Biotech firms to testify against BioShield rules

The Baltimore Sun

WASHINGTON -- Federal officials have undermined the national program to find medicines to protect Americans against chemical, biological or radiological attacks, the head of a San Diego biotechnology company will tell Congress today.

Richard B. Hollis, chief executive of Hollis-Eden Pharmaceuticals Inc., whose anti-radiation drug was rejected by the government, plans to tell legislators that his company "will never again seek to work with the government."

He says the Department of Health and Human Services rewrote the rules after his company spent $85 million developing a breakthrough treatment for radiation sickness.

In testimony prepared for delivery to a House homeland security subcommittee, Hollis says Congress has saddled taxpayers with a huge financial burden with little benefit in revamping the 10-year, $5.6 billion BioShield program last year. Under the revisions, a new government agency will underwrite a share of the costs of early drug development, expenses now bankrolled by shareholders of private companies.

Hollis and executives of two other companies that have had difficulties dealing with HHS over the companies' countermeasures against deadly anthrax bacteria are to testify during a hearing that will examine whether Project BioShield can effectively safeguard the nation against such threats.

The other two executives are Jim Panek, president and CEO of VaxGen Inc., based in Brisbane, Calif., whose $877 million contract for an anthrax vaccine was scrapped last year, and James Davis, a senior vice president of Human Genome Sciences, a Rockville company from which HHS committed to buy only 20,000 doses of its anthrax antitoxin.

Senior HHS officials and Dr. Anthony Fauci, head of the National Institute for Allergies and Infectious Diseases, also will testify. Fauci has assumed a leading role in BioShield, with his agency doling out $47 million annually in research grants and evaluating potential medicines.

HHS has declined to detail publicly its decision to reject Hollis-Eden's drug NEUMUNE, except to say that it failed to meet the government's "technical" requirements.

In his prepared testimony, Hollis chronicles his company's 5 1/2 -year "attempt to answer the call by our nation to develop the first practical treatment to the life-threatening effects of radiation exposure."

NEUMUNE, the product of more than 30 years of research by the Armed Forces Radiological Research Institute, is the first drug shown in human and animal studies to regenerate blood-forming bone marrow after radiation exposure, which could occur in a "dirty bomb" or nuclear attack.

Hollis says in his testimony that the 2004 BioShield law provided for the award of an advance purchase contract if the HHS secretary reasonably concluded that a countermeasure would win approval from the Food and Drug Administration within eight years. But, he said, HHS officials "have taken it upon themselves" to rewrite that standard.

Hollis contends that the latest legislation, which creates a Biomedical Advanced Research Development Agency, "will only make things worse" by shifting financial burdens to taxpayers "with no guarantee of the results."

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