Words of comfort for biotech industryLast week was a hard...

LIFE SCIENCES

March 02, 1993|By Liz Bowie | Liz Bowie,Staff Writer

Words of comfort for biotech industry

Last week was a hard one for biotechnology stocks, which were down about 20 percent after disappointing news from two major companies, Synergen Inc. and Amgen Inc. But Stelios Papadopoulos, managing director of investment banking at PaineWebber Inc. and a biotech specialist, doesn't believe the long-term effect will be catastrophic.

While public capital markets for biotech companies appear to have been shut tight, biotech companies have raised an unprecedented $7 billion in the past two years, he says. "We have never had such a long run of capital."

Investors, however, are concerned about the impact of President Clinton's health care reform proposals, he says. Uncertainty over that issue is likely to drag prices down for the next three to six months, he predicts.

"The ability to grow will be curtailed some," he said, particularly for the traditional pharmaceutical companies. But those with new products in their pipelines will fare far better than those companies that have slowed research and development.

Some biotech companies have products that would fit with reforms designed to lower health care costs. But major pharmaceutical companies, scrambling to cut operating costs, might be reluctant to snatch up those products through alliances.

"There is a panic in the pharmaceutical industry," Mr. Papadopoulos said. "Their appetite to spend money will go down." The industry will rebound, he says. As the months pass, "Synergen will be a memory. We shouldn't think of catastrophic scenarios."

But not all executives of local biotech companies appear to be comforted.

At Martek Corp. in Columbia, Chief Executive Henry "Pete" Linsert worries that shutting off access to capital markets will hurt the ability of biotech companies to get products to market. The most expensive part of the development process is the final stage of clinical experiments.

"When you take away the public market to fund these things, [biotech companies'] backs will be against the wall," he said.

If U.S. biotech companies cannot obtain funding to complete clinical trials, they might have to sell licensing agreements to XTC foreign companies, which would reap big profits from the products, he adds. "A bright light in the country will be dimmed."

Drug makers respond to price criticism

The nation's pharmaceutical companies have bought full-page ads in 40 major newspapers, including The Sun, to respond to criticism about high drug prices.

Full-page ads running today are designed to "open a dialogue directly with the American people about the industry and the future of America's health care system," says the Pharmaceutical Manufacturers Association.

The ads make several claims directed at reformers who want to lower health care costs. Some examples: "the fact that drug price increases last year were the lowest in 15 years; that Americans work fewer hours to pay for their average annual supply of drugs than people in most other industrialized countries; and that drugs help to hold down health care costs by containing other medical expenses such as surgery, hospitalization and nursing home care."

One suggestion from the association: making prescription drug insurance a basic part of health care reform.

Hopkins aids search for quick heart test

The Johns Hopkins School of Medicine has agreed to provide a Toronto-based biotechnology company with research material to help produce a cheap, quick test to diagnose heart problems. Financial details of the agreement, which was announced last week, were not released.

Spectral Diagnostics is developing kits that can be used to help diagnose whether a patient with chest pains is merely having indigestion or a heart problem, and what kind of heart problem it might be. The first test, which the company hopes to begin marketing in six months, could help an emergency room doctor or an ambulance medical technician detect the nature of chest pains within four to six minutes.

The company said there is no such quick test available today.

A second diagnostic test uses an enzyme, Troponin I, to give doctors information about how well a patient is recovering and what the damage to the heart was, according to the company.

Anne Murphy, a Hopkins assistant professor of pediatric cardiology, said one of the enzymes that appears in a heart muscle during a heart attack is called Troponin I. She has successfully cloned a gene that produces Troponin I, and will provide that to the company.

UM, PharmaKinetics working on blood tests

PharmaKinetics Laboratories of Baltimore, which tests generic drugs, has received a $76,787 Maryland Industrial Partnerships award with the University of Maryland at Baltimore School of Pharmacy.

During a six-month collaboration, the university and the company will develop three tests for analyzing blood samples.

PharmaKinetics compares how fast a generic drug and a brand-name drug get into a patient's bloodstream and how long the drug stays there. If results for both drugs are the same, then the drugs are considered equivalent, said Max L. Mendelsohn, vice president of PharmaKinetics.

Such tests are used by pharmaceutical companies to apply for U.S. Food and Drug Administration approval.

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