VentureBeat

(UPDATED: See below.)

Yesterday, the WSJ Health Blog cited a WSJ story as evidence that “biogenerics” — that is, generic versions of biotech drugs, which currently don’t exist — need to be treated with caution. Unfortunately, that post missed a much more important point about biogenerics: The double standard that the biotech industry holds when it comes to determining whether different batches of biotech drugs are equivalent or not. The subject is still widely misunderstood, thanks in part to chaff kicked up by the biotechnology industry itself. (See our previous coverage here and here.)

The original WSJ story, written by David Armstrong and Geeta Anand, concerned production problems at a new Genzyme plant making Myozyme, the company’s new drug for a rare genetic condition called Pompe disease. Myozyme produced at the new plant, it turns out, differs measurably from that pumped out by the same genetically engineered cells at the company’s older manufacturing facility. In particular, the “new” Myozyme appears to contain less of a carbohydrate that helps muscle cells take in the drug. Because of this difference, the FDA has so far refused to approve the new manufacturing plant, which raises the prospect of Myozyme shortages and a financial hit for Genzyme.

The WSJ story itself didn’t delve into the issue of biogenerics. On the health blog, however, Armstrong wrote:

Making biologics is complicated work, and that’s one reason the biotech industry has voiced caution about legislation to allow generic versions of the medicines.

In the case of Myozyme, billions of cells from hamster ovaries growing in large stainless steel tanks produce the enzyme Pompe patients lack. The fact that Genzyme, which has loads of biotech experience, is having such difficulty ramping up production of its own drug heightens worries about the ability of generic manufacturers to accurately copy brand-name biotech drugs.

The first issue here is that there’s nothing new about biotechs finding that new production batches of a complicated protein differ in certain ways from older batches. I listed several examples in an online column I wrote for the WSJ more than three years ago, and there have undoubtedly been others since. Sometimes these differences are serious; more often, they’re not. When there is a major discrepancy, as there was for Genentech’s drug Raptiva (then called Xanelim) in 2001, the FDA requires the biotech to carry out clinical trials to ensure that the new production line is pumping out a drug that’s equivalent to the old stuff. So far, the FDA isn’t requiring Genzyme to conduct new clinical trials of Myozyme produced at the new facility, company spokesman Dan Quinn told me.

The second issue — and those of you who’ve followed these debates can probably see where I’m going — is that the biotech industry wants to have it both ways when it comes to the “complicated work” of making biologics. Where biogenerics are concerned, the industry insists that copycat versions of biotech drugs must undergo those expensive and lengthy clinical trials in the interests of “patient safety.” When it comes to their own drugs, however, biotech companies are perfectly willing to rely on a battery of simpler tests to ensure that a new production batch is equivalent to an old one, and only run clinical trials as a last resort (and when forced to by the FDA).

All of which suggests that it would probably suffice to subject any would-be copycat drug to the same set of tests that biotech manufacturers themselves must meet for a new production facility. If it passes, it’s approved. If not, then it’s time to consider clinical trials. In fact, this is pretty much the “case-by-case” strategy adopted by the House and Senate biogenerics bills — ones that I’m pretty sure the Biotechnology Industry Organization opposed. In any event, it doesn’t seem too much to ask that journalists covering these debates realize that the case against biogenerics is a lot weaker than the industry would like us to think.

UPDATE: This NPR story (via the LAT) makes some of the same mistakes. It’s not the complexity, folks — it’s whether there are reliable tests for ensuring that batches of these complex molecules are equivalent to one another short of clinical trials, which there most certainly are.

UPDATE REDUX: The In Vivo blog weighs in with a related story about the slow start to sales of Omnitrope, a generic human-growth hormone (which they refer to as a “biosimilar,” a word preferred by the biotech industry).

UPDATE, TAKE THREE: I revised the headline and first paragraph to better reflect the post’s main point. I also wanted to belatedly credit David Williams of the Health Business Blog for sparking this train of thought in the first place with this post. (I’d written about his thoughts on the subject earlier, but now that I’m thinking about it, there was no good reason not to mention it again.)

(UPDATED: See below.)

Ceregene, a San Diego biotech at work on a gene therapy for Parkinson’s disease, has so far raised $28 million in a third funding round and last week struck a development partnership with Genzyme that resulted in a $25 million up-front payment and potential payments of another $125 million plus royalties.

Those are some surprisingly large numbers for gene therapy, the experimental practice of inserting new genes into the human body in hopes that their activity will make up for a defective or malfunctioning natural gene. The technique once served as a poster child for biotechnology’s promise of curing genetic disease, but crashed and burned when early efforts failed or, in a few tragic cases, proved harmful to patients. One infamous trial involving a rare genetic disease led to the 1999 death of 18-year-old Jesse Gelsinger, after which interest in the field dropped precipitously.

Now enthusiasm for gene therapy may once again — tentatively, at least — be on the upswing. Ceregene’s focus lies in genes that can deliver so-called neurotrophic factors, which are naturally occuring proteins that protect brain, spinal and nerve cells against damage, prevent programmed cell death, and stimulate the growth of new neurons.

While researchers have long considered neurotrophic factors a possible way to treat degenerative neural diseases such as Parkinson’s disease and Alzheimer’s disease, the proteins themselves don’t make promising drugs — largely because they’re too large to cross the blood-brain barrier. Some researchers have experimented with delivering similar proteins directly into the brain via invasive shunts or catheters, but the results have been unimpressive and the cost and difficulty of the procedure would likely limit its widespread use in any case.

Ceregene’s technology involves adeno-associated viruses that have been modified to carry genes for particular neurotrophic factors and disabled from reproducing naturally. These viruses are designed to carry the genes into at-risk cells — say, dopamine-producing neurons in Parkinson’s patients — and then “install” the carried gene into cellular DNA, where the cell’s own natural machinery will activate the gene and begin to produce neurotrophic factors.

In an early-stage trial involving just 12 Parkinson’s patients, administration of Ceregene’s gene therapy CERE-120 was associated with a 36 percent reduction in symptoms 12 months after the gene-loaded virus was injected into the volunteers’ brains. That trial didn’t have the most rigorous controls necessary to protect against investigator bias and placebo effect, so it’s impossible to draw too many conclusions from it. Ceregene is currently at work on a 51-patient follow-up trial that may produce data by the fall of 2008.

The promising results still intrigued Genzyme, an early pioneer in gene therapy for cystic fibrosis, who two years earlier had bought out much of the gene-therapy business of the struggling biotech Avigen, which also has a gene-therapy treatment for Parkinson’s disease.

Last week, Genzyme agreed to pay Ceregene 50 percent of the late-stage development costs for CERE-120 plus up to $150 million in cash in exchange for all rights to the treatment outside the U.S. and Canada. That’s a fairly hefty sum for a treatment that hasn’t even completed mid-stage trials and which also depends on such a relatively untested technique as gene therapy. Genzyme has other irons in the gene-therapy fire as well; today, Applied Genetic Technologies announced that it received $2 million from the big biotech as a milestone payment for its development of a gene therapy for a particular form of blindness.

Meanwhile, Ceregene has also raised $28.1 million in an open third funding round, VentureWire reports (subscription required). Investors in the round include Investor Growth Capital, Alta Partners, California Technology Ventures, Hamilton BioVentures, MPM Capital and Cell Genesys, Ceregene’s former corporate parent.

UPDATE: Added MPM Capital to the investors list, per Ceregene CEO Jeff Ostrove’s comment.

Applied Genetic Technologies, an Alachua, Fla., gene-therapy developer, received a $2 million milestone payment from Genzyme.

The two companies are jointly developing a gene therapy for treating a form of blindness called age-related macular degeneration. The treatment uses an adeno-associated virus designed to deliver a gene to eye cells that, when activated, will disrupt a protein called VEGF that stimulates the growth of leaky blood vessels that contribute directly to blindness.

The milestone payment covered the successful transfer of AGT’s adeno-associated virus production technology to Genzyme. The gene-therapy treatment doesn’t appear to be ready for clinical trials yet.

Amicus Therapeutics, a Cranbury, N.J., developer of drugs to treat rare genetic diseases, said it plans to raise as much as $92 million in an IPO — money that would fund its pursuit of new drugs for rare genetic diseases, a strategy could be disruptive for both medicine and the biotechnology landscape.

According to its SEC filing, Amicus plans to offer up to 5.75 million shares at a price of $14 to $16. The company’s market capitalization could exceed $355 million if the shares price at the upper end of that range.

In contrast to Jazz Pharmaceuticals, which also has lofty IPO plans but a drug-development strategy that could most politely be characterized as conventional, Amicus’ business and technology are both potentially quite exciting. In business terms, the startup is aiming to take on some of biotech’s oldest and biggest drugs — enzyme-replacement therapies for rare but often fatal genetic diseases. In medical terms, the Amicus approach could, depending on whether and how well it ends up working, greatly change the treatment of many sorts of disease, including neurological problems, heart conditions and cancer.

The enzyme-related diseases in question are a trio of genetic disorders known as Fabry disease, Gaucher disease and Pompe disease. All three conditions result from genetic deficiencies of enzymes that break down and process fats and sugars. In the absence of normal enzyme levels, those fatty or sugary molecules build up in various organs, with debilitating and sometimes fatal results.

One of the early successes of biotechnology involved the mass production of these missing enzymes using genetically engineered cells, a technique that made it possible to slow and sometimes reverse the ravages of these diseases. Genzyme was an early pioneer in this area, and now makes enzyme-replacement drugs for all three diseases. Because these conditions are quite rare, the enzyme drugs are among the most expensive in the world. Genzyme’s Cerezyme for Gaucher disease, for instance, costs $200,000 a year; sales of the drug last year were $1 billion.

Replacing the “missing” enzymes, however, isn’t the only way to treat these diseases. As it turns out, the enzymes aren’t missing at all — they’re just inactive, mostly because mutations have caused their complex protein molecules to fold up into the wrong shape. Amicus has identified what it calls “pharmacological chaperones” — small molecules that stick to these enzyme proteins as they’re folding in order to usher them into the proper shape. Early evidence suggests that even mutated enzymes can carry out many of their functions if folded properly.

For instance, here’s a diagram showing how Amigal, an Amicus chaperone for Fabry disease, stabilizes the alpha-galactosidase A enzyme:

Such chaperones might actually reverse the effects of these diseases at a molecular level, which could potentially stave off other complications associated with replacement therapy and the cellular buildup of misfolded enzymes. Another plus: Because these chaperones are traditional small molecules, they can travel anywhere in the body (large proteins have difficulty penetrating certain organs, particularly the brain) and can be formulated as pills instead of injections.

The Amicus chaperones are a long way from definitive proof that they work as planned, but the company believes that its IPO proceeds will carry Amigal through pivotal late-stage trials by 2010. While it’s probably too much to expect that competitors to enzyme replacement would bring down prices very much — for various reasons, the drug industry tends not to work that way — competition is usually a good thing, and new treatment alternatives are always welcome in such complicated diseases. And if Amicus is right, the molecular-chaperone approach may have applications in a variety of other protein-folding diseases. Sounds like an avenue well worth exploring.