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by Cynthia Robbins-Roth, Ph.D.
Salt To Taste
Pricing, Data Leaks, Safety: Biotech's Simmering Stew
By Cynthia Robbins-Roth
BioWorld Today Columnist
Editor's Note: This is part one of a two-part series on notable industry happenings. Part two will run in Friday's issue.
OK, I admit it. The plethora of crazy biotech stories put me in a cranky frame of mind. There has been just too many great news bits to ignore! So here are some snapshots of the autumn season here in biotech land.
That's just a few things I've got on my mind. In Friday's issue, I'll put down the rest of the observations that left me shaking my head.
- Momenta Pharmaceuticals Inc. got in trouble for allegedly sharing nonpublic scientific information on its lead drug with a biotech analyst, who was a bull on the stock. Another biotech analyst told The Wall Street Journal that he signed a confidentiality agreement with Momenta in 2004, and in return was allowed to use nondisclosed data to form judgments about the company and its product.
Momenta put out a statement saying that its actions were legal: Momenta enters into confidentiality agreements with other parties, including investment banks, but does so with the purpose of protecting competitively sensitive trade secrets as part of confirmatory due diligence activities - not with the purpose of disclosing material, nonpublic information.
Remember when the SEC enacted Regulation Full Disclosure in 2000 to give smaller investors a level playing field with the big boys?
- What is the deal with the New York Stock Exchange backing down from a confrontation with animal rights activists over Life Sciences Research (a camouflaged Huntingdon Life Sciences)? After all the bluster about capitalism ruling the universe, it was surprising to see the big board back off of an IPO - a chance for bankers to make some money! - apparently because the names and addresses of NYSE officials were published on the Stop Huntingdon Animal Cruelty website (and reportedly their yacht club was vandalized). Come on, you guys! You were willing to stand up to protestors in the streets of Seattle! What happened here?
There was a report in The San Francisco Chronicle that Chiron Corp. refused to bow to a harassment campaign that included bombings, but Deloitte & Touche caved by dropping Life Sciences as a client.
Various animal rights groups have been publishing family information about drug company employees as a way to threaten and harass folks. Given the incredible importance of animal-based research for this industry, biotech needs to come up with a proactive, public response. Otherwise it risks becoming similar to another group that allowed its very name to be turned into a bad word - liberals!
- Does the biotech industry really want to join forces with big pharma and California Gov. Arnold Schwarzenegger on Prop. 78? That proposition was written to compete with Prop. 79, which aims to coerce drug companies into providing discounted drug prices for the poor in California.
Prop. 79 has its own problems. It would make it a civil offense for drug companies to engage in profiteering from prescription drug sales, defined in part as demanding an unconscionable price or prices that lead to any unjust and unreasonable profit. Sounds like some irritated consumers (or perhaps lawyers) wrote that section. Those terms are not defined, leaving the industry open to lawsuits galore!
The drug industry-backed Prop. 78 claims to want to provide better drug pricing for the poor - just a smaller group of the poor, and on a strictly voluntary basis. While Prop 79 wants to cover those earning four times the federal poverty level (that's $77,000 for a family of four), Prop 78 cuts that to families earning at three times the federal poverty ($58,000, which should just about cover their asthma medication). Prop 79 also covers folks with high medical expenses and the underinsured, while 78 dumps both groups.
The clincher: Prop 79 aims to enforce the pricing by linking this program to MediCal participation, while big pharma's Prop 78 is completely voluntary.
Let's see. The industry has such a great track record going now on drug pricing that, why yes, I'd be willing to bet they comply!
- Take that, U.S. Feds! The Cuban biotech industry continues to thrive in spite of the U.S. boycott. A plant manufacturing humanized monoclonal antibodies aimed at cancer opened in Beijing in September. The product, called TheraCIM h-R3, is the first hu-MAb to be produced in China. A second joint Cuban-Chinese biotech manufacturing plant, for vaccines and therapeutic proteins, was inaugurated in Northeastern China.
- It's always nice when non-science types get involved in biotech investing. Who can forget the thrill of having Martha Stewart give the keynote address at the annual New York Biotech Association meeting back in the 1990s? This year, we have Dan Marino Investments joining the syndicate behind the $19 million Series D round in Bioheart Inc., located in Florida, of course.
- Just because your company develops drugs aimed at life-threatening diseases does not guarantee that everyone will love you! Especially if they can't actually get your drugs, thanks to hefty price tags. New Zealand still has kids dying of Gaucher's disease, as the national health plan can't cover the $100,000, more or less, price tag of treatment.
Reuters published a report in October that cancer patients in Spain have a better chance of getting treatment with the snazzy new targeted drugs including Avastin and Erbitux than do patients in Britain. Britain was grouped with the Czech Republic, Hungary, Norway and Poland for slow adoption of new drugs.
- Another reminder that unexpected outcomes should be expected in science: BioWorld International reported last month that European researchers finally have found the function of the amyloid precursor protein (APP) that accumulates in Alzheimer's disease. APP and its cleavage products turn out to be involved in control of lipid metabolism, maintaining the correct ratio of two important lipid molecules. One of the APP fragments down-regulates cholesterol synthesis in part by targeting HMG Co-A reductase - the same enzyme targeted by statins. Some early studies suggest that statins just might help Alzheimer's patients. The research was published in Nature Cell Biology.
- It's not just safety any more! FDA reportedly has started tipping off the SEC when it finds potential violations. According to an article in The Boston Globe in October, an FDA tip played a role in the lawsuit filed in September against Biopure Corp., in which the SEC claims the company hid FDA concerns from investors while fund raising. SuperGen Inc. also found itself on the wrong side of the FDA, which issued a talk paper warning in 2003 that the company was misrepresenting in a press release the efficacy and safety risks of a drug.
-- November 3, 2005
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by Cynthia Robbins-Roth, Ph.D.