Editor

NEW YORK - At the seventh annual BIO CEO & Investor Conference, about 2,000 registrants got their first taste of the powerhouse trade association's new leader, former U.S. Rep. James Greenwood, who delivered a keynote luncheon speech in which he vowed "high-tech lobbying" to educate legislators and a poll of Congress that will discover what the lawmakers need to know most about the industry.

"There almost isn't a right answer to the question, What is biotechnology?'" the Biotechnology Industry Organization's president told BioWorld Financial Watch in an interview after his speech. "If you gave a 3x5 card to the 2,000 people at this conference and said, What is a biotech company?' you'd get 2,000 different answers."

Just the same, he noted, there are basic, valuable characteristics of the industry that those inside what Greenwood called the "black box" of government that should be explained, given how seriously decisions on Capitol Hill can affect drug development.

Scientists and company officials tend to use meetings such as the one arranged by BIO to start the process of capital-raising by chatting up would-be investors, but there's plenty that can go wrong further down the line, he said.

"They can show them the data, they can show them the business plan, they can really impress them with their milestones and progress," Greenwood said. "Investments can be made very intelligently, products can be developed, and then they take their new drug application to the FDA. If the FDA sits on it for two or three years, the company's burn rate is such that they can't sustain that, and so it's death. And if they do get it through the FDA and [the Centers for Medicare and Medicaid Services] don't come up with the right formulation for reimbursement, they're dead."

Greenwood, who had represented the Eighth District of Pennsylvania in the House since 1993, was named in July to take over the position held by Carl Feldbaum, who announced his retirement in February 2004. The newly chosen chief acknowledged his status as neither a biotech businessman nor a scientist, and nodded to a "pretty significant debate" among BIO's board members regarding "what kind of replacement" might best serve the trade association.

"There were those who were of the anyone but a Congressman' school," he said. " Whatever you do, don't do that.'" But the board did.

Greenwood pledged his "passion for the science - not a great knowledge of it but a passion for it. I can learn enough of the science fast enough to be able to help the industry," he added, "but I'm not sure the most brilliant Ph.D. can learn about the political process that fast. It's one of those things you almost have to learn by doing."

And he has 24 years under his belt of "navigating that black box called government," he said.

Among the legislative challenges will be reimbursement, drug importation, and keeping an eye on the "evidence based medicine" initiative by Mark McClellan, former FDA head and current chief of CMS.

McClellan's program "has the potential to spotlight the value" of biotech, Greenwood said.

"We're going to watch that one very closely because we do have some concerns about bureaucrats making decisions as to whether it's worth X' thousands of dollars to extend a patient's life by Y' months," he said. "That's probably a decision that should be made by patients and doctors, not bureaucrats."

Reimbursement will be a long-term battle, Greenwood said. No one would claim that health care costs aren't skyrocketing, but "we will argue that only 2 percent of the cost of health care is biologics, biotech products, and I think only 7 percent is pharmaceutical, all in, so you shouldn't be picking on us," he said. "Look at the hospitalization costs. And in fact, obviously drugs are designed for the most part to keep people out of hospitals. We think the value is on our side."

Another case to tackle on behalf of startup biotechs is the crackdown on Small Business Innovation and Research (SBIR) grants by the Small Business Administration.

SBIR and Small Business Technology Transfer (STTR) programs award grants to companies that meet two main conditions. They must list fewer than 500 employees and they must be at least 51 percent owned and controlled by one or more individuals (in other words, be "independently operated").

If a subsidiary of a large company applies for an SBIR, even if the subsidiary has fewer than 500 employees, it's disqualified because of ownership by a "non-individual" - that is, by the parent firm. Possibly even worse, if the small company applying for the SBIR is more than half-owned by a venture capital firm, as often is the case with startups, it also is disqualified, thanks to a more strict reading of the rules that have been in place for years.

"We will make sure in short order that we have legislation introduced in the House and in the Senate" to fix the rule, Greenwood said, adding that apparently an attorney at the SBA decided to follow the guideline precisely and across the board.

"A lawyer doesn't necessarily have any ill will, doesn't necessarily want to blow anything up," Greenwood said. "He just says, Look guys, I'm a lawyer and I read the words and tell you what they mean.' My guess is, that may very well be a correct, strict interpretation of the statute - but probably not the Congressional intent. That's why I think this is a winnable battle."

The two-day BIO conference ended Thursday.