Does FDA Safety Initiative Aid Investors more than Patients?

"Looking at the events of the past five months, one has to now wonder if the creation and placement of the DSB [Drug Safety Oversight Board] and other changes at the FDA will protect investors more than the public. The original public outcry was about the safety of Vioxx and how the FDA (and Merck) could allow it on the market. With the independent panel of experts believing Vioxx should remain on the market but with stricter warnings, it begs the question, was all this necessary and whom do these changes really benefit?

Patient safety is probably not going to benefit much if at all from the changes at the FDA. Prior to the formation of the DSB, the burden of continued monitoring fell in large part to the pharmaceutical company due to legal worries. Patient safety and the fear of litigation is what drew Merck to pull Vioxx off the market. That drastic and major reaction by Merck caused its shares to fall over 30% from its pre-recall value.

For a company to take such a drastic step, highlights the fear pharmaceutical companies have over litigation. The DSB is now placing more of the burden of drug safety on them and this protects the financial interests of pharmaceutical companies because they may not have to act so proactively. If the DSB supports continued marketing of a particular drug, then this lowers the company’s legal risk. Now that the independent counsel has approved keeping Vioxx on the market, some of Merck’s litigation risk has diminished.

The new initiative from the FDA does not really protect consumers any more than in the past, the only thing that has changed is the shifting burden of drug monitoring. Responsible pharmaceutical companies have always monitored their drugs because of the enormous liability issues that surround a poor product. As evident with Vioxx, a company will pull a $2.5 billion product off the market to try and save itself from some litigation. Now that the burden is on a government oversight committee, we cannot expect unsafe drugs to be found any quicker or examined anymore thoroughly than the prior system.

If the DSB was in existence prior to the recall of Vioxx, we might have seen a greatly different story unfold. A story in which Vioxx was never removed from the market but just new warnings added. A story in which Merck’s shares do not fall 30%. This story shows the same amount of protection for patients as the real story but also protects the value of Merck. This new drug safety initiative might potentially protect companies but may do little to increase patient safety.

From this frost.com article.

Drug Patent Approval Watch Newsletters Available

Enter your email address at Drug Patent Approval Watch to receive notification of new drug patent approvals.

Via this Biotech Blog post.

Birchmere to invest $44 million in biotech

"Birchmere Ventures, a North Side-based venture capital firm, has secured more than $44 million to invest in fledgling biotechnology firms, the state said yesterday.

The total includes $10 million from the state Tobacco Settlement Investment Board, which tapped Birchmere to raise private dollars to match the tobacco settlement money it would provide to help finance promising biotech ventures in Western Pennsylvania."

From this Pittsburgh Post-Gazette article.

Security Resource Sheet For Biologics Manufacturers

"The physical security of biological products and the facilities in which they are manufactured and otherwise held is an important public health issue. Effective security can help prevent terrorism, counterfeiting, or tampering activities that could harm United States citizens by, among other things, disrupting medical supplies. Therefore, the physical security of regulated products is an important focus for Center for Biologics Evaluation and Research of the US Food and Drug Administration"

This CBER - Security Resource Sheet For Manufacturers of Biological Products: may be helpful in protecting facilities and products.

Biotech Venture Investing in Denmark

This article from VC Experts provides an overview of venture capital investing in Denmark from the investor point of view and contains valuable information for entrepreneurs generally. An excerpt:

"There are very few barriers of contact between venture capitalists and entrepreneurs in Denmark. Usually, the phone numbers and email addresses of the venture capitalists are public and freely available, and many companies approach the decision-makers directly.

As in all industries, anyone with a track record of exits will be preferred over less experienced people. If a person can show that he has built a biotech company and exited with a nice historical return for the co-investors, his value to future venture investors is immense, and he is likely to receive capital. However, since most entrepreneurs are first timers, this is usually not the case. In those situations, investors look for entrepreneurs who have clarity in presenting the investment case - meaning that the entrepreneur has put a lot of careful thought into every possible scenario over the next couple of years and has determined steps to prevent failure.

At BankInvest Biomedical Venture, we are looking for three things:

First is clarity of plans. What are their goals? What might prevent them from reaching their goals? What steps are taken to alleviate those risks?

Second is focused management. Can they attract co-investors? Are they cash-focused? Have they made a six-year cash liquidity plan including expected valuations of the company tied to significant (corporate, scientific) milestones?

Last is the technology platform, which generates numerous potential products. What, exactly, is the product to be sold, and why would anyone pay a premium to buy this product?"

Crisis management in Biotechnology

Biotechnology product development faces significant internal and external challenges. While scientific setbacks may be difficult to predict, many external problems can be anticipated and prepared for. Read this article from About.com for strategic guidance to anticipating and managing biotechnology crises.

Promise of Agriculture Biotechnology Withering

"The biotechnology industry and its supporters have long proclaimed all the great things that genetically engineered (GE) crops will do for agriculture, consumers, and the environment in America and around the world. The first generation of products developed and commercialized in the 1990s have, in fact, been commercially successful in the United States and several other countries. Those GE crops – primarily insect-resistant corn and cotton and herbicide-tolerant corn, cotton, soybeans, and canola – have been found safe to humans and the environment. Indeed, they have benefitted the environment and farmers and have been widely adopted by farmers. However, the promise of additional benefits has not been realized. The “second generation” of crops, such as ones engineered to be salt-tolerant or to have enhanced nutritional qualities have still not gotten beyond the laboratory. Is agricultural biotechnology a growth industry with a steady stream of new products or one limited to marketing a few hugevolume commodity crops with narrow agronomic benefits?"

So states the executive summary of this report from the Center for Science in the Public Interest that analyzed existing publicly available regulatory information to determine whether development of new biotech products has been increasing, decreasing or remaining constant. CSPI also assessed how long it takes two federal regulatory agencies to complete their review of biotech crops so those products can be commercialized. The report continues:

"The study found that the number of biotech crops going through the regulatory review process decreased sharply between the last five years of the 1990s and the first five years of the 21st century. Furthermore, the products that the government reviewed between 2000 and 2004 were not “novel” because they involved engineering crops with the same or similar genes that were commercialized in the 1990s. Also, while the number of products to be reviewed by federal regulators declined by two thirds between 2000 and 2004, the time it took to receive a regulatory clearance doubled. Those unexplained trends should worry those who believe that agricultural biotechnology can be used safely and can benefit farmers, consumers, and the environment in the United States, other developed countries, and in developing countries. Public discourse is needed to understand what factors account for the trends and whether and how they can be reversed."