Scenting cents from vaccines
Genta's failure to convince the FDA's Oncology Drug Advisory Council (ODAC) of the efficacy of its antisense drug, Genasense, left not only Genta with a headache.
As analysts from Rodman & Renshaw said: 'The stock either goes from $11 to $20 if it's successful, or down to $4 if it fails.' In fact the share price fell to below $3, which was probably a reflection of the staff losses and the lawsuits filed against Genta following the ODAC decision. It is a problem many small biotech companies face and the underlying message for both the biotechnology and the pharmaceutical industries must be a worrying one.
On the one hand, you have the pharmaceutical companies who see their market value, if not eroding, certainly not increasing as fast as they would like. A paucity of pipeline products and the loss of patent protection for a number of blockbuster drugs within the next five years means they are relying on biotech companies to deliver new, experimental, alternatives.
On the other hand, you have many biotech companies who are banking on one IND and a limited number of preclinical/clinical studies to attract venture capitalists, while having a burn-rate in the many millions of dollars. As the Genta situation showed, one setback has serious consequences not only for the company concerned, but for the industry as a whole.
June saw two primary biotech shows, Bio2004 and ASCO, both of which should have lifted the biotech industry. But while both were successful in terms of attendees and highlighting the number of experimental products in the pipelines, there was no great rally on the markets, with outside factors such as the Iraq conflict, the war on terrorism, the upcoming US presidential election and interest rates keeping investors at home.
That said, drugs are still moving through clinical trials, FDA approvals are still being granted, new alliances are being forged, and Initial Public Offerings are proceeding.
One thriving area is vaccines. The biotech industry has garnered large value contracts from US government departments, such as the NIH, to develop modern vaccines against pandemic diseases such as smallpox, anthrax and Ebola.
Many companies are also looking at cancer vaccines. While to some these have ethical problems - not least because currently companies have to test their experimental therapies in patients who are late-stage and frankly have no other options - such research is attracting the venture capitalists.
The biotech industry needs a boost now, and vaccines may just provide a jab in the right direction, and attract the finances needed to sustain life.