A Novel Approach To Shortening The Drug Approval Process
By Rob Wright, Chief Editor, Life Science Leader
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By Rob Wright
Two pharmaceutical industry stories recently caught my attention. The first involves Nabi Biopharmaceuticals (NASDAQ: NABI) which recently announced that the company's smoking cessation vaccine NicVAX failed a second late-stage trial. The data results were similar to those of an earlier Phase III trial reported in July, which resulted in the stock dropping from just under $6 a share to around $2. The recent announcement has had a negative impact as well, though not as dramatic. "We are clearly disappointed with the results of this second NicVAX Phase III trial but not completely surprised," said Nabi CEO, Raafat Fahim.
Which begs the question, if you weren’t completely surprised then why continue with the study after the July results? Many of the pharma and bio executives with which I speak discuss the importance of killing a drug quickly and placing resources behind more promising compounds. But how does a small company do this when they have limited resources, are privately held or have just a couple of promising compounds? For example, I was recently researching a small company, Sangart, which has basically two compounds – MP4CO and MP4OX. Sangart was founded in 1998 by Dr. Robert M. Winslow, who has gained a reputation as a world-renowned leader in the field of oxygen transport within the circulatory system. The compounds Sangart is working on are lifesaving medicines specifically designed to enhance the perfusion and oxygenation of ischemic tissues through targeted oxygen and other gas delivery. I wonder if Dr. Winslow has gained a reputation for being a very patient man with as long as the process for drug approval takes. Here is a tip, don’t keep your company private and release all of your positive clinical trial findings to members of government. Here’s why.
Lawmaker Drug Stocks
The second story which caught my eye, and which just seemed wrong, was about whether rules governing stock ownership by U.S. congressional representatives should be changed. I feel so stupid for not having known this. Did you know that lawmakers ARE NOT prohibited from acting on the kind of insider information they tend to get about companies! When I read this I about fell out of my chair. It has been reported that representatives and their aides have repeatedly profited off stock trades in industries they oversee and has been reported by the Wall Street Journal. I find it amazing that this is allowed -given how interwoven the government is with the biotech and pharmaceutical industries - from Medicare reimbursement to drug approval. If I got a tip from an executive to buy a stock because of some pending favorable clinical trial results, that is called insider trading. If a congressman hears the same information and acts upon it, which apparently they have done, that is totally legal. In the spirit of providing you with some actionable information, here is a list of drug stocks which are the most popular among members of Congress, as compiled by OpenSecrets.org – Pfizer (NYSE: PFE), Johnson & Johnson (NYSE: JNJ), Merck (NYSE: MRK) Abbott Laboratories (NYSE: ABT), Bristol-Myers Squibb (NYSE: BMY), Amgen (NASDAQ: AMGN) and Teva Pharmaceutical Industries (NASDAQ: TEVA) also made the top 40. I found it intriguing, and probably just coincidental, that one member of congress bought some Amgen stock April 1, 2010, prior to the announcement of favorable preclinical study results and then sold the stock three days after the announcement and just one day after Amgen released its first quarter 2010 adjusted earnings per share. Another member of congress and former presidential candidate really liked Merck in March and April of 2010 – according to the OpenSecrets website – making 7 separate purchases. As a former employee of Merck, who, along with several hundred colleagues, was collecting unemployment, having been laid off in January of 2010, I really question the ethics of such stock purchasing behavior.