This Week's News Update

There were a number of important news developments during the past week that impact people with diabetes, therefore I have summarized all of them here. Some are related to The Business of Diabetes, while others are related to legislation, but rather than list them each of these separately, I thought it might be relevant to post them all together here to communicate them in a timely fashion:

California Institute for Regenerative Medicine to Award First Research Grants

This week, the California Institute for Regenerative Medicine (CIRM) will award its first grants for stem cell research, marking a milestone of sorts. Over two years ago (in 2004), California voters overwhelmingly decided that embryonic stem cell research was so important that the State of California should not only allow embryonic stem cell research to proceed (at least in California) but also substantially fund it with the passage of proposition 71. Proposition 71 authorized the issuance of $3 billion in bonds over a 10-year period ($300 million per year) to establish a new entity called the California Institute of Regenerative Medicine (CIRM). The impetus for the California law was President George W. Bush's decision to stop funding all embryonic stem cell research except on a very limited number of stem cell lines (only about 19 are currently available to researchers) created before the arbitrary date of August 9, 2001, the date of his speech on the topic.

Unfortunately, lawsuits challenging the new law on various grounds were filed, and until recently, those effectively prevented CIRM from issuing bonds, and therefore awarding any research grants. While the litigation continues, it does appear that it will soon be concluded successfully in favor of CIRM in the near future. For example, the trial court has already ruled in CIRM's favor, and on February 14, 2007, an appellate court heard oral arguments on the appeal filed by Prop 71's opponents. The court is expected to rule shortly, and those involved in the litigation expect a favorable decision in the next few months.

The reason for the delays in awarding its first research grants is complex, but it boils down to the fact that numerous legal challenges were made in the California courts, which were both time-consuming and expensive to respond to. However, recently, CIRM has found new funding sources: namely a $150 million General Fund loan, ordered by California Governor Arnold Schwarzenegger in 2006, and $31 million from the sale of bond anticipation notes (BANs) to private individuals and philanthropic foundations. These funds will support stem cell research in California, at least until the litigation challenging the voters' right to fund it through general obligation bonds concludes. As a result, on February 16, 2007, CIRM is expected to announce the award of at least 30 research grants totaling $24 million for human embryonic stem cell research in California. These will be the first research grants approved under Proposition 71, and as such, they represent a significant milestone for the pro-cures movement. Gov. Schwarzenegger was in San Francisco to herald the moment, so there is apparently strong support from the statehouse.

As I wrote back in 2004, disease advocates, particularly type 1 diabetes advocates, were largely responsible for launching Proposition 71 and getting the measure approved by voters. They hope that embryonic stem cell research might enable a cure to be found, whether via culturing replacement insulin producing beta cells in a lab for transplantation, or by enabling the regeneration of beta cells combined with some way of arresting the autoimmune process which causes the disease in the first place.

With the first research grants for embryonic stem cell research finally being awarded, perhaps the real work -- research -- can finally begin!

References:

Previous Posts

Stem Cell Action Network


U.S. Congress Introduces Bill For Generic Biologics

I have been a vocal critic of the FDA and Congress' failure to remove legal impediments to generic insulin. As I wrote a few weeks ago, I believe the lack of a procedure for the FDA to approve generic biopharmaceuticals is a troubling delay, although perhaps not the only one.

Regardless, this week, Democrats Hillary Rodham Clinton of New York and Henry Waxman of California introduced legislation on Wednesday that would give the Food and Drug Administration the legal authority to approve cheaper, generic versions of biotech drugs known as biologics, the lawmakers said.

Biologic drugs may be used to treat diseases such as cancer, diabetes and AIDS. They are produced from living cell cultures rather than synthesized from chemicals like conventional prescription drugs, and some cost patients tens of thousands of dollars annually.

Waxman, a California Democrat who is now chairman of the House Oversight and Government Reform Committee, introduced similar legislation last year, but that bill was never voted on.

The new bill, if approved and signed into law, would change U.S. patent laws under the 1946 Public Health Services Act that now prevents the FDA from approving some generic versions of biotech drugs -- also known as biologics. The new bill will give the FDA the express legal authority to approve generic biotech drugs, and in many cases, remove the need for expensive and time consuming repetition of clinical trials. However, the FDA would also be given the authority to decide on a case-by-case basis what additional clinical information is required before approval will be granted. Also, in an effort to avoid the various legal loopholes that now delays FDA approval of many generic chemical drugs, this legislation also calls for timely resolution of patent disputes.

To date, the FDA has managed to approve just one simple generic biologic enabled under current law. Last year, a follow-on version of Pfizer's human growth hormone known as Genotropin (somatropin) made by the Sandoz unit of Novartis which is branded Omnitrope was approved. But that approval occurred only after a lengthy and frustrating process that ended with a victorious lawsuit against the FDA. The Clinton-Waxman proposal would finally create a specific pathway for FDA consideration of drugs with more complex compositions. The bill would change patent laws under the 1946 Public Health Services Act that now prevent the FDA from approving many generic versions of biotech drugs. If approved, the measure eventually would lead to approval of more generic biologics, the senators said.

In a statement, Waxman said other sponsors of the legislation include Democrats Sen. Charles Schumer of New York, Rep. Jo Ann Emerson of Missouri and Rep. Frank Pallone of New Jersey. The lawmakers scheduled a Wednesday news conference to discuss the new legislation.

Not surprisingly, Jim Greenwood, president and CEO of the Biotechnology Industry Organization, which represents biologics manufacturers (including Eli Lilly and Company, Novo Nordisk and Sanofi Aventis), said that in proposing changes in FDA regulations, lawmakers are overstepping their scientific expertise, putting consumers at risk and "undermining the scientific judgment of the FDA."

In a similarly predictable response, the Generic Pharmaceutical Association (GPhA) expressed its strong support for the legislation. "Safety is and always will be our number one priority. That's why we support the approval pathway created in this legislation that gives the FDA the authority it needs to ensure safety, efficacy and timely access to affordable biogenerics," GPhA President and CEO Kathleen Jaeger stated. "Under the legislation, FDA would let sound science drive the approval process for biogenerics, just as it does today for biopharmaceuticals."

Jager also added "By creating a safe, clear and efficient abbreviated approval pathway, this critical bipartisan legislation will save consumers and our health care system billions of dollars and bring the true promise of these life-saving medicines to patients in need."

References:

The Washington Post

San Antonio Express-News

Medical News Today

Biopharma Reporter

Much more complete details on the bill can be found at Rep. Waxman's website


Pfizer finds Diabetes to be a Sweet Market

Before Exubera was approved by the FDA in January 2006, the world's largest pharmaceutical company, Pfizer, was a virtual no-show in the diabetes treatment market. Its no secret that diabetes has become endemic in size and is set to grow even further, with huge unmet clinical needs that still exist.

Although Pfizer's first entry, Exubera, the world's first inhalable insulin formulation, has seen somewhat disappointing sales initially (both Germany and the U.K.'s national health programs have determined that Exubera is not a cost-effective way to treat diabetes, and the company has also struggled to get it added to the formularies of many insurance plans in the U.S.), Pfizer apparently sees the world diabetes market as too sweet to ignore.

On February 1, 2007, Pfizer announced it had entered into an agreement to acquire BioRexis Pharmaceutical Corp., a privately-held biopharmaceutical company based in the Philadelphia area with two potential diabetes drug candidates in early development. Financial terms of the acquisition were not disclosed. Most notable among BioRexis' potential products is a long-acting glucagon-like peptide 1 (GLP-1) agonist for the potential treatment of patients with type 2 diabetes.

This category of medicine (pioneered by Byetta) serves several therapuetic needs for patients with type 2 diabetes: stimulates insulin release from the islet beta cells, while also inhibiting the release of glucagon from islet alpha cells and delaying gastric emptying, thus helping to control blood glucose levels in type 2 diabetes patients. The company has developed proprietary protein engineering technologies which provide substantially longer duration of action than current synthetic peptides. In addition to reducing dosing frequency, these technologies also have the potential to substantially improve patient tolerability as compared to other evolving protein therapeutic technologies.

Pfizer vice chairman David Shedlarz called the acquisition another step in Pfizer's strategy to bolster its current medicines by "acquiring technologies that can be applied to strengthen and add value to our portfolio."

References:

Pfizer Corporate Website

The Phildelphia Inquirer


Sanofi Aventis Calls Off Acquisition of Bristol-Myers Squibb

In late January, the Financial Times of London reported that Bristol-Myers Squibb had recently hired investment banker Lehman Brothers to work alongside Citigroup and Morgan Stanley to examine Bristol's options ahead of an expected takeover approach from Sanofi Aventis. That report followed a French publication's article earlier that said the drug companies had signed a "pre-merger" agreement. Sanofi Aventis is itself the product of over 11 mergers and acquisitions, but more recently, investors have soured on mergers being the solution to lackluster growth in the pharmaceutical industry.

Sanofi-Aventis apparently called off talks with Bristol-Myers Squibb over a deal to create the world's biggest pharmaceutical group because of disagreements over price and legal disputes surrounding the top-selling drug, the Financial Times reported without citing its sources.

The paper wrote that an acquisition would have created a pharmaceutical giant with a market value of $175 billion and revenue of $56 billion, outstripping the market leader Pfizer. It was understood that Sanofi was not comfortable with the valuation of Bristol-Myers with a share price of around $28, the paper wrote.


References:

Dow Jones MarketWatch

Various private equity publications