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Exec: Government is hindering BioShield efforts

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 biotech company will tell Congress Wednesday.

Richard Hollis, the 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 said 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 said 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 their countermeasures against deadly anthrax bacteria are due 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., whose $877 million contract for a next-generation anthrax vaccine was scrapped last year, and James Davis, a senior vice president of Human Genome Sciences, a company from which HHS committed to buying 20,000 doses of its anthrax anti-toxin.

Senior HHS officials and Dr. Anthony Fauci, the 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 chronicled his company's 5-{-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.

Bone marrow, vital for survival, is the most susceptible tissue to high doses of radiation, which kills infection-fighting white blood cells and blood platelets, which prevent unchecked bleeding.

The company's drug was appealing for several reasons: It promoted growth of both white blood cells and platelets, could be self-injected and, as a hormonal steroid, didn't require refrigeration. But HHS officials expressed concern that the drug had been shown to improve the survival of irradiated monkeys only when administered within four hours of radiation exposure, saying it might be of little use by the time rescue teams reach victims.

Company executives contend that the drug could be used to treat people exposed to the limited radiation of a dirty bomb or deployed in advance for use on hundreds of thousands of people fleeing a nuclear blast or its radioactive fallout.

Hollis wrote 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 U.S. Food and Drug Administration within eight years. But, he said, HHS officials "have taken it upon themselves" to rewrite that standard.

After his firm was repeatedly assured that it was "within the competitive range" on an HHS proposal to buy up to 100,000 doses of a counter-radiation drug, Hollis said, the agency raised the bar in early March. The company was told it must prove its product's safety and efficacy at a level "just shy of what we would be required to show to obtain full FDA approval," he wrote.

"I am honestly at a loss to explain how HHS decided to cancel outright" the procurement and start over, Hollis wrote.

He urged the subcommittee chaired by Rep. Jim Langevin, D-R.I., to investigate whether the contract decision was delayed repeatedly because HHS officials were waiting for Congress to revamp the BioShield program to provide public funding for research.

Hollis contended 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."

"And given there are hundreds of failures for every approved drug, and that each failure can cost a significant amount of money," he wrote, "the cost to the taxpayer will quickly add up."

HHS officials have said that, while the new law provides federal research funding for BioShield drugs, they'll continue to work with private companies.