BIO Top Brass Meet the Press

    By Kevin E. Noonan --

The Biotechnology Industry Organization (BIO) held a media briefing on Federal policy issues today, with most of BIO's executive staff assembling at BIO headquarters in Washington, D.C.  In addition to the media present on site, BIO hosted several more members of the press by teleconference.

Jim Greenwood (at left), BIO's President and CEO, started the meeting with prepared remarks concerning healthcare reform, patent reform, and the energy bill.  With regard to healthcare reform, Mr. Greenwood reiterated BIO's support, provided that any healthcare bill recognize four fundamental objectives:  access for all ("every man, woman and child"), cost containment, quality, and innovation.  Mr. Greenwood also mentioned biosimilars legislation, where he expressed pride that BIO had "played it straight" with legislators "from the beginning."  BIO's position was consistently that a 14-year data exclusivity period was the right length, and didn't advocate for longer terms of 16-18 years as a negotiating ploy.  He said that BIO had done "quite well" against a "well-organized coalition" of generics companies, the AARP, the White House, and other factions.  He also said that BIO was willing to accept the Senate bill's compromise of 12 years if that was what it takes to get a bill passed.  He also voiced BIO's support for "comparative effectiveness" as a tool for making medical decisions but not for reimbursement.  On energy, Mr. Greenwood maintained that there was no way to significantly reduce greenhouse gases without contributions from biotechnology, including cellulosic ethanol technology, algae, and other methods of energy production.  Mr. Greenwood ended his remarks with patent reform, which he characterized as a "long, hard fight" contested "at a great disadvantage" against an IT industry that supported "reforms" that would make it "easier to infringe patents."  He voiced BIO's support for the compromise that had produced a bill in the Senate.

Also addressing the press was Dr. Stephen Sherwin (at right), BIO's chairman and also the Chairman of Cell Genesys, Inc.  Dr. Sherwin, a biotech entrepreneur throughout his career, spoke on the economic climate for biotechnology.  He mentioned the obvious -- that it had been an "extremely difficult and challenging time" for biotech over the past 18-24 months, with almost half of the organization's member companies having enough cash for 12 months and a quarter having less than 6 months of cash reserves.  He also mentioned that there has been no significant IPO activity in the biotech sector in almost two years.  The reason is that investors are nervous about the regulatory environment if there is a follow-on biologics bill and the effects any FOB bill may have on the timing of product development.  (In response to a question, Dr. Sherwin said that Wall Street hates uncertainty, even when it is uncertainty Wall Street has created.)  On the bright side, Dr. Sherwin mentioned that there had been "some thawing" in the capital markets in the face of "good news" from clinical trials, etc.  He also noted that he had met with the new FDA commissioner, Dr. Hamberg, and was pleased with her "science-based" approach.  He also noted that there was progress on reauthorizing SBIR grant legislation that would permit companies having venture capital funding to compete for such grants.  He said that he was optimistic, but that "we have our work cut out for us."

In the question-and-answer portion of the meeting, Mr. Greenwood responded to a question from Reuters on healthcare reform that certain revenues for smaller companies -- like royalties and milestone payments -- should be exempt from the fees (or taxes) that the Obama administration proposed on drug sales revenues in an agreement with the pharma industry announced earlier this summer.  Mr. Greenwood also reminded listeners that predictions such as a recent one by BioWorld, that biotech drugs would represent 50% of all new drugs by 2015 and 71% by 2025, might not come to pass if a shortened data exclusivity period drove investment away from the biotech sector.  The 12-year period is the minimum required to maintain the incentives for investment in new biologic drugs, which is why BIO supports this number.  Investors have other opportunities that are less risky that they will take if there isn't a sufficient data exclusivity period to support such investment, Mr. Greenwood said.

Business Week asked about BIO's position on the "politics" of 'partisan gridlock" over the healthcare and energy bills, where Republicans might oppose the bills merely to hand the Obama administration a political defeat.  Mr. Greenwood said it wasn't BIO's role to try to "change the playbook" for the parties, and that the "big picture" required healthcare reform.  BIO has been (and by implication, will continue to be) "religiously non-partisan" on the healthcare issue, resulting in strong bipartisan support (with 28 of 38 Democratic members and all but one Republican member of the Energy and Commerce committee voting for the biosimilars amendment supported by BIO).  There is nothing partisan about using biotechnology in reducing greenhouse gases, he said.  Brent Erickson (at left), BIO's Executive Vice President, Industrial and Environmental Section, chimed in that opposition to the energy bill was not partisan so much as regional, reflecting differences in the reliance of different sections of the country on fossil fuels.  It has been "a bit of an uphill battle" in educating Congress about the contributions of biotechnology in addressing climate and energy problems, he said.

Mr. Greenwood had another opportunity to remind his listeners that BIO had played the role of honest broker in the healthcare debate, in response to a question from the Pink Sheet about whether BIO would need to "cut a deal" with the Obama administration like PhRMA did (according to the Pink Sheet reporter).  Mr. Greenwood said there had not been any horse-trading or quid pro quo in BIO's position -- he said that BIO's success in pursuing its agenda regarding FOB legislation was the result of old-fashioned "shoe leather" politics, by meeting with "scores" of Congressional leaders and explaining BIO's position.  He mentioned that he carried two things to these meetings:  a model of the aspirin molecule and a DVD showing the structure of erythropoietin (see image at right).  Mr. Greenwood also said that BIO's success makes getting a bill passed even more important, since BIO's "enthusiasm for the package [will be] dramatically diminished" if the bill undergoes major changes in the House.

Dr. Sherwin addressed a question about the priorities BIO would advocate for the FDA.  He mentioned that he was "encouraged' by the new FDA commissioner's (science-driven) approach, which he says he expects to be characterized by "efficiency" and "clarity."  He said there will be an effort to strike a balance between safety and efficacy, a balance he said was familiar to all physicians in assessing risks and benefits of any course of treatment.  While acknowledging that a single meeting could not address complex issues, he said he was "encouraged" by having someone with her background in her position early in the Obama administration.

Andrew Noyes from Congress Daily asked about patent reform, and Brent Delmonte, BIO's Vice President for Governmental Relations said that BIO hopes for support for the Senate bill, a "fair, responsible compromise," and that contentious bills (like H.R. 1908 from the previous Congress) could slow patent reform.  He mentioned "great ideas" from both sides of the Hill, including re-examination and the "second window," and the "gatekeeper" function of judges on the damages issue.  On balance, BIO remains "hopeful" for a patent reform bill in this Congress, but doesn't see any "date certain" for the bill coming to the floor.

A reporter from Scripps News asked the panel about the SBIR bill, and Mr. Greenwood said that BIO was very pleased with the result of the vote on the reauthorization bill in the House, which passed the bill 386-41.  Alan Eisenberg, BIO's Executive Vice President Emerging Companies and Business Development, mentioned that the SBIR program is funded by a 2.5% set-aside from other departments and Federal agencies (the Department of Defense, the Department of Energy, the National Institutes of Health), and that the bill was an attempt to overturn "fairly arbitrary" administrative agency (Small Business Administration) decisions that prevented venture capital-funded companies -- the majority of BIO's small company members -- from participating.  BIO is confident that Congress will be able to resolve differences between the House and Senate versions of the bill.

Hans Sauer, BIO's Associate General Counsel for Intellectual Property, fielded a question on the Bilski case, specifically why BIO was interested in the case.  Mr. Sauer provided a brief synopsis of the case, mentioning that the Federal Circuit had fashioned a rule on patent eligibility of method claims that was far broader than necessary to answer the question of whether the business method claims in the Bilski patent should be patent-eligible.  This broader rule put at risk the patentability of claims to important methods, such as biomarkers and biological correlations with disease, and personalized medicine, that made the issue one important to BIO.  He noted that biotech methods, not business method cases, were some of the first cases affected by the Federal Circuit's new rule.  He expressed confidence that the Supreme Court would understand these distinctions when it fashions a different rule in deciding Bilski.

A reporter from the Journal of Commercial Biotechnology and Scientific American brought the discussion back to the economy, and Mr. Eisenberg provided some additional sobering statistics.  He said that the total number of public companies has been reduced, some by mergers and acquisitions, and others by bankruptcy, with more than 20 biotech member companies having declared bankruptcy under Chapter 11.  He also mentioned that the statistics were more certain for public companies, which are under an obligation to report bankruptcies, and that privately-held companies may be able to just "sell their assets" and disappear.  The number of public biotech companies has decreased from 370 to less than 330, and "well over" 100 companies have laid off employees (with a total of 10,000 to 12,000 employees being laid-off throughout the industry).  The most ominous and telling fact, according to Mr. Eisenberg, is that companies were "shelving" projects having positive clinical data, simply because the companies don't have the money to continue funding these projects, and the capital markets have not recovered their interest in the sector.

Finally, Mr. Greenwood reiterated that BIO is in favor of healthcare reform, but that it was just as important that any healthcare reform bill doesn't disincentive innovation.  As it is, investors are sufficiently concerned about FOB legislation that it is an impediment to investment, and it would help investment, and be favorable to innovation, to get a bill passed and end the uncertainty that is inhibiting investment in the industry.  Mr. Greenwood said that the slogan "heat, heal and feed the world" reflects BIO's view that you cannot address these problems in a sustainable way without contributions from biotechnology.

A podcast of the media briefing can be obtained here.

Comments

[staff1]

"Mr. Greenwood ended his remarks with patent reform, ... He voiced BIO's support for the compromise that had produced a bill in the Senate."

Patent reform is a fraud on America...
Please see http://truereform.piausa.org/ for a different/opposing view on patent reform.