The FDA's Infection

Memo to whoever gets the nod as the next commissioner of the Food and Drug Administration: As you settle into your new digs in Rockville, Md., you might want to give some thought to the case of a tiny biotech company called Theravance .

The reason: This company's story shows how your every attempt to fix the FDA is likely to cause even more problems.

In November, after months of delays that hammered Theravance shares, a panel of FDA advisors voted 21-5 that the company's antibiotic, televancin, should be approved despite its potential to cause birth defects and kidney damage. Panelists said televancin filled a need for new weapons against the deadly methicillin-resistant staphyloccus aureus (MRSA) bacterium, which kills more Americans annually than AIDS. The panelists weren't pushovers: They nixed two other anti-MRSA drugs with weaker data.

Last Thursday night, the FDA rejected televancin. According to Theravance, the agency needs more time to decide how to warn patients and doctors about the drug's risks. That means months more delays, though analysts think televancin will eventually get approved.

"It doesn't seem it should be so hard to make sure this drug isn't used in women of childbearing age," says Rachel McMinn, a biotechnology analyst at S.G. Cowen.

Theravance isn't alone. Six medicines aimed against MRSA that have gone before the FDA in the past five years have not been approved; one has, but it generates little in the way of sales. Pfizer dropped $1.9 billion to buy the maker of an anti-MRSA drug in 2005, only to have the medicine vanish into regulatory limbo. Last weak, Basilea, a Swiss biotech developing anti-MRSA medicines, hauled its partner, Johnson & Johnson , into Dutch arbitration proceedings because it says J&J has fouled up the applications for its lead drug, ceftobiprole.

Experts worry that the pervasive FDA delays could lead drug companies to shy away from antibiotics. Despite the pressing public health need, hospital antibiotics remain low sellers because they are not taken long term. Televancin will take years to generate a modest $300 million in annual sales--not enough to convince companies to endure a regulatory gauntlet.

"The regulatory authorities make it so difficult," says Arthur Higgins, chief executive of Bayer's health care unit, which used to count the antibiotic Cipro among its top-sellers but has pretty much abandoned the field. "Today you couldn't launch a profitable community-based antibiotic. We all as a society regret that."

FDA officials say they don't want to squelch innovation. By law, the agency can't explain the delays on unapproved drugs. Antibiotics are "a unique area," says John Jenkins, head of the FDA's Office of New Drugs, because bacteria are constantly evolving new immunities that make existing drugs "obsolete." He says: "We definitely want to work with companies to find ways to get new drugs approved." A Booz Hamilton analysis showed that regulatory delays frequently result because companies don't address the FDA's concerns.

But a recent review of drug company pipelines by the Infectious Diseases Society of America found "no evidence" that the "urgent, immediate need" for new antibiotics will be met in the foreseeable future. "Every chief executive we talked to said the regulatory uncertainty is a major obstacle," says Helen Boucher of Tufts Medical Center, the report's lead author.

The slowdown seems to have its roots in one of the biggest controversies to beset the FDA. The antibiotic Ketek, from Sanofi-Aventis , was approved to treat everything from nasty bronchitis to sinusitis in 2004. Ketek was a pill, and its sales were expected to pass $1 billion. But after just two years, Ketek's use had to be severely restricted because it was toxic to the liver. The FDA was accused of allowing fraudulent data to be used to support the drug's approval, of allowing subpar clinical trials and of not paying enough attention to the liver risk. A criminal investigation and Senate hearings followed.

As a result of the Ketek controversy, the FDA division that handles antibiotics "is one of, if not the most, difficult, environments to work in at the agency right now," according to Patrick Ronan, a former FDA chief of staff who now consults for health care companies.

Theravance filed a new drug application for televancin in February 2007, only two months after a panel of FDA advisors recommended severe restrictions for Ketek. The FDA asked for more data in December 2008 and then scheduled an FDA advisory committee meeting for February 2008.

As executives from Theravance and the company's marketing partner, the Japanese drug giant Astellas, were heading to the airport to travel to Rockville, Md., for the meeting, they got a phone call from the FDA. The meeting was canceled.

FDA advisors had found irregularities in the data for one research site that was part of the televancin clinical trials. Jenkins says there's no way to control when such problems turn up, because FDA inspectors have to cover a lot of ground. In this case, the problems were found just before the advisory panel. The problems were "very deja vu to Ketek," Jenkins says. "We had no way of knowing whether the further investigation would lead to the data being OK."

Over the next six months, Theravance shares dropped 75% to $4, erasing $700 million in market value. Then came the November panel meeting. It turned out the data problems affected only 50 of 1,900 patients in Theravance's studies and had no effect on the result. Still, repeated references were made to the data integrity of the study. In the end, televancin was the only one of three antibiotics reviewed that got the thumbs up. Theravance stock rebounded.

Boucher, the Tufts infectious disease specialist, says that Edward Cox, the current director of the FDA's Office of Antimicrobial Products, has actually sped things along, finally developing guidelines for companies testing new drugs. "In a short period of time," she says, "he's made things better."

But the last really successful anti-MRSA drug was Cubicin from Cubist Pharmaceuticals , which has annual sales of $400 million. It was shepherded through the approval process by Frank Tally, a former Wyeth antibiotics guru. He has since died of an antibiotic-resistant bacterial infection. Theravance's televancin was created by chemist Burton Christensen, who had invented three antibiotics at Merck . Theravance's founder, P. Roy Vagelos, is also known as one of Merck's greatest chief executives, and he lured Christensen briefly out of retirement.

Whether the next FDA chief is a relatively safe choice like former New York City health commissioner Margaret Hamburg, a riskier bet like Baltimore health commissioner Joshua Sharfstein or a drug industry critic like Cleveland Clinic cardiologist Steven Nissen, the hard part of the job will be fixing decision-making problems that lead to mistakes like Ketek without scaring the industry away from tough research areas where treatments are desperately needed.

When it comes to antibiotics, time is already running out.

"We are in a maximum of two generations time going to be in the pre-antibiotic era. That is not a possibility, it is a statement of fact," says Peter Appelbaum, a scientist at Penn State who discovered the first resistant strains of pneumococci in 1977. He says regulators or companies will pay more attention to the pressing need "when people start dying. Not if, when."