Chapter 9

Investment in BiotechnologyApplied to Human Therapeutics

“Biotechnology is in a state of evolution . . .the industry is moving away from the technologi-cal phase into the clinical phase. ”

Peter Drake in Chemical Week,Sept. 30, 1987, p. 20.

“[there are] not many problems with FDA. It takes a long time to get anything approved,but the delays are not unique to biotech products.”

unidentified industry spokesman, Bio/Technology,December 1987, p. 1277.

(“The equation in biotechnology is becoming all too familiar: patent plus patent equals lawsuit .“

(editor) /In The News/ Bio/Technology,December, 1987, p. 1251.

"We seem to be at a point in the history of biology where new generalizations and higherorder biological laws are being approached but may be obscured by the simple mass of data. ”

H. Moskowitz and ‘l’. SmithReport of the Matrix of Biological Knowledge Workshop, Santa Fe, New. Mexico

July 13 to Aug. 14, 1987

CONTENTS

PageIntroduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...............161Applications of Biotechnology to Human Therapeutics . . . . . . . . . . . . . . . . . . . . ..162

Biotechnology and the Development of Human Therapeutics . ..............162Biotechnology and the Production of Human Therapeutics. . ...............166

Factors Influencing Innovation and Commercialization . . . . . . . . . . . . . . . . . . . . . .168Gaps in Basic and Applied Research . . . . . . . . ............................168Research and Development Funding . . . . . . . . . ...........................173Regulation of Pharmaceutical Biotechnology . ............................177Intellectual Property Protection. . . . . . . . . . . . . . . . . . . . . . . .................181Access to Biotechnology Information . . . . . . . . . . . . . . . . . . . . . ..............182Availability of Trained Personnel . . . . . . . . . . . . . . . . . . . . . .................184

Future Applications of Biotechnology to Human Therapeutics. . ..............185Issues adoptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..........185Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........................187Chapter p references. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..................188

BoxesBox Page9-A. Known or Expected Therapeutic Applications of Some Human Gene

Products Under Commercial Development . . . . . . . . . . . . . . . . . . . . ........1659-B. Protein Engineering and the Development of Human Therapeutics. . ......1669-C. Center for Advanced Research in Biotechnology (CARB):A Research Facility

for Protein Engineering and Rational Drug Design . ....................175

FiguresFigure Page9-1. Preparation of Mouse Hybridomas and Monoclinal Antibodies . ..........1639-2. DNA Cloning Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............1649-3. Mouse/Human Hybrid Gene Enables Mice to Secrete Human Therapeutic

proteins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..........................1679-4. Structural Similarities Between the Domains of Different Proteins , . . . . . . .1709-5. The Financial Maturation of a Biotechnology Company . .................1769-6. Databases in Biology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .................,183

TablesTable Page9-1. Biotechnology-Based Human Therapeutics With FDA Market Approval. ,...1629-2. Representative Biotechnology Small Business Innovation Research (SBIR) Program

Grants Funded by the National Institute of General Medical Sciences inFiscal Year 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .................174

Chapter 9

Investment in BiotechnologyApplied to Human Therapeutics

INTRODUCTION

The promise of novel pharmaceutical applica-tions has captured most of the attention given tobiotechnology in the last decade. Pharmaceuticalbiotechnology, for the purposes of this report, isdefined as the use of recombinant DNA, hybri-doma, and related new technologies in the man-ufacture of human therapeutic products; diagnos-tics and vaccines are not included under thisdefinition. Although the new biotechnologies havenot radically changed the pharmaceutical indus-try, they have contributed to progress in a num-ber of important product development areas, andhave brought about a commitment to researchand development (R&D) funding from both pub-lic and private sources that greatly exceeds thatfor any other industry.

Biotechnology has facilitated the developmentof human therapeutic proteins that are difficultto produce in large quantities by traditional meth-ods such as chemical synthesis or extraction fromblood plasma, or tissues. Recombinant DNAtechnologies to combine DNA from one organ-ism with that of another have been used to clone,or make copies of, genes that produce proteinswith therapeutic potential, and to engineer genesto make proteins that are more stable or activethan their natural forms. Monoclinal antibod-ies secreted from hybridomas (the cells result-ing from the fusion of immortal tumor cells withantibody producing cells from mouse, rat, or hu-man sources) have been developed primarily asdiagnostic reagents, but their ability to specificallyrecognize foreign substances has made their useas human therapeutics possible. Studies of thebasic molecular mechanisms governing cell phys-iology have been greatly enhanced by the toolsof biotechnology, and will likely continue to leadto new drug discoveries and increased under-standing of the origins of disease. Enthusiasm forthe design of a new pharmaceutical from knowl-edge of the structure of the molecule (e.g., a cell

surface receptor protein) upon which it acts—often called rational drug design—has also beenrenewed by advances in methods to determinethe three-dimensional structures of proteins. Suchprogress has been spurred in part by the fact thatrecombinant DNA technology has increased theavailability of previously scarce human proteins.

In 1982, the Food and Drug Administration(FDA) approved human insulin as the first recom-binant DNA product for clinical use in humans.Scientists at Genentech, Inc. (South San Francisco,CA) devised recombinant DNA methods for pro-ducing insulin in bacteria from synthetic insulingenes, and assembling the protein chains into bi-ologically active insulin. Eli Lilly and Company (In-dianapolis, IN) subsequently developed and mar-keted the recombinant DNA version of humaninsulin, under the trade name Humulin®, as a ther-apy for diabetes. Since that time, six additionalhuman therapeutic agents produced using bio-technology have been approved for marketing inthe

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United States (table 9-l):

two recombinant DNA-derived versions of hu-man growth hormone for long-term treat-ment of children with growth failure due tolack of adequate endogenous growthhormone,two recombinant DNA-derived versions of hu-man alpha-2 interferon for treatment of hairy-cell leukemia,a recombinant DNA-derived human tissueplasminogen activator protein for treatmentof coronary artery blood clots that triggerheart attacks, anda mouse monoclonal antibody preparation forpreventing acute rejection in kidney trans-plantation.

These biotechnology products underwent sepa-rate testing and clinical trials to receive marketapproval from the FDA, even though several are

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Table 9=1.—Biotechnoiogy-Based Human Therapeutics With FDA Market Approval

Company ReceivingTrade Name/Generic Name Use Market Approval

Humulin®/Human Insulin Treatment of diabetes Eli Lilly and Company

Protropin®/Human Growth Hormone Treatment of children with inadequate Genentech, Inc.secretion of growth hormone

Humatrope®/Human Growth Hormone Treatment of children with inadequate Eli Lilly and Companysecretion of growth hormone

Intron A®/Alpha Interferon Treatment of hairy-cell leukemia Schering-Plough Corporation

Roferon-A®/Alpha Interferon Treatment of hairy-cell leukemia Hoffman-La Roche, Inc.

Orthoclone OKT*3@/Monoclinal antibody against T-cells Treatment for reversal of acute kidney Ortho Pharmaceutical Corporationtransplant rejection

Activase®/Tissue Plasminogen Activator Treatment of cardiac arrhythmia Genentech, Inc.%irst recombinant DNA product to be developad, manufactured, and marketed by a dedicated biotechnology company.SOURCE: Office of Technology Assessment, 1988.

the same type of protein marketed by differentcompanies for the same therapeutic use.

This chapter assesses the current U.S. invest-●

ment in biotechnology as it applies to the discov-ery and development of human therapeutics. Thefollowing questions are addressed:

● How is biotechnology being used to discovernew or better therapeutic pharmaceuticals?

● What basic and applied research programs

related to pharmaceutical biotechnology arebeing invested in by the public and privatesectors?How are factors such as gaps in basic and ap-plied research, availability of funds, regula-tion, intellectual property protection, infor-mation access, and availability of trainedpersonnel affecting overall investment in thedevelopment of human therapeutics derivedfrom biotechnology?

APPLICATIONS OF BIOTECHNOLOGY TO HUMAN THERAPEUTICS

Biotechnology has become an integral com-ponent of many aspects of pharmaceutical re-search, easing the technical bottlenecks thatslow the pace of new human therapeutic dis-coveries. Biotechnology has brought about sig-nificant innovations in methods for isolating andproducing human proteins with therapeutic po-tential in human beings. The following sectionssummarize the state of the art of research in thedevelopment of human therapeutics made usingbiotechnology.

Biotechnology and the Developmentof Human Therapeutics

Scientific advances in biochemistry, cell biology,immunology, virology, structural biology, and re-lated disciplines over the last 10 to 15 years haveyielded an explosion in understanding about thestructure and function of infectious agents and

the machinery of cells at the molecular level. Thissubstantial progress has been greatly enhancedby the development of methods for DNA and pro-tein sequencing, DNA and protein synthesis, mon-oclonal antibody production from hybridomas (fig-ure 9-l), recombinant DNA construction, andprotein structure determination. Thus, comparedto traditional approaches to drug development,biotechnology potentially offers a more rationalor targeted strategy that involves an in depth un-derstanding of the complexities of human biol-ogy (18)24).

The number of potential human therapeuticsis increasing in two general categories becauseof advances in biotechnology:

. monoclinal antibodies made from mouse orhuman hybridoma cell lines; and

● human proteins produced from director engi-neered copies (clones) of genes.

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Figure 9-1.— Preparation of Mouse Hybridomas and Monoclinal Antibodies

removed andminced torelease antibodyproducing cells(B lymphocytes)

Continuous cell cultureof mouse myeloma cells

The products of thisfusion are grown in aselective medium. Onlythose fusion productswhich are both “immor-tat” and contain genesfrom the antibody-pro-ducing cells survive.These are called“hybridomas.”

SOURCE: Office of Technology Assessment, 1988

Monoclonal Antibody Products ofHybridomas

few cells that producethe antibodies beingsought are grown inlarge quantities forproduction of mono-clonal antibodies.

tion. Whereas traditional drugs suppress theentire immune system, resulting in life-threatening

ORTHOCLONE OKT3® is a monoclinal anti- infections, the value of OKT3® lies in its specific-body that targets a subset of the body’s white blood ity for T-cells. At least three biotechnology com-cells (T-cells) responsible for acute rejection of panics (Centocor (Malvern, PA), Cetus Corpora-transplanted tissue. This therapeutic, manufac- tion (Emeryville, CA), and Xoma Corporationtured by Ortho Pharmaceutical Corporation (Rar- (Berkeley, CA)) are developing either mouse or hu-itan, NJ), is used to prevent acute kidney rejec- man monoclinal antibodies against the gram-

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Photo credit: University of California, San Francisco

Molecular biologist preparing for DNA cloning and inv i t ro mutagenes is exper iments .

negative bacterial endotoxins that cause septicshock, a life-threatening condition characterizedby a severe drop in blood pressure. Other thera-peutic monoclinal antibodies under commercialdevelopment include those for reducing risks asso-ciated with bone marrow transplants, correctingfor drug overdoses, and treating various cancerseither directly or as targeted carriers of cytotoxicdrugs (1,48).

There is also incentive to develop human mye-loma cell lines for making human hybridomas. Af-ter repeated or long exposures to therapeutic an-tibodies from rodent sources, humans can becomesensitive to the mouse antibodies and respond bymaking their own antibodies against them (8,26,34,44). In addition, cell lines derived from miceoften release pathogenic viruses that could posedangers to humans if not removed from the mon-oclonal antibodies during their purification frommouse ascites fluid (57). An alternative methodfor producing monoclinal antibodies is to synthe-size them from cloned genes in bacteria, yeast,or myeloma cells. Monoclinal antibodies with dual

specificities, pre-determined specificities, and ad-ditional activities are all possibilities with recom-binant DNA technology (69).

products of Cloned Genes

With the exception of the one monoclinal anti-body, all of the biotechnology derived human ther-apeutics presently on the market and most of thosein clinical trials are products of genes cloned byrecombinant DNA technology (figure 9-2). Brief

Figure 9-2.—DNA Cloning Technology

Chromosomal DNAto be Cloned

Recombinant DNA Molecules

SOURCE: MedSciArtCo, Washington, DC.

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M and w h i t e b l o o d

~~ the blood and pre-+“ in cardiac treatment+.’?.

SOURCE: Office of Technology Aseaiment, 1988.

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descriptions of the major recombinant DNA-derived proteins currently under commercial de-velopment for use as human therapeutics aregiven inbox 9-A. Two other OTA reports describethe categories of proteins being developed as hu-man therapeutics (e.g., regulatory proteins includ-ing the interferon and lymphokines; blood prod-ucts; growth factors; and monoclinal antibodies)and the technologies used to make them (51,54).

Recombinant DNA methods can also be used tosubstitute, delete, or add nucleotides to the DNAthat makes up a gene. Such alterations in the DNAlead to changes in the amino acids that makeupits protein product. These biotechnologies forprotein engineering have already been used

commercially to facilitate protein purificationprocesses, and they show promise for develop-ing the second generation of human therapeuticsfrom biotechnology (see box 9-B).

Biotechnology and the Productionof Human Therapeutics

Scale-up and manufacturing technologies for theproduction of human therapeutics from cells con-taining recombinant DNA, or from hybridomas, are considered in detail in an earlier OTA report(51) and more recently in other reviews (7,28,29,70). This section focuses, therefore, on the cellsor organisms currently being used for the pro-duction of gene products and on some of the tech-

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nical limitations associated with the use of eachsource.

Once a human gene is isolated, recombinantDNA methods can be used to make it function inmany foreign hosts, ranging from bacteria andyeast cells to insects, mice, and sheep. For humantherapeutics made from recombinant DNA tech-nology, vectors (plasmid or phage chromosomesdesigned to carry extra genes) have been con-structed that maximize the expression of the geneproduct (the protein) in different cell types ororganisms. Once synthesized, the cell may needto modify the human protein for proper function-ing. These modifications can include the attach-ment of sugar molecules, by a process calledglycosylation, or the removal of some terminalamino acids (45). Therefore, it is necessary to de-termine the appropriate organism or cell typefrom which large quantities of a human gene prod-uct can be easily purified in a form sufficientlysimilar to the protein as it is found naturally inhuman beings.

The choice of host cell or organism for the pro-duction of human therapeutics is decided mostlyby logistic and economic factors (28), and in manycases, by the particular post-synthesis modifica-tion requirements of the protein [29,61). Recom-binant DNA-derived insulin, alpha interferon, andhuman growth hormone–three marketed humantherapeutics-are all produced in bacteria. Despitethese successes, bacteria are not always able tosynthesize human proteins that are similar enoughto their natural human counterparts to functionadequately. Human proteins that require specialchemical modifications, like the glycosylated hor-mone erythropoietin, are best made in mammaliancell culture where they acquire optimal levels ofglycosylation (63). On the other hand, the typeof protein glycosylation varies among species andin higher organisms, and also varies from tissueto tissue. In those instances, it may be more eco-nomical to synthesize proteins in yeast with par-tially correct chemical modifications, and then

modify the product in vitro (outside of the cell)(28). One alternative to mammalian culture forthose proteins that require special modificationsis production from the lactating mammary glandsof an animal. Isolated genes can be injected intoanimal embryos (e.g., mouse, goat, sheep, cattle)and incorporated into the germ line where theycan function just as the mouse’s own genes (fig-ure 9-3) (21). The latter technology is examinedin a forthcoming OTA special report on Patent-ing Life. The challenge for bioprocess engi-neers working with human proteins isolatedfrom nonhuman organisms has been to devisemethods for retaining protein activity whilemaximizing yields.

Figure 9-3.—Mouse/Human Hybrid Gene Enables Miceto Secrete Human Therapeutic Proteins

, .

SOURCE: Adapted from Integrated Genetics, Inc., Cambridge, MA.

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FACTORS INFLUENCING INNOVATION AND COMMERCIALIZATION

OTA identified six major factors that influencethe rate at which biotechnology research will betransformed into commercial products in the areaof human therapeutics. These factors, some ofwhich might be considered incentives and othersobstacles to product development using biotech-nology, were identified in interviews with repre-sentatives of established pharmaceutical compa-nies and dedicated biotechnology companies(DBCs), Federal agencies, and from a 1987 OTAworkshop on “Factors Affecting Commercializa-tion and Innovation in the Biotechnology Indus-

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try” (52). They are:

gaps in basic and applied research;availability of R&D funds;regulation of products made using biotech-nology;protection of intellectual property;access to information generated in biomedi-cal research; andavailability of trained personnel.

The availability of funds for basic research isthe factor of central concern to those involvedin developing new human therapeutic prod-ucts. Nevertheless, each of these elements fac-tor into the R&D process, and taken together, theyinfluence the overall level of investment (includ-ing monetary, personnel, and other types of re-sources) in applications of biotechnology by thepharmaceutical business sector.

Gaps in Basic and Applied Research

Despite significant advances in recombinantDNA technology and the development of efficientprotein production systems, major bottlenecks,or gaps in knowledge, remain in research ulti-mately applicable to the development of new hu-man therapeutic agents. This section focuses pri-marily on the major research needs in theidentification, isolation, engineering or chemicalsynthesis of new drugs, including new approachesfor:

. isolating human proteins and genes;● establishing relationships between protein

structure and function;

● determining how proteins fold into activethree-dimensional structures;

● developing animal models useful for elucidat-ing the physiological roles of previously un-characterized proteins;

● understanding mechanisms of protein matu-ration and export from cells; and

. administering protein drugs.

Isolating Human Proteins and Genes

There are probably over 50)000 proteins in thehuman body (11). Only a few hundred of the hu-man genes that produce these proteins havebeen isolated, however, so many more humangenes will be needed before the full impact ofrecombinant DNA on the discovery of poten-tial human therapeutic proteins is realized.Currently, most scientists target specific genes andgene products for study, often using informationfrom small amounts of the natural human pro-tein to isolate the corresponding gene (53). A Na-tional Research Council panel urged that additionalresources be given to scientists for developing theDNA mapping technologies necessary for identify-ing and isolating the entire set of human genes (40).

Establishing Relationships BetweenProtein Structure and Function

Regardless of the method used to isolate a hu-man gene, the function of the corresponding pro-tein product is rarely obvious from the structureof the gene. Studies aimed at determining the po-tential of human proteins as therapeutic agentsdepend on knowing how the proteins functionin the human body. In the absence of experimentalevidence for the function of a particular protein,scientists often attempt to predict the protein’sfunction from its structure. From the DNA se-quence of a gene, the genetic code can be usedto predict the amino acid sequence of the cor-responding protein. The next step is to predictfrom the amino acid sequence the three-dimen-sional structure of the protein. The final step, theprediction of a protein’s function, is less straight-forward. At the molecular level, the "structure-function problem)) refers to the difficulty sci-entists have in determining the relationship

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between the presence of a particular stretchof amino acids in a protein, and the activity orfunction of those amino acids (38).

A standard approach of biologists to thestructure-function problem is to compare thestructure of a protein with unknown function toa protein or proteins with known functions (fig-ure 9-4). If structural similarities exist, then ex-perimentally testable predictions can be made onpossible functions of the uncharacterized protein.Computer methods for identifying amino acid se-quence similarities among proteins, or DNA se-quence similarities among genes, are available (16),as are methods for three-dimensional structureprediction and comparison (5). These tools needto be further developed for predictions of pro-tein structure and function from sequence datato become more practical. In addition, in vitromutagenesis techniques for engineering genes toproduce modified proteins (protein engineering–see box 9-B) have advanced, but are still in needof further development (30). These techniques areimportant for making detailed molecular modelsof how specific protein structures correlate withparticular functions.

Understanding How Proteins Fold IntoActive Three-Dimensional Structures

“protein-folding is the genetic code expressedin three dimensions” (19). How does the linear se-quence of amino acids in a protein code for itsstructure? How does the three-dimensional con-formation of a protein drive its function? Some-times the amino acid sequence of a protein withan unknown function is similar to that of a pro-tein with a known function; in many such cases,the similarity is a valid indicator of comparablejobs. In other cases, the three-dimensional struc-ture of a protein (the amino acid sequence foldedinto the actual structure of the protein) gives morereliable clues about function. At present, scien-tists cannot predict with certainty how the linearsequence of amino acids in a protein will fold intothe protein’s three-dimensional structure—thusthe protein-folding problem. As more DNA se-quences of genes are obtained, the problem willtake on even greater significance. In a recent re-port, the National Academy of Sciences stated thatprotein folding is “the most fundamental prob-

lem at the chemistry-biology interface, and its so-lution has the highest long-range priority” (38).

The protein products of cloned human genescan be produced in and purified from other organ-isms or cells, but in the process, they often be-come improperly folded, inactive molecules. Thehuman factor VIII blood clotting protein requiredby hemophiliacs (see box 9-A), for example, hasposed significant problems for protein chemiststrying to purify the recombinant DNA versionfrom non-human sources (32). Because of suchproblems, it is important to develop a better un-derstanding of how the chemical and physicalproperties of a protein guide it to become a prop-erly folded, active structure under normal phys-iological conditions.

Most predictions of three-dimensional structureare based on theories of the behavior of aminoacids in certain chemical and physical environ-ments and on information gleaned from viewingthe atomic structures of proteins through x-raydiffraction (5). X-ray diffraction of protein crys-tals is an important tool in the field of structuralbiology-the study of protein and other macro-molecular structures. It is the most importanttechnique for determining the three dimensionalstructures of large proteins at the atomic level.Advances in x-ray crystallographic (15,65) andother biophysical technologies are needed so thatmore protein structures can be determined to givea solid foundation for further development ofprotein-folding theories.

Experimental evidence suggests that certainstructural domains serve similar functions in anumber of different proteins. Thus, it is the com-bination of domains that gives a protein its uniqueoverall function (figure 9-4). Protein structurepredictions have recently been used to proposea possible structure for Interleukin-2 in an im-portant step toward understanding the interac-tion of this protein with its receptor during theimmune response in humans (13). Once theprotein-folding problem is solved, and methodsfor correlating structure with function are fur-ther developed, the road going from the DNA se-quence of a gene to the function of its proteinproduct will be considerably shortened, and insome cases, will pave the way for the developmentof promising new human therapeutic products.

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Photo credit: University of Texas Health Sciences Center, Dallas

Instrument for x-ray diffraction analysis of protein crystals used in three-dimensional structure determinations

Developing Animal Models for Studyingthe Function of Human Proteins

The therapeutic potential of any newly isolatedhuman protein can only be ascertained once itsfunction in the body is known. With current tech-nology, it is faster to clone a human gene thanto establish the function of its protein product.As already described, there are theory-based toolsfor extracting functional information about a pro-tein from both its amino acid sequence and itsthree-dimensional structure. The most directmethod is to experimentally determine the roleof a particular human protein under the physio-logical conditions of the human body. However,experimentation with untested protein productson humans is necessarily prohibited to protect hu-man subjects. In animals, advances in recombi-nant DNA technology have made it possible to in-

troduce human genes into germ lines shortly afterthe egg is fertilized (41). An example of such atransgenic animal is the mouse whose milk pro-duces tissue plasminogen activator protein (21)(see figure 9-3). For transgenic animals to be use-ful in the analysis of human genes whose func-tions are not known, methods must be devisedfor directing genes to specific sites in the genome,and for assaying the physiological effects of in-troducing human genes into animals (53).

Understanding Mechanisms of ProteinMaturation and Export From Cells

For many proteins, mammalian cell culture canproduce a human protein with greater similarityto proteins isolated from natural human plasmaor tissue than can bacteria or yeast cells. Thereare many problems, however, with the use of large-

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scale mammalian cell culturing for the produc-tion of human therapeutics, including: high costs;technical difficulties; infection of cultures withviruses and other agents that might be danger-ous to humans; and contamination of productswith proteins secreted from the host cells or withproteins present in the culture medium that maycause an immune response or be otherwise toxicto humans (7)9). The levels and types of contami-nants in the final preparation of a human thera-peutic is a major concern of both producers andFederal regulators, and a great deal of effort needsto be directed at finding technical solutions tothese problems. In addition, since bacteria andyeast have proven to be commercially valuablesystems for the production of human proteinsfrom recombinant DNA, it is important to con-tinue developing an understanding of the proc-ess of protein maturation (e.g., how and why cer-tain chemical modifications occur) and exportfrom these cells, so that better production meth-ods might be devised.

Methods for AdministeringProtein Drugs

One of the greatest challenges to the develop-ment of proteins for use as human therapeuticsis the requirement of special delivery mechanismsfor proteins—both those derived from recombi-nant DNA and those extracted from human tis-sue and blood. Protein drugs are often ineffec-tive if ingested, because they are rapidly brokendown by enzymes in the gastrointestinal tract.When they do survive in such harsh environ-ments, the large sizes of proteins can inhibit theirabsorption through the intestinal wall. Conse-quently, protein drugs are usually administeredby subcutaneous, intramuscular, or intravenousinjections, but even these delivery routes are asso-ciated with problems. Dosage is also a problemunique to protein therapeutics; many proteins,particularly hormones, must be released continu-ously at a controlled rate over a period of weeksor even months (25). In addition, prolonged ex-posure to incompletely processed human proteinscan induce allergic responses.

Manufacturers of biological therapeutics are be-ginning to address these problems with a varietyof innovative approaches. Protein engineering, for

example, could potentially be used as a tool formore effective drug delivery. Industrial re-searchers used recombinant DNA and computergraphics-assisted molecular modeling to engineera version of insulin that, when injected daily, isreported to behave more like the body’s own in-sulin than do earlier versions of recombinant DNA-derived human insulin (49). While intravenous andsubcutaneous delivery have been standard pro-cedures for many years, methods for administer-ing protein drugs through mucosal routes are nowbeing developed. California Biotechnology, Inc. isdeveloping Nazdel®) a nasal delivery system, asan alternative to insulin injections. Other proteintherapeutics such as human growth hormone anda hormone secreted by the heart (atrial natiureticfactor, or Auriculin®), are also under study forintranasal delivery (2).

Photo credit: University of California, San Francisco

Scientist illustrating the use of computer modeling inprotein engineering.

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Research and Development Funding

Biomedical research encompasses a large num-ber of disciplines, including biochemistry, virol-ogy, immunology, genetics, neurobiology, and cellbiology. Research in these fields serves as the foun-dation for innovation in the pharmaceutical in-dustry. The tools of biotechnology are now so in-timately woven into each of these fields that itis difficult to differentiate between funding dedi-cated to biotechnology-based research and thatgoing to more traditional technology. The Na-tional Institutes of Health (NIH), the NationalScience Foundation (NSF), the Department ofDefense (DoD), and the Department of Energy(DOE) are the government agencies funding thegreatest amount of biomedical research thatunderlies applications of biotechnology to thedevelopment of human therapeutic products.

The contributions of Federal agencies, the States,and U.S. industry to biotechnology research arecovered in detail in chapters 3, 4, and 5, respec-tively. In this section, examples of notable bio-technology projects funded by Federal agenciessupporting the greatest portion of biomedical re-search are identified. Investment by industry andphilanthropic organizations in biotechnology re-search with implications for the development ofnew drugs is also discussed.

Federal Agencies

The National Institutes of Health (NIH). Withthe exception of the National Institute of GeneralMedical Sciences (NIGMS), each institute of theNIH has as its principal mission the support ofresearch on a range of diseases. NIGMS supportsresearch and training in the basic biomedical sci-ences fundamental to understanding health anddisease. Its primary function is to support U.S.and international research projects that can serveas the basis for the more disease-specific researchundertaken by the other, categorical NIH insti-tutes. The NIH has two categories of biotechnol-ogy research: basic research directly related toor using the new techniques that comprise bio-technology; and a larger science base of free-ranging research underlying biotechnology. Themore applied areas of research fall under the firstcategory.

The NIH estimates that 38 percent of its $6 bil-lion fiscal year 1987 budget was devoted to bio-technology research. The National Cancer Insti-tute (NCI), the NIGMS, and the National Institutefor Allergy and Infectious Diseases (NIAID), werethe three lead institutes for biotechnology fund-ing, spending $645, $356, and $297 million, re-spectively (see table 3-2). NIH funds a number ofbiotechnology research grants that are pertinentto drug discovery and development. Particularlyrelevant to the discovery of human therapeuticsare relatively new programs aimed at developingtherapies for Acquired Immunodeficiency Syn-drome (AIDS), stimulating research in proteinstructure determination and other areas of struc-tural biology, and developing techniques for map-ping and sequencing genomes. These projectsoften fund multidisciplinary research teams.

Under its Small Business Innovation Research(SBIR) grants program (see ch. 3 for further dis-cussion) in fiscal year 1986, NIH funded $44.5 mil-lion worth of research at small companies, withnearly 40 percent awarded to companies usingbiotechnology in their research. Research on de-livery systems for protein drugs, production meth-ods for human therapeutic proteins, and otherapplications of biotechnology is also being fundedby NIH at dedicated biotechnology firms and phar-maceutical companies (see table 9-2).

The National Science Foundation (NSF). Thefunding of basic research grants in genetics, cellbiology, and biochemistry is the major mechanismof NSF for supporting biotechnology research withlong-term applications in human therapeutics.However, while NIH contributes the greatest shareof basic research funds to independent investiga-tors, other agencies, such as NSF, are making sig-nificant contributions to the discovery of novelpharmaceuticals by funding large multi-investi-gator projects in applied research. NSF funds anEngineering Research Center (ERC), called the Bio-technology Process Engineering Center, at theMassachusetts Institute of Technology (see box3-A). The Center has programs in genetics andmolecular biology, bioreactor design and opera-tion, product purification, and biochemical proc-ess engineering systems.

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Table 9-2.–Representative Biotechnology SmallBusiness Innovation Research (SBIR) Program GrantsFunded by the National Institute of General Medical

Sciences in Fiscal Year 1987

Biotechnology Firm Title of Research Grant

Radiation Monitoring Devices, Inc. Improved gel electrophoresis forWatertown, MA medical research

Genelabs, Inc. Rapid approaches for productionSan Carlos, CA of genomic DNA probes

Collaborative Research, Inc. Analysis of yeast glycosylation ofLexington, MA a human glycoprotein

Biosym Technologies, Inc. Computer-assisted protein designRockville, MD

Biotech Research Laboratories, Inc. Porous microcarriers for growingRockville, MD cell cultures

Litron Laboratories, Ltd. Genetic Toxicology Testing byRochester, NY high-speed flow cytometry

Applied Sciences Consultants, Inc. Computer folding of RNA usingSan Jose, CA Monte Carlo method

Biogen Research Corporation Production of recombinant pro-Cambridge, MA teins in milk

TSRL, Inc. Technology for oral delivery ofAnn Arbor, Ml first pass drugs

Genex Corporation Bacillus hosts for pharmaceuticalGaithersburg, MD protein secretion

Electrocell Electrofusion and electropermea-Buffalo, NY tion of cells

Verax Corporation An improved system for massLebanon, NH culture of human hybridomas

Stratagene Cloning Systems New chromosomal jumping vec-San Diego, CA tors for gene mappingSOURCE: The National Institute of General Medical Sciences, 1988.

The NSF, the North Carolina Biotechnology Cen-ter, and several corporations jointly fund the Mon-oclonal Lymphocyte Technology Center. The Cen-ter supports research at several North Carolinauniversities in genetic engineering, lymphocytebiology, immunochemistry, and bioengineering asthey apply to the production and use of mono-clonal antibodies. The major goal of the programssupported by the Center is to stimulate university-industry cooperative research in areas with goodpotential for commercialization.

The Department of Energy (DOE). The Officeof Health and Environmental Research (OHER) isthe component of DOE with a mission in biomedi-cal research. The primary mission of OHER is tostudy sources of radiation, pollution, and otherenvironmental toxins (particularly those relatedto the generation of energy), to trace them throughthe environment, and to determine their effects

on human health and the environment. DOE’scommitment to funding a major initiative to mapthe DNA in the human genome (the entire set ofhuman chromosomes) could be particularly rele-vant to the application of biotechnology in thepharmaceutical industry. This commitmentstemmed from the work of the DOE national lab-oratories on developing technologies to isolate hu-man chromosomes and examine their structure.An outside advisory panel to OHER recently pro-posed that DOE request $20 million in additionalfunds for fiscal year 1988, $40 million in fiscalyear 1989, and $200 million in funds by fiscal year1993 for mapping the human genome at both aca-demic and National Laboratories (55). DOE spent$4.7 million on projects related to mapping geneson human chromosomes in fiscal year 1987, andreceived an appropriation of $11 million in fiscalyear 1988 to expand their gene mapping efforts.

The Department of Defense (DoD). While bio-logical research is not the main mission of DoD,some areas of biotechnology research are sup-ported by its various components. Each militaryservice, especially the Army and the Navy, con-ducts some research related to the health needsof military personnel or to defenses against chem-ical and biological warfare. Over $2 million peryear is being spent by DoD through its DefenseAdvanced Research Projects Agency (DARPA) pro-gram on university research aimed at proteinstructure determination and solving the proteinfolding problem. Biotechnology R&D at the U.S.Army’s Medical Research and Development Com-mand Laboratories, such as the unclassified re-search at the Institute of Infectious Diseases(USAMRIID), has led to the development and test-ing of a number of internationally important vac-cines. USAMRIID spent about $20 million in fis-cal year 1987 for applied medical biotechnologyresearch.

Joint Agency R&D Funding. Besides large con-tract research such as GenBank®—a DNA sequencedatabase funded primarily by NIH and DOE–thejoint funding of multi-investigator biomedical re-search programs by NIH, NSF, and other Federalagencies is uncommon. Joint agency researchfunding might, in certain instances, bean ap-propriate mechanism for accelerating the ap-

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plication of biotechnology to neglected areasof biomedical research.

The States

The States have few programs directed solelyat pharmaceutical biotechnology applications (seech. 4). The Center for Advanced Research in Bio-technology (CARB) based in Shady Grove, MD isone State-supported biotechnology research pro-gram with emphasis on human therapeutic de-sign. Protein engineering and rational drug de-sign are the focus of CARB (see box 9-C). The NorthCarolina Biotechnology Center, funded in part bythe State of North Carolina, is contributing ap-proximately one-third of the funding for a new

Engineering Research Center at Duke Universitythat will use emerging technologies to developtreatments for cardiovascular disease.

Industry

Setting up the infrastructure and facilities fordeveloping and manufacturing biotechnology de-rived human therapeutics is expensive. Establishedcorporations can support these initial costs fromprofit on sales revenues from traditional drugs,whereas dedicated biotechnology companies (DBCs),in general, continue to rely on capital from con-tract/collaborative research agreements with largecompanies, and private and public stock offerings.

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OTA surveyed 296 DBCs in Spring 1987; of these,63 firms (21 percent) had a primary research fo-cus in human therapeutics. The mean R&D bud-get of biotechnology companies dedicated to ther-apeutics was $9 million in 1986 (compared to amean of $4 million for all DBCs), and a total R&Dinvestment of $0.6 billion.

Fifty-three large, established corporations weresurveyed in July 1987; of these, 14 corporations(26 percent) had a primary biotechnology researchfocus in human therapeutics. These pharmaceu-tical corporations had a mean biotechnology R&Dbudget of $16 million in 1986 (compared to $11million for all established corporations), and a to-tal biotechnology R&D investment of $0.2 billion,or 33 percent as much as the DBCs. The total R&Dbudget of the large corporations with a primaryfocus in human therapeutics was $3 billion in1986, making biotechnology R&D only 7 percentof their total R&D expenditures.

More than for any other business sector, appli-cations of biotechnology to the pharmaceuticalindustry are moving from the technology devel-opment phase to the clinical phase. Contributingto this transition, among other factors, is that be-tween 1983 and 1986, the top management ofmany of the DBCs changed from the early scien-tist/entrepreneurs to professional managers, oftenfrom the larger, established corporations (33).Nevertheless, over the next several years, reve-nues from biotechnology product sales will be areality for only a few firms specializing in humantherapeutics. Profit from sales of more traditionalpharmaceuticals (e.g., products of chemical syn-thesis) is still the primary source of biotechnol-ogy R&D funds for established companies, whileeven the most successful DBCs continue to relyon revenues from contract/collaborative arrange-ments and other outside sources (see ch. 5).

The long-term independence of the DBCs de-pends upon their ability to continue to raise thecapital needed to become fully integrated phar-maceutical companies. A fully integrated companyinvents, develops, and markets products independ-ently. In the view of most industry analysts, Genen-tech, Inc. is the only DBC, thus far, that hasachieved the goal of becoming a fully integratedpharmaceutical company (figure 9-5). As discussed

Figure 9-5.-The Financial Maturation ofa Dedicated Biotechnology Company

Dollars (millions)2 5 0

200

150

1 0 0

50

0

sales revenues* Net income loss of $352.2 million.

SOURCE: Genentech, Inc., 19S8.

in chapter 5, the primary source of capital forcompanies striving for independent growth mustchange from venture capital, private or public eq-uity investments, or contract research revenue,to revenues from product sales. Becoming a fullyintegrated pharmaceutical company is not the goalof each of the DBCs that specializes in human ther-apeutics, however, and it is an unlikely option forthe majority.

Philanthropic organizations

Biomedical research, including that involvingbiotechnology, enjoys the greatest level of privatefunding of all the sectors considered in this re-port. Endowments used to fund biomedical re-search are provided by numerous foundations,ranging from disease-specific foundations, suchas the National Huntington’s Disease Associationand the Cystic Fibrosis Foundation, to very largeorganizations targeting research at diseases affect-ing large numbers of Americans, such as theAmerican Cancer Society.

In the last several years, the Howard HughesMedical Institute (HHMI), a medical researchorganization with an endowment of over $5billion, has emerged as a major source of fundsfor researchers in a number of biomedicalfields that involve biotechnology research. TheInstitute has increased its biomedical researchfunding dramatically over the last decade, from

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about $15 million in 1977 to over $168 million in1987 (10).

HHMI operates three main research programs.The first and largest sponsors research in 27 lab-oratories in medical centers throughout the UnitedStates. Research funded by the Institute focuseson five main areas: genetics, neurobiology, cell bi-ology, immunology and structural biology. The sec-ond major program includes the human genomeprogram for international data collection and co-ordination of genome mapping projects, and theCloister project, a joint effort with NIH to en-courage medical students to pursue careers inmedical research by enabling them to spend a yearat NIH. The third program is the Institute’s newest,and focuses on three main areas: graduate train-ing fellowships; research resources grants; andundergraduate science education. Programs forpromoting public understanding of science andfor evaluating biomedical ethics issues are alsobeing evaluated for this program. The Institutewill dedicate at least $500 million to this third ma-jor program over the next 10 years (10).

Leaders of the HHMI professed a desire to ad-dress gaps in the NIH basic research program ata NIH Director’s Advisory Committee meeting inJune 1987 (43). The Institute’s Director also ex-pressed interest in working with NSF to ensurea strong national program of training grants fordoctoral students in biomedical research dis-ciplines (10). The influx of HHMI funds in biomedi-cal research, much of which involves biotechnol-ogy, is an important supplement to governmentfunding, but deficiencies in basic research fund-ing could arise if such private investments are con-sidered as substitutes rather than supplementsto Federal funds.

Regulation of PharmaceuticalBiotechnology

For DBCs participating in the high value-addedhuman therapeutics industry, the renewal offunds for R&D and ultimately the survival of thosecompanies depends on the incentives and barriersalong the path to market approval of their prod-ucts. The regulatory component of the humantherapeutic development process is perceived byboth entrepreneurial and established companies

as the major factor influencing the time requiredto develop a pharmaceutical product.

The debate over the rigorous and lengthy drugregulatory process has gone on for years. Argu-ments have been made that when too strict, reg-ulation becomes prohibitive to pharmaceutical de-velopment. Overly stringent regulation couldimpede international competitiveness, and com-promise human health by reducing the availabil-ity of therapeutic products. On the other hand,the private sector and the general public continueto stress the importance of protecting publichealth from unsafe or ineffective drugs. As a back-ground for analyzing regulatory issues relevantto biotechnology products, this section describesthe mechanisms currently employed in the UnitedStates for regulating human therapeutics. TheFood and Drug Administration (FDA) is the regu-latory agency with purview over the developmentof therapeutic products.

Biotechnology Regulatory Policy at FDA

An underlying policy question addressed by theWhite House Office of Science and TechnologyPolicy (OSTP) in the Coordinated Framework forRegulation of Biotechnology was whether the reg-ulatory mechanisms that pertained to productsdeveloped by traditional techniques were suffi-cient for regulating products produced using re-combinant DNA and other new biotechnologies(51 F.R. 2331 O). Congress gave FDA authority, un-der the Federal Food, Drug and Cosmetics Act(FFDCA) and the Public Health Service Act (PHSA),to regulate products regardless of how they aremanufactured. These laws authorize the FDA tomonitor the testing of a new drug for safety andefficacy before it can be marketed for human usein the United States. The FDA has determined thatthere is no need for new administrative proce-dures and regulations specific for products madeby biotechnology. In its final policy statement, theFDA indicated that it would not classify prod-ucts of recombinant DNA or hybridoma tech-nologies any differently from those producedby traditional techniques, and that such prod-ucts are already covered under existing statu-tory provisions and regulations for drugs andbiologics for human use.

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The New Drug orBiologic Approval Process

The general process for obtaining new drug ap-proval includes four main stages: preclinical (ani-mal) studies; clinical investigation; applicationapproval to market the new product; and post-marketing surveillance.

Investigators planning to conduct clinical inves-tigations on human subjects with new productsmust file a Notice of Claimed Investigational Ex-emption (IND). The IND must contain informationon drug composition, manufacturing data, dataon experimental controls, results of animal test-ing, the training of investigators, intended proce-dures for obtaining the consent of subjects andprotecting their rights, and an overall plan for hu-man clinical studies. Detailed records of clinicalinvestigations are required by the Center for DrugEvaluation and Research before a New Drug Ap-plication (NDA) for marketing approval will be con-sidered. The Center for Biologic Evaluation andResearch also requires such documentation forbiologics (e.g., blood proteins). In addition, eachbiologic product lot must be characterized, andan establishment license for the production facil-ities must be obtained before a Product LicenseApplication (PLA) for marketing approval will beconsidered (56). Proteins with therapeutic poten-tial fall under the purview of one or the otherof the two Centers.

Special “Points to Consider” bulletins have beenissued by FDA for products made using recombi-nant DNA and hybridoma processes. These in-clude information to assist manufacturers in de-veloping and submitting to FDA applications forapproval of such biotechnology products for in-vestigation or marketing, The FDA has requestedassistance from product developers in the con-tinuing development of the “Points to Consider”documents (53 F.R. 5468).

FDA Approval of Human TherapeuticsFrom New Biotechnologies

Seven human therapeutics made using recom-binant DNA or hybridoma technologies have thusfar been approved for marketing by the FDA. Todate, the mean time spent by companies tak-

ing their biotechnology products through clin-ical trials and regulatory review at FDA (i.e.,from the filing of an IND to the approval of anNDA or PLA) has been five years, significantlyless than the 10- to 16-year average estimatedfor conventional drugs (67).

For some of these therapeutics, clinical data ontheir counterparts, or on close analogues preparedfrom human plasma or tissues by non-biotechno-logical methods, were available. For example, sub-stantial information already existed on the effec-tiveness of human growth hormone for dwarfismand on porcine insulin for diabetes-each pre-pared by conventional techniques (31). A key com-ponent of clinical trials for some of the seven bio-technology products now on the market was thusto demonstrate that the biotechnology productsare as safe and effective as products prepared byconventional means.

The lack of previous preclinical or clinical studieson a potential protein drug has not, however, ap-peared to slow the regulatory approval processfor biotechnology products at the FDA. Genen-tech, Inc.'s tissue plasminogen activator protein(Activase®) was approved for marketing only fouryears after the IND was filed, even though themanufacturing method was modified in the proc-ess (47), and there were no prior clinical studieswith the protein (32). On the other hand, somebiotechnology products, such as interleukin-2,have been in clinical trials for substantially longertimes. Over the last several years, there has beenconsiderable controversy surrounding the degreeto which the effectiveness of this protein as ananti-cancer agent balances with its toxicity in hu-man beings (1,35). Biotechnology products do nothave a monopoly on the “fast-track” at FDA (3).For example, the NDA for azidothymidine (AZT),a non-protein drug that is not a product of bio-technology, was approved in March 1987 for treat-ment of AIDS symptoms, only 4 months after itwas filed, and only two years after the IND wassubmitted (27), Therefore, therapeutic productswhose effectiveness can be demonstrated eas-ily, and for which an efficient productionmethod and dosage form can be readily deter-mined, are likely to be approved in a timelymanner, while others will require more exten-sive clinical studies.

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In addition to the seven biotechnology productsalready approved for marketing by the FDA, thereare nearly 400 human therapeutics (produced ei-ther by cells that express cloned genes or by hybri-domas) in some stage of clinical trials (32). Com-pared to the total number (25,000) of active INDsfor all drugs and biologics currently on file at theFDA, the number of biotechnology products issmall—representing only about 2 percent of po-tential therapeutics in some stage of human clini-cal trials (32). Nevertheless, in 1986 alone, 20 newhuman therapeutics were approved, of which fourwere products made using either recombinantDNA or hybridoma technologies. INDs for prod-ucts made using the new biotechnologies are cur-rently being filed in the Center for Biologic Evalu-ation and Research at a rate of about 125 per year,corresponding to nearly 50 percent of the totalnew INDs for 1987 (32). Meanwhile, the numberof FDA personnel available to review the data fromthe relevant clinical studies has not increasedproportionately (32, 71). The FDA Commissionerreported that these factors, combined with therecent emphasis at the FDA on speeding the re-view of applications involving drugs and biologicsthat are potential AIDS therapies, could cut intothe Agency’s resources for processing biotechnol-ogy product applications aimed at other therapeu-tic uses. Despite these concerns, the relativelyshort time required to obtain market approvalof human therapeutic products made using thenew biotechnologies, and the high proportionof biotechnology products approved, shouldhelp sustain the current high level of publicand private R&D funding for the applicationof biotechnology to human therapeutics in thenear term.

Recent Legislative Actions

Since the 1984 OTA report on commercial bio-technology (51), Congress acted in at least twoareas involving drug regulation that influence thelevel of industrial investment in biotechnology-based human therapeutics: orphan drugs anddrug exports.

The Orphan Drug Act.—Prior to 1983, phar-maceutical companies had little incentive to in-vest research funds and personnel in developingdrugs likely to yield only limited financial profit.

Small biotechnology companies developing inno-vative new techniques were even less likely to in-vest any of their limited R&D budgets in unprof-itable human therapeutics. Drugs for such rareafflictions as Huntington’s disease and Turner’sSyndrome, that affect only a small population,were thus commonly known as “orphan drugs, ”In 1983, Congress amended the FFDCA with the“Orphan Drug Act” (Public Law 97-414) to pro-vide incentives for developing drugs for rare dis-eases that would otherwise not be developed be-cause the anticipated financial rewards wereinsufficient. A 50 percent tax credit for the costof conducting clinical trials and 7-year market ex-clusivity were the key incentives provided in theAct. The 7-year market exclusivity provisionof the Act was designed to protect companiesselling dregs that were ineligible for productor use patents, were off patent, or had littlepatent term outstanding. Such companies couldnot otherwise be protected from competition fromfirms that were already marketing the drug forother therapeutic applications, and thus wouldnot be able to recoup their costs in developingthe product for an orphan application.

The Act has been amended twice. A 1984 amend-ment (Public Law 98-551) defines a rare diseaseor condition as that which affects fewer than200,000 persons in the United States, or more than200,000 persons for which it is clear that the costof developing the drug will not be recovered bysales of the drug in the United States. A 1985amendment (Public Law 99-91) authorizesseven years of exclusive marketing approvalfor all orphan drugs regardless of their patent-ability, with the intention of encouraging pri-vate pharmaceutical companies to invest morein orphan drug development (50). In addition,the amendment reauthorizes grants and contractsfor clinical testing of orphan products, author-izes grants and contracts for preclinical testing,and establishes a National Commission on OrphanDiseases.

More than one company can receive the or-phan designation for a particular use of a prod-uct, entitling them to the tax credit incentivefor conducting clinical trials. However, in thecases where several sponsors seek marketing ap-proval at the same time, only the first sponsor

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to receive approval is awarded the 7-year marketexclusivity for that drug approved for that par-ticular use. The approval of all others is delayeduntil the end of the 7-year period. The provisionsof the Orphan Drug Act have stimulated new com-mitments to orphan drugs by both research-oriented pharmaceutical companies and DBCs(50,59). As of December 1987, a total of 179 drugsand biologics had been given an orphan designa-tions for specific therapeutic uses (50). Of these,there were eight cases in which more than onecompany had initiated development of the samedrug.

The awarding in 1985 and 1986 of 7-year mar-ket exclusivity rights to two companies for theuse of their recombinant DNA-derived humangrowth hormones as a treatment for a rare formof childhood dwarfism has spurred substantialcontroversy (14,20,37,42). The second version ofhuman growth hormone differed from the firstby one terminal amino acid, and may cause lessof an immune response in human beings. By ap-proving the second product, the FDA indicatedthat they considered it a different, and presuma-bly a more effective product, than the first. Othercompanies are also developing versions of recom-binant DNA-derived human growth hormone, andview their own products as having therapeuticadvantages as well (66). Analysts predict a poten-tial annual market of over $150 million for hu-man growth hormone, which is one likely reasonfor the competition among firms for exclusive mar-keting rights. Human growth hormone is onlyone of several biotechnology products thathave received ‘(orphan” designation from theFDA that are expected to yield substantial rev-enues. other products include erythropoietin,epidermal growth factor and superoxide dismu-tase (see box 9-A). Each of these also show poten-tial for additional, non-orphan therapeutic usesand greater long-term profitability.

Competition among U.S. companies for accessto future market shares of a few of the same “or-phan” biotechnology products is already evident,leading some observers to question whether ahighly profitable drug, or one with broad poten-tial applications outside the particular rare afflic-tion warranting its orphan designation, should beeligible for special regulatory status (17,42,50). The

market exclusivity provision in the Orphan DrugAct was not intended to be applied unless it is anecessary incentive for innovation. The Commit-tee on Energy and Commerce in the U.S. Houseof Representatives reported their concern thatthere will be a sizeable number of drugs devel-oped using the new biotechnologies that will besponsored by more than one company. The pri-mary reason, in the view of the Committee, is thatthese companies are not confident about thepatentability of their products, and believe thatthe 7-year market exclusivity provision of the Actis an excellent alternative (50).

Drug Export Amendments Act of 1986.--Until1986, the United States banned the export for saleof drugs and biologics not yet approved by theFDA. (Prior to the Act, unapproved drugs couldbe exported for investigational use only.) TheFFDCA was amended in the 99th Congress toestablish conditions for the commercial export ofnew drugs and new animal drugs and biologicsmanufactured but not yet approved for sale inthe United States. The new provisions are referredto as the “Drug Export Amendments Act of 1986”(Public Law 99-660).

Commercial biotechnology trade groups weremajor advocates of this legislation, arguing thatprevious export restrictions on drugs and biologicsnot yet approved by the FDA put them at a com-petitive disadvantage by forcing them either tobuild plants abroad or to license their valuabletechnology to potential competitors. The DrugExport Amendments Act allows, under certainconditions, U.S. pharmaceutical manufactur-ers to export for commercial purposes drugsand biologics to any of 21 developed countriesprovided that the drug or biologic has been ap-proved for sale by the importing country (2 IU.S.C. Sec. 382(b)(l)). The exporting company musthave an effective IND exemption allowing testingon human subjects, and be actively pursuing fi-nal product approval. If a listed country has notapproved the product for sale, it may still receivethe product for purposes of export to anothercountry on the list in which the drug has beenapproved.

The Drug Export Amendments create a newexport category for the sale of semi-processed)

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or biological intermediate products (e.g., astrain containing a recombinant DNA mole-cule). Under the law, a partially processed bio-logical product that will be used as a therapeuticcan be exported for sale upon FDA approval. Toobtain FDA approval, the exporter must show thatthe product is manufactured in compliance withGood Manufacturing Process regulations; theproduct is labeled appropriately; and there mustbe certification from the importing company thatthe finished product is approved or approval isbeing sought. The provision for partially processedbiological products could be particularly impor-tant to entrepreneurial companies, such as theDBCs, with budgetary constraints that precludethem from building facilities abroad.

The new drug export laws might benefitDBCs seeking new markets more than large,established corporations using biotechnology.Many established pharmaceutical companies havelicensing agreements with international affiliates,or with foreign companies to manufacture theirproducts locally. In contrast, less established bio-technology companies do not want to license outall of their technologies to foreign competitors,but they cannot generally afford to build facil-ities in several countries. The new Drug ExportAmendments lessen the likelihood that the DBCswill lose their share of a product in foreignmarkets—where the drug could be approvedfirst–by the time FDA approves the drug for mar-keting in the United States.

Opponents of the new drug export legisla-tion voiced concern that products not yetrigorously tested would be eligible for export.In their view, once an unapproved drug leavesthe United States, the FDA will have great diffi-culty monitoring problems such as mislabeling orillicit shipment to other nations, especially thosewith little or no regulatory restrictions. It is stilltoo early to establish whether these concerns havebeen substantiated by FDA actions.

Intellectual Property Protection

The legal protection of intellectual property isa necessary factor for encouraging investment.Reliable patent protection stimulates innovationand reduces the focus on developing analogs or

modifications of drugs that have already beenproven effective. When intellectual propertylaws are unclear, the companies developingimportant new products, such as human ther-apeutics, are forced to invest valuable re-sources in expensive and time-consuming liti-gation. In the case of human therapeutics madeusing recombinant DNA technology, the litigationhas involved all types of patents, including thosefor the products themselves, the processes usedto manufacture and purify them, and their vari-ous uses.

Broad Scope of Patent Claims

A widely held view of industrialists is that thescope of the patent claims for biotechnology-basedhuman therapeutics is too broad (52). An exam-ple of litigation over broad patent claims is thatinvolving the tissue plasminogen activator protein(TPA). A British court revoked a TPA patent thatGenentech, Inc. had been awarded in the UnitedKingdom. The court ruled that the claims in thepatent were too broad upon a challenge by theWellcome Foundation (England) (22). Genentech,Inc.’s U.S. patent for TPA is still pending. GeneticsInstitute (Cambridge, MA) was awarded broadprocess patent coverage for a purification methodfor erythropoietin (EPO) from any source. Thisdecision is being challenged by Amgen (ThousandOaks, CA), which has product and process patentspending for EPO (1,22).

Effects of Infringement Suits onWall Street

Infringement suits between companies produc-ing human therapeutics by recombinant DNAtechnology have, at the very least, temporary ef-fects on the investment community. On Septem-ber 12, 1986, for example, Genentech, Inc.’s stockplunged 10.5 points based on the news that Hoff-man-La Roche, Inc. (Nutley, NJ) had sued for in-fringement of their patent covering synthetic hu-man growth hormone. Likewise, the issuance ofGenetics Institute’s patent on EPO sent Amgenstock down $6.75 per share from $38.25, andGenetics Institute’s stock up $4.75 per share from$31.25 on the day of the announcement, July 1,1987, This oscillating investment activity reflects,in part, the lack of case law histories for biotech-

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nology patent infringements. There is a long caselaw history for patents on traditional pharma-ceuticals, but there is little information inves-tors can use to determine the potential out-come of litigation over patents on humantherapeutics derived from biotechnology. Thecreation 4 years ago of the Court of Appeals ofthe Federal Circuit has resulted in a strong pre-sumption of patent validity for all classes of pa-tents (46).

What Is Patentable?

The U.S. Patent and Trademark Office has fourmain criteria for patentability of an invention: itmust be novel, possess utility, be nonobvious, andthe patent must enable others in the field to usethe invention (64). Products of biotechnology arecomplex proteins that must maintain a certainthree-dimensional structure, and in many casesacquire certain chemical modifications, in orderto function at their full potential, Thus, depend-ing on the organism used to produce the protein,and the process used to purify it, two recombi-nant DNA-derived versions with identical aminoacid sequences could fold into three dimensionalstructures with different levels of activity. Thisleads to questions on whether the patent on oneprotein product excludes the rights to patent allother versions. Another question regarding bio-technology patents relates to the nonobviousnesscriteria. Once a protein is discovered, is it obviousto produce it using recombinant DNA technology?For these and other reasons, some industryanalysts believe that second and third generationrecombinant DNA-based human therapeutics willbe more easily protected under existing patentlaws (1,22). Second generation protein productsmade using biotechnology can be those modifiedby protein engineering to have enhanced activ-ity, or those made by a sufficiently different proc-ess than the first generation product. The patentprotection of these products is uncertain, but thenumber of companies developing such productsreflects high hopes (see ch. 5). There are at leastfive companies competing for second generationtissue plasminogen activator protein, for example.

Alternatives to Patent Protection

Pharmaceutical companies trying to protecttheir human therapeutic products may use pa-

tents, trade secrets, or copyrights. RecombinantDNA technology offers the pharmaceutical indus-try new methods for producing proteins that al-ready exist in nature. As long as it does not natu-rally occur in pure form, and the purificationprocess is not obvious, a therapeutic protein canbe patented by the first individual or individualsto create a purified version. Recombinant DNA-derived insulin and human growth hormone werenot patentable because purified forms had beenprepared in the past using conventional tech-niques. However, the non-recombinant DNA-derived human alpha interferon was patented (46).

Although patents are the strongest protectionand most favorable, there are certain circum-stances under which trade secret protection couldbe preferable (see ch. 6). Process patent protec-tion is not as broad and enforceable as productpatent protection can be, so it is sometimes desira-ble to make innovative processes trade secrets.The advantages of trade secrets are that they donot have to be published, nor do they have to meetthe patent requirements of novelty and nonobvi-ousness (51).

Other Intellectual Property Issues

Another issue of intellectual property protec-tion that can influence the level of investment inpharmaceutical applications of biotechnology isthe infringement of U.S. process patents by de-veloping and newly industrialized countries.Emerging biotechnologies are particularly vulner-able to weaknesses in process patent protectionbecause it is often the only protection availablefor a human gene product isolated or producedusing biotechnology. A forthcoming OTA reporton Patenting Life will examine these process pat-ent issues, as well as those surrounding the patent-ing of whole animals engineered to produce hu-man gene products with therapeutic potential.

Access to Biotechnology Information

Rapid advances in recombinant DNA and otherbiotechnologies have caused an information ex-plosion in the biological sciences, The relentlesspace of new developments in biotechnologyparallels that of information processing, storage,and retrieval. The combination of developmentsfrom these two high-technology sectors could lead

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to even greater advances. Access to informationgenerated by biotechnology is crucial to innova-tion. Organization of the data generated in bio-technology research is necessary for researchersin the participating scientific disciplines (e.g.,microbiology, biochemistry, immunology etc.) tobuild on their individual contributions. Biotech-nology information access and organization hasimplications in several areas of national policy,such as:

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●

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regulation of commercial products of biotech-nology;support of biotechnology research and de-velopment;public perception and awareness of biotech-nology;intellectual property rights; andcoordination among Federal agencies (39).

This section focuses on how information accessand organization is vital to continued advancesin the application of biotechnology to medicine.

A National Research Council report (39) urgedthat Federal agencies supporting biotechnologyresearch continue to fund or initiate funding inactivities concerning biotechnology information.These efforts could range from developing rele-vant computer software to national centers forinformation networks. Another recommendationwas that the National Library of Medicine (NLM)at the National Institutes of Health coordinate a“database of databases” for biotechnology infor-mation and expand its role as an information re-source center. Implementation would require anexpansion of the current NLM directory of infor-mation sources (DIRLINE) and would include across-referencing system and a thesaurus for bio-technology. The users of these facilities would notonly be the researchers in the multiple scientificdisciplines involved, but regulators, patent attor-neys, and other officials needing information onbiotechnology. Congress appropriated $3.83 mil-lion in fiscal year 1988 for the NLM to initiate workon the proposed database of databases.

There are more than a hundred different data-bases—some more frequently used than others—maintained as sources of data for researchers inthe various biological sciences (12). There are data-bases containing the nucleotide sequences ofcloned genes, the amino acid sequences of pro-

Figure 9.6.—Databases in Biotechnology

Protein structures

SOURCE: The National Library of Medicine and Office of Technology Assess-ment. 1988.

teins, the structures of organic molecules, loca-tions of genes on chromosomal maps, pedigreedata from families with genetic diseases, and three-dimensional atomic coordinates of protein struc-tures (figure 9-6). Computer software has beendeveloped that allows a researcher to analyze hisor her own data relative to that stored in the data-bases. The Division of Research Resources at NIHfunds a national computer resource, called BIO-NET, that offers sophisticated analytical softwarefor use by government and academic research-ers (industry only has access to the BIONET in-formation network). Databases of structures ofnonbiologic drugs with established activity canbe used together with those containing three-dimensional structure data on proteins in rationaldrug design strategies. Research on the structureof one of the family of viruses that cause acquired

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immune deficiency syndrome was made feasibleby the BIONET resource (60).

In 1987, a group of government, academic, andindustrial scientists met in Santa Fe, NM to de-velop a strategy for making biological informa-tion accessible to all users. Their goal is to createan expert system, called the Matrix of BiologicalKnowledge, by interconnecting available data-bases in ways that will interpret the scientific ques-tions of investigators from any one of a numberof diverse fields in biology and chemistry (36). TheNLM database of databases would be only onecomponent of the system. Through the Matrix sys-tem, a pharmaceutical scientist would be able tocommunicate on-line with the data from the workof agricultural scientists, for example. Certain taskgroups have been set up to initiate small projectsthat would demonstrate the efficacy of Matrix,with the hope of gaining additional support forthe project (68).

The transfer of information from proprietarysources to the public domain is an important pub-lic policy issue. For example, scientists from boththe public and private sectors are conducting re-search aimed at elucidating the structure and func-tion of human genes and gene products. Readyaccess to information, as it evolves, is essen-tial for maintaining the current pace of inno-vation in areas of biotechnology that could im-prove human health and prevent disease. Thiswill require the timely entry of information(proprietary and otherwise) into public data-bases (53).

Availability of Trained Personnel

The availability of trained personnel has beenindispensable to the dominant position maintainedby the United States in pharmaceutical biotech-nology. There is a wide variety of scientific andadministrative personnel who perform the workinvolved in applying biotechnology to the discov-ery and commercialization of human therapeu-tics. Scientists who carry out basic research, proc-ess engineers responsible for product scale-up,pharmacologists and clinicians who performstudies in animals and humans, legal and regula-tory administrators who must apply existing lawto the products and processes of biotechnology,

and marketing personnel are all involved. Chap-ter 8 covers the general scientific training and per-sonnel needs of both academia and industry. Chap-ter 6 addresses the problems in obtaining andkeeping highly trained scientific personnel in thevarious government agencies. This section sum-marizes the research disciplines from whichhighly trained scientists must continue to emergeto fill the existing gaps in biotechnology researchalong the path to development of new human ther-apeutic products.

In a recent report, the National Academy of Sci-ences (NAS) (38) requested increased Federal at-tention to the need for interdisciplinary trainingin biology, chemistry, and physics for graduatestudents and postdoctoral personnel. The newgeneration of structural biologists, those who willbe primarily responsible for advances in proteinengineering and rational drug design, must betrained in the basics of protein chemistry, molecu-lar biology, and biophysics. An increasing num-ber of large corporations and dedicated biotech-nology companies have set up programs to studythe three-dimensional structure of large moleculessuch as proteins and DNA. These programs re-quire expertise in such biophysical methods asx-ray crystallography, nuclear magnetic resonancespectroscopy (NMR), theoretical molecular mod-eling, and computer graphics. While the fields ofmolecular and cellular biology are well populated(38), academia and industry (especially pharma-ceutical companies) are competing for scientiststrained in structural biology (23).

As the number of cloned human genes rises,and the ability to purify their protein productsincreases, there will be a growing need for scien-tists trained to determine how these proteins workin the human body, and to assess their potentialas human therapeutics. This would require re-searchers from the traditional fields of humanphysiology, pharmacology, and toxicology, butwith experience that extends beyond traditionalsynthetic drugs to include protein drugs.

In assessing personnel and training programneeds, it is important to emphasize that as bio-technology becomes fully integrated into biomedi-cal research, and new research tools continue tobe developed, the types of scientific expertise re-

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quired will also evolve. Therefore, scientists likely be the best prepared to meet the chang-with solid training in the general areas of bi- ing needs of biomedical R&D in both acade-ology, chemistry, and computer science will mia and industry.

FUTURE APPLICATIONS OF BIOTECHNOLOGY TOHUMAN THERAPEUTICS

Some scientists believe that the use of biotech-nology will actually contribute more to studiesaimed at understanding the basic processes under-lying cellular physiology than to the productionof novel human therapeutics. In other words, oncethe mechanisms directing normal cellular func-tions are known, conventional drugs (e.g., phar-maceuticals made by chemical synthesis) may bedesigned more intelligently (or rationally) becausethe chemical characteristics of their target sitesand their mechanism of action will be better un-derstood (6). Biotechnology has stimulated the in-terest of pharmaceutical companies in rationaldrug design, but research in this area is expen-sive, requiring multidisciplinary research teamsand costly instrumentation and computers for de-signing molecules. Despite the renewed enthu-siasm in this area, computers and molecular mod-eling have led to very few rational drug designsuccesses (43)62). Therefore, for the time being,these methods are more likely to remain in aca-demic laboratories and a few large pharmaceuti-cal companies, than in the smaller companies dedi-cated to biotechnology.

One strategic challenge posed by human thera-peutics made using biotechnology is that new

methodologies are constantly being developed thatimprove product purity, stability, and productionefficiency, and manufacturing processes must bemodified accordingly, For example, Genentech,Inc. modified its manufacturing protocol for TPAduring clinical trials, making it necessary to ascer-tain any effects unique to the product manufac-tured by the new process (47,7 I). In such circum-stances, the sponsor is faced with the obviousbenefits of rapid advances in molecular biologyand the desire to design a superior product againstthe financial and regulatory burdens incurred byaltering manufacturing processes during devel-opment (4). In contrast to the scenario for con-ventional drugs where manufacturing recordsestablish the criteria for product purity, for hu-man therapeutics made using biotechnology, theprocess also plays a role in defining the regula-tory guidelines for the products (57,58). For ther-apeutic applications in which biotechnology is notthe only option for product development, thesefactors will continue to influence the choicebetween biotechnology and more conventionalroutes.

ISSUES AND OPTIONS

ISSUE 1: Should action be taken to ensure thatthe development incentives provided in theOrphan Drug Act are being used for theirintended purposes?

The objective of the Act was to provide incen-tives for developing drugs for rare diseases thatwould not otherwise be developed because theanticipated financial rewards were insufficient.The simultaneous development of an orphan prod-uct by multiple companies implies either that the

potential commercial value of the product is highenough that it would be developed even withoutthe Orphan Drug Act incentives, or that the com-panies are unaware of each other’s developmentactivities. Therefore, if Congress takes measuresto amend the provisions of the Act to prevent im-proper use of its objectives, it should do so takingcare not to remove incentives for the majority ofsponsors who are developing drugs that are trulyorphans.

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Option 1.1: Take no action.

The Orphan Products Board reported a signifi-cant increase in orphan drug development, includ-ing a substantial number of products made usingbiotechnology (over 10 percent of the total) in thefive years since the Act. Dedicated biotechnologycompanies have limited resources to invest, andthey generally aim their R&D budgets at poten-tially profitable drugs. If the existing incentivesfor R&D investment in orphan drug applicationswere altered, the dedicated biotechnology com-panies might be less likely to participate in orphandrug development than would the large, estab-lished corporations. However, the smaller com-panies have contributed much to innovation inthe development of biotechnology products, andfor some orphan diseases, these could prove tobe the only effective products. Congress could thusdetermine that the tax credit and 7-year marketexclusivity incentives of the Act are, for the mostpart, being used as designed, and that no furtheraction is necessary.

Option 1.2: Amend the Orphan Drug Act to dis-courage sponsors from using orphan drug sta-tus as a means of achieving market exclusivityfor drugs that they would likely develop with-out the incentives of the Act.

The 7-year market exclusivity provision of theAct was intended to assure orphan drug de-velopers that they would recoup their develop-ment costs, even though there was little commer-cial value and inadequate patent protection forthe product. Concern has been raised that in theface of uncertainty over the validity and scopeof patent protection on many biotechnology prod-ucts, the developers are viewing the Act marketexclusivity provision as a patent substitute. There-fore, in keeping with the legislative intent of theAct, measures could be taken to ensure that itsincentives are not abused by sponsors who standto make substantial financial gains on orphanproducts. One or a combination of any of the fol-lowing options could be used by Congress toamend the market exclusivity provisions of theOrphan Drug Act:

● Orphan drug sponsors with pending patentapplications, or holding patents with lifetimes

●

●

●

●

that will not expire soon after market ap-proval, could be excluded from 7-year mar-ket exclusivity rights.Any company willing to carry out all of thenecessary testing of a drug identical to or sim-ilar to one already approved for the same dis-ease could market their product during the7-year protection period afforded to the com-pany that originally developed the drug.A 7-year term of market exclusivity could begranted to all companies that had filed NDAsor PLAs for the same therapeutic use of theorphan product by the time market approvalwas granted to the first company. Congressmight find that this option balances the needto continue proven incentives for orphandrug development with both the equitabletreatment of codevelopers of a particular drugand competition in the major markets thatcan support it. If market exclusivity is sharedonly by companies that have already filed anNDA or PLA at the time the first applicationis approved, then companies only days awaycould be excluded, even though they hadmade significant investments in orphan drugdevelopment.The market exclusivity provision could be re-moved. Congress could determine that thelow profitability of drugs marketed for or-phan uses offers a natural market exclusiv-ity to the original developer in most cases,thereby superseding the need for such a pro-vision. Without the provision, however, therewould be no assurance that the sponsor ofa product that is either off patentor unpatent-able, could offset some or all of the develop-ment costs by recouping all possible revenuesfrom the sale of the drug. Moreover, exercis-ing this option would remove incentives forall orphan product developers, even thoughonly a few products, such as recombinantDNA-derived human growth hormone anderythropoietin, could yield substantialrevenues.Sponsors receiving revenues from sales of or-phan drugs for rare disease applications thatexceed a fixed ceiling could lose their mar-ket exclusivity rights. Congress could find thatthis approach is the most direct one for dis-couraging the use of the development incen-

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tives offered by the Act for drugs with antic-ipated profitability.

ISSUE 2: Should Congress act to facilitate ac-cess to information generated by biotech-nology-based research with potential appli-cations to human health?

Rapid advances in recombinant DNA, hybri-doma, and other biotechnologies have led to anexplosion of information in the biological sciences.Organization of the data generated in researchbased on biotechnology is necessary for buildingon individual contributions and furthering inno-vation. Databases exist in government and aca-demic laboratories for a wide variety of biologi-cal information; some of the databases, such asthose containing DNA and protein sequences, areheavily used, while others are used by individ-uals in more specialized fields. In some cases, data-bases are used to indicate the availability of andto describe certain types of biological materials.The users of biotechnology information are notonly academic, government, or industrial re-searchers, but regulators, patent attorneys, andother officials needing data.

Option 2.1: Take no action.

The National Institutes of Health, through theDivision of Research Resources and other cate-gorical institutes, maintain over 100 informationaldatabases, and fund research for managing andunderstanding large amounts of biological infor-mation. Congress could conclude that these NIHactivities, and those of other Federal agencies aresufficient to meet the major needs in biotechnol-ogy information management. However, many sci-entists view the existing resources for assimilating

and analyzing the rapidly accumulating biotech-nology information as insufficient to meet theneeds of the community of users.

Option 2.2: Increase funding levels for existingprograms or initiate funding in new activitiesconcerning biotechnology information man-agement.

The development of computer software to linkthe large number of different databases in a waythat will allow researchers to better analyze theirown data, and to avoid unnecessary duplicationof research, is a major goal of all researchers usingbiotechnology. Congress could authorize Federalagencies that support biotechnology research tofund more activities related to the developmentof new systems for managing biotechnology in-formation. These efforts could range from devel-oping relevant computer software to nationalcenters for information networks. The designa-tion or creation of a center or centers for biotech-nology information analysis and managementcould assist in the development of new commu-nication tools and serve as centers for the distri-bution of biological information.

The National Library of Medicine (NLM) is onepossible location for a biotechnology informationcenter. The NLM has made a catalog of humangenetic loci, called Mendelian Inheritance in Man,available on line through its Information RetrievalExperiment (IRX) program, and has linked the datain this volume to the information available inGenBank® and the Protein Information Resourcedatabank (funded primarily by NIH), to importantdatabases for researchers in molecular biology.The NLM has also begun an experimental programfor linking molecular biology databases, using re-searchers at NIH to test the system’s effectiveness.

SUMMARY

The pharmaceutical industry enjoys the high- any other Federal agency on biotechnology R&D.est level of biotechnology R&D investment from Companies developing human therapeutics basedboth public and private sources. In fiscal year on biotechnology had R&D budgets higher than1987, the National Institutes of Health, with its those financed by any other industrial sector inresearch mission inhuman health and disease pre- the 1986/1987 fiscal years. Human therapeuticsvention, provided about 20 times the amount of make up the primary R&D effort of 21 percent

76-582 0 - 88 - 7 : QL 3

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of dedicated biotechnology companies and 26 per-cent of the larger, established corporations usingbiotechnology. Because the application of biotech-nology to the development of human therapeuticshas only recently begun to make the transitionfrom new technology development to successfulclinical applications, the availability of funds forbasic and applied research will be important insustaining the current pace of product devel-opment.

The rate of human therapeutic product devel-opment could be substantially increased if greatereffort were given to developing new methods toisolate genes and proteins for research; establishrelationships between protein structure and func-tion; determine how proteins fold into active struc-tures; study the physiological roles of human pro-teins in model systems; analyze the mechanismsof protein maturation and export from cells; anddeliver human therapeutic proteins to the appro-priate targets in the human body. Despite its suc-cesses in the area of human therapeutics, how-ever, biotechnology will likely only complement

CHAPTER 9

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2. Baxter, J., California Biotechnology, Inc., MountainView, CA, personal communication, March 1987.

3. Beers, D. O., Arnold and Porter, Washington, DC,persona] communication, December 1987,

4. Berkowitz, K. P,, Vice President and Director,Hoffman-La Roche, Inc., Public Affairs, Nutley, NJ,personal communication, Sept. 3, 1987.

5. Blundell, T. L., Sibanda, B. L., Sternberg, M.J.E., etal., “Knowledge-Based Prediction of Proteins Struc-tures and the Design of Novel Molecules,” Nature326:347-352, 1 9 8 7 .

6. Brown, M. G., “Second Annual Biotechnology Con-ference,” Jan. 27-29, 1987.

7. Cartwright, T,, “Isolation and Purification of Prod-ucts from Animal Cells” 7’HWECH 5:25-30, 1987.

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9. Chee, Darwin O., “Biotechnologists Recognize Grow-ing Importance of Animal Cell Cultures, ” GeneticEngineering News, June 1987, p. 6.

more traditional methods of isolating or synthe-sizing pharmaceuticals.

The new biotechnologies are now an integralpart of research in the development of humantherapeutics at dedicated biotechnology compa-nies and at larger, more established pharmaceu-tical corporations. Biotechnology is now being ap-plied by the pharmaceutical industry as a tool fordeveloping therapies for many different humandiseases and afflictions. A company’s success inapplying biotechnology to the development of hu-man therapeutics will now be measured not justby its research capabilities, but also by its strengthsin meeting drug approval requirements, protect-ing intellectual property rights, and new productmarketing. There is no longer a clear advantageof the dedicated biotechnology companiesover the pharmaceutical industry giants inthe development of new products and proc-esses. On the other hand, the large, estab-lished companies can no longer claim a sub-stantial lead in the management end of productdevelopment.

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