By Randall Osborne
It's the endgame, and it's where everything can go wrong.
Finding that first scientific clue, pumping the millions of dollars into a biotechnology drug, wooing a pharmaceutical partner, jumping through the FDA hoops in trial design ¿ all can come to naught when the agency pounds its gavel, approving or not approving.
Even worse, all can be delayed. Holdups in FDA decisions cost plenty by themselves for biotechnology firms, and such snags can make partners blanch, investors run, and red ink flow from accountants' pens.
The situation is bad. Still without a leader, the agency has been growing slower and slower in its decision making. Its pace had been picking up from 1992 (when the first Prescription Drug User Fee Act was passed) to 1999. The median time for approval fell from 23 to 11.6 months during those years.
In 2000, the median time rose 34 percent to 15.6 months, and S.G. Cowen Securities' insiders noted that statistical median figure, dark as it seems, can be misleading on the hopeful side. Of 27 drugs that won the FDA's nod in 2000, more than half had been filed before 1998.
Any improvement will be slow in coming, said Eric Schmidt, analyst with Cowen, in New York.
"No one at the FDA wants to admit there's any structural or organizational problem," he told BioWorld Financial Watch, "and I don't know if it's as much a backlog as a lack of leadership, an unwillingness to stick their neck out."
Schmidt is the author of a report that claims to have gained "the inside scoop" on the FDA and drug approvals, through a trio of Washington insiders. Two have held senior positions at the agency, but none still works there. Schmidt declined to identify them further.
The stage was set when Jane Henney, former FDA commissioner, began putting in place much stronger safety rules. Since 1997, 14 drugs had been pulled from the market because of safety issues, and Congress had begun pressuring the agency to fix the problem.
Among those to get tangled up in the higher standards, the Cowen report noted, was Genentech Inc., with its drug Xolair (omalizumab), developed for asthma and seasonal allergic rhinitis with Novartis AG.
The companies were first told they needed to monitor adverse events that would hit 5 percent of patients using the drug. They set up a database accordingly ¿ and, in July, learned the agency's requirements had changed, calling for a reading of 1 percent.
"Amgen [Inc., of Thousand Oaks, Calif.] and Genentech both had drugs slip off the approval process this summer," Schmidt said. "And it's affecting big and small companies alike."
Amgen and Praecis Pharmaceuticals Inc. were told in June that the new drug application for their prostate cancer therapy, Plenaxis (formerly known as abarelix depot) was inadequate for approval. The drug is a gonadotropin-releasing hormone antagonist that avoids the testosterone surge common to other prostate cancer therapies. The NDA for Plenaxis was accepted for filing in January.
No fair? Probably not, but the public was hardly sympathetic to monolithic drug vendors, often seen as raking in enormous profits at the expense of a helplessly ailing customer base, with its money-tree insurance providers. The pressure stays on.
Henney is gone, and President Bush's administration has entered what the Cowen report calls a "highly politicized" process of selecting a new commissioner, and may end up, it said, with something more like an "ideal Republican" with evident Christian values than a solid leader.
Among the problems: Sen. Edward Kennedy (D-Mass.), chairman of the Senate Health, Education, Labor and Pensions Committee ¿ which must approve the FDA commissioner nominee ¿ has said he will not support an industry executive for the job.
But the consultants cited in the Cowen report noted that the worst agency heads in years past have been those right out of academia.
"It would have to be a very strong individual, to stand up to Congress," Schmidt said.
The trouble is not only lack of leadership, he added.
"There are probably some things an FDA commissioner can fix, and some things you can't fix," he said. "Much of the heightened vigilance comes from outside the FDA."
Within the agency, though, lie definite weak spots. Schmidt points to the Center for Biologics Evaluation and Research as being "a bit of a mess." Of all the FDA's centers, it was named by the report as least efficient, pulling down 43 percent of the budgetary funding, yet proving "particularly inept of late" in getting biologics license applications approved ¿ only 11 between 1999 and 2001.
Nitpicking and bureaucracy are the main culprits, the report says. During labeling talks, CBER might ask for an "arcane yet extremely time consuming" detail that involves only a minor adverse event at a particular timepoint, yet requires recoding of the entire trial's data set, thus delaying the whole process by several months. One consultant also recalled arguing with CBER for months over whether to use "a" and "the" as the article in a sentence.
The "overworked, understaffed and underpaid" agency overall has figured out how to exploit loopholes in the PDUFA, which specifies deadlines for the FDA to complete actions and reviews, says the report.
"Our consultants noted that CBER in particular has become adept at using the PDUFA timetables to its advantage, and will sometimes ask filers to simply reformat and resubmit data so that it can classify the correspondence as a 'response' and have a few more months to review the application," the report finds.
Easy as it might be to blame the FDA, the industry itself often tries to "game" PDUFA ¿ and ends up shooting themselves in the foot. Sometimes, a company will slap together a new drug application to get an accelerated PDUFA date, and in its haste will submit material that wouldn't have been ready for review in any case, the report says. The company then ends up waiting longer than it would have in the first place.
For investors, the key is vigilance, Schmidt said.
"If you've got a drug for a life-threatening indication, like Novartis' Gleevec . . . it was approved in three months," he said. "One, it works like a charm, and two, it's a very severe disease."
Gleevec (imatinib mesylate) won FDA approval May 10 as an oral therapy for chronic myeloid leukemia in the blast crisis, accelerated phase, or in chronic phase after failure of interferon-alpha therapy. It has since shown strong data in another indication: the rare and otherwise incurable form of gastrointestinal cancer called gastrointestinal stromal tumor. (See BioWorld Financial Watch, May 21, 2001.)
In other words, investors should look for "a drug that just flat out works in very nasty [diseases]," Schmidt said.
Many factors can be blamed for the delays, and getting a new FDA leader or revising PDUFA won't fix them all, or fix them quickly, Schmidt said. The wider phenomenon, probably caused by political and social currents, is "a pendulum here, and it swings back and forth," he said. "Perhaps the pendulum swung too far in 1996 and 1997, when a lot of drugs were getting through, and [it's swung] too far the other way now."