Washington Editor

WASHINGTON - President Bush's State of the Union Address received praise from political pundits who applauded his call for increasing the nation's biofuel capacity.

That message, of course, resonated loudly within the industrial biotech sector. Industry watchers expect the president's so-called "Advanced Energy Initiative," in which he proposed a 22 percent increase in clean energy research at the Department of Energy, to provide a big boost. The president's budget for the coming government fiscal year, to be released next week, will include $150 million to help develop bio-based transportation fuels from agricultural waste products, a $59 million increase over last year.

"I think it's going to be a big shot in the arm to industrial biotech companies that are developing enzymes for cellulosic ethanol," said Brent Erickson, BIO's executive vice president of its industrial and environmental section. He added that growing fuel costs and national security issues prompted the president's new policy goals, despite his oil state roots.

Calling America "addicted to oil," Bush said the country needs "more reliable alternative energy sources." Among them: domestic sources of transportation fuel such as ethanol made from corn starch and other agricultural wastes, including wood chips, stalks or a dedicated energy crop like switch grass. Current production of corn starch-based ethanol amounts to about 4 billion gallons per year, and while there is a congressional mandate to increase that amount, a ceiling exists because of the need for corn in the general food supply.

That's where cellulosic ethanol comes into play; it is produced from the aforementioned crop wastes that undergo a fermentation process through enzymes developed by companies such as Genencor International Inc., of Palo Alto, Calif.; Novozymes A/S, of Bagsvaerd, Denmark; Dyadic International Inc., of Jupiter, Fla.; and Iogen Corp., of Ottawa. Those businesses, aided by past Energy Department support, have reached what Erickson termed "the tipping point" in terms of making commercial enzyme technology available and affordable. Both Genencor and Novozymes have publicized their 30-fold cost reductions in producing enzymes to convert biomass into fermentable sugars.

"Our goal is to make this new kind of ethanol practical and competitive within six years," Bush said, adding that the U.S. should aim to replace more than 75 percent of oil imports from the Middle East by 2025, although Bush did not specifically mention other regions. Erickson told BioWorld Today that such timelines possibly could be sped up.

"We could be making between 25 and 50 percent of our gasoline by 2015 with cellulosic ethanol," he added, noting that only about 286,000 gallons of it are made annually right now because there is only a single biorefinery in operation: Iogen's facility in Canada. The development of biorefineries to handle the enzymatic process necessary to break down crop waste into cellulosic ethanol is key to meeting any of the president's goals. Since institutional lenders have been hesitant to back additional biorefinery construction - viewing the technology as unproved, Erickson said - then the industrial biotech sector continues to need government support such as grant and loan provisions found in the latest energy bill.

BIO, which says the U.S. could produce more than 70 billion gallons of cellulosic ethanol per year, has been lobbying the White House and Department of Energy for assistance on biofuels and biorefineries.

EU Votes In Favor Of Follow-On

Last week, European regulatory authorities delivered for the first time their official support for a generic biotech product, the growth hormone Omnitrope, a decision that is reverberating throughout the FDA.

Industry observers have long postulated that U.S. regulators would let their overseas counterparts take the first steps concerning follow-on biologicals, and it appears that the European Medicines Agency is on the verge of approving Omnitrope. Its Committee for Medicinal Products for Human Use determined that the product, manufactured by Sandoz GmbH, demonstrated comparable quality, safety and efficacy to a reference product already authorized there, the widely used recombinant human growth hormone Genotropin (somatropin, from Pfizer Inc.). Deemed "a similar biological medicinal product" by the Europeans, Omnitrope also contains the recombinant-DNA growth hormone somatropin, and is designed to treat growth disturbance and growth hormone deficiency in children and adults.

Sandoz, a subsidiary of Basel, Switzerland-based Novartis AG, has an ongoing legal suit against the FDA, attempting to force a ruling on the new drug application filed in July 2003. In September 2004, the FDA delayed regulatory action despite finding no deficiencies in the application because of uncertainty around the scientific and legal issues involved in authorizing biogenerics. In the recent past, FDA officials have said the agency might adopt a case-by-case review process for follow-on biologicals, though official guidance remains to be issued. (See BioWorld Today, Sept. 22, 2005.) Officials at Sandoz, of Holzkirchen, Germany, are optimistic. "With Omnitrope's positive status in Europe," Sandoz CEO Andreas Rummelt said in a statement, "we now hope the FDA will finally move in granting a marketing authorization for the U.S., acknowledging the sound science that supports this product."

Pandemic Drug Shortage Continues

On Capitol Hill this week, drug industry executives and top government health officials warned that it would take years for the U.S. to reach its pandemic flu stockpile plans. Among speakers at the Senate Appropriations Committee hearing was Daniel Soland, the president of the vaccines unit at Chiron Corp. in Emeryville, Calif. He said it was crucial to "create an environment of certainty" for vaccine makers to establish domestic manufacturing capacity and "enable it to flourish." Julie Gerberding, the head of the Centers for Disease Control and Prevention in Atlanta, said her agency is working to build lab capacity and to encourage more drug companies to return to the vaccine market.

In separate government action to protect against the pandemic, the Bethesda, Md.-based National Institute of General Medical Sciences, a component of the National Institutes of Health, agreed to grant $7.8 million over the next five years to four new research teams that have joined an international network developing computer-based simulations of pandemic flu and other infectious disease outbreaks. The network is part of the Models of Infectious Disease Agent Study (MIDAS), an ongoing NIH effort to use computer modeling techniques to better understand the spread of contagious diseases and the potential impact of public health measures.

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