy") scenario developed by an early nanotech theorist, which holds that a tiny, self-replicating device could end up consuming all the organic material on earth, turning the world into a sterile mush.

Granted, there are genuine toxicity questions raised by the use of nanomaterials in consumer products, such as sunscreens and cosmetics, in which ultrafine particles are incorporated into the formulations. The dilemma, of course, is that the growing concerns over the use of nanoparticles in consumer products could outweigh the benefits that can be had in medicine and technology. Every new technology brings a new set of benefits and fears that are dealt with as they arise but public perception means a lot in both the marketplace and in the world of regulation where the FDA rules are often driven by politics.

Although the safety of nanoparticles and nanomaterials deserves careful consideration, what the public thinks about gray goo is critical. If they're not careful, nanotech companies will lose the battle over public opinion and suffer the backlash felt by companies like Monsanto over biotech foods.

Roche has received European Commission approval for Herceptin (trastuzumab) for patients with early-stage HER2-positive breast cancer following surgery and chemotherapy. HER2-positive breast cancer affects approximately 20% to 30% of women with breast cancer and has a higher likelihood of relapse. The fast approval was based on results from the international HERA (HERceptin Adjuvant) study which showed Herceptin following standard chemotherapy significantly reduces the risk of cancer coming back by 46% compared to chemotherapy alone.

In HER2-positive breast cancer, increased quantities of the HER2 protein are present on the surface of the tumour cells. This is known as 'HER2 positivity.' High levels of HER2 are present in a particularly aggressive form of the disease which responds poorly to chemotherapy. Research shows that HER2-positivity affects approximately 20-30% of women with breast cancer.

Herceptin is a humanised antibody, designed to target and block the function of HER2, a protein produced by a specific gene with cancer-causing potential. In addition to its efficacy in the early-stage breast cancer setting, Herceptin also has demonstrated improved survival in the advanced (metastatic) setting, where its addition to chemotherapy allows patients to live up to one-third longer than chemotherapy alone.

Herceptin received approval in the European Union in 2000 for use in patients with metastatic breast cancer, whose tumours overexpress the HER2 protein. In addition to being indicated for use in combination with docetaxel as a first-line therapy in HER2-positive patients who have not received chemotherapy for their metastatic (advanced) disease, it is also indicated as a first-line therapy in combination with paclitaxel where anthracyclines are unsuitable, and as a single agent in third-line therapy. Herceptin is marketed in the United States by Genentech, in Japan by Chugai and internationally by Roche. Since 1998, Herceptin has been used to treat over 230,000 HER2-positive breast cancer patients worldwide.

In the US, Genentech filed a supplemental Biologic License Application (sBLA) for the use of Herceptin in early-stage HER2-positive breast cancer with the Food and Drug Administration (FDA) on February 15th, 2006. The application is based on data from the combined interim analysis of two large US trials, and Genentech has received a priority review designation.

Forbes.com reports that Merck is close to obtaining approval for a vaccine against common viruses that lead to cervical cancer. An FDA advisory committee voted 13-0 to approve Merck's Gardasil, a vaccine that protects against four types of sexually transmitted viruses-- two of which are believed to be responsible for about 70% of cervical cancer cases. According to Merck, approval and widespread use of the vaccine could cut worldwide deaths from the disease by two-thirds.

Amid uncertainties regarding the age group for treatment, the extent of the campaign, and how routine pap smear screening will be affected, are some medical concerns. In particular, the FDA has questioned whether the vaccine could make disease progression worse among women already infected and whether the benefit is partly mooted by the fact that the vaccine does not protect against all viral strains linked to cervical cancer. Of further note, the agency is expected to discuss the five congenital defects of children born to women who were vaccinated with Gardasil around the time of conception.

The good news for Merck is that the FDA usually follows the recommendations of its outside panel of experts, who in this case all support approval of the vaccine. The final decision is expected by June 8. The anticipated cost of treatment, administered in three shots over six months is $300-500. According to analysts, this could translate into over a billion dollars in sales. This may be the break Merck needs-- approval could help offset mounting legal costs as the company continues to defend against Vioxx lawsuits.

Merck recommends that the vaccine be used for females aged 9 to 26. The Advisory Committee on Immunization Practices is considering these recommendations and whether routine vaccination should be endorsed. GlaxoSmithKline PLC is working on a similar vaccine, hoping to submit it for approval by the end of the year.

The World Health Organization (WHO) is calling on all medical studies that test treatments on humans to be registered, in order to make research more transparent and enhance the public's trust in science.

Currently, the registration of clinical trials - scientific studies carried out in human participants - is voluntary. As a result, negative results in the early stages of a drug's development can be kept secret. The WHO is urging research institutions and companies to register all clinical trials, including the earliest trials, whether they involve patients or healthy volunteers. It made its call as part of the International Clinical Trials Registry Platform, a major initiative aimed at standardizing the way information on medical studies is made available to the public. WHO is also recommending that 20 key details be disclosed at the time studies are begun.

The initiative seeks greater transparency regarding all clinical trials. The planned Registry Platform, however, will not be a register itself, but rather will provide a set of standards for all registers. It has not only standardized what must be reported to register a trial but is creating a global trial identification system that will confer a unique reference number on every qualified trial.

Currently, there are several hundred registers of clinical trials around the world but little coordination among them. Later this year, the WHO Registry Platform will launch a web-based search portal where scientists, patients, doctors and anyone else who is interested can search among participating registers for clinical trials taking place or completed throughout the world.

The issue at the heart of this matter is that selective reporting of trials does occur, and it distorts the body of evidence available for clinical decision making. The thinking is that a large body of collected evidence, consisting of many studies, provides the best basis for changes in medical practice. If certain trials are not revealed, then clinicians do not have all the information necessary to make the best choices. If all trials are registered in a public repository, then everyone in the chain of healthcare can evaluate the entire body of clinical evidence.

However, not everyone agrees this is a good idea. Since the policy will recommend registration of every “interventional study” (i.e. every trial for every intervention, whether marketed or not; whether randomized or not; and whether early phase or late phase), the registration process itself could act as a disincentive for doing many early studies. The information could, at best, be confusing and, at worst, later used as a club against drug companies. Phase I and other early studies have a different scope and purpose that later trials and so the results are not necessarily comparable to a fully prepared study. Since we would never rely on these studies to prove efficacy of a drug, why allow the use of this data against the drug companies?

In addition, there is concern that these new requirements could jeopardize academic or commercial competitive advantages if they apply to preliminary trials of new therapeutics. Similar concerns have been voiced about the requirement to disclose certain items--such as the scientific title of the study, the name of the treatment being tested and the outcomes expected from the study--at the time of registration. These disclosures could prevent drug companies from securing valuable IP rights for new formulations, methods of making the drugs, and new uses of the drugs.

The result is that drug companies may delay or forego certain early studies in favor or fewer, larger studies that will not necessary provide information in the patients' best interest. More cost, less information. Not the best scenario.

Results reporting

What information does the WHO want out there? Once a trial is registered, full transparency and accountability requires that all of the trial's results be made available to the public without any bias or selectivity in reporting. At present, there is no formal consensus on international norms and standards for results reporting. The international understanding is as follows:

• It is understood that trial results databases would be useful for multiple constituencies (clinicians, systematic reviewers, patients, policy-makers) and are intended to complement, not replace, peer-reviewed journal publication


• Results should be reported in at least as much detail as suggested for the ICH E3 format, with the WHO CT-UID added and the Conclusions heading removed


• If the results are reported to a database other than the trial register(s) for the trial, there should be mutual links between the results database and the trial register(s)


• Results should be available with at least an English summary, and should be available without charge (i.e., open access)


• As a general standard, trial results should be disclosed within one year of study completion ("study completion" to be defined)


• The sponsor/funder is responsible for ensuring that results are reported, unless the trial is unfunded, in which case the primary investigator is responsible.

We hope to see further discussion on this matter and better guidelines on which trials and information should be disclosed.

They say the modern biotechnology industry was born 30 years ago this year, with the founding of Genentech in April 1976. Now, in its 20th anniversary edition report called Beyond Borders 2006, Ernst & Young sets out an in-depth analysis and key trends for the biotechnology sector with a timeline charting the industrys evolution.

The news is good as biotech is booming across the globe, from the maturing US sector to the emerging Asia-Pacific. Revenues of the world’s publicly traded biotech companies grew 18 percent in 2005, reaching an all-time high of $63.1 billion. In addition, the sector raised $19.7 billion in capital, the sector’s second highest total since 2000.

According to Ernst & Young, the European biotechnology sector has emerged from a lengthy restructuring period with double-digit revenue growth and the second-strongest financing year on record, with €3.2 billion in capital raised. The pipelines of Europe's publicly traded biotech companies increased by 28 per cent. While the US biotechnology sector is still strong with 32 new product approvals, the Asia-Pacific biotechnology sector showed 46 per cent increase in revenues.

There is also tremendous growth in biotech crops despite the EU's chronic incapacity to lift national bans on GMO products. There is increasing pressure by the WTO to allow such crops. Other countries have asserted that the EU had been in violation of international trade rules since 1998 by imposing a moratorium on GM crops, contrary to scientific advice that they presented no health or safety risk. They complained that the EU has set no deadline to lift the moratorium.

Between 1997 and 2000, Austria, France, Germany, Greece, and Luxembourg imposed individual bans on GM crops that had secured approval by the European Food Safety Agency (EFSA). The bans were imposed on a temporary basis using a so-called "national safeguard clause" that EU member states can invoke when they have doubts about the products' safety for human health or the environment. The EU commission is responsible for the implementation of EU treaties and decisions but has imposed delays on biotech approvals, preventing the marketing of GM crops.

While oversold in the beginning, the next big thing in biotech may just be biogenerics (if the FDA ever sets out guidellines for their approval). It is predicted that by 2009, the pharmaceutical market will hit $650 billion, with biotech drug sales representing 15 percent to 20 percent of total sales. Furthermore, it is expected that 50 percent of all new drug approvals in 2010 will be for biotech drugs. Already, the top five biotech drugs represent almost $12 billion in sales with most of them already off patent but there are no generics given the regulatory hurdles for biogenerics.

Given the relatively complex nature of biotech products compared with conventional chemical generics, it is clear that when the FDA acts on biogenerics, it will most likely require substantially more data to obtain approval. Unlike small molecules, the data needed for biogenerics may depend on the product itself.

We'll keep you posted on developments.

The European Commission has given Sandoz, the generic division of Novartis, approval for the sale of a generic version of a human growth hormone, making it the first generic of a biotechnology drug authorized for sale in Europe.

The approved drug, Omnitrope®, is based on Pfizer's Genotropin, a treatment for abnormal growth and growth hormone deficiency in children and adults. The active substance of Omnitrope is somatropin, a growth hormone produced by recombinant DNA technology. Somatropin is a hormone of importance for growth and for the metabolism of lipids, carbohydrates and proteins.

Earlier, the European Medicines Agency recommended approval of Omnitrope. In addition to the European Union, Australia approved Omnitrope sales last year.

Sandoz has asked the FDA to approve Omnitrope in the U.S., "acknowledging the sound science that supports this product." So far, the FDA has not been keen on biogenerics and has not approved Sandoz' 1994 application to make and sell Omnitrope in the U.S. even though regulators in Australia and the European Medicines Agency found Omnitrope showed comparable quality, safety and efficacy to Pfizer's Genotropin.

Sandoz sued the FDA last year and a judge in the U.S. District Court for the District of Columbia ordered the FDA to make a decision after FDA Acting Commissioner Andrew von Eschenbach disclosed the agency wouldn't release long-awaited guidelines on how to best test generic versions of insulin and human growth hormones, the compounds generic companies most want to copy.

I just returned from the BIO 2006 conference in Chicago. It was a fantastic meeting with lots of excitement in the biotech arena. Almost every U.S. state had a booth and lots of governors and state officials were in attendance. With sponsorships going for over $200K, there were big bucks being splashed around - including a lot of tax dollars. It's not hard to see why. All the states (and countries) want a piece of the growing biotechnology industry pie given its revenue and employment opportunities. A report by Battelle’s Technology Partnership Practice shows bioscience employment was 1.2 million in 2004, which represents more than a 1% increase over the 2001 level, with workers earning an average annual wage of $65,775.

This week's worldwide biotech industry meeting at Chicago's McCormick Place convention center drew almost 20,000 registrants (and apparently half of them were in line at Starbuck's when I arrived Monday morning. Ohio Gov. Bob Taft made the rounds over at the Ohio exhibit headed up by Tony Dennis of Omeris. I had a chance to meet up with clients, associates, trades people and even other bloggers (a nod to Ellen at Life Science Communicants)

There was a wide diversity of life science beyond therapeutics that plays to the strengths in the Midwest including medical devices (surgical, orthopedic, cardiovascular, etc.), diagnostics, nanotech, Agbiotech, and industrial/environmental (e.g., biofuels). Agbiotech really was shining bright - you could almost smell the biodiesel. Former U.S. president Bill Clinton gave a speech touting biodiesel as a way to combat global warming. BASF announced it would dedicate more than $320 million over next three years to development of next generation biotechnological optimized crop plants. DuPont and Syngenta announced a joint venture to facilitate the out-licensing of seed genetics and biotech traits.

While not everyone thinks this is all good, most had a fantastic time. The exhibits from Scandinavia, Scotland, Wales, UK, and many others were a wonderful chance to meet people from all around the globe. And for just a short time, the world felt like a kinder, gentler (and smaller) place.

I'll see you next year in Boston.

The European Medicines Agency (EMEA) published a set of five final guidelines on similar biological medicinal products. They are intended to give guidance to industry in the development of this new type of applications for marketing authorisation.

They give guidance on quality, non-clinical and clinical issues. The product class specific annexes to the guideline on non-clinical and clinical issues give guidance for certain classes of medicines: those containing insulin, containing somatropin and those containing recombinant granulocyte-colony stimulating factor (an annex for medicines containing epoetin will also be available soon). The guidelines come into effect from June 1, 2006.

EMEA has also published two new concept papers. The first is a concept paper on comparability of biotechnology-derived medicinal products after a change in the manufacturing process (non-clinical and clinical issues). The second is a concept paper on immunogenicity assessment of therapeutic proteins.

The guideline on comparability of medicinal products containing biotechnology-derived proteins as active substance addresses (a) when a change is introduced in the manufacturing process of a given product (either before the granting of a marketing authorization or after the granting of a marketing authorization) and (b) when a product is claimed to be similar to another one already authorized in the EU after the expiry of the data protection period.

The guideline addresses the requirements regarding manufacturing processes, the comparability exercise for quality, considering the choice of reference product, analytical methods, physicochemical characterization, biological activity, purity and specifications of the similar biological medicinal product. A company may choose to develop a new biological medicinal product claimed to be similar (Similar Biological Medicinal Product) in terms of quality, safety and efficacy to an original, reference medicinal product, which has been granted a marketing authorization in the EC.

Similar biological medicinal products are manufactured and controlled according to their own development, taking into account relevant and up-to-date information. Comparison can be made against the official data, e.g. pharmacopoeial monographs or against other published scientific data. However, such comparisons at the level of both active substance and finished product are limited and not sufficient to establish all aspects pertinent to the evaluation. Consequently, an extensive comparability exercise will be required to demonstrate that the similar biological medicinal product has a similar profile in terms of quality, safety and efficacy to the reference medicinal product.

The manufacturer developing similar biological medicinal products would normally not have access to all necessary information that could allow an exhaustive comparison with the reference medicinal product. Nevertheless the level of detail must be such that firm conclusions can be made. Based on the comparability approach and when supported by sufficiently sensitive analytical systems, the comparability exercise at the quality level may allow a reduction of the non-clinical and clinical data requirements compared to a full dossier.

The similar biological medicinal product may refer to the non-clinical and clinical data previously generated with the reference product; however, non-clinical and clinical data will normally be required as identified in related non-clinical and clinical guidelines on similar biological medicinal products.

The guideline addresses quality issues during demonstration of comparability for Similar Biological Medicinal Products containing recombinant DNA-derived proteins. As a consequence, the principles adopted and explained in this document apply to proteins and peptides, their derivatives and products of which they are components (e.g. conjugates).

The similar biological medicinal product, as for any other biological medicinal product is in part defined by its own specific manufacturing process for both active substance and medicinal product. These processes should be developed and optimized taking into account state-of-the-art information on manufacturing processes (i.e. expression system / cell substrate, culture, purification, viral safety, excipients, formulation, primary packaging interactions, etc.) and consequences on product characteristics.

In addition, each medicinal product is defined by the molecular composition of the active substance resulting from its process, which may introduce its own process related impurities. Consequently, the similar biological medicinal product is defined by the following two sets of characteristics: i) related to the characteristics of the molecule (including product related substances/impurities), and ii) related to its process (which may affect molecular characteristics and includes process related impurities).

The Applicant must demonstrate the consistency and robustness of his own process according to existing guidelines. Formulation studies should be considered in the course of the development of a suitable dosage form, even if excipients are qualitatively and quantitatively the same as the reference product. These studies should demonstrate the suitability of the proposed formulation with regards to stability, compatibility (i.e. with excipients, diluents and packaging materials), and integrity of the active substance (both biologically and physico-chemically) for its intended medicinal use.

As is the case for any biotechnology-derived medicinal product, a comparability exercise should be considered when a change is introduced into the manufacturing process (active substance and finished product) during development. For the purposes of clarity, any comparability exercise(s) for process changes introduced during development should be clearly identified and addressed separately from the comparability exercise versus the reference product. It is not expected that the quality attributes in the similar biological and reference medicinal products will be identical.

Adopted Guidelines

The University of California won a $100 million plus settlement from Monsanto for patent claims that had been pending for over 24 years - a patent covering the growth hormone used to make cows produce more milk. Monsanto reached a deal with the university just as the case was set to begin a jury trial.

As part of its settlement, Monsanto was granted an exclusive license to the university's patents for making recombinant bovine growth hormone (rBGH), a genetically-engineered bovine somatotropin (BST) that Monsanto sells under the brand name Posilac. About one-third of the dairy cows in the United States receive Posilac.

The University of California will get an upfront royalty payment of $100 million from Monsanto, and an ongoing royalty of 15 cents per dose of Posilac sold, with a minimum annual royalty of $5 million. Monsanto will pay the royalties through 2023, when the University of California's patents expire.

Three researchers at the University of California in San Francisco were the first to isolate and identify the genetic code for bovine growth hormone. The university sued Monsanto in February 2004, after it received one of its patents.

U.S. Patent No. 6,692,941, was filed February 15, 1990, which was a continuation of applications dating back to August 26, 1980! The patent claims a DNA comprising a deoxynucleotide sequence coding for bovine growth hormone. A transfer vector and an expression vector containing this DNA and microorganisms transformed by these vectors are also described.

The present invention discloses the cloning of a DNA coding for bovine growth hormone and the expression of the cloned DNA in microorganisms. In the process, mRNA coding for bovine growth hormone is isolated from bovine pituitaries, a reverse transcript (a cDNA copy) of the mRNA is prepared and inserted into a transfer vector. The transfer vector is used to transform bacteria which express the cloned cDNA.

The FDA approved Monsanto's rBGH product, Posilac, for commercial use on November 5, 1993. A 90-day moratorium on the sale of rBGH ended on February 3, 1994. Posilac went on sale the following day - 10 years before the UC patent issued but still 14 years after the UC patent was filed.

BST has been controversial since it was introduced, because its opponents claim it forces cows to produce more milk than they normally would produce and makes them susceptible to udder infections. Some groups consider the use of BST unhealthy for humans.

The European Union decided against allowing a protein drug derived from the milk of genetically-engineered goats. In a press release, the European Medicines Agency (EMEA) in London said it had rejected the application to license a natural human protein extracted from the milk of goats. EMEA recommended against approval of ATryn (recombinant antithrombin alpha), which was set to become the world's first medicine to be produced from a genetically modified animal. The 57 unique goats that produced the drug-laden milk live on a farm belonging to GTC Biotherapeutics.

The Committee for Medicinal Products for Human Use (CHMP) adopted a negative opinion, refusing to allow the marketing authorization for ATryn 1750 IU powder for solution for infusion, to be used in surgical patients with congenital antithrombin deficiency for the prophylaxis of deep vein thrombosis and thromboembolism in clinical risk situations, i.e., during the peri-surgical period. Genzyme Europe B.V. may request a re-examination of the opinion.

ATryn was to be used in patients who have an inherited reduction of the protein antithrombin, to prevent problems due to the formation of clots in the vessels of the legs (deep vein thrombosis, DVT) or in other vessels of the body (thromboembolism) during high risk situations (for example major surgery). ATryn is an anti-clotting agent. The active substance in ATryn, antithrombin alpha, is a copy of the natural blood protein that is produced by recombinant DNA technology. It is extracted from the milk of goats who have a gene (DNA) inserted, which make them able to produce the human protein in their milk.

In the body, antithrombin blocks thrombin, one of the substances involved in blood coagulation (clotting). Thrombin plays a central role in the process of blood clotting. Patients who have a congenital antithrombin deficiency have blood levels of antithrombin that are lower than normal, which may result in a reduced anti-clotting capacity of the blood. This increases the risk of the formation of clots during high-risk situations. ATryn would be expected to correct the antithrombin deficiency and to give temporary control of the clotting disorder.

The disease is rare (it is estimated that about one person in 3, 000 to 5,000 have a congenital antithrombin deficiency), and this explains why few patients have been treated during the studies. However, for the proposed indication, only 5 surgical cases were considered. The CHMP considered this number to be too small, and not in line with the EMEA’s recommendation of 12 patients.

The results in patients treated in the compassionate use program and at childbirth could not be used to support the proposed use in patients undergoing surgery. Also, the process for the production of the medicine used in the studies is not exactly the same as that which would have been marketed (addition of a filtration step). ATryn is a protein-based medicine, and, like all protein-based medicines, it is possible that patients develop antibodies (proteins produced in response to ATryn). The CHMP considered that they did not carry out enough studies looking for the development of antibodies.

At this point in time, the CHMP was of the opinion that it was not yet demonstrated that ATryn’s benefits are greater than its risks. Hence, the CHMP recommended that ATryn be refused authorization in the EU. Progress has been slow in bringing products to market that are derived from animals. It has been nearly 14 years since the birth of GTC's first ATryn goat, and not a single product has made it to market yet.

See the EMEA Opinion here.

The European Medicines Agency recommended approval of Omnitrope, which copies an existing growth hormone prescribed for undersized children. If given final OK by the European Commission, Omnitrope could be on the market later this year and would be the first-ever generic biotechnology drug. Omnitrope marks the first real threat to the near monopoly enjoyed by biotechnology drugmakers.

Generic biologics have been a tough fight in the U.S. as biotech drug makers say it would be dangerous to allow approval for biotech drugs since generics don't have to perform expensive human tests but simply show their molecules are "equivalent" to existing drugs. The argument is that biotechnology drugs are made up of proteins, antibodies, and other substances derived from living cells, which can be extremely difficult, if not impossible, to reproduce exactly.

So far, the FDA has agreed. The Hatch-Waxman Act doesn't include biologicals and the FDA has never issued any guidelines for getting biogenerics to market more quickly. While a single biotech drug can generate over $1 billon a year in revenues, biotechnology companies are coming under increasing pressure from possible generic competition due to high healthcare costs.

In the European case for Sandoz' Omnitrope (somatropin), the Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion, recommending to grant a marketing authorization for Omnitrope for treatment of growth disturbance and growth hormone deficiency. The active substance of Omnitrope is somatropin, a growth hormone produced by recombinant DNA technology. Somatropin is a hormone of importance for growth and for the metabolism of lipids, carbohydrates and proteins.

The Committee for Medicinal Products for Human Use (CHMP) issues specific guidelines concerning the scientific data to be provided to substantiate the claim of similarity used as the basis for a Marketing Authorization Application (MAA) for any biological medicinal product, e.g.: medicinal products containing biotechnology-derived proteins as active substance, immunologicals such as vaccines, blood-derived products, monoclonal antibodies, etc.

In principle, the concept of a "similar biological medicinal product" is applicable to any biological medicinal product. However, in practice, the success of such a development approach will depend on the ability to characterize the product and therefore to demonstrate the similar nature of the concerned products.

Biological medicinal products are usually more difficult to characterize than chemically derived medicinal products. In addition, there is a spectrum of molecular complexity among the various products (recombinant DNA, blood or plasma-derived, immunologicals, gene and cell-therapy, etc.). Moreover, parameters such as the three-dimensional structure, the amount of acido-basic variants or post-translational modifications such as the glycosylation profile can be significantly altered by changes, which may initially be considered to be ‘minor’ in the manufacturing process. Thus, the safety/efficacy profile of these products is highly dependent on the robustness and the monitoring of quality aspects.

Therefore, the standard generic approach (demonstration of bioequivalence with a reference medicinal product by appropriate bioavailability studies) is normally applied to chemically derived medicinal products. Due to the complexity of biological/biotechnology-derived products the generic approach is scientifically not appropriate for these products. The "similar biological medicinal products" approach, based on a comparability exercise, will then have to be followed.

Comparability exercises to demonstrate similarity are more likely to be applied to highly purified products, which can be thoroughly characterized (such as some biotechnology-derived medicinal products).

The ‘similar biological medicinal product’ approach is more difficult to apply to other types of biological medicinal products, which by their nature are more difficult to characterize, such as biological substances arising from extraction from biological sources and/or those for which little clinical and regulatory experience has been gained.

Whether a medicinal product would be acceptable using the ‘similar biological medicinal product’ approach depends on the state of the art of analytical procedures, the manufacturing processes employed, as well as clinical and regulatory experiences. The active substance of a similar biological medicinal product must be similar, in molecular and biological terms, to the active substance of the reference medicinal product.

The pharmaceutical form, strength and route of administration of the similar biological medicinal product should be the same as that of the reference medicinal product. When the pharmaceutical form, the strength or the route of administration is not the same; additional data in the context of the comparability exercise should be provided. Any differences between the similar biological medicinal product and the reference medicinal product will have to be justified by appropriate studies on a case-by-case basis.

CHMP guidelines are available here. (Guidance Documents / Biosimilar Products)

A Frost and Sullivan report out says that the expiration of the Polymerase Chain Reaction (PCR) patent (US Patent No. 4,683,202) is setting the stage for growth opportunities for nucleic acid purification and amplification technologies. Companies can now offer tests without developing a novel nucleic acid technology or paying a license fee.

The expiration of the PCR patent will be especially beneficial to academic research, given that they lack money but have lots of indentured grad students who can put together their own kits. The report also takes into account funding resources becoming ever scarcer causing researchers to look for alternatives for inexpensive sample preparation.

There is an intrinsic paradigm shift in research as the scientific community transitions from sequencing to functional genomics. This will lead to a greater need for consistently pure nucleic acid samples, which will drive demand for automated instrumentation products.

The demand for nucleic acid-based amplification kits is expected to continue over the next decade due to the completion of the human genome project and growing interest in molecular diagnostics.

The polymerase chain reaction is a test tube system for DNA replication that allows a "target" DNA sequence to be selectively amplified, or enriched, several million-fold in just a few hours. PCR uses just one indispensable enzyme - DNA polymerase - to amplify a specific fraction of the genome. DNA polymerase was first isolated from Thermus aquaticus in 1976. (Deoxyribonucleic acid polymerase from the extreme thermophile Thermus aquaticus by A Chien, D B Edgar, and J M Trela in Journal of Bacteriology 127 (3): 1550–1557.)

To perform a PCR reaction, a small quantity of the target DNA is added to a test tube with a buffered solution containing DNA polymerase, oligonucleotide primers, the four deoxynucleotide building blocks of DNA, and the cofactor MgCl2. As amplification proceeds, the DNA sequence between the primers doubles after each cycle. Following thirty such cycles, a theoretical amplification factor of one billion is attained.

The polymerase chain reaction was introduced at a conference in October 1985. Cetus rewarded the inventor, Kary Mullis, with a $10,000 bonus for his invention and later sold the patent for the PCR process to the pharmaceutical company Hoffmann-La Roche for $300 million.

More information on the report is available here.

The U.S. House of Representatives approved $3.78 billion prepare for a possible avian flu epidemic, including stockpiling potential vaccines, training emergency officials and increasing international surveillance. At the last minute, an unrelated provision (called the Public Readiness and Emergency Preparedness Act) to protect vaccine, drug and medical device makers against lawsuits in a public health or bioterror emergency. The avian flu funding was attached to an unrelated FY 2006 Defense appropriations bill (H.R. 2863 - H. Rept. 109-359), and passed by the House by a vote of 308-106.

Under the provisions of the bill, drug companies are given complete immunity from civil liability for all aspects of the development and production of drugs, vaccines or devices specified by the government. There is no limitation in scope to pandemic flu or even to major public health hazards. Instead, the immunity can apply to just about any product directed at an "epidemic" and includes any product that mitigates the side effects of a drug used to counteract an epidemic. So, in theory, if a medicine produces high blood pressure or pain, then any blood pressure or pain medication could also be covered.

Consumer and health groups opposed the vaccine liability provisions, which were sought by pharmaceuticals, saying it would protect companies from "gross negligence." Some said the measure could make medical personnel and other emergency workers reluctant to get vaccinated if there was a chance they could suffer negative reactions and not get compensated.

The current measure to shield drug manufacturers from lawsuits is an effort to encourage them to develop new vaccines. But, the bill would make it very difficult for people harmed by vaccines distributed during a national health emergency to pursue legal action against the manufacturer. An earlier bill by Sen. Richard Burr, would also establish a Biomedical Advanced Research and Development Agency (BARDA) that critics say would be exempted from public and congressional scrutiny.

Here, the liability shield proposed can be granted to any product used to prevent or treat an epidemic or a pandemic, and the Secretary of Health and Human Services decides what that means. It also provided a compensation program without any of funding. The legislation puts in place a compensation system modeled after what Congress approved for those who experience harmful side effects from the smallpox vaccine. Under the program, pandemic flu vaccine recipients or their families could apply for lost income, medical expenses and death benefits but the legislation appropriates no money for the compensation fund.

The possibility of an avian flu epidemic, as well as the use of biological weapons, has spurred interest in stepping up production of new vaccines. Proponents argue that big drugmakers would never take much interest in vaccines until they were given strong protections against lawsuits. Here, the bill requires plaintiffs to prove "willful misconduct" by drugmakers in order to seek redress for harm. That's a higher standard than negligence, which is the failure to exercise reasonable care.

Just what constitutes "willful misconduct"? The definition of "willful misconduct" depends in some measure on which court is deciding the issue but some common factors that courts will consider are: (1) knowledge that an action will probably result in injury or damage, (2) reckless disregard of the consequences of an action, or (3) deliberately failing to discharge a duty related to safety. Courts may also consider other factors.

Willful misconduct is the intentional doing of an act which one has a duty to refrain from doing or the intentional failure to do an act which one has the duty to do when he or she has actual knowledge of the peril that will be created and intentionally fails to avert injury. On the other hand, wanton misconduct is the intentional doing of an act which one has a duty to refrain from doing or the intentional failure to do an act which one has a duty to do, in reckless disregard of the consequences and under such surrounding circumstances and conditions that a reasonable person would know, or should know, that such conduct would, in a high degree of probability, result in substantial harm to another.

[update] The Senate passed the bill 93-0 and it was sent to the President on December 28, 2005.

Columnist Robert Horton ran a story, entitled “Muckraking movie takes on biotech industry” in the Daily Herald about a new documentary film: "The Future of Food." It's not the views of the documentary that scared me (documentaries are often slanted to make a point) but it was instead the views of the columnist himself that were worrisome.

In his article, Horton noted that "the film depicts the inexplicable Supreme Court decisions that opened the door for companies to patent living species." This set the stage for his next point, which was that with seeds and grains, "this opens up a nightmare scenario, especially for farmers." Scarier than this column?

I'm OK with people having different viewpoints, I just get offended when they don't check the facts and just propagate misconceptions. Horton gives an overview of a recent Canadian case where Monsanto Corp. sued a farmer for prorogating plants grown with patented genes stating the facts as:

A hapless Saskatchewan farmer recounts his experience getting sued by Monsanto for illegally possessing their patented product. The Monsanto canola seeds probably blew onto his farm from trucks passing by on the highway, and he doesn't want their stuff on his property anyway, but there it is, growing and mixing with his own seeds.

This sounds a little like someone walking into your home uninvited, urinating on your living room rug, and then suing you for possession of their bodily fluids. The courts, however, have been supporting Monsanto.

But, is it really like that? Despite an abundance of news articles perpetuating the view that this case was about an elderly gentleman haplessly planting a few plants in Mr. McGregor’s garden, as though it was his only sustenance, this case actually concerns a large scale, commercial farming operation that grew canola containing a patented cell and gene without obtaining license or permission. This is not about the innocent discovery by farmers of "blow-by" patented plants on their land or in their cultivated fields.

Schmeiser never purchased Roundup Ready Canola nor did he obtain a license to plant it. Yet, in 1998, tests revealed that 95 to 98 percent of his 1,000 acres of canola crop was made up of Roundup Ready plants. While the origin of the plants is unclear, the trial judge found that "none of the suggested sources [proposed by Schmeiser] could reasonably explain the concentration or extent of Roundup Ready canola of a commercial quality" ultimately present in Schmeiser's crop.

In the decision, Monsanto Canada Inc. v. Schmeiser, 2004 SCC 34, the Supreme Court of Canada upheld the validity of the Monsanto patent. Canadian Patent 1,313,830 (“the '830 patent”), issued to Monsanto for “Glyphosate-Resistant Plants,” claims a gene, methods of inserting the gene into a cell, and the derived cell line. However, it does not include claims to the plant per se.

The patent claims:

1. A chimeric plant gene which comprises: (a)a promoter sequence which functions in plant cells;(b)a coding sequence which causes the production of RNA, encoding a chloroplast transit peptide/5-enolpyruvylshikimate-3-phosphate synthase (EPSPS) fusion polypeptide, which chloroplast transit peptide permits the fusion polypeptide to be imported into a chloroplast of a plant cell; and (c)a 3' non-translated region which encodes a polyadenylation signal which functions in plant cells to cause the addition of polyadenylate nucleotides to the 3' end of the RNA; the promoter being heterologous with respect to the coding sequence and adapted to cause sufficient expression of the fusion polypeptide to enhance the glyphosate resistance of a plant cell transformed with the gene.

The Supreme Court underwent some linguistic jujitsu in construing the claims to not extend to plants and seed (finding that the cultivation of plants containing the patented gene and cell does not constitute an infringement) but found that Schmeiser's actions constituted use of the patented product that resulted in infringement.

The dissent disagreed, stating that "use" was limited by the subject matter of the invention (the gene, the insertion of the gene and the derived cell line) and did not extend to cover disclaimed subject matter, namely the plant. To construe the claims in the patent otherwise would confer patent protection on the plant which, according to the minority, would be improper. However, Monsanto did not claim protection for the genetically modified plant itself, but rather for the genes and the modified cells that make up the plant.

In the end, the court stated that Schmeiser actively cultivated Roundup Ready Canola as part of his business operations and noted that the trial judge found that Mr. Schmeiser was not an innocent infringer given that he knew or should have known that he saved and planted seed containing the patented gene and cell and that he sold the resulting crop also containing the patented gene and cell.

While Monsanto states that this is a matter of putting farmers on a level playing field and not letting freeloaders gain the benefits without paying, there has been criticism from some farmers and international agronomic groups because of its potential to effect subsistence farmers who need to grow and collect their own seeds. In any case, it seems that farmers will always be able to simply decide whether Monsanto’s seeds are worth the legal restrictions they carry.

See the text of the Supreme Court decision here.

Peter Zura's Two-Seventy-One Patent Blog has an interesting note about the valuation (or, overvaluation, as the case may be) of Biotech patents. Zura points to an article from Dominique Patton, questioning whether the current onslaught of high profile patent litigation is causing excessive valuations of the Intellectual Property Rights (IPRs) of technology companies. But, one of the biggest problems with intangible assets is that there are few fundamental accounting norms for actually calculating a patent's value.

Pointing to high-profile, high-value lawsuits, Patton believes this only increases the urge to count every patent as a winner. But, as she notes, "not all patents are valuable, and very many are worthless" and unless companies differentiate the wheat from the chaff, the currently excessive valuation of intellectual property could turn out to be the bubble of this decade.

Currently, intangible assets make up about two-thirds of corporate market value in the US with biotech firms typically showing IP as 60% of their market value. Yet, intangible assets can evaporate into thin air - witness that Enron's intangibles were once estimated to be worth $60 billion.

Patton writes:

Experts have long warned about the inadequacy of existing accounting norms in capturing the monetary worth of patents. Those that are generating licensing revenue and royalties can be valued on a discounted cash-flow basis. A further slice is deemed valuable because of the competitive threat it prevents.

In the food, pharmaceutical and biotech industries, for instance, where it is now commonplace to seek to block out an entire market space with a patent barricade, some 11 per cent of the patents filed are subsequently contested. A patent battle, alone, is the first mark of real value, according to some commentators.

Elsewhere, within some companies, the monetary value of patents is deduced by looking at what it would cost to license in the same notional technology. This provides a theoretical basis, but little real data to work with.

Yet the most striking fundamental of patent valuation, overall, is how few fundamentals there are. Companies themselves struggle to evaluate their own intellectual property.

For those managing both patent applications and granted patents it is essential to know the value of each sufficiently accurately if one is to make well-founded decisions about their management. Since only a small proportion of patents turn out to be of extraordinary value, methods which lead to a better understanding of the value of given patent applications or patents are necessary.

The problem in the case of patents is particularly complex due to the, sometimes lengthy and certainly complex, application process involving initial uncertainties about both the technical and commercial success in competitive markets of the underlying technology as well as uncertainties about the legal challenges which can occur both during the application and subsequent enforcement.

Several methods for valuing patents are in common use. Among the most popular are the cost method, the income method, the design around method, the comparable transactions method, and the discounted cash flows method. There are also some less popular methods of patent valuation, including relief from royalties, real options, and various rules of thumb. However, these methods are less popular because they tend to be complex and unreliable.

The cost method values a patent at the cost of developing the patented technology. The cost method may place a lower limit on the valuation, since the patent owner generally wants to at least recoup development costs. However, it does not account for the ability of a patent to generate profit. However, valuation methods based on the historic costs of acquisition make no allowance for the future benefits which might accrue from the patent. They are of no help other than in historical cost based accounting systems or where taxation methods dictate their use and not useful for making business decisions.

The income method involves some element of forecasting the future cash flows. However, it is only with the addition of trying to account for the elements of time and uncertainty in future cash flows that these valuation methods gain a solid foundation. The key issue in these methods is how the forecast cash flow is derived.

The design around method values a patent at the cost of designing around the claims of the patent. The design around method may place an upper limit on the valuation, since it usually doesn’t make sense to pay more for a patent than it would cost to develop an alternative product.

The comparable transactions method uses the sale of a comparable patent as a basis for valuation. However, this is only useful when comparable patents exist. It can be very difficult to find comparable patents. Even if there are benchmarks, there is no assurance that the purchase price of the comparable patent properly took into account an appropriate value (i.e., it the comparable transaction may have been over- or undervalued).

The discounted cash flows method attempts to account for the profit that a patent can generate and is the method most often used for patent valuation. However, this method relies upon company specific profit projections and the use of a risk premium, which make the valuation far too subjective.

As you can see, a patent is not a simple investment project involving initial costs and near certain future returns but a complex series of possibilities each involving costs and actual benefits or potential future benefits. These factors only are revealed over time with considerable uncertainty as to the final outcome.

Just be careful out there in case the bubble bursts.

In India, a team of doctors is reviewing ancient Indian medical texts and putting this information into a 30-million-page electronic encyclopedia of India's traditional medical knowledge, the first of its kind. As practitioners of ayurveda, unani and siddha, ancient Indian medical systems that date back thousands of years, these doctors are trying to put an end to Biopiracy.

'Biopiracy' describes a process in which living resources or traditional knowledge and practices are patented, thus applying intellectual property restrictions to their use. The resources in question are predominantly from developing countries, and are the subject of patent applications by companies in developed countries. An important criticism in this context relates to foreigners obtaining patents based on biological materials, and the pharmacopeias and oral knowledge, such as that of the Indian Ayurveda and other traditional systems of medicine. However, it is difficult to precisely define Biopiracy. One countries folk medicine is another countries recent find.

The project, called the "Traditional Knowledge Digital Library," will put together an encyclopedia of the country's traditional medicine in five languages in an effort to stop people from claiming them as their own and patenting them. The electronic encyclopedia, which will be made available next year, will contain information on the traditional medicines, including exhaustive references, photographs of the plants and scans from the original texts.

This is an especially difficult task in that the ayurvedic texts are in Sanskrit and Hindi, unani texts are in Arabic and Persian and siddha material is in Tamil language. Material from these texts is being translated into five international languages, using sophisticated software coding. Currently, there are nearly 150,000 recorded ayurvedic, unani and siddha medicines. Under normal circumstances, a patent application is rejected if there is prior existing knowledge about the product but this generally must be published in a journal or available on-line and not just an oral tradition.

When the USPTO granted a patent on the wound-healing properties of turmeric, Indian scientists protested and fought to get the patent revoked. And, as we reported earlier, after patent was awarded to the U.S. Department of Agriculture and the multinational company WR Grace & Co. in 1995 for the fungicidal properties of seeds extracted from the neem tree, native to India, the European Parliament's Green Party, India's Research Foundation for Science, Technology and Ecology, and the International Federation of Organic Agriculture Movements fought to have it revoked on the grounds of biopiracy.

The basis of the challenge to the patent was that the fungicide qualities of the neem tree and its use had been known in India for over 2,000 years. The neem derivatives have also been used traditionally to make insect repellents, soaps, cosmetics, tooth cleaners and contraceptives. In 1995, WR Grace patented neem-based bio pesticides, including Neemix, for use on food crops. Neemix suppresses insect feeding behavior and growth in more than 200 species of insects. But the EPO agreed that the process for which the patent had been granted had actually been in use in India for many years.

While patents should not be granted on known materials, many developing countries want to deny patents for new uses of a known product or process, including second use of a medicine. The fear is this could stall research into new areas for these known starting materials. There is the view that the TRIPS Agreement is aiding the exploitation of biodiversity by privatizing biodiversity expressed in life forms and knowledge but patents are granted under national patent laws and have territorial application only. But, the TRIPS Agreement merely provides minimum standards of protection for intellectual property rights including patents, while WTO Members are free to grant a higher level of protection under their national laws.

Thus, India and other countries are free to deny patents on life forms, except on micro-organisms and micro-biological and non-biological processes, as per the provisions of the TRIPS Agreement. However, if the U.S. chooses to grant patents on plants or other life forms, other nations cannot object. Nevertheless, such patents will have force only in the U.S. and cannot be enforced elsewhere.

Science magazine ran a story that researchers at MIT found that nearly 20 percent of the human genome, or 4,382 of the known 23, 688 human genes, have been patented, with over half owned by private companies and 28 percent assigned to universities. Around 63% of the patents are assigned to private firms, with one firm, Incyte Pharmaceuticals/Incyte Genomics, having intellectual property rights covering 2,000 human genes.

The study also shows that there are specific regions of the human genome known as "hot spots" of patent activity where some genes have up to 20 patents asserting rights to how those genes can be used. There are the genes thought likely to be involved in certain diseases.

Obviously, we don't all have to start sending in royalty checks for use of our genes or anything but it does tend to surprise laypeople that isolated DNA sequence can be patented in the same manner that a new drug. Which begs the question: Is this a good thing or a bad thing to have all these patents?

Some argue that gene patents promote the disclosure and dissemination of information by making important uses of gene sequences publicly known. They also provide the promise of financial rewards necessary to secure financial backing, e.g., venture capital, to pay for the cost of doing research.

There is the risk that research will tend more toward commercially-exploitable products than towards those that are most in need. But this is the whole of the patent bargain - giving an incentive to do the research. While one could argue that research would be better spent on treatments for AIDS instead of for Viagra®, the profits propel the scientific machinery and can provide insights that can have a broader impact.

Others feel that gene patents can block future research and discoveries into these genes. It also means that researchers and research institutions need to tread carefully in their work to avoid infringing on someone's patent. Although, I would argue that it's no more true than the care that must be taken with any other type of patented composition, method or other intellectual property right that might be infringed in the course of research. And, look at it this way, in 20 years, all those inventions will be public domain. Sweet.

See more details here.

Wherever you look these days, the biotech industry wants more incentives to lure startup companies to this or that state. Ohio, Michigan, Florida, Maryland, California, Wisconsin, Missouri. It seems it would be much easier to just ask which one or two states is not using one type of incentive package or another to get their piece of the elusive high-tech pie.

Now, Floridians for Stem Cell Research and Cures, embryonic stem-cell research advocates in Florida, have drafted a ballot initiative that would put $200 million toward the science over the next 10 years. The measure would mandate that "the Department of Health shall make grants for embryonic stem-cell research using, or using the derivatives of, human embryos that, before or after formation, have been donated to medicine under donor instructions forbidding intrauterine embryo transfer."

Other states, e.g., New Jersey and Illinois, have allocated money for stem-cell research, but Proposition 71 in California is the only successful effort to amend a state constitution to allow and fund embryonic stem-cell research. Wisconsin is in the game and who wouldn't want a piece of the Scripps Florida deal where Florida will pay Scripps $310 million to run the center and Palm Beach County is financing the land and construction costs, which already total more than $200 million.

This is not a U.S. phenomenon, of course, as we move to a global economy. In France, venture capitalists have written to Dominique de Villepin, French prime minister, calling on his government to grant tax breaks for investments in small high-tech companies in this year's finance bill. Their proposals would offer tax breaks to investors buying shares in companies with fewer than 2,000 employees, at least 10 per cent of spending going on research and development, and revenues of less than $184m. Just 10% on R&D? Only 2,000 employees? Wow, that's not exactly the definition of a struggling, cash-strapped start-up trying to bootstrap itself up from zero.

The idea of tax breaks for high-tech investments is supported by several ministers since the French government is worried about falling behind the US, UK, and Germany. In their letter, 14 specialist high-tech funds wrote that "[T]he stock market does not work in France for these innovative SMEs, great capital consumers and future world leaders." They don't explain why the rules need to be different for VC-backed companies.

They only give the example of biotechnology, where France initially had an early lead in Europe, but now has only four listed companies, versus 15 in Germany, more than 50 in the UK and 350 in the US. I find it hard to believe that tax breaks would suddenly rocket France to the top of the biotech ladder.

This also seems questionable given all the reports lately that tax subsidies don't really deliver all that they promise. In "The Great American Jobs Scam," Greg LeRoy, details what he sees as a system that enables corporations to extract huge taxpayer subsidies by promising quality jobs - and then lets them fail to deliver. The other benefit often promised - higher tax revenues - often proves false or exaggerated as well. One study of 80 companies that had received "retention" subsidies from New York City found that at least 39 had later announced major layoffs, or they had entered into large-scale mergers or put themselves up for sale - events that usually trigger mass layoffs. A detailed analysis of 10 subsidized companies found they had a total loss of more than 3,000 jobs.

LeRoy claims that schemes like this cost taxpayers an estimated $50 billion a year in total spending by states and cities. The bulk of this comes from the tax breaks granted by states - income, sales, and excise taxes - the least visible, least accountable, and most corrosive means by which states fund job creation. Those granted locally - in particular, property tax abatements and diversions - are especially harmful to schools.

This would all be well and good except that, in general, these have failed to create or retain as many jobs as they said they would. Companies often have laid people off since they got the subsidies while other companies that have gotten paid just to move existing jobs from one place to another, where they are proclaimed to be "new jobs."

What started as a strategy for economically depressed regions to develop has turned into a national epidemic of job blackmail. Subsidy packages routinely exceed $100,000 per job. And guess who's getting stuck with the tab. One construction executive admitted during a lawsuit deposition:

"I hate to give the example, but we decided very early in the game we were going to locate somewhere in the Winston-Salem/Greensboro area and narrowed it down to Kernersville rather rapidly; but spent a lot of time in Siler City and Asheboro and other communities hearing their story, primarily to use as a leverage to get all we could out of Winston-Salem. Now I give you that as a local example. But a more recent one - in Dickson, Tennessee, we had about ten west Tennessee municipalities chasing us with all kinds of offers; although we knew through the whole process it was going to be Dickson. And it was unfair and probably, as bad as it sounds, we used the others to get what we could out of where we were going in the first place. . . . you know, I've been around it a long time; but to me it's the process. Usually, you know early where you are going, and you use your leverage."

Maybe we need political leaders to call a cease-fire in the incentive wars and work together, knowing that companies locate in areas that are desirable to employees. Money might be better spent on education and training initiatives, universities, transportation infrastructure, and public policies supporting technological innovation. We need the kinds of investments that will drive our economy, improve our quality of life and raise incomes for all in the next century.

The Baristas need to look into getting some tax breaks by threatening to move off-shore. The state needs us.

Read more in Greg Le Roy's new book: The Great American Job Scam: Corporate Tax Dodging and the Myth of Job Creation.

After just giving a talk this past week on international strategic alliances, I was struck by the recent Forbes article on the increasing number of big pharmaceutical companies increasingly forming alliances with biotech firms. It seems that almost 30% of big pharma's revenue now comes from products licensed from smaller biotech firms. This shows the powerful force that biotech has become in the world of targeted drug therapies.

But, figuring out how to make an alliance work is another matter. At least one-third of alliances between big pharma and biotechs are canceled or renegotiated, and less than 40% of alliances meet their stated objectives, according to a report by Deloitte & Touche.

Still, there does seem to be increased activity since the number of alliances last year between big pharma and biotech rose to 502, from just 69 in 1993, netting biotech companies a combined $11 billion last year. There's also been a boomlet of about 750 biotech-biotech alliances between 2000 and 2003.

Of the 126 biotech companies with revenues less than $500 million surveyed by Deloitte, nearly three-quarters said they plan to increase the number of alliances in the next three years. For 59% of firms surveyed, alliances are part of their core strategy.

So, what makes for a successful alliance? Biotech firms surveyed described four key factors:

* Commitment from senior management
* Favorable deal terms
* Market depth in particular therapeutic areas
* Firm alignment with the partner's core strategy

Since big pharma and biopharma are competing for alliances to make up for patent expirations and depleting pipelines, small biotechs are choosing from an average of eight candidates for each alliance deal and at earlier stages of product development.

As I always tell clients, you need to develop a patent and licensing strategy that is consistent with the company’s business plan. That is, look for a strategic partner that advances the company's goals and not just provides licensing revenue back to the licensor or you'll find yourself without a "next phase" in the plan. And while you always expect the best, you need to plan for the worse in case things go wrong. This includes setting up various exit strategies so you're not tied to a bad deal.

But most of all, remain flexible. Many times, I've had to work with clients to re-do a deal because things did not go well, such as regulatory approval or clinical trials. I've had to re-negotiate the licensing terms of more than one deal where the licensee finds out the payments are more than the market can bear. Often, it is when the company goes to the next round of financing and they find that no one will invest because of the royalty rates.

Then there are the tax ramifications. In globally-competitive development, manufacture, sales, or partnership agreements, there can be some overall tax savings or deferral (or improvement to the company balance sheet) through cross-border shifting of income, risk, and/or control. But, as they say, offshore tax strategies are hard to do properly -- you must establish residence for central management and control in an offshore jurisdiction.

Some of the substantial elements to establishing residence:

(a) a majority of directors are non-residents; (b) director’s meetings are held outside of current country; (c) licensing entity staffed with employees who have authority to direct operations; (d) books and records are maintained offshore; (e) all contracts are signed by offshore staff; and (f) day-to-day operations conducted by offshore staff.

And like they say, these are trained experts; don't try this at home without adequate supervision.

There has been a flurry of news reports this year showing the heightened awareness of the biotech industry and the concomitant growth.

Business Week recently published an article touting that Biotechnology has finally come of age after 30 years of biological research. Now, recent developments in gene and exotic chemical manipulation have brought a wave of biological drugs, many of them reengineered human proteins. These drugs represent real progress for a range of diseases all but untreatable just five years ago.

The article points out that a decade ago there were fewer than 10 oncology drugs in clinical trials, most of them highly toxic chemotherapies. Today, there are 230 medicines and related products created from biotech techniques with over 400 cancer drugs being tested in humans, and almost all are targeted biotech drugs.

Last year alone, the Food & Drug Administration approved 20 biotech drugs and there are at least 50 of 250 biotech drugs currently in late-stage clinical trials that should gain FDA approval. This represents a success rate of almost three times that of Big Pharma.

This all means that biotech investors are starting to be optimistic even though few of the 1,500 companies in this sector are profitable (see BW Online, 6/2/05, "Why Biotech Stocks Are Sedated"). A new report from Ernst & Young shows a 17 percent increase last year in global revenues at publicly traded biotech companies, to $54.6 billion. In the United States, equity financing rose 17 percent, to $16.9 billion from $14.4 billion in 2003. In Europe, the percentage increase was even higher, with equity financing increasing 31 percent, to $3.4 billion last year from $2.6 billion in 2003.

It's not all rosy, though. The biotechnology industry lost a combined $6.4 bln in 2004, according to Ernst & Young, leaving biotech a money-losing, niche industry of 1,400 companies that employ about 183,000 workers nationwide.

But the drugs are selling. Ernst & Young International estimates that nine new biotech drugs approved in 2004 will bring in total revenues of $3 billion this year. By 2007, sales of just those products should grow to $8 billion. These numbers have spurred efforts by Big Pharma to mimic biotechs or merge with them.

Interestingly, the article points out that this blooming of biotech really owes a debt of gratitude to academic researchers who, since 1973, have been the real forefront to gene manipulation and gene targeting.

Many now see stem cells as the next great advance of bio-medical research, which may enable many different kinds of tissue regeneration in patients to repair or replace diseased organs.

Let's hope politics don't get in the way of real advances in medicine.

In IPO arena, things finally seem to be percolating. First, Reliant Pharmaceuticals has filed to raise an IPO worth $300 million in a public offering. The New Jersey company holds rights to four marketed brands, and has three drugs in late-stage clinical trials. Two of its three late-stage compounds have recently received approval from the U.S. Food and Drug Administration. This despite the fact that the company lost $170.8 million in 2004. Reliant relies on both third-party drug testers and third-party manufacturers for its cardiovascular drug portfolio.

Phenomix Corp., a San Diego-based drug company focused on immune disease and metabolic syndrome, has raised $40 million in Series B funding. Phenomix has raised $65.5 million in total VC funding since its 2001 inception.

Genomic Solutions Inc., which makes gene-analysis software and instruments, announced plans to go public in an initial public offering worth as much as $100 million.

In addition, Oxagen, a drug discovery and development company, announced the successful completion of a $59.8 Million (£31.6 Million) Series B round to support its work on anti-inflammatories and respiratory drugs.

In some recent Midwest activity, Advanced Life Sciences Inc., a developer of antibiotics and other drugs, plans to raise up to $86.25 million in an initial public offering. Advanced Life Sciences has no products for sale and has had a cumulative net lost of $41.3 million through the end of March, according to the SEC filing. The company has drugs in earlier-stage development that it hopes could treat cancer and HIV patients and is trying to get approval for an antibiotic cethromycin owned by Abbott Laboratories. The drug is in the final stage of testing generally required for U.S. approval.

Not all is rosy as Swiss biotech company Speedel Pharma AG has pulled its planned initial public offering (IPO) on the SWX Swiss Exchange due to weak market conditions, particularly for biotech stocks. The company claims to be under no pressure to go ahead with the listing and plans to continue with clinical trials with its kidney disease drug SPP301.

This follows the recent listing of Swiss drug development company Arpida Ltd., whose shares were sold at the bottom end of the range and are currently trading lower than their issue price. Arpida is focused on the discovery and development of antibiotic drugs that seek to overcome the growing problem of bacterial resistance.

The IPO market had a weak first quarter, with only eight companies going public. But, of those eight, four companies were biopharmaceuticals and raised a total of $171.8 million. Also, five of the top 10 acquisitions during the first quarter were also biotechs, which sold for $1.75 billion total -- keeping in mind that the typical IPO raised $41 million during the first quarter.

While fewer than 40 U.S. biotech companies went public between late 2003 and the end of 2004, overall VC investment in biotech startups dropped 56 percent in the first quarter from the same quarter last year, $656.6 million compared to $1.50 billion.

Noteworthy is that there seems to be optimism in the sector with many predicting some good times ahead for the industry. At Biotech 2005, it was trumpeted that 2005 will be an even bigger year than 2004, as venture capitalists continue to plow more money into the biotech sector.

Cheers!

The U.S. House of Representatives voted today to lift limits on embryonic stem cell research, which could speed cures for diseases. The House approved the Stem Cell Research Enhancement Act by a 238-194 vote, short of the two-thirds majority (290 votes) that would be needed to override a veto by President Bush -- who has said he would veto the bill.

Admittedly, the threat comes from someone who has never vetoed a single bill as president. Bush said the legislation would violate his earlier policy in which he allowed federal funding for stem cell research but limited it to 78 stem cell lines that existed as of Aug. 9, 2001. However, only about 20 of those lines proved suitable for basic research and even these cannot be used in people because they were contaminated with mouse feeder cells.

Supporters of the measure said many of the embryos that would be studied would be discarded otherwise rather than implanted anyway. They hope that federal funds could go to research that could lead to cures for diseases like Parkinson's and Alzheimer's.

As we posted earlier, this comes after opponents introduced a parallel Stem Cell Therapeutic and Research Act bill (H.R. 2520), introduced by Reps. Chris Smith, R-N.J., and Artur Davis, D-Ala., it would provide $79 million to increase stem cell research using umbilical cord blood and establish a national database for patients looking for matches. It also would clear the way for studies on stem cells derived from adults.

Many members were voting for both measures, saying that together they represented hope for the largest number of people critically ill with diseases that scientists say could be treated or even cured through stem cell research.

But, the two bills address very different procedures. Blood saved from newborns' umbilical cords is rich in a type of stem cells that produce blood cells and could be used to help treat leukemia and other diseases, even as most are routinely discarded. The Castle-DeGette bill deals with embryonic stem cells, which are the building blocks for every tissue in the body.

However, umbilical and embryonic stem cells are not interchangeable as cord stem cells have only been made to give rise to blood cells, not other tissue types as is the case with embryonic stem cells.

The bill now goes to the Senate where backers of embryonic stem cell research say it is supported by 60 senators, enough to break a filibuster by opponents, and could even get a two-thirds majority to that would be enough to beat a presidential veto.

The annual meeting of the American Society of Clinical Oncology (ASCO) took place this past week in Orlando, FLA. Much of this meeting was dominated by industry giants such as Pfizer and Genentech. Although no magic bullets were revealed, the meeting does provide a forum for the smaller biotech companies to present their promising new drugs and also gives investors and others watching the industry an idea of what companies and technologies to keep an eye on.

“AP23573” - Ariad Pharmaceuticals This Cambridge, Mass.-based biotech's new drug, AP23573, showed promising results among advanced sarcomas. AP23573 is an mTOR inhibitor, a popular class of drugs getting attention at big pharmaceutical firms such as Novartis. In a study with 51 patients from a mid-stage trial of AP23573, 37%, saw their cancers stabilize for at least six months. Three of those patients actually saw their tumors shrink. These results suggest that Ariad's drug may have big potential.

“Acadopene” - GTx
GTx, founded by urologist Mitchell S. Steiner, is targeted to be the first drug firm aimed exclusively at men's health--and, more specifically, at prostate cancer. Selective endrogen receptor modulators, or SERMs, including Eli Lilly's Evista, block estrogen in some tumors, but also simulate estrogen-like effects, and are used to prevent osteoporosis in women. SERM's have shown promise against breast and endometrial cancer as well. Steiner theorizes that estrogen may be a factor in the development of prostate cancer, and thinks that a SERM could keep the disease under control. In a phase II trial unveiled at ASCO, scientists demonstrated that GTx's SERM, called Acadopene, reduced the chances of high-risk premalignant cells turning into prostate cancer by 48%. GTx is moving ahead with a phase III clinical trial in order to prove that the drug works for men.

“CRx-026” - CombinatoRx
This small, privately held company comes with a pedigree. It was founded by several researchers who are interested in attacking disease from multiple directions, using multiple chemical pathways. Peter Elliott, who co-developed Millennium's Velcade, a treatment for multiple myeloma, is now working on new drugs at Boston-based CombinatoRx. The company showed extremely early data of its first cancer drug, CRx-026, in a handful of patients, and a few seemed to be helped by it. The data are very premature, but CombinatoRx could be one to watch.

“Dasatinib” - Bristol-Myers Squibb
Novartis' Gleevec was the first gene-targeted pill to show a marked effect in a cancer--in this case, chronic myelogenous leukemia. But Gleevec eventually fails for some of those patients, as new mutations make the cancer more complex--and resistant to the drug. This new drug from Bristol-Myers Squibb appears to help those patients. Several studies appeared to link Dasatinib to mutations in specific cancer genes.

The President's Council on Bioethics has released a report that describes potential ways around the objections that have been raised against embryonic stem cell research. Because obtaining stem cells requires the destruction of a human embryo, many researchers find performing research with these cells ethically unacceptable.

Stem cells are unspecialized cells that can renew themselves for long periods through cell division. In addition, under the right conditions, they can develop, or "differentiate" to become cells with more specialized functions. Embryonic stem cells are "pluripotent," or capable of differentiating. Under the right conditions, human embryonic stem cells will proliferate indefinitely without specializing or differentiating into specific cell types.

Earlier, President Bush limited the use of federal funds for stem cell research by Executive Order, as of Aug. 9, 2001, which put a restraint on U.S. labs so that they can receive federal funding to study only the 22 embryonic stem cell lines available and approved by the National Institutes of Health. Although millions of stem cells can come from each line, they will only contain the genetic diversity of a few individuals. [However, see CNN's recent article on why the ban may be reversed.]

Now, the President's Council report looks at four potential methods of deriving cells that would have all the therapeutic potential of embryonic stem cells, without the ethical objections. The methods include deriving stem cells from embryos that have stopped growing and are essentially dead, or finding ways to trick adult cells into behaving like embryonic cells. While none of these approaches is certain to work, the report encourages more scientific research on these alternatives.

Read the Report President's Council on Bioethics: 'Alternative Sources of Pluripotent Stem Cells'

You can also hear discussion about the report on NPR's All Things Considered, May 15, 2005. The NPR Audio link can be found here.

According to the New York Times, two of the three research scientists on the council have "vigorously rejected" the report's recommendations. Michael Gazzaniga, a professor of neurology at Dartmouth College, said the proposed alternatives are "high-risk gambles" and evade the question as to whether the United States should endorse embryonic stem cell research as it currently is done or whether the country will "remain hostage to the arbitrary views of those with certain beliefs about the nature of life and its origins".

Janet Rowley, a cell biologist at the University of Chicago, said it is "totally baffling" to let healthy embryos die instead of using them to help other patients. The "sharp division" between scientists and bioethicists on the council is "unusual," the Times reports. Council Chair Leon Kass said the council has a more balanced perspective, with more members who are "pro-life" than past councils, and that it is "more representative of the nation as whole."

The dead-embryo idea draws on the fact that in fertility treatments, when many embryos are made in a test tube by mixing eggs and sperm, typically several embryos cease to undergo further cell division and can be regarded as dead. The council considers it possible that other cells might still be viable and could be salvaged for use as stem cells. Since use of tissues from cadavers is ethically acceptable, by analogy the use of viable cells from embryos regarded as dead should also pose no problem, it believes.

The second method deemed acceptable depends on the fact, basic to the technique for cloning animals, that when the nucleus of an adult cell is inserted into an unfertilized egg, the egg somehow makes the nucleus revert to an embryonic state. Presumably, there are chemical signals in the egg that enter the nucleus and reprogram its DNA. The council recommends finding these factors and using them to convert adult cells into stem cells.

On a related matter, the ban on federal funding for research has set off the Great Stem Cell Gold Rush, as states via for developing funding at the state level to concentrate the research in their own states. States all believe that they can bring lucrative companies and jobs to their state even though, despite all the excitement, no human therapies from embryonic stem cells have yet to be developed or tested.

California has passed Proposition 71, which provides $3 billion for stem cell research throughout the state over the next ten years ($350 million a year) and creates the The California Research & Cures Coalition, which has changed its name to The Foundation for Stem Cell Research, to administer funding. New Jersey established the New Jersey Stem Cell Institute, the first state-funded human embryonic stem cell research center and plans to introduce a $500 million bond proposal to continue to fund human embryonic stem cell research over the next 10 years. Similar activities are being proposed in Connecticut, Florida, Illinois, Maryland, Massachusetts, Minnesota, New York, Texas, Wisconsin, Pennsylvania, New Jersey, and Delaware.

It will be quite interesting to see how all these tax dollars sloshing around changes the landscape of research, perhaps further concentrating the research and related commercialization to just a few epicenters across the country.

Somewhere around the world, likely around Sunday, May 8 or Monday, May 9, 2005, the one billionth cumulative acre of biotech crops was planted, as reported by the policy analysts for Truth About Trade and Technology (TATT).

Just how big is a billion acres? It’s really big. A billion square acres would cover the entire land area of the European Union’s 25 countries. (World Factbook, 2004)

For a prospective on the magnitude of the growth in biotech plants, though it has taken the past 10 years to achieve that milestone, at the present double-digit growth rate, it won't be more than four years until the second billion acres of biotech crop plantings is reached. In 2004 alone, more than eight million farmers planted 200 million acres of biotech crops in 17 countries.

More here.
See Pioneer Hi-Bred's Comment.

This comes on the heels of the introduction by Syngenta of genetically engineered golden rice, "Golden rice 2" that contains up to 23 times more provitamin A, the substance converted in the body into vitamin A. This vitamin is vital for preventing childhood blindness, which affects 500,000 children worldwide each year.

The breakthrough was achieved by replacing a gene originally borrowed from daffodils, and which also has a counterpart from maize. Critics of the original golden rice said that its levels of provitamin A - 1.6 micrograms per gram of rice - were too low to make the rice a practical proposition. But each gram of the new strain contains up to 37 micrograms of the provitamin. The new rice could provide at least half what a child would need and might now contain enough to supply the entire recommended daily intake.

But critics point out that it remains to be proven that the provitamin A is absorbed and converted into vitamin A when people eat the rice. However, questions about the uptake of provitamin A, also known as beta carotene, could be answered later in 2005 through experiments in people using the original golden rice.

Syngenta owns Golden Rice 2, but is donating it to the Humanitarian Rice Board.

At the WIPO General Assembly meetings from September 27 to October 5, 2004 the governments of Argentina and Brazil submitted a proposal for "the Establishment of a Development Agenda for WIPO". The proposal was co-sponsored by Bolivia, Cuba, Dominican Republic, Ecuador, Egypt, Iran, Kenya, Peru, Sierra Leone, South Africa, Tanzania and Venezuela. The Development Agenda proposal asked for fundamental changes in WIPO. Some of the proposals were specifically directed at the special concerns of developing countries, while others were efforts to redirect WIPO to give more weight to general consumer and public interests in matters concerning patents, copyrights and other intellectual property rights. Among the proposals for a Development Agenda is a proposal for a "Treaty on Access to Knowledge and Technology". The Development Agenda proposal, the WIPO General Assembly decision and many of the comments and discussions are available here.

World Intellectual Property Organization (WIPO) took the step of agreeing to consider the impact of its decisions on developing nations — including assessing the impact of intellectual property law and policy on technological innovation, access to knowledge, and even human health. There is much at stake since WIPO decisions affect everything from the availability and price of AIDS drugs, to the patterns of international development, to the communications architecture of the Internet. As part of the agreement, WIPO held meetings to discuss the "Development Agenda", endorsed by hundreds of individuals and public-interest non-governmental organizations (NGOs) including EFF and the Consumer Project on Technology (CPTech) through the Geneva Declaration on the Future of WIPO.

As reported by the EFF, the first session of the Inter-Sessional Intergovernmental Meeting (IIM) on a Development Agenda for WIPO was held from April 11 to 13, 2005, where 99 Member States, 16 Intergovernmental Organizations (IGOs) and 41 Non-Governmental Organizations (NGOs) participated in the session. The IIM decided to admit, on an ad hoc basis, 17 non-accredited NGOs, as per the attached list, without implications as to their status for future WIPO meetings. More info is available here, here and here.

Wired ran an interesting article on the struggle relating to Bioprospecting detailing how companies are traveling to the deepest parts of the jungle, the highest mountains and, even the antarctic, to hunt for plants and animals with commercially valuable properties. The question, of course, is who should reap the rewards?

Thus, the discussion at U.N. headquarters was to debate strategies that developing countries can adopt to attract investments in drug research based on genetic resources.

The concept behind bioprospecting is not new and one of the first major deals was in 1991, when the pharmaceutical giant Merck made an agreement with Costa Rica's National Biodiversity Institute to collect and prepare specimens for inventory. The first payment was $1 million, but it's not clear how any future revenue generated from pharmacological discoveries would be shared with indigenous peoples.

However, many countries are looking to protect indigenous peoples' rights to ownership of the traditional knowledge associated with their land, and to promote sustainable development. The most important is the Convention on Biological Diversity, which came into effect in 1993, but which the United States has yet to ratify. And then there is the Agreement on Trade-Related Aspects of Intellectual Property Rights, commonly known as the TRIPS Agreement.

Although the Convention on Biological Diversity has established a framework for allowing access to biological resources, it assumes that individual states in fact have sovereignty over these resources, a presumption that does not hold for every resource. Additionally, it is already a problem to figure out who is doing the collecting and for what purpose. Bioprospecting often involves consortia composed of public and private entities. Delineating where scientific research ends and commercial activity begins becomes a difficult task, notes a report from the U.N. University Institute of Advanced Studies entitled "The International Regime for Bioprospecting: Existing Policies and Emerging Issues for Antarctica." The document was drafted in preparation for a biodiversity meeting, the Seventh Conference of Parties to the Convention on Biological Diversity, held in Kuala Lumpur, Malaysia, this past February.

The report calls for the development of regulations to govern bioprospecting that would address a series of basic questions: Who owns the continent's genetic resources? How can scientists legitimately acquire biomaterials? What measures should researchers take to protect extremophiles? Who owns the products that eventually get marketed commercially from these discoveries?

I wonder how this can be effectively enforced whenever plants and animals often can migrate and thrive (invade?) another territory. How can there be regulatory control over every species? I have a friend who, while doing studies on a plant from another continent, had its seeds put into the local area waters. (Basically, the cleaning people came into the lab and removed the special filters on the floor drain so they could wash the floor - and washed the seeds right down the drain!) These plants found a new, indigenous place to live.

Critics often condemn bioprospecting as a loss to Third World countries. Bioprospectors are seen as carrying off native plants, animals, microorganisms and other natural products with potential commercial value. Then science transforms these products into outrageous profits for wealthy investors.

Yes, abuses do occur but bioprospecting is not a get-rich-quick scheme. Out of 10,000 natural organisms screened for useful compounds, maybe one results in a new drug or other commercial product, and this only after many years of analysis and testing that typically cost hundreds of millions of dollars. Moreover, bioprospecting can be done responsibly. Development of products based on the genes, chemical compounds and structures of natural organisms can benefit not only consumers and commercial firms, but farmers, local communities and natural ecosystems as well.

Rather than bash bioprospecting, a more useful approach might be to understand how a poor country can maximize benefits from its biological resources.

The National Academies' National Research Council has come out encouraging the National Institutes of Health to foster independence among postdoctoral scholars, entry-level faculty, staff scientists, and other new investigators in biomedical research by improving their training and giving them more resources to pursue their own projects.

In case you think this is not a problem, consider that the median age at receiving their first R01 grant is 42 for those holding Ph.D.’s. In 2003 investigators under the age of 40 received less than 17 percent of the agency's competitive research awards -- down from more than 50 percent in 1980.

Among the recommendations are:

1. Enforce a 5-year limit on the use of any funding mechanism—including research grants—to support postdoctoral researchers.

2. Postdoctoral researchers should be more independent and less dependent of the research grants of PIs. NIH should reallocate support away from the R01 and toward individual awards and training grants.

3. Provide equal opportunities for non-U.S. citizens on postdoctoral training awards. Modify citizenship requirements or make available “alternative and equivalent mechanisms of support”

4. Postdoctoral scientists should receive improved career advising, mentoring, and skills training.

5. Postdoctoral Independent Research Award. A new research award for an independent research project

6. NIH should commission an independent evaluation of the different models of postdoctoral support.

The report noted that in most cases, biomedical postdocs are paid through "R01" research grants that are made to principal investigators (PIs). Consequently, postdocs are often required to spend their time focused on the research of these senior investigators, a pattern that may stifle their creativity.

The report went so far as stating that applicants for R01 grants seeking postdoc assistance should be required to provide lists of current postdocs as well as the names, laboratory tenure, and present job status of all postdocs supported in the past decade.

Like ever lengthening doctoral programs, it is obvious that the system encourages keeping new faculty/scientists in a low paying, hard labor position as long as possible (which sounds an awful lot like the associate track for lawyers). Perhaps I would have finished my doctoral dissertation work if it had not seemed so much like the ever elusive "piece of cheese" that kept getting moved further and further away.

More available here.

See the slide show here.

In the collaboration which was initiated only about two years ago in 2003, Pharmacopeia scientists identified lead compounds - from Pharmacopeia's proprietary collection of 7.5 million drug-like small-molecules - acting at Celgene's inflammation-related kinase target. The optimization of the potent and selective lead compounds to a pre-clinical development compound took little more than a year, so that the total time taken from target selection through to development was well under two years.

Pharmacopeia is entitled to on-going payments to the extent Celgene advances the program into and through clinical development, including annual payments and milestone payments at classical value inflection points. Pharmacopeia is further entitled to royalties on commercial sales of any products resulting from this collaboration.

It will be interesting to see whether or not their success will continue into 2005, but it appears as though they have the right formula for success, especially in view of the large library of compunds and lead drugs identified by Pharmacopeia. Certainly a testament to the capabilities of combinatorial chemistry, now at least twenty years old.

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If you can’t beat them, buy them……………

Novartis AG announced today (Feb. 21, 2005) that it will buy generic drugmakers Eon Labs of the United States and Hexal AG of Germany for $8.3 billion, creating the world's largest generic drug company.

Novartis Chief Executive Daniel Vasella has made no secret of his desire to build up the Swiss group's Sandoz generics business, the world's second biggest behind Israel's Teva through acquisitions. But he did not want to overpay, especially since many analysts believe the fundamentals of the German generic drugs market may be deteriorating, putting margins under pressure.

Novartis said it will buy all of Hexal and the two-thirds of Eon Labs that the German company owns for 5.65 billion euros (about $7.3 billion). In addition, Novartis expects to spend close to $1 billion to buy the remaining Eon Labs shares, which trade on the Nasdaq Stock Market.

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Stephen and I attended a breakfast meeting on Wednesday morning. It started at 8:00 A.M. He was there on time. He is very good at that. I, of course, was late as usual. BT (before toddlers), I was either early or on time. AT (you can figure out what it stands for), I feel like I am in slow motion or reverse motion. Who knows, maybe Brownian motion will be next, but I digress….

The meeting was hosted by Omeris. Omeris, founded in 1986 as Edison BioTechnology Center, is a non-profit organization designed to build and accelerate bioscience industry, research, and education in Ohio. As Ohio's bioscience membership and development organization, they are focused on networking the bioscience assets of Ohio.

The purpose of the breakfast meeting was for Omeris , in partnership with Cincinnati USA and BIO/START, to present Phase I data on their Targeted Asset Based Company Attraction Strategy. This Phase I data strongly support Phase II, in which Omeris will develop 2-3 Target Asset Clusters. The presentation was given by 3 of the principals at Omeris, Anthony J. Dennis, Ph.D., president, John F. Lewis Jr., vice-president and Catharina Maulbecker-Armstrong, senior consultant .

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The new biotechnology open-source group, called the Biological Innovation for Open Society ("BIOS"), announced that researchers from Australia published a paper in Nature describing a method of creating genetically modified crops that does not infringe on patents held by big biotechnology companies.

Like open-source software, they said the technique, and a related one already used in crop biotechnology, would be made available free to others to use and improve, as long as any improvements are also available free.

The researchers claim to have modified three types of bacteria so they could be used for transferring desirable genes into plants and these were tested on rice, tobacco and Arabidopsis.

BIOS is a spin-off of Cambia, a not-for-profit, Australian-based organization that licenses a variety of technologies under an open source principle. They believe that patents covering tools for genetically engineering plants have impeded the use of biotechnology in developing countries.

Current technologies, patented by Monsanto, Syngenta, Bayer CropScience and others, rely on Agrobacterium tumefaciens. Biotechnologist remove some of the disease-causing genes from the bacterium and insert the genes they want added to the plant, such as those providing resistance to insects or herbicides. With the new technique, called TransBacter, researchers at Cambia have modified other types of bacteria by transferring DNA from the Agrobacterium into the other bacteria.

Whether this technique will really be a true design around and circumvent current patent claim coverage is not clear.  It will be interesting to see if taking the necessary genes out of the Agrobacterium bacteria and placing them in non-Agrobacterium bacteria is enough.  Given the CAFC's continued limitation of the doctrine of equivalents, the patent holders will need to rely on close coverage.

I'm not sure the whole idea of an open-source biotechnology initiative will gain traction given the tremendous cost of biotech research and the fact that patent protection tends to be critical to biotech commercialization - unlike open-source software.

I also would take issue with the statement on the BIOS web site that "Patents were intended to inspire, advance and promote the social benefits deriving from 'science and the useful arts'. However, the complexity and volume of patents has obscured this focus."   This all sounds well and good until you realize that you can't afford to develop technologies only to have all your competitors gain a free-ride on your research expenditures. 

As Lincoln said, in a speech in 1859 "The Patent system added the fuel of interest to the fire of genius" - financial rewards act as an incentive to genius like no other.

You can read the Nature paper at:  http://www.bios.net/daisy/bios/393/version/live/part/4/data

More info at the NY Times here.

A BIOS paper describing the Agrobacterium-mediated transformation of plants is here:  http://www.bios.net/daisy/bios/50/78

Monsanto Co. has resolved a patent dispute with Bayer CropScience and a German non-profit research organization in a worldwide cross-license deal. This ends a long-standing rift over Agrobacterium technology, a transformation technology used to transfer a gene into a host plant's DNA with more precision and efficiency than other available methods. Scientists at Monsanto and at the Max Planck Society claim to have invented it.

You can read details about Agrobacterium-mediated transformation in plants here.

Bayer CropScience is the exclusive licensee for the Max Planck Society for the Advancement of Science. Both are based in Germany. Under the agreement, Bayer CropScience and Monsanto will cross-license the agrobacterium-mediated transformation in selected areas of the globe.

In October 2003, Monsanto and Bayer CropScience reached a truce on a 20-year patent dispute (the longest-running patent battle in the history of plant biotechnology), with both sides dismissing at least five lawsuits against each other. In that deal, the two agreed to license each other for various patented technologies, including products that are insect-resistant and herbicide-tolerant. The companies are still in a patent dispute over insect-resistant corn.

Press release here.

A UK publication, Medical News Today,  has asked for input on how to deal with the growing problem with royalty stacking, the sharing of third-party royalties caused by a multiplicity of overlapping patents. The article states that many companies are forced to pay large amounts to obtain these multiple licenses and, hence, are forced to raise prices and are being discouraged to undertake technical innovation.  See the entire article here.

The article cited a vaccine plus adjuvant as an example of a product that would be a difficult option to commercialize due to the multiple, overlapping patents held by varying parties. They go on to state that growing litigation and rising production costs, along with stacking is also constraining research causing "closure of vital projects mid way through development."  They especially point to biotech companies as being a problem area.

Some suggested remedies include (i) use of clearing houses, consortia and cross-licensing; (ii) patent pools, exclusive and non-exclusive licenses; and (iii) risk-adjusted royalties or demanding up-front payments rather than royalties.

This seems to be another one of those articles about companies saying "We want to make more money so stop asking for so much of a cut!"  Look, it's a free market and the market bears what it can or it doesn't.  I don't think it's fair that I have to pay my local telephone bill and then pay the "stacked" charges for long distance by the long-distance telephone company.  But crying about it doesn't make it the fault of the telecos.  I have often been involved in renegotiating deals when the reality at the end of the road made commercialization impractical.  No one will make any money unless the end product is a success so everyone is free to negotiate (or re-negotiate) as they wish.

If you are interested in an analysis overview providing an introduction into the Strategic Analysis of Royalty Stacking for Pharmaceutical and Biopharmaceutical Products - then send an email to Katja Feick -Corporate Communications at katja.feick@frost.com with the following information: Full name, Company Name, Title, Contact Tel Number, Email. Upon receipt of the above information, an overview will be emailed to you.

A new report out says that all federally approved lines of embryonic stem cells are contaminated with a non-human sialic acid molecule.  New research now suggests those lines may not prove useful as therapeutic agents.

The sialic acid, Neu5Gc, is found on the surface of some animal cells, e.g., pigs, dogs, and mice, and human immune systems recognize the molecule as foreign and automatically attack Neu5Gc-bearing cells.  Inspection in the laboratory proved that all U.S. embryonic stem cell lines currently used in research have picked up Neu5Gc during the culturing process

While the federally approved lines remain useful for in vitro or animal studies in the lab, it points out a reason to look at non-embryonic [adult] stem cell sources, such as umbilical cord blood, bone marrow, fat cells, other types, which can be harvested and transplanted whole, without the need for culturing.  Researchers are also working to develope new methods of culturing stem cells without animal-cell contamination.

The full details of the study are published in the Jan. 23 issue of Nature Medicine after being outlined to a panel of stem cell experts at the National Academies of Science in October.  More here.

Reuters announced that the American Heart Association journal Circulation published an article showing Pfizer Inc.?s Bextra, a COX-2 inhibitor, can triple the risk of heart attack and stroke in certain patients.

In the study, the researchers studied mice genetically prone to hardening of the arteries or atherosclerosis and found that a compound called thromboxane or TxA2, produced by COX-1, accelerates atherosclerosis.  While low-dose aspirin prevents heart attack and stroke by blocking COX-1 formation of TxA2 in platelets, the addition of a COX-2 inhibitor caused changes that would result in a loss of stability of the plaque, making it more likely to rupture and activate clotting, causing heart attack or stroke.

Merck & Co. Inc. pulled its COX-2 inhibitor Vioxx from the market after clear evidence its use could raise the risk of heart attacks and in December, the National Institutes of Health halted a study involving Pfizer?s COX-2 inhibitor Celebrex.

See more here.

GenoMed announced today that it has filed a patent application on two genes linked to common cancers.  These are the first new disease genes the company has filed on since its multiple patent applications on ACE, a "master" disease gene.

The first gene, involved in copying DNA, was linked specifically to pancreatic and ovarian cancers, which are notoriously hard to diagnose at an early stage.  It could help in the early diagnosis of patients at high risk for these cancers, as well as serve as a possible drug target for treatment of these poorly treatable diseases.

The second gene codes for a scaffolding protein involved in building protein networks inside the cell.  It was linked to all six common cancers (lung, colon, breast, prostate, ovarian, and pancreatic), and may lead to new broad-spectrum chemotherapeutic agents.

Although an FDA advisory panel voted 20-3 Friday to recommend against allowing Merck to sell over-the-counter (OTC) Mevacor, a cholesterol-lowering statin drug, Bristol-Myers Squibb is seeking approval of a 20-milligram OTC version of Pravachol. "We are continuing a robust program to provide the FDA with the information it needs," company spokesman Rob Hutchison says. "Our own studies are underway."  Panel members said Merck's "actual use" study, which simulated pharmacies selling OTC Mevacor, failed to show that consumers could properly decide on their own whether to take the statin.

Nearly six out of 10 study participants who used OTC Mevacor still ended up consulting a doctor. And even so, nine out of 10 failed to meet at least one of the criteria set forth on the drug's label.

By switching a drug to OTC status, manufacturers hope to boost sagging sales resulting from generic competition. When a drug is switched, its manufacturer gets exclusive rights to sell it OTC for three years. Prescription Mevacor already is off patent, so it faces competition from generic lovastatin. Pravachol's patent expires in April 2006.  OTC Mevacor would have been the first non-prescription drug to treat a symptomless chronic condition.  The FDA has until Feb. 24 to reach a decision about OTC Mevacor.

See more here.

Amgen Inc. has added a warning to its anemia drug Aranesp after studies showed high doses of similar drugs can cause blood clots and death.  Aranesp is widely used to treat anemia in adult cancer patients as well as chronic kidney disease.  Some researchers had thought elevating hemoglobin might boost the effectiveness of chemotherapy and radiation to fight cancer.  The company said in a Jan. 11 letter to health professionals that two clinical studies revealed the complications when similar drugs were used to raise hemoglobin levels above recommended levels.  A Food and Drug Administration panel of outside experts last year called for more study of the risks of the anemia drugs, including faster tumor growth and more blood clots.  The company said it would not change its dosage recommendations.  Story here.

InPharma reported that the European Commission, the biotech industry and Chinese government are funding a project aimed at safety in nanobiotechnology. As Philips and GE Healthcare are working on the development of nanomaterials for use in patients, a portion of the $15.6 million will be directed towards studies of the in vitro and in vivo toxicology of nanomaterials, and also whether the size of the particles affects their toxicity, in the same way that asbestos is safe when encountered in a sheet, but causes cancer when inhaled as a dust. Last year, one study was reported showing that inhaled nano-sized particles accumulate in the nasal cavities, lungs and brains of rats, raising concerns that this build-up could lead to harmful inflammation and a risk of brain damage or other central nervous system disorders. And it is known that carbon "buckyballs," a spherical form of the element that has properties attractive for drug delivery, are toxic to cells.  See the article here.

In a Forbes article, Matthew Herper lays out his ideas for five ways we could improve the FDA.

Fix 1: Pay Up

How do we expect to police a $216 billion industry on $300 million per year?

FDA Fix 2: Power Up The FDA

Give the FDA powerful sticks and carrots to compel drug companies to test their medicines more thoroughly.

FDA Fix 3: Track Side Effects

In order to make sure that medicines are safe, we need to find new ways to track existing drugs.

FDA Fix 4: Fund Drug Studies

Right now, we depend entirely on companies to test the drugs they sell us. That's not smart medicine, and it's bad economics too.

FDA Fix No. 5: Forget Labels

Adding warnings to drugs has a limited effect. Does the FDA need its own ad agency?

As the author points out, this is only an agency that regulates products that make up a quarter of every dollar Americans spend annually--some $1 trillion in total. More here.

Health and Human Services today announced steps HHS can take to advance medical innovations and move products more quickly from the lab bench to the bedside.  The recommendations were outlined in a new report: "Moving Medical Innovations Forward -- New Initiatives from HHS."

The HHS task force examined internal procedures at agencies across the department, including the Centers for Disease Control and Prevention (CDC), the Centers for Medicare & Medicaid Services (CMS), the Food and Drug Administration (FDA) and the National Institutes of Health (NIH).

The report made several specific recommendations:

      Improving cooperation with other federal agencies that play a role in medical technology development.

      Creating a forum that will serve as a sounding board for investigators and manufacturers to communicate with HHS agencies.

      Supporting the ongoing development of standard formats for electronic clinical trial data.

      Improving collaboration between CMS and FDA.

      Supporting new inter-agency scientific education and cross-training efforts to identify knowledge gaps among those serving in the technology transfer functions in HHS.

The report is available here.

Girindus America is hosting an Oligonucleotide Technical Symposium being held in conjunction with the inauguration of their new commercial scale oligonucleotide facility. This symposium is co-sponsored by the Genomics Research Institute and the Cincinnati chapter of the American Chemical Society.

The Symposium will be March 9, 2005, at the Genomics Research Institute Auditorium in Cincinnati, Ohio. They have assembled an international team of oligonucleotide experts who will present during this one day symposium. There is no charge for the conference but there is a nominal charge for the ACS dinner that can be paid prior to the dinner.

There are a limited number of openings for the conference so reserve a place at the symposium by emailing your response to Ms. Rose Hawkins.

The New York Times ran an article promoting the idea of a risk-based protocol for safety evaluation that would greatly reduce the time and costs involved in developing most new gene-spliced crops. The author warns that alarmist warnings about the possible hazards of gene splicing have made the public extremely wary of this selective form of genetic modification even though such warnings have so far been groundless.

The article cites a telephone survey of 1,200 Americans released last October by the Food Policy Institute at Rutgers University, 43 percent thought, incorrectly, that ordinary tomatoes did not contain genes, while genetically modified tomatoes did. One-third thought, again incorrectly, that eating genetically modified fruit would change their own genes.

Most worrisome is that the European Union has banned imports of all foods produced through gene splicing, and it has kept many nations, including those afflicted with widespread malnutrition, from accepting even donated gene-spliced foods and crops by threatening to cut off products they export because they might become contaminated with introduced genes. Uganda has even prohibited the testing of a fungus-resistant banana created through gene splicing, even though the fungus is devastating that nation's most important crop.

However, among foods developed through conventional methods to induce mutations, e.g., lettuce, beans, grapefruit, rice, oats and wheat, none had to undergo stringent testing and federal approval before reaching the market. Only those foods produced by the specific introduction of one or more genes into the organism's DNA are subject to strict and prolonged premarketing regulations.

Read the article at here.

An article by SiliconVally.com entitled "Loophole boosts biotech profits" describes the extension of patent term Amgen received for applications filed prior to June 8, 1995, the date that patent term was changed from 17 years after issuance to 20 years from the date of filing an application. The key patent covering the drug Epogen expired Oct. 27, 17 years from issuance.

Epogen and its chemical twin, Procrit, brought $6 billion in revenue last year, $19 billion worth of Epogen since 1989. Fortunately for Amgen, the revenue will continue since it won as many as 12 extra years of protection beyond that first patent, running until 2016.

While the article bemoans Amgen's filings prior to the law change for extending patent protection and the fact that biotech generics are not available for approval by the FDA, it isn't so clear that Amgen manipulated the system. Arguing that they took advantage of the law as it applied to everyone is a little like complaining that retirees born before 1960 are taking advantage of an earlier retirement age allowed over those born in 1960 or later.

With respect to generics, biotech and pharmaceutical industries argue that there can be small but important differences in different versions of biotech drugs and that generics should be subject to the same FDA studies as the original products. The FDA has put off considering any biotech generics until it completes a series of public workshops on the subject, set to continue next year.

See the entire article here.

Carnegie Mellon University scientists have developed a new way to introduce peptide nucleic acid (PNA) directly into live mammalian cells, including human embryonic stem (ES) cells. The work, published online December 2 in Chemical Communications, holds considerable promise in genetic engineering, diagnostics and therapeutics.

Until now, getting PNAs into living cells has been difficult. While other laboratories have developed ways to shuttle PNAs into cells, these methods remain largely ineffective and limited to small-scale experimental setups. Messenger RNA (mRNA) is the current preferred target of antisense therapy.

The Food and Drug Administration will publish draft guidelines today that would encourage companies to submit voluntary safety evaluations of bioengineered food crops that sometimes drift and cross-pollinate with
plants in nearby fields.

The biotech industry welcomed the new approach, but environmental and food-safety advocates called it a poor substitute for the rigorous testing they have sought before the planting of scientifically engineered crops that could enter the nation's food supply.

Under the new FDA guidelines, which are to be published in the Federal Register, companies also would be asked to conduct a voluntary safety evaluation and submit it to the agency. Critics of bioengineered crops have called instead for full-scale, mandatory safety testing and prohibiting the introduction of new biotech foods without detailed FDA certification that they are safe.

More from the Washington Post.

Now that we're all stuffed with turkey, I thought it was timely to note an AP article on the research into perfecting the turkey.  Most turkeys have been selectively bred for their white meat for so long that even walking can be a problem for many of the big-breasted birds and sex is no longer possible.  A research team is now hoping to come to the rescue, employing the latest in biotechnology to chart the turkey's genetic map to eventually alleviate the breeding problems.  The idea is to identify specific genes that produce desirable traits such as salmonella resistance, strong leg muscles and, of course, big breasts.

That would do away with much of the guesswork involved in traditional breeding methods as farmers try to match birds that appear to have the sought-after qualities.  With just $1 million in funding from the U.S. Department of Agriculture and two commercial poultry interests, the researchers hope to publish by year's end a guide to roughly 300 turkey genes, and have twice that many by next Thanksgiving, far short of the turkey's 25,000 genes.  Animal rights activists believe this is not enough since turkeys will still be treated as commodities and more is needed to alleviate suffering.

Some news I always like to hear (being in the wet, allergy-prone Midwest), a new research from the University College London branch of the Ludwig Institute for Cancer Research (LICR), published in this week's Nature, detail how inactivating a key signalling molecule called p110delta reduced the effect of allergies on mice. In mice lacking the gene for p110delta, the allergic response was reduced substantially; in normal mice that had been treated with an experimental drug inhibiting p110delta, the allergic response was stopped completely.

Experts estimate that, in the UK alone, one in three people will suffer from some form of allergy during their lifetime; some nine million people suffer from hay fever, six million from eczema and five million from asthma each year. In the most extreme circumstances, an allergic reaction can be life-threatening or even fatal. The p110delta could also play a role in certain tumours, like leukemia, and that targeting the p110delta pathway may one day also be useful in the treatment of cancer.

See details here.

A movement has started called the Biological Innovation for an Open Society (BIOS) initiative by molecular geneticist Dr. Richard Jefferson, founder and CEO of the CAMBIA (Centre for the Application of Molecular Biology to International Agriculture) in Canberra. BIOS is an attempt to establish an open-source technology movement in the biotechnology industry, similar to the computing industry's open-source software movement.

BIOS provides biotechnology with its own free 'operating system': a public-domain toolkit and associated patents, aimed at freeing researchers worldwide to innovate without restriction, and without being forced into partnerships or unfavorable royalty agreements. They have developed a core toolkit of patented techniques that will expand into a protected 'commons', protected by licenses and other contracts, as biotechnology researchers and agencies around the world contribute new ideas and refinements.

Jefferson is concerned about the lack of sustainable food production, fragile rural economies, poor nutrition, environmental degradation, and poor public health practices and given insufficient attention to diseases and medical conditions of poor people in marginalized communities. He argues that BIOS will facilitate a bottom-up, rather than a top-down, approach to biotechnology innovation. He argues that the tools for innovation should be a shared, public resource, freely accessible to all researchers and businesses, with everyone contributing to their improvement.

The BIOS project does not address the question of whether this could lead to increased or decreased innovation. More importantly, would such tools be commercialized? Typically, in a regulation-ladened industry like biotech, it is difficult to imagine that companies would be willing to expend the resources it would take to get a product to market. Generally, broad patent protection is essential to the development of biotechnology. Biotechnology companies consume large amounts of capital and resources to develop new therapeutics even while the failure rates in the biotechnology industry are extraordinary. For illustration, in order to get just one new drug approved by the Food and Drug Administration, companies will typically screen 5,000 to 10,000 compounds, spending $800 million over the course of 14 years from initial screening to FDA approval.

While it sounds good in principle, I'll be interested in seeing how BIOS progresses. It may be that we need to bear the short-term cost (a 20-year patent monopoly) in order to gain the benefit of the innovation provided for all time. Read more here.