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The FDA's Drug Review Process: Ensuring Drugs are Safe and Effective


by Michelle Meadows


The path a drug travels from a lab to your medicine cabinet is usually long, and every drug takes a unique route. Often, a drug is developed to treat a specific disease. An important use of a drug may also be discovered by accident.


For example, Retrovir (zidovudine, also known as AZT) was first studied as an anti-cancer drug in the 1960s with disappointing results. It wasn't until the 1980s that researchers discovered the drug could treat AIDS, and the Food and Drug Administration approved the drug, manufactured by GlaxoSmithKline, for that purpose in 1987.


Most drugs that undergo pre-clinical (animal) testing never even make it to human testing and review by the FDA. The drugs that do must undergo the agency's rigorous evaluation process, which scrutinizes everything about the drug--from the design of clinical trials to the severity of side effects to the conditions under which the drug is manufactured.


Stages of Drug Development and Review



The FDA first enters the picture when a drug sponsor submits an IND to the agency. Sponsors--companies, research institutions, and other organizations that take responsibility for marketing a drug--must show the FDA results of pre-clinical testing they've done in laboratory animals and what they propose to do for human testing. At this stage, the FDA decides whether it is reasonably safe to move forward with testing the drug on humans.




Drug studies in humans can begin only after an IND is reviewed by the FDA and a local institutional review board (IRB). The board is a panel of scientists and non-scientists in hospitals and research institutions that oversees clinical research.


IRBs approve the clinical trial protocols, which describe the type of people who may participate in the clinical trial, the schedule of tests and procedures, the medications and dosages to be studied, the length of the study, the study's objectives, and other details. IRBs make sure the study is acceptable, that participants have given consent and are fully informed of their risks, and that researchers take appropriate steps to protect patients from harm.


Phase 1 studies are usually conducted in healthy volunteers. The goal here is to determine what the drug's most frequent side effects are and, often, how the drug is metabolized and excreted. The number of subjects typically ranges from 20 to 80.


Phase 2 studies begin if Phase 1 studies don't reveal unacceptable toxicity. While the emphasis in Phase 1 is on safety, the emphasis in Phase 2 is on effectiveness. This phase aims to obtain preliminary data on whether the drug works in people who have a certain disease or condition. For controlled trials, patients receiving the drug are compared with similar patients receiving a different treatment--usually a placebo or a different drug. Safety continues to be evaluated, and short-term side effects are studied. Typically, the number of subjects in Phase 2 studies ranges from a few dozen to about 300.


Phase 3 studies begin if evidence of effectiveness is shown in Phase 2. These studies gather more information about safety and effectiveness, studying different populations and different dosages and using the drug in combination with other drugs. The number of subjects usually ranges from several hundred to about 3,000 people.


Phase 4 studies occur after a drug is approved. They may explore such areas as new uses or new populations, long-term effects, and how participants respond to different dosages.




This is the formal step a drug sponsor takes to ask that the FDA consider approving a new drug for marketing in the United States. An NDA includes all animal and human data and analyses of the data, as well as information about how the drug behaves in the body and how it is manufactured.


When an NDA comes in, the FDA has 60 days to decide whether to file it so that it can be reviewed. The FDA can refuse to file an application that is incomplete. For example, some required studies may be missing. In accordance with the Prescription Drug User Fee Act (PDUFA), the FDA's Center for Drug Evaluation and Research (CDER) expects to review and act on at least 90 percent of NDAs for standard drugs no later than 10 months after the applications were received. The review goal is six months for priority drugs. (See "The Role of User Fees.")


The Tufts Center for the Study of Drug Development in Boston estimates that about 1 in 5 drugs that enter clinical testing ultimately are approved by the FDA.


How often the FDA meets with a drug sponsor varies, but the two most common meeting points are at the end of Phase 2 clinical trials and pre-NDA--right before a new drug application is submitted.


At the end of Phase 2, the FDA and sponsors try to come to an agreement on how the large-scale studies in Phase 3 should be done. The pre-NDA meeting is for discussing what the FDA expects to see in the application.


There is also continuous interaction throughout the review process. For example, over roughly six years, the sponsor Merck Research Laboratories of West Point, Pa., and the FDA had a half-dozen face-to-face meetings and about 28 teleconferences regarding the asthma drug Singulair (montelukast sodium).


In 1992, Merck submitted an IND for Singulair so that it could begin conducting studies in humans. After clinical trials were complete, the company submitted a new drug application in February 1997. The FDA approved Singulair in February 1998.


"It's the clinical trials that take so long--usually several years," says Sandra Kweder, M.D., deputy director for the Office of New Drugs in CDER. "The emphasis on speed for FDA mostly relates to review time and timelines of being able to meet with sponsors during a drug's development," she says.


Reviewing Applications

Though FDA reviewers are involved with a drug's development throughout the IND stage, the official review time is the length of time it takes to review a new drug application and issue an action letter, an official statement informing a drug sponsor of the agency's decision.


Once a new drug application is filed, an FDA review team--medical doctors, chemists, statisticians, microbiologists, pharmacologists and other experts--evaluates whether the studies the sponsor submitted show that the drug is safe and effective for its proposed use. No drug is absolutely safe; all drugs have side effects. "Safe" in this sense means that the benefits of the drug appear to outweigh the risks.


The review team analyzes study results and looks for possible problems with the application, such as weaknesses of the study design or analyses. Reviewers determine whether they agree with the sponsor's results and conclusions, or whether they need any additional information to make a decision.


Each reviewer prepares a written evaluation containing conclusions and recommendations about the application. These evaluations are then considered by team leaders, division directors, and office directors, depending on the type of application.


Steven Hirschfeld, M.D., Ph.D., a medical officer in CDER's Division of Oncology Drug Products, says, "It is impossible to have all the information we wish to have at the time we need it." One factor is the practical size of clinical trials, which typically include several thousand subjects at the most.


"We are using information about past experience from a select group of people--those enrolled in particular clinical trials--and attempting to predict the future experience of the population at large."


For Hirschfeld, recognizing uncertainty and attempting to minimize it is one of the greatest challenges in reviewing information about health products. Recommending designs for clinical trials is one way to ask for more information and resolve unanswered questions, he says. Controlled clinical trials allow the FDA to conclude whether a new drug has shown substantial evidence of safety and effectiveness.


In Hirschfeld's opinion, some aspects of the job are similar to the responsibilities of air traffic controllers in the sense that they also analyze information that's available to them and make recommendations that can be acted on.


"People bringing planes in have to balance weather, other planes in the sky, ground traffic, and arrival and departure schedules, all without placing people at greater risk," he says. They can rearrange flight schedules and use different runways to lower the risk of problems, and the FDA can limit a drug's use or take other steps to lower the risk of problems, he says. "We all have responsibilities to protect or guide those who are vulnerable, and we use the best analytic tools at our disposal."


Reviewers receive training that fosters consistency in drug reviews, and good review practices remain a high priority for the agency. For example, CDER recently held a two-day retreat in which clinical reviewers discussed review priorities, including improved communication between drug review divisions in CDER regarding drugs being reviewed for more than one indication.


Sometimes the FDA calls on advisory committees made up of outside experts who help the agency decide on drug applications. Whether an advisory committee is needed depends on many things.


"Some considerations would be if it's a drug that has significant questions, if it's the first in its class, or the first for a given indication," says Mark Goldberger, M.D., director of CDER's office that evaluates drugs to treat infectious diseases and immunosuppressive agents. "Generally, FDA takes the advice of advisory committees, but not always," he says. "Their role is just that--to advise."


Accelerated Approval

Traditional approval requires that clinical benefit be shown before approval can be granted. Accelerated approval is given to some new drugs for serious and life-threatening illnesses that lack satisfactory treatments. This allows an NDA to be approved before measures of effectiveness that would usually be required for approval are available.


Instead, less traditional measures called "surrogate endpoints" are used to evaluate effectiveness. These are laboratory findings or signs that may not be a direct measurement of how a patient feels, functions, or survives, but are considered likely to predict benefit. For example, a surrogate endpoint could be the lowering of HIV blood levels for short periods of time with anti-retroviral drugs.


Gleevec (imatinib mesylate), an oral treatment for patients with a life-threatening form of cancer called chronic myeloid leukemia (CML), received accelerated approval. The drug was also approved under the FDA's orphan drug program, which gives financial incentives to sponsors for manufacturing drugs that treat rare diseases. Gleevec blocks enzymes that play a role in cancer growth. The approval was based on results of three large Phase 2 studies, which showed the drug could substantially reduce the level of cancerous cells in the bone marrow and blood.


The sponsor, Novartis Pharmaceuticals Corp. of East Hanover, N.J., submitted the IND in April 1998. The FDA received the NDA in February 2001, and the drug was approved two and a half months later in May 2001. Novartis has made commitments to conduct Phase 4 studies that investigate Gleevec's clinical benefit, such as increased progression-free survival in the treatment of CML.


Most drugs to treat HIV have been approved under accelerated approval provisions, with the company required to continue its studies after the drug is on the market to confirm that its effects on virus levels are maintained and that it ultimately benefits the patient. Under accelerated approval rules, if studies don't confirm the initial results, the FDA can withdraw the approval.


Because premarket review can't catch all potential problems with a drug, the FDA continues to track approved drugs for adverse events through a postmarketing surveillance program.


Bumps in the Road

If the FDA decides that the benefits of a drug outweigh the risks, the drug will receive approval and can be marketed in the United States. But if there are problems with an NDA, the FDA may decide that a drug is "approvable" or "not approvable."


A designation of approvable means that the drug can probably be approved, provided that some issues are resolved first. This might involve the sponsor and the FDA coming to a final agreement on what should go on the drug's label, for example. It could also involve more difficult issues, such as the adequacy of information on how people respond to various dosages of the drug.


A designation of "not approvable" describes deficiencies significant enough that it is not clear that approval can be obtained in the future, at least not without substantial additional data.


Common problems include unexpected safety issues that crop up or failure to demonstrate a drug's effectiveness. A sponsor may need to conduct additional studies--perhaps studies of more people, different types of people, or for a longer period of time.


Manufacturing issues are also among the reasons that approval may be delayed or denied. Drugs must be manufactured in accordance with standards called good manufacturing practices, and the FDA inspects manufacturing facilities before a drug can be approved. If a facility isn't ready for inspection, approval can be delayed. Any manufacturing deficiencies found would need to be corrected before approval.


"Sometimes a company may make a certain amount of a drug for clinical trials. Then when they go to scale up, they may lose a supplier or end up with quality control issues that result in a product of different chemistry," says the FDA's Kweder. "Sponsors have to show us that the product that's going to be marketed is the same product that they tested."


John Jenkins, M.D., director of CDER's Office of New Drugs, says, "It's often a combination of problems that prevent approval." Close communication with the FDA early on in a drug's development reduces the chance that an application will have to go through more than one cycle of review, he says. "But it's no guarantee."


The FDA outlines the justification for its decision in an action letter to the drug sponsor. When the action is either approvable or not approvable, CDER gives the sponsor a chance to meet with agency officials to discuss the deficiencies. At that point, the sponsor can choose to ask for a hearing or correct any deficiencies and submit new information.


Michelle Meadows is a staff writer for FDA Consumer.





The Role of User Fees

Since the Prescription Drug User Fee Act (PDUFA) was passed in 1992, more than 700 drugs and biologics have come to the market, including new medicines to treat cancer, AIDS, cardiovascular disease, and life-threatening infections. PDUFA has allowed the Food and Drug Administration to bring access to new drugs as fast or faster than anywhere in the world, all while maintaining the same thorough review process.


Under PDUFA, drug companies agree to pay fees that boost FDA resources, and the FDA agrees to time goals for its review of new drug applications. Along with supporting increased staff, drug user fees help the FDA upgrade resources in information technology. The agency has moved toward an electronic submission and review environment, now accepting more electronic applications and filing review documents electronically.


The goals set by PDUFA apply to the review of original new human drug and biological applications, resubmissions of original applications, and supplements to approved applications. The second phase of PDUFA, known as PDUFA II, was reauthorized in 1997 and extended the user fee program through September 2002. PDUFA III, which extends to 2007, was reauthorized in June 2002.


The FDA continues to meet or exceed PDUFA's review goals, which have become more demanding each year. FDA's Center for Drug Evaluation and Research (CDER) approved 66 new drugs in 2001, 24 of which were new molecular entities (NMEs) with ingredients never marketed before in the United States. Ten were priority products, believed to represent an advance over available therapies. The FDA's Center for Biologics Evaluation and Research (CBER) reviewed 16 complex biological license applications (BLA) last year. Two of the BLAs reviewed were classified as priority products. Biologics are medical products derived from living sources, such as vaccines and blood products.


In addition to setting time frames for review of applications, PDUFA sets goals to improve communication between the FDA and drug sponsors. PDUFA outlines how fast the FDA must respond to requests from sponsors and how often meetings should occur. Throughout a drug's development, the FDA advises sponsors on how to study certain classes of drugs, how to submit data, what kind of data is needed, and how clinical trials should be designed.







The Quality of Clinical Data

The Food and Drug Administration relies on data that sponsors submit to decide whether a drug should be approved. To protect the rights and welfare of people in clinical trials, and to verify the quality and integrity of data submitted, the FDA's Division of Scientific Investigations (DSI) conducts inspections of clinical investigators' study sites. DSI also reviews the records of institutional review boards to be sure they are fulfilling their role in patient protection.


"FDA investigators compare information that clinical investigators provided to sponsors on case report forms with information in source documents such as medical records and lab results," says Carolyn Hommel, a consumer safety officer in DSI.


DSI seeks to determine such things as whether the study was conducted according to the investigational plan, whether all adverse events were recorded, and whether the subjects met the inclusion/exclusion criteria outlined in the study protocol.


At the conclusion of each inspection, FDA investigators prepare a report summarizing any deficiencies. In cases where they observe numerous or serious deviations, such as falsification of data, DSI classifies the inspection as "official action indicated" and sends a warning letter or Notice of Initiation of Disqualification Proceedings and Opportunity to Explain (NIDPOE) to the clinical investigator, specifying the deviations that were found.


The NIDPOE begins an administrative process to determine whether the clinical investigator should remain eligible to receive investigational products and conduct clinical studies.


CDER conducts about 300-400 clinical investigator inspections annually. About 3 percent are classified in this "official action indicated" category.







Drug Review Steps

Pre-clinical (animal) testing.

An investigational new drug application (IND) outlines what the sponsor of a new drug proposes for human testing in clinical trials.

Phase 1 studies (typically involve 20 to 80 people).

Phase 2 studies (typically involve a few dozen to about 300 people).

Phase 3 studies (typically involve several hundred to about 3,000 people).

The pre-NDA period, just before a new drug application (NDA) is submitted.

A common time for the FDA and drug sponsors to meet.

Submission of a new drug application is the formal step asking the FDA to consider a drug for marketing approval.

After an NDA is received, the FDA has 60 days to decide whether to file it so it can be reviewed.

If the FDA files the NDA, an FDA review team is assigned to evaluate the sponsor's research on the drug's safety and effectiveness.

The FDA reviews information that goes on a drug's professional labeling, guidance on how to use the drug.

The FDA inspects the facilities where the drug will be manufactured as part of the approval process.

FDA reviewers will approve the drug or find it either "approvable" or "not approvable."


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What I don't have a good feel for with these companies is the expected behaviour of share prices for the companies at each stage in the approval process. I would imagine that as each stage in the approval process is cleared:


1. There would be a significant incremental jump in the responsible company's share price.


2. This would be followed by a decay in the share price as investors take their profits but that the end price would be higher than prior to the stage approval.


Can anyone enlighten me?

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hi smartman- i don't know how to really answer that one- all i know that the market can be weird at times.


imo, the biggest problem that biotechs face are long development times (5-15 years is common), and massive amounts of cash needed to do the studies. because of this, investors get bored (time) and scared (cash). and most of these projects fail- over 90%. so its pretty risky stuff.


personally, i don't see phase 1 or 2 results as any big deal- i wouldn't rush into investing on the basis of even positive results here. thats because phase 3 results are really the only ones that matter when it comes to deciding if there is a viable product. i'm also wary of company announcements of good results- i'm amazed how they actually dress up findings that are really not that impressive if you see the detail.


the following is a document i found that looks at some the various methods used in valuing biotechs. hope it helps.

good luck


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Thanks for that drrc. I will read through that document in my spare time. I do have a bit of a feel with oil and gas stocks, so from what you wrote and taking a bit of license, I can sort relate the following with biotechs:


Phase 1 - identifying a prospetive area


Phase 2 - performing seimic surveys


Phase 3 - drilling and logging to determining if economic to produce


I presume that subsequent phases would equivalence to all the work to produce, store and transport the oil/gas. The spectacular price movements happen during phase 3. In oil and gas drilling there might be ASX releases that there are hydrocarbon shows and pressure increases which allow for investors to take profits while drilling is in progress. I don't know if there might be similar sub-parts in biotechnology.


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Armed for bioterror

Advances in genetic engineering have raised concerns among security agencies about the prospect of terrorists creating a new superbug and unleashing it against perceived enemies. Ean Higgins reports

June 12, 2004


THE idea of the experiment was to make female mice less fertile in order to help curb mouse plagues, which often cost the Australian farm sector dearly. Canberra immunologists Ron Jackson and Ian Ramshaw injected 10 mice with a mousepox virus that had been modified with a gene producing interleukin-4, a natural chemical secreted by the immune system.


The modification could, it was thought, trick the mice's immune systems into rendering their eggs infertile.


The type of mouse, called Black 6, was known to be naturally resistant to the effects of mousepox. So if they were infected with the modified mousepox, the idea went, they would remain healthy to scurry around, spreading the virus along with the infertility gene to other mice.


What happened six days later left Jackson and Ramshaw stunned. One mouse was dead, with its tissues swollen up -- a classic case of mousepox -- and several others looked the worse for wear. Before long, the other mice died.


Jackson and Ramshaw realised they had managed by accident to create a supervirus. The IL-4 modification had undermined the production of the mice's defence cells, leaving them more exposed to diseases they should normally be able to cope with. Just to be sure, Jackson and Ramshaw vaccinated another group of mice against mousepox, then injected them with the modified virus. Even then, 60 per cent of the mice died.


Jackson and Ramshaw held off for two years before publishing their results, and when they did, it caused alarm all the way to America's CIA.


The implication was that diseases could, potentially, be made far more deadly through genetic engineering, and existing vaccines rendered less effective. Further advances in genetic engineering have left US security services even more worried.


A CIA report released in November last year warns that advances in biotechnology have greatly increased the potential danger of biological warfare.


"The effects of some of these engineered biological agents could be worse than any disease known to man," the CIA says. "The same science that may cure some of our worst diseases could be used to create the world's most frightening weapons."


The CIA highlighted Jackson and Ramshaw's work, saying a similar technique could be used to increase the lethality of diseases.


After the September 11 attacks in 2001, the White House budgeted nearly $US6billion to counter the threat of bioterrorism. But even this huge effort is now regarded as insufficient.


The US -- considered to be the No.1 target of a bioterror threat -- is not even close to adequate levels of preparedness for a bioterror attack, according to a recent report from the congressional General Accounting Office.


In response, President GeorgeW. Bush a few weeks ago signed a series of measures designed to improve US defences against bioterrorism, including a new national centre to assess threats.


This week in San Francisco, at the world's biggest biotechnology conference, BIO 2004, companies and researchers showcased new measures designed to fight bioterrorism. Among them was the Australian firm Anadis, which is promoting the world's first anti-anthrax spray.


Anthrax has been used in terror attacks: a sect in Japan pumped it into a factory in Tokyo, and after September 11 spores were mailed to US congressmen, costing lives among mail workers.


What is particularly worrying security and health authorities is that the scientific advances in genetic engineering are moving at such a pace that if the technology falls into the wrong hands, the danger and severity of an attack could rise exponentially.


Some diseases, such as anthrax, for example, are not normally contagious. However, if through genetic engineering a non-contagious disease could be made to spread from one human to another, it would be a vastly more dangerous weapon.


The scientific community has shown astounding ability in recent years to manipulate diseases -- including recreating polio. Stephen Prowse, the chief executive officer of the Australian Biosecurity Co-operative Research Centre, says the new capabilities reflect advances in dissecting the genetic make-up of an entire virus.


Theoretically, it would be possible to take DNA from one virus and combine it with another to achieve the desired effect.


"You could, for example, modify a bird flu to make it more infectious among humans. Just chop up the bird flu and chop up conventional human flu, and make a recombinant," says Prowse.


He adds, however, that such an experiment would be much more difficult than it sounds, requiring a fair bit of sophisticated technology.


But Ramshaw sees this sort of bioterrorism as "a likely scenario". Ramshaw, who is head of vaccine immunology at the Australian National University, points to smallpox, one of the greatest fears among the security establishment.


In principle, it should be almost impossible for terrorists to get their hands on the virus. The disease was eradicated in 1980 and stocks are kept safely hidden away at two locations, one in the US and the other in Russia.


However, diseases normally associated with animals could be used instead. Although not as infectious as smallpox, monkey pox is lethal and transmissible to humans. Ramshaw says it has a genetic make-up similar to human smallpox, and could possibly be adjusted to become a highly contagious disease.


Monkey pox would be "generally available", Ramshaw says, as would camel pox, which is "all over the place in the Middle East" and has 99 per cent of the same genetic make-up as human smallpox.


Through genetic engineering processes, it might be possible to recreate smallpox itself or a new "designer" disease.


Former Iraqi leader Saddam Hussein's regime was known to be conducting experiments with camel pox, which some intelligence analysts believed were aimed at doing just that.


"The technology is such that you are going to be able to do lots more things


than have been done in the past," Ramshaw says.


The number of people familiar with the technology is spreading -- there are about four or five institutions in Australia capable of such research, Ramshaw says, and dozens elsewhere around the world.


Another factor in the equation is the scenario of "suicide bioterrorism", which the federal Government has conceded it has considered as a possible threat.


In this case terrorists would not need a crop-duster or aerosol spray to spread a transmissible disease, but inject themselves with the virus and then spread it through direct contact.


In the US, the threat of suicide bioterrorism has been explored by the Centre for Deterrence of Biowarfare and Bioterrorism at the University of Louisville in Kentucky, which has trained more than 4000 health and security professionals in how to cope with a bioterrorism attack.


Its co-director, Richard Clover, says the centre has, in particular, looked at the possibility of smallpox with a three-day window in which a self-infected terrorist could spread the disease.


However it is transmitted, the likelihood of bioterrorism remains a matter of debate among the intelligence community.


According to the Australian National University's head of terrorism studies Clive Williams, groups such as al-Qa'ida are more likely to choose traditional technology such as bombings aimed at specific targets.


The greater risk, he says, is more likely to come from "religious sects who have scientists among their membership" or even "a scientist who has gone a bit potty".


Williams says the point, however, is that if one of the bioterrorism scenarios did come true, it could be far more disastrous than anything al-Qa'ida has done so far. The Spanish flu epidemic in 1918-19 killed at least 20 million people.


"The consequences are very high, even though the likelihood is very low," Williams says.


In Australia, the Government has considered the threat serious enough to


have imported 50,000 vials of smallpox vaccine, which can be diluted to treat up to 250,000 people as a preventative or curative measure.


A plan has been developed requiring hospitals and doctors to report immediately any symptoms in patients for six diseases suspected of bioterrorist potential: smallpox, anthrax, tularemia, botulism, plague, and viral haemorrhagic fevers such as ebola.


The Department of Health would then assess the probability that the cases constituted a terrorist attack in co-operation with security agencies.


The paradox, as posed by the CIA, is that experimentation with diseases through genetic modification -- usually in a bid to find cures -- is creating the knowledge that terrorists could employ.


However, Singapore-based terrorism expert Rohan Gunaratna says there is no choice but to advance such research, and authorities might have to help fund it where required.


"The governments must continue to stay one step ahead of the terrorists," he says.


from http://www.theaustralian.news.com.au/commo...5E23289,00.html

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Stuart Roberts of SCE showed a graph of the biotechnology index vs All Ords. The suggestion is that the current dip is due as much to the influx of capital raisings in the biotech sector over the last several months (usually at significant discount to the current share price). An interesting observation worthy of further analysis. Perhaps the sector is fundamentally more buoyant than we might think.



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Crowds - and protesters - flock to Bio 2004


by Maggie Shiels

in San Francisco, California



Everyone wants a piece of the biotech action and this week, at the world's biggest industry convention, around 17,000 people descended on San Francisco to pitch for business.


Will the protests deter investors?


Demonstrations by protesters blocking the streets and railing against an industry it regards as evil and dangerous did little to deter the scientists, business leaders and government officials flocking to Bio 2004.


And with good reason.


A report released at Bio 2004 by global accounting firm Ernst & Young shows the biotech sector is becoming more stable and taking a leap forward following the bruising many investors suffered in 2000 when the so-called genomics boom burst.


Promising outlook


The study, regarded as one of the most definitive in the business, shows that the worldwide biotechnology market grew by one sixth in 2003 to $47bn in revenues.


The biotech industry is realising that the future has got to be based on products, rather than just technology


William Powlett Smith, Ernst & Young

America led the way with 77% of global revenues while Europe had a down year. Revenues in Canada rose about 20% to $1.8bn and Asia-Pacific revenues rose 9% to $1.5bn.


Job growth is estimated at 15% this year creating a worldwide workforce of around 220,000.


Ernst & Young partner William Powlett Smith told BBC News Online the stars certainly seem to be better aligned than they have been for a long time.


"We have seen global revenues shooting up and there is much better funding for the industry.


"There is also a strong product pipeline and there are some very exciting new products that have been launched, about 25 new ones this year, with a lot of approvals still to come through. All of that is very promising for the industry."


Profits goal


Mr Powlett Smith points to a 'new realism' that is defining the sector today.


"The biotech industry is realising that the future has got to be based on products, rather than just technology.



Bio 2004 has attracted global interest

"Products are what make revenues and you have to have revenues in order to make a profit and you have to have profits in order to go on investing in research and development and so on."


The lesson in basic economics might seem insulting but biotech is regarded as one of the riskiest investment fields around with drugs often taking decades and hundreds of millions of dollars to make.


Overall the industry remains unprofitable and Ernst & Young predicts it will be 2008 before the sector shows a collective profit.


Since 1990, the firm notes that investors have showered $100bn on public and biotech companies, which accumulated an aggregate loss of $71bn in the 13 years that followed.


Despite the caution there are serious profits to be made.


Mr Powlett Smith notes that "Amgen, which was one of the first two biotech companies along with Genetech, is now so large that it exceeds the market capitalisation of the entire European industry".


British invasion


Money and jobs are why Bio 2004 has attracted delegations from 60 foreign countries including Australia, Japan, India, Kazakhstan, France, German, Taiwan and Singapore.


A slew of government big wigs including the Malaysian Prime Minister and Thailand's Deputy Prime minister also came to town to promote their back yard for business.


The UK mounted the biggest delegation with more than 600 delegates representing over 150 companies, universities and research and development institutions.


Asling Burnand, chief executive of the Biotech Industry Association of the UK says the British biotech industry is "looking promising".


"We are second to the United States. We have 480 companies, employing 22,000 people directly and 40,000 indirectly.


"We have 18 profitable companies and if you had asked me that question two years ago, there would have hardly been any. So I think you can actually see the sector beginning to mature."


Wider audience


One company that was creating some buzz at the Moscone Convention Centre was Dundee-based CXR Biosciences.



Dr Tom Shepherd says CXR's profile has been boosted

Just last month it signed a partnership deal with US-based Geron and the Roslin Institute of Edinburgh, which developed Dolly the sheep.


The venture, to develop technology to test the safety of new drugs, could signal the end of animal testing and a financial windfall for CXR Biosciences.


Company chief executive Dr Tom Shepherd told BBC Online working with Geron certainly helps put them on the map.


"We are a small company, just 35 people, and Geron is a public company on the US stock market, so itÃÆâ€â„¢ÃƒÆ’ƒâ€Â ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒ¢Ã¢â‚¬Å¾Ã‚¢ÃƒÆ’ƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’‚¡ÃƒÆ’Æâ€â„¢ÃƒÆ’ƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¹s quite nice for us to have that deal working with them.


"(It shows) that there are a number of companies in Scotland our size that are getting known for being quite innovative and creative in biotech."


Craig Wheeler, president of biopharmaceuticals for Emeryville's Chiron Corp says he was overwhelmed by solicitations to move his company to other countries or other states.


He maintains that Bio 2004 certainly shows that foreign companies need to be taken seriously.


"I would bet if you took a poll here today, 50 to 75% of companies would admit they already have some sort of joint venture in India or China.


"And so what we are starting to see is the changing face of the industry as some of these knowledge based economies begin to build up around the world."




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