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3) Craft Smarter Regulations


Freeing up biotechs to tackle any and all diseases may require help from Washington. Today, companies are reluctant to pursue many chronic diseases for fear they won't meet the FDA's stringent drug approval standards. The agency often requires them to show that a new drug will prevent or significantly delay worst-case scenarios such as organ failure and death. That can require years of studies with thousands of patients. It's especially difficult in complex chronic conditions such as the autoimmune disease lupus and congestive heart disease, which can cause different symptoms in each patient.

The FDA bottleneck means agony for lupus patient Lisa Amato, 39, of Avon, Conn. Her illness destroyed her kidneys, requiring a transplant and anti-rejection drugs -- which in turn triggered a bout of lymphoma. Amato recovered, but the steroids she takes to relieve her chronic aches and fever have decimated her bones. She has had two knee replacements and three hip surgeries so far. Lupus affects 1.4 million Americans, but the FDA hasn't approved a new medication to treat it in more than 30 years. "It's a nightmare. We really need new drugs," she complains.

Biotech execs are pushing the FDA and its new commissioner, Dr. Mark McClellan, to consider compromises that might speed lupus drugs and other new biotech products to market. They believe some drugs should be approved based on "biomarkers" -- signposts such as antibodies in the blood that prove that at least some patients might benefit. Surrogate markers, such as the ability to lower cholesterol or blood pressure, have already been used in the drug-approval process for heart disease and other illnesses. Further relaxing the rules might help shrink the length of clinical trials, which often drag on for more than a year. And many believe the FDA should formalize the process of tracking patients after drugs hit the market. That would make it less risky for the agency to approve drugs quickly because there would be a better system in place to spot later safety problems.

What the biotech industry needs most from the FDA is better communication throughout the trial process. It isn't uncommon for a biotech to file a new-drug application only to find that its study data don't jibe with what the agency was expecting. McClellan knows it's a problem. "Early communication and more transparency in our regulatory requirements might help avoid [delays]," he said in an April speech.

There are already signs of change. In May, the agency approved Iressa, AstraZeneca (AZN) PLC's new drug for a deadly form of lung cancer, even though it caused tumors to shrink only in about 10% of trial patients. Its approval brings hope to biotechs pursuing drugs that might work in a small group of patients. "The fundamental problem is that everyone doesn't react the same way to every drug," says Stanley Crooke, CEO of San Diego-based Isis Pharmaceutical, which is testing its failed lung-cancer remedy in other cancers. "If the FDA refocuses on serving subsets of patients who might benefit, then we'll have more successes."

The industry would like to see other changes in Washington. In 2001, President George W. Bush banned federal funding for research aimed at developing new lines of embryonic stem cells. Such cells can be programmed to develop into virtually any type of human tissue, making them potentially powerful remedies for many diseases. Now, Congress is weighing a ban on all human cloning -- even the kind that yields stem cells without producing viable fetuses. The uncertain legislative environment has caused VCs to shun companies working in these promising areas, choking the flow of money to stem-cell startups.

Those already pursuing stem cells are finding alternative ways to keep research on track. Many are limiting their experiments to the roughly 60 stem-cell lines that existed before the federal funding ban went into place. Others have begun studying adult stem cells, which they extract from sources such as bone marrow and fat. So far, though, adult stem cells don't seem to be as flexible, so their therapeutic value may be limited. Thomas Okarma, CEO of Geron Corp. in Menlo Park, Calif., has spent many hours on Capitol Hill, trying to explain the therapeutic promise of embryonic stem cells to legislators. "They're turning their back on the relevance of the science," Okarma gripes. "We're paying the bill for much of this research now. It slows the pace down."


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