Things Can Go Awry During the Drug Approval Process.

by Hugh G. Davis, Senior Instructor , Kriger Pharmaceutical Marketing and Management Program www.kriger.com , info@kriger.com

This article has been published by the International Biopharmaceutical Associationwww.ibpassociation.org

The project is sponsored by KRC CRO and training services ( www.kriger.com ) and ClinQua CRO (www.clinqua.com )

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There are many opportunities out there in the pharmaceutical and biotechnology marketplace that are very attractive in terms of investment. Beware! Investing in companies developing drugs or other biotechnology products on the premise that their shares will rise post-launch requires consideration of the probability of success and the impact on fundamentals. It is always best to know the most about the drug or biotech product you are planning on investing in. Even then, there are still many things that can go awry during the Drug Approval process.

For example, Genta and Allos Therapeutics have both recently seen staggering declines in their stock prices, 70% and 50% respectively, after having their drugs reviewed by the FDA's Oncologic Drugs Advisory Committee (ODAC). This is a board of experts that evaluates oncology drugs and makes recommendations to the FDA. The ODAC saw significant problems with the clinical data from these drug programs and as a result these drugs are not likely to be approved without additional clinical trials.

In the case of Allos, the ODAC did not agree with the statistical analysis of their Phase III trial on thier anti-cancer drug RSR13. When the ODAC analyzed certain sub-groups of the study population they came to the conclusion that the survival rates reported by Allos indicated a false positive.

The ODAC also had several reservations about the Genta data for their anti-cancer drug called Genasense for the treatment of metastatic melanomas, including: complete responses reported by Genta that were not independently verified, increased toxicity in the Genasense arm without an increase in survival, and prognostic factors that were skewed in favor of the Genasense arm.

O bviously, investors in these drugs did not see this coming. These two examples demonstrate the need for effective clinical trial planning and the necessity of fully complying with the regulatory requirements of the drug approval process. In both of theses cases, consultation with the statisticians at the FDA could probably lessened the impact of these situations.

Another consideration of investment in the biopharmaceutical industry is an analysis of your assumptions about the company you may be considering. In evaluating biotechnology or pharmaceutical companies it is important to distinguish science from business. Exotic scientific techniques do not guarantee commercial success. Development of biotech-derived silk is an excellent example of the importance of understanding the science behind a product. Stronger and lighter than steel, spider silk has many potential applications. The problem in producing spiders silk stems from the inability to farm spiders.

Nexia Biotechnologies Inc. has produced genetically engineered, cloned, goats that make spider silk in their milk. Sounds promising, doesn't it? Researchers have also found a way to produce spider silk in potatoes. While potatoes aren't quite as exotic as cloned sheep, they promise a lower price for production.

The assumption inherent in producing spider silk in goats, potatoes, or anything that isn't a spider, is that you can actually produce a useful product. Nobody has yet managed to find a way to spin silk proteins into the strong fibers that spiders make. Thus, even if it becomes possible to produce spiders silk in large quantities, the remaining challenge is to form an active product.