Optimism greets FDA reforms Biotech firms predict easier medicine trials

November 19, 1995|By Mark Guidera | Mark Guidera,SUN STAFF

From his office at the Ft. Holabird Industrial Park in southeast Baltimore, Dr. Craig Smith watches with anticipation as a $4 million, cutting-edge biotechnology laboratory takes shape down the hall.

The new facility is where scientists at his fledgling biotechnology company, Guilford Pharmaceuticals, will work to develop breakthrough treatments for Parkinson's Disease, brain cancer and other life-threatening illnesses. It represents just the latest of the millions of dollars the company has invested, including a new $2 million production facility, in the hope of future profits.

Dr. Smith and many other biotechnology executives in Maryland and the nation are breathing a lot easier these days about such big up-front investments now that the Food and Drug Administration has revamped a host of regulations governing the industry.

The FDA reforms, which many in the industry consider the most significant and sweeping in 50 years, were announced earlier this month by Vice President Al Gore and Maryland Sen. Barbara A. Mikulski, who has played a key role in streamlining the FDA.

In short, say company executives and industry experts, the reforms taking effect over the next few months should dramatically cut down on the time and cost of getting new biotechnology-derived drugs into clinical trials and eventually to market.

Currently, the average cost of taking a drug from lab to market is $150 million.

"Ultimately, these reforms should result in important new products getting into the market quicker so a company can start making money on its investment earlier," said Dr. Smith.

"A six-month or one-year delay in getting a product into the market can have a huge impact on its net value. Hopefully, this is the beginning of a process that will bring a lot of badly needed reform to the FDA that will streamline how new medicines are approved."

Said William Washecka, director of high technology and life sciences for Ernst & Young, the national professional services firm: "Ten years from now, the hope would be that the FDA reforms will be seen as a defining turning point for biotechnology. This is part of the evolutionary process for the industry."

In the long term, say industry experts, the reforms should bode well for venture capitalists, shareholders and other investors, including Maryland taxpayers who have provided capital to several biotech companies, including Guilford. The reforms should free company time and money spent on regulatory issues for research and capital investment.

Promising reforms

Three reforms in particular, say industry experts, hold the most promise for improving the biotech industry. They are:

* Elimination of a licensing procedure that required a company to seek a separate license for each facility where it planned to manufacture a drug from what are called "well-characterized" drugs -- those considered well understood by scientists. Under the new system, biotechnology companies will only have to seek one manufacturing license for a drug, no matter how many facilities it plans to build. This is the same standard used for the traditional pharmaceutical industry.

The reform is significant, say industry executives, because the documentation needed for a manufacturing license is extensive and preparing the documentation can cost thousands.

* Elimination of the requirement that each batch of a biotechnology-developed drug be sent to the FDA to test for quality and safety. Once the FDA approves a biotech drug for use, no further approvals will be needed. This is a recognition by the FDA that manufacturing techniques used in the industry are as systematized and well controlled as those of the pharmaceutical industry, and should result in significant cost savings for companies, said experts.

* Imposition of a 30-day deadline for the FDA to respond to a company that has submitted additional information that was requested after the FDA has put a clinical trial on hold. If it does not respond, the company may proceed with the trial without fear of being penalized. Prior to that reform there was no time restriction with which regulators had to respond to the information the company submitted.

"In effect, your trial could be held in limbo," said Dr. Smith.

Dr. Smith says that concession alone should prove vital, in particular, for small biotechnology companies that don't have the financial resources to weather months of not knowing when, or even if, they will be able to proceed with a human trial.

"These trials often can be among the most expensive part of getting a drug into the market," he said.

Critical time

The reforms, say industry experts, come at a critical time for biotech companies, few of which have turned a profit. After spending years -- and millions of dollars -- on pioneering research, dozens of biotechnology firms have potential breakthrough medicines either in clinical trials or close to market approval.

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