Biotech Values

[DewDiligence]

Update on the NVS lawsuit against the FDA:

[This lawsuit is of great interest to TEVA, among others. However, the wheels of bureaucracy turn ever so slowly.]

http://yahoo.reuters.com/financeQuoteCompanyNewsArticle.jhtml?duid=mtfh63392_2005-11-15_15-45-59_l15...

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FDA rebuffs Novartis over delay to biogeneric drug

By Ben Hirschler, European Pharmaceuticals Correspondent

LONDON, Nov 15 (Reuters) - The U.S. Food and Drug Administration has asked a U.S. court to dismiss a lawsuit from a unit of Novartis AG ( NVS ) alleging undue regulatory delays in deciding on its copycat human growth hormone drug, Omnitrope.

Sandoz, the generics arm of the Swiss drug maker, sued the agency in September for leaving the product in limbo -- in a move designed to break a logjam over so-called biogenerics. The FDA argued in its defence that the charges were unfounded, since its experts had not finished their review.

In its response filed in the U.S. District Court in Washington this week, the FDA admitted that it did not request additional information for Omnitrope's new drug application but denied that its professional scientific and review staff had completed their review of the application. The FDA did not disclose any reason why the application should be either approved or rejected.

Sandoz said in a statement it remained confident of an eventual positive decision. "We look forward to a thorough airing of the issues in court," the company said.

Industry analysts said the FDA response suggested the dispute would drag on, to the frustration of generics firms which hoped the expiry of patents on the first generation of biological medicines would quickly create a lucrative market.

AUSTRALIAN GREEN LIGHT

No "biogenerics" have yet been approved in either the United States or Europe, although Sandoz's Omnitrope has been given a green light in Australia.

"We believe this follow-on biologic (Omnitrope) will eventually gain approval in the U.S. It is apparent from the FDA response, however, that this issue will take some time to resolve," said Michael Leacock, an industry analyst with Nomura in London.

Sandoz argues that Omnitrope is indistinguishable from Pfizer Inc.'s ( PFE ) hormone drug Genotropin, for which the patent has expired. Pfizer petitioned the FDA to reject Omnitrope. Sandoz contends that the FDA has failed in its statutory obligations by not ruling on Omnitrope, which was filed for approval in July 2003. It has also taken action against European regulators for their failure to approve the drug.

Genotropin had U.S. sales of around $240 million last year, but the overall prize for copying biotech drugs is a lot bigger. Sales of branded biotech drugs total $30 billion a year in the United States alone, and their average cost is around $45 a day, compared with $2 a day for conventional chemical medicines.

Regulators, however, face a dilemma in trying to judge whether copies of biotech drugs will be as good as the original patented products. While generic forms of conventional small-molecule drugs can be compared with the original through a simple chemical test, biologics contain large molecules whose precise composition varies according to the manufacturing process. Makers of branded biotech medicines argue this makes it very hard to prove equivalence, without which patient safety might be compromised.
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