Foley & Lardner Survey of Industry Insiders Reflects Desire for European Regulatory Approach to Follow-on Biologics; Despite Current Gridlock, 50 Percent of Respondents Believe the FDA Has the Authority to Approve Follow-on Biologics.

CHICAGO -- Forty-four percent of industry executives believe the United States should follow the European approach for adopting follow-on biologics according to a survey of biotechnology executives conducted during BIO 2006.

The survey, conducted by Foley & Lardner LLP, found that despite the FDA's inability to reach consensus on the issue, 59 percent of respondents believe the FDA is effectively regulating biotech products in the United States.

More than half of the respondents said they believe the FDA has the authority to approve "generic" follow-on biologic products under the administration's current statutes and regulations. This view stands in contrast to the FDA's long-standing debate on the issue of introducing follow-on biologics in the United States. On May 31, 2006, after a protracted review and court battle, the FDA approved Sandoz's new drug application for Omnitrope (somatropin--rDNA origin) as a follow-on protein product, not as an "AB" rated interchangeable generic biologic.

"Many in the industry are growing impatient with the FDA as they continue to deliberate while the European market begins to take off," said David Rosen, a Foley partner and co-chair of the firm's Life Sciences Industry Team who formerly served as an FDA official for 14 years. "The survey reveals that informed industry insiders realize that progressing to a European regulatory model for follow-on biologics is not only inevitable, but a critical step in the continued evolution of the U.S. generic pharmaceutical/biotech industry."

The most recent debate began in July 2003, when the first application for a biosimilar product was filed in the United States by Sandoz, a generic pharmaceutical company owned by Novartis. Follow-on biologics, also referred to as "biosimilar" or "generic biologics," refer to the generic reproduction of biologics, complex medicines developed from living organisms.

The current sales of marketed biologics account for $30 billion(1) of the estimated $602 billion global pharmaceutical market(2). Follow-on biologics have been widely predicted to be the fastest-growing segment of the U.S. pharmaceutical industry, pending FDA approval.

European Commission Provides A Progressive Roadmap

In early April, the European Commission approved a generic version of the largest selling human growth hormone, Omnitrope. The generic biologic copies an existing growth hormone packaged in a generic alternative prescribed for undersized children.

With the FDA's review and approval of Omnitrope, there is speculation that other products will follow. The FDA has held and participated in several workshops to discuss the issues and regulatory scheme for follow-on biologics and promised to release guidance for the industry on the regulatory issues and requirements for approval of these products.

"Unfortunately, to date, such guidance has not been released by FDA for review and comment," said Rosen. "The Sandoz case, combined with the recent European approval of Omnitrope, will further increase pressure on the FDA to address the follow-on biologics issue directly."

However, in the FDA's "Questions and Answers" document on the approval, the agency stated:

1. Omnitrope is not rated as therapeutically equivalent to (and therefore substitutable for) any of the other approved human growth hormone products. Omnitrope is more appropriately characterized as a "follow-on protein product."(3)

2. The approval of the Omnitrope NDA under section 505(b)(2) of the federal Food, Drug and Cosmetic Act does not establish a pathway for approval of biologic products licensed under section 351 of the Public Health Service Act.(3)

Set against the backdrop of the looming FDA review of Omnitrope, 70 percent of respondents who characterized themselves as "researchers" believe the current state of science allows companies to establish pharmaceutical equivalence and bio equivalence of follow-on biologic products, two requirements for FDA approval.

"Given the recent momentum in Europe and the current high level of scientific capabilities worldwide, the stage is clearly set for significant change throughout the industry," said Rosen. "The FDA, which has traditionally served as a regulatory compass for the rest of the world, needs to step up and provide clear direction for the industry."

For a complete report on the results of the Foley survey, visit: www.foley.com/biosurvey2006.

Methodology

Foley facilitated the survey at the recent 14th Annual International Convention of the Biotechnology Industry Organization, attended by a distinctive cross-section of biotech leaders, over a three-day period. Respondents were comprised primarily of biotech executives/managers; sales and marketing professionals; attorneys; and researchers. A total of 88 surveys were completed.

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(1) "The Law of Biologic Medicine," Hearing before the Committee on the Judiciary, United States Senate, 108th Cong. 2d Sess.

(2) IMS Health

(3) FDA document issued 5/31/06 Omnitrope (somatropin (rDNA origin)) Questions and Answers http://www.fda.gov/cder/drug/infopage/somatropin/qa.htm