BioSpace BioPharm Exec
Tuesday, March 31, 2009
Biogenerics: The Time Has Come

Sorry, Biotechnology Industry Organization, but I just don't think you're going to win the battle on follow-on biologics (FOBs) this time. In fact, I'm going to step up the rhetoric a notch and call these "FOBs," "FOPPs," or "biosimilars" by a forbidden name: biogenerics (gasp!). It may not be totally accurate to view any biologics as "generic" in the same sense as small molecules, but that's how the public are going to view them, and that's how I think the legislation around them is going to shape up.

I wrote about biogenerics a little over a year ago, when BIO was in a hurry to push through a friendly bill before the makeup of Congress changed and made their lives more difficult. That might have been a good strategy, but it didn't happen. I didn't think then that we'd see a law signed in 2008, but I do think we'll see something passed in this Congress. BIO is backing a new bill introduced by Reps. Anna Eshoo (D-CA) and Joe Barton (R-TX) that looks a lot like a bill they introduced in the last Congress. It calls for potentially extensive clinical trials for any potential biogeneric and long periods of exclusivity that would make bringing a biogeneric to market almost as onerous as simply doing a whole new BLA. Except now, the follow-on maker wouldn't have the market exclusivity to make the investment worthwhile.

Of course, I can understand why BIO and its members would like that--it would pretty effectively choke off the biogenerics market in its cradle. But I think that an administration and a public focused on cost savings and greater access to life-saving drugs is going to follow a path closer to that outlined in alternative legislation from Henry Waxman (D-CA) (vehemently opposed by BIO), who would do away with the large-scale clinical trials on biogenerics and make an abbreviated path much closer to that enjoyed by convention generics.

Is that really a safe approach? BIO has insisted that there can't really be two truly equivalent biologics. And they're right, of course. But lest we forget, the modern BLA was ushered in back in 1997--with the support of BIO--because it was recognized that the old establishment licensing application was no longer necessary. Under the ELA system, a manufacturer couldn't just scale up production of a biologic because it was believed that any change--a new tank or hose, a new pH meter--could change the protein being made. Yet we'd already come a long way--and have continued to make progress--in our ability to characterize biologics and determine when one product is close enough to another to be safe. Without recognition that there is such thing as close enough, the modern biotech industry wouldn't exist.

The Europeans, who have led the way on biogeneric legislation, have come around to viewing follow-on products as near enough to equivalent that they can bear the same name, although the issue of substitutability--whether a pharmacist can substitute a biogeneric for the reference product without consulting a physician--is still controversial and left up to individual countries to determine.

When this debate was heating up in 2007, Rep. Darrell Issa (R-CA) held up a bottle of wine during a hearing and asked whether a $90 bottle of California merlot was really equivalent to a boxed wine. Certainly not. But you can probably count on them having the same biological effect.

--Karl Thiel

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Over the years, certain diseases have humbled ambitious life sciences companies over and over again. Tough nuts like sepsis and psoriasis have never really been cracked (Lilly's Xigris and Genetech's Raptiva--both troubled by safety concerns and disappointing sales--notwithstanding). You can certainly add lupus to the list. Long-suffering La Jolla Pharmaceuticals finally given up its quest for approval of Riquent, and now we know that mighty Rituxan isn't up to the task, either. Makes you wonder about Human Genome Sciences' Hail Mary shot at lupus with a phase 3 study of LymphoStat B. We'll know in July. -KT

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President Obama turned out to be pretty quick in naming a new FDA commissioner, certainly by comparison to the last administration. Margaret Hamburg is former health commissioner of New York City, and a purported expert on bioterrorism--which is actually pretty relevant to her mission of improving the seemingly rampant safety problems that have plagued the U.S. food supply over the past several years. Joshua Sharfstein, who was floated as a possible nominee, was named deputy commissioner.

And a purely anecdotal observation here: There are fewer major layoff announcements this month (although that's hardly a comfort to the folks at Agilent, or at the many small biotechs facing potential liquidation). The market bottoms when sellers exhaust themselves; are we finally something similar in employment? -KT

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I noted last month that the Pfizer/Wyeth match-up--despite coming in January--would be the biggest life sciences deal of the year. Yet when Merck announced its huge $41 billion marriage to Schering-Plough earlier this month, it turned out to be not even the biggest deal of the week! That honor went to Roche and Genentech, who buried their differences three days after Merck's announcement with a $47 billion, $95-per-share buyout offer. Roche and Genentech, of course, have been living together for years, although adjusting to married life will still have its difficulties. Merck, on the other hand, is a lifelong bachelor that has avoided major mergers in the past (note its prosaically simple one-syllable name, so different than the many hyphenations of its competitors). Its combination with Schering-Plough will undoubtedly create some cultural challenges, even though it's all taking place in New Jersey. Still, the companies have a pretty nice fit, with some similar therapeutic specialties but very different pipelines. -KT

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Rumors of private equity's death have been greatly exaggerated, it seems. GTCR is sinking $200 million into newly formed Actient Pharmaceuticals, and it has tapped former Abbott Labs exec Ed Fiorentino to head the operation. Actient will be yet another acquisition-focused specialty pharma company. Guess the folks at GTCR must have been impressed by the runaway success of Jazz Pharma (yes, that's sarcasm). Then again, maybe the massive devaluation of assets in the industry means this strategy can finally find more than sporadic success.

Also, I couldn't help but remark that Sangart, a company focused on oxygen therapeutics, just raised a Series F round. Series F?! I Googled it and found out that while Sangart isn't the first company to raise six separate venture rounds, it appears to be on a very short list. (Top of Google's results: Sangart). Moreover, it doesn't appear that any company to go to the well six times has yet followed up with a successful IPO. Still, desperate times and all...Gets you wondering how far down the alphabet venture capital rounds might go in the current drought. -KT

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Lots of weighty legal issues to consider this month. Wyeth v. Levine, which I started carping about before the case was heard by the Supreme Court last November, went against Wyeth in a 6-3 decision. That means scientifically-based decisions by FDA can now be revisited by anyone who strolls into a courtroom-- meaning some far-reaching potential implications for the industry. Then we have President Obama's reversal of an executive order banning federal funding of stem cell research and a spiraling scandal involving Harvard psychiatrist Joseph Biederman and antipsychotic meds. Add to that growing rumors that FDA will start regulating tobacco (as if it didn't have enough other things to be getting on with) and, well, the news speaks for itself. -KT

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Rockville is no town for old men, or anyone else seeking a grandfather clause. Last December, FDA issued new guidelines for diabetes drugs requiring that all applications for new Type II diabetes therapies include long-term studies on cardiovascular effects. But surely that didn't apply to drug applications submitted before the new guidelines, did it? Think again. Takeda found out that alogliptin, its long-awaited successor to Actos, won't move forward without a new study, even though the NDA was submitted back in December 2007. Now the question is whether Novo Nordisk's diabetes drug Victoza, also submitted before the new guidelines were issued, can get approval without a major delay. We'll find out at an advisory committee meeting in early April.

Another interesting story to emerge from Rockville this month has to do with the Plan B, the "morning after" pill made by Barr. FDA is being told to reconsider a 2005 decision to block over-the-counter sale of the drug despite the conclusion of agency staffers at the time that it would be safe to allow it. Back then, assistant FDA commissioner Susan Wood quit over what she called politically motivated interference from then-commissioner Lester Crawford. Fair enough...but still, as much as I personally support this latest development, I have a niggling feeling some might consider it politically motivated. -KT

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Karl Thiel is an analyst for The Motley Fool, a columnist for BioWorld Today, and a contributor to Nature Biotechnology. He lives in Portland, Oregon.

You may contact Karl Thiel at Karl.thiel@biospace.com.

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