-Submitted by David Drumm (Nal), Guest Blogger
In 2004 President Bush signed the Project Bioshield Act that authorized $5.6 billion over ten years for “the government to purchase and stockpile vaccines and drugs to fight anthrax, smallpox and other potential agents of bioterror.” The potential use of anthrax as a bioterror weapon is well documented, but smallpox has been eliminated and exists only in ultra-secure labs in Russia and the U.S.
The idea that terrorists are going to break into one of these labs and steal the smallpox virus is absurd. The best defense against this absurd idea is to destroy the remaining stockpiles. However, U.S. Health and Human Services Secretary Kathleen Sibelius said the U.S. and Russian stockpiles would remain in place for at least another five years. There is a reasonable explanation for the U.S. to keep smallpox virus around: to develop a smallpox vaccine against the possibility that Russia weaponizes its stockpile.
Smallpox is caused by the variola virus. According to the FDA, “During the smallpox era, the only known reservoir for the virus was humans; no known animal or insect reservoirs or vectors existed.” That is, any potential threat has to come from the virus in the stockpiles. According to the CDC, “the last naturally occurring case in the world was in Somalia in 1977.”
In 2007, the Bush administration issued a $505 million contract to a Danish company, Bavarian Nordic, to provide twenty million doses of smallpox vaccine for those whose immune system has been compromised. Vaccination is effective within three days of exposure and will remain effective for three to five years with decreasing effectiveness thereafter.
The Obama administration has been pushing a $433 million “sole source” contract to New York based SIGA Technologies Inc who bought the rights to an antiviral drug, ST-246. After complaints from SIGA that negotiations weren’t going to their satisfaction, senior HHS officials replaced the government’s lead contract negotiator, and SIGA was awarded the deal in May. The contract calls for the delivery of 1.7 million doses of the drug to the nation’s biodefense stockpile. The price per dose is $255, yielding a profit of 180%, well above what government specialists consider reasonable.
SIGA’s controlling shareholder is billionaire Ronald O. Perelman. Perelman has made political contributions totaling $620,870, with 40% going to Democrats, 14% going to Republicans, and the balance of 46% going to special interest groups. Perelman donated an additional $50,000 to President Obama’s inauguration.
The effectiveness of this drug on humans is unknown and, for ethical reasons, cannot be tested by exposing humans to the smallpox virus. Dr. Thomas M. Mack, an epidemiologist at USC’s Keck School of Medicine, has called the plan to stockpile SIGA’s drug “a waste of time and a waste of money.”
In addition to the dubious requirement of an untested, short shelf-life, smallpox drug, there’s the problem of getting approval from the FDA. Robert G. Kosko Jr., a manager in the FDA’s antiviral-products division, wrote that there was “no clear regulatory path” for approving antiviral drugs for smallpox — again because of the uncertainty surrounding evidence of effectiveness.
The Animal Efficacy Rule was adopted by the FDA in 2002 to address the problem of testing drugs on humans, when exposing humans to the disease presents ethical problems. However, guidance from the FDA, dated November 2007, on animal models for smallpox states:
Currently, available data do not establish specific preferred, well-characterized animal models for smallpox, and no animal models have been shown to replicate or to predict human responses to therapy for smallpox.
An FDA antiviral drug advisory committee will meet on December 14-15, 2011, to discuss “pathways for the development of drugs intended to treat variola virus infection (smallpox) in the event of an outbreak, including the use of animal models of other orthopoxviruses (the group of viruses that includes smallpox) as potential evidence of efficacy.”
The contract with requires SIGA to develop its drug “for ultimate approval by the FDA.” FDA approval will help determine whether the government exercises its options to buy more of the drug in the future, turning a $433 million contract into a $2.8 billion windfall.
From a SIGA webpage: “The FDA has designated ST-246 for “fast-track” status, creating a path for expedited FDA review and anticipated regulatory approval.” What would justify the anticipation of said FDA approval when the use of animal models has yet to be decided?
While ST-246 may be an effective antiviral drug against orthopoxviruses, the way this contract was negotiated stinks to high heaven.
H/T: David Willman (LA Times), CDC, FDA.
Bron,
Siga owns the patent, however the rights to the drug are under attack as a result of a drawn out legal battle with a company called Pharmathene. An unprecedented ruling was just handed down from the court of Chancery’s Judge Parsons, awarding Pharmathene a “revenue stream” of 50% of all profits from ST-246 for the next 10 years after the first $40M goes to Siga. Completely ridiculous and devastating to Siga and it’s shareholders. The trial is currently being reargued, with little expectation for any reversal of fortune. The end game will most likely be a drawn out appeal process. An ugly situation to say the least.
Regarding the rest of Siga’s pipeline. It is has been under development for a while now and the potential for IND applications seems strong for several of their candidates, most notably the IV formulation of ST-246. They are moving along nicely on a product for Dengue fever, which is currently endemic in tropical climates around the world and carried by common Mosquitos. In fact for the first time in a long time, native cases have been detected in south Florida. This drug seems to be nearing IND as well as their Lassa fever candidate. On their pipeline, the one that is potentially most exciting, but also the furthest out, is ST669, their broad spectrum antiviral candidate. In previous conference calls, it has been described as “showing activity” against 11 of the 12 viral FAMILIES. Yes it is very far out, but if it goes where they think it might, it would be the next penicillin.
Regarding the sole single source aspect of the story, the RFP for this contract was completely public and open to qualified bidders. It only went sole source after it was determined that no other bidder could meet the requirements established by BARDA, and in my opinion to bypass Chimerix’s clearly obstructionist activities. Chimerix created roadblock after roadblock to buy time for their inferior, monkey killing product, cmx001. The fact is there is no other through antiviral (not vaccine, there is a BIG difference) that can fulfill the publicly published requirements. MKA has threatened our national security by preventing this NEEDED defense measure from being stockpiled.
Siga, of course, has the patent on its drug. But like all drugs, it only has a limited time before generic makers can jump right in and produce it. So after years of development, it has a window of a few years to make a profit.
I’m delighted to see Mike Nutello and especially the esteemed John McBroom jump in on Siga’s side. But do we have the same writing style? I don’t think so. Like a number of Siga investors, we know each other from message boards. We share information — and by that I mean the facts. Had Willman of the Times been a little more interested in finding the facts, rather than doing the bidding of powerful people, he would have discovered WHY a no-bid contract was done and WHY the product being purchased is an amazing, even miraculous one. There are so many corrupt dealings out there, it is astonishing that the LA Times is trying to shine a light on this contract — where the right product was being bought by the government. At least until his article came out, triggering a government investigation. For investors like me, it’s a sickening lesson in what gets results in this country.
I’ve now said my piece, and I’m getting off this site. Anyone who wants to do a little research can find out for themselves why Willman and the original blogger here, David Drumm, are simply mistaken.
Otteray Scribe
Being a doctor only means you have some formal education….not common sense. Instead of throwing stones like most liberal bent posters when they have no logical contrarian arguments/facts to present, why don’t you research some of these points and post your educated rebuttal….this is my last post on this site since as I said before, those charging blindly ahead are not logically engaged with mere facts!
So where were those facts, doc? Last post with you.
Mike Nutello:
they think everyone with a differing viewpoint is a paid agent of the right wing cabal of the military industrial complex.
Who has the patent for the drug and are there others as good?
Sometimes you have to purchase something from a single source.
http://images2.dailykos.com/i/user/6/usland.jpg
I am a doctor. Yes I have a clue. I have no time for greed.
Otteray Scribe,
Instead of trying to turn the posting of informed posters into a conspiracy, why do you try something useful and start talking about FACTS. Go ahead and refute any point that I have made or ken or John for that matter. Are myopic political bloggers, like you are proving yourself to be, capable of researching facts and forming arguments around such research? I know, too much to ask. So please I beg you, tell me where either of the 3 of us are wrong.
I am utterly sick of the NOISE from lazy uninformed individuals like yourself! DO YOU HAVE A CLUE?????
Anyone notice a coordinated effort here where each of the posters has an almost identical writing style?
The average American reader….much like the writer who produced this piece….reads something and jumps on the train blindly instead of doing some basic factual research. For example, a simple review of the 2005 Rand study that said IN A SINGLE ATTACK ..(VICE MORE PROBABLE LIKE 9/11 MULTIPLE SIMULTANEOUS ATTACKS)…THE US COULD EXPECT TO LOSE UP TO 50,000 LIVES. How much time/money are 50,000 American lives worth in your opinion? Be sure to see the UCLA follow up that doubled the number by considering those who would have major disfigurement…..not to mention the economic and military exposure the country would experience during such a plague. Pretty steep price for not being prepared imo. If you’re not too lazy, you can easily look up the links youself.
As far as pricing is concerned, recall there is a difference between a course and a dose. One is 28 pills and one is one pill. While the simple math establishing $255 for a 28 pill course is a bit high in my mind (closer to $180-200 per 28 pill course)….how does it compare to others….for example……
Valtrex = $203.28 for 30 tablets
Famvir = $351 for 30 tablets
ST 246 = $255?????? for 28 capsules
A little basic research here confirms that the pricing of a one of a kind, technology breakthrough drug with a limited market like ST-246 is MORE than fair.
NO….I’m not a PR guy…..I’m a retired General who used to run the nation’s NBC response program. This thread is almost as ridiculous as the initial one in the LA Times. I could write another article as long as the initial post just refuting many other errors….but it isn’t worth the effort trying to change those blindly charging ahead.
A lot of food products posting on here today!
Now, in response to the author’s comment that it is absurd to think that labs will be broken into and sample of variola stolen. It may be absurd to think that this is a threat, but it is even more absurd to think this is the only reason to stockpile. As Ken mentioned there are various rogue states that are strongly suspected to have stocks of variola, but as Ken suggested it goes much deeper. The more probable source for a conventional, or weaponized strain (by the way vaccine can not be assured to work here), is synthetic biology. The genome is in the public domain, and could be accomplished by setting up a lab and modifying another form of orthopox or by contracting a genetic foundry to do the work. Don’t take my word, do some research on this and you’ll be amazed at what you’ll find. So now that we understand how it could be sourced, let’s go into why it it so important to have an antiviral in addition to a vaccine.
The reason why it is imperative for the BARDA to stockpile this CURE under Project Bioshield (a bush program that funded Siga’s ST-246 program well before Obama was in office) is 2 fold. While the vaccine will help those it is given to, it will only ‘take’ if administered in a controlled setting well before infected person becomes symptomatic. Once symptomatic, the vaccine is worthless. In our ever globalized/mobile society, there would be multitudes of infected people falling into this category, emerging simultaneously around the world. EVEN AFTER YOU ARE SYMPTOMATIC ST-246 CURES THE INFECTED and can be taken orally. It could even be distributed through the postal system to avoid the dissemination of the disease at public vaccination facilities. Because of fear of vaccination there will also be some portion of our population that will simply refuse to get vaccinated. The second reason why ST-246 is needed in our stockpile, is to treat the estimated 4% of our population that the vaccine simply will not generate an immune response in. This group, made up of the sick, the elderly, & immunocompromised individuals can only be helped by an antiviral like ST-246 (This is why the original RFP was looking for the optional 12m add-on courses).
(…cont’d)
It is unfortunate that these facts are getting lost in the quest launched by the Los Angeles Times reporter David Willman and Senator Claire Mccaskill. Like Ken, In my opinion they are either flat-out uninformed, or being compensated by Chimerix or through their lobbying arm McKenna, Long, and Aldridge. Here is a write-up on their relationship: http://vfcsstockhouse.blogspot.com/2011/06/siga-are-high-profile-conflicts-of.html
From MKA’s website, here is the profile on Chimerix’s top gun John Clerici. He reeks of pay for play cronyism, if anyone does. http://www.mckennalong.com/professionals-JohnClerici.html
“His practice centers on working with new entrants to the government marketplace and assisting existing government contractors to develop effective government affairs strategies for selling goods and services to the federal, state and local governments, particularly in the biotechnology, pharmaceutical, and public-private partnership arena. These strategies involve all aspects of government affairs, including providing targeted legislative and regulatory solutions, public relations strategies, legal advice regarding appropriate contract vehicles and corporate structures to maximize business opportunities. ”
Yeah ok!
I just tried posting but made the error of putting too many links into one thread so I’ll try again and apologize in advance if there is any double posting.
I just want to say that it is refreshing to see Ken Chowder putting link based facts out there instead of the usual politically charged speculation based rhetoric normally seen surrounding this discussion. I, like Ken, have been following Siga for years. I am a retail investor not affiliated with the company in any way who believes in the science behind ST-246 and it’s pipeline. You can accuse me as well of being part of Siga’s PR department or whatever you like, but these are the facts about me. I am not going to allow any uninformed reporters, senators, or random politically myopic lifetime bloggers aid in the destruction of my investment and as a result my livelihood and family. You would try to protect your own, wouldn’t you?
Anyway Ken has thankfully covered most of the facts so I won’t repeat everything he said, but I just want to say a few things, and reiterate a few others.
Regarding efficacy, ST-246 has been used 4 times in human vaccinia infections. Vaccinia is what the smallpox vaccine is made from and is a closely related virus to variola (smallpox). Here is one such case. Notice the 2007 date, well before Nobama was in the picture: http://www.news-medical.net/health/Eczema-and-Vaccinia-Virus.aspx
ST246 has been tested in multiple CDC sanctioned clinical trials to date for safety. It has demonstrated a completely safe profile. Here are the results from the 100 person study:
http://clinicaltrials.gov/ct2/show/NCT00907803?term=ST-246&rank=1
Nal wrote: “No one needs a CURE for a disease that only exists in labs.”
The government thinks they need cures for various kinds of possible bioterror weapons, including smallpox and anthrax. Maybe you don’t think you need to be cured of smallpox, but if a smallpox attack happened, you might change your mind.
BARDA, the government agency, was started during the Bush administration with this goal in mind. It is not a Democratic nor a Republican project; it has had broad-based two-party support.
The no-bid status happened because BARDA couldn’t manage to make a competitive RFP without Chimerix fouling the legal waters with challenges each time.
And the project manager, Michele Gray, probably got fired for that very reason: because Chimerix managed to postpone the execution of the contract for two years. (The initial RFP was supposed to be concluded with an award in Sept. 2009.)
Like any and every emerging biotech company, Siga has gone years and years before making any profit (it is still yet to make a profit).
As you all know, there is no “natural” market for a drug made to combat a bioterror attack; the only market is the government (and other governments). The whole idea behind the invention of BARDA was to try to make it profitable for a private company to develop drugs against possible bioterror attacks. If you keep in mind the fact that Siga’s been around at least 7 years, and this is its first contract — and the fact that the government is probably its only customer — it only makes sense that it should have a good profit margin on the contract, after losing money for seven years.
What is really remarkably absurd about this media attack on Siga is that Siga is Barda’s success story. This is the ONLY disease for which Barda can claim to have helped develop a drug that works NOW. Meanwhile, it gives out lots of grants to companies like Pharmathene and EBS (for anthrax antivirals that the FDA has estimated are at least 7 years away from being approved), and quite frankly it would make sense to attack THOSE grants. But Siga’s drug, despite what Hillman claims in the article, is probably just a year or two away from FDA approval (they have to do one more safety test, and have been discussing dosing with the FDA for a long while). And yet it is THIS contract, of all the dubious grants and contracts being handed out by BARDA, that has come in for media and now congressional criticism. And why? Because the attack has been orchestrated by Chimerix.
Ken Chowder:
No one needs a CURE for a disease that only exists in labs.
This is not about Chimerix. That’s why they’re not mentioned in my post. It’s about the way the contract was negotiated. It’s about the appearance of politicians interfering with government contracts to get sweetheart deals for donors.
Made some changes to my post:
Changed “no-bid” to “single source”.
Added paragraphs about FDA approval.
Rearranged some paragraphs to group topics together.
(I have no idea what the above movie is about, I apparently watched it and it’s sequel about 5 times each in a loop while in an ICU. I do remember realizing it was Ron Perlman and wondering why he was in the longest movie ever.)
Let’s remind everyone why Ron Perlman really wants this drug. It’s most likely to either reverse his prior insanity with medical experimentation, or to further create some twisted evil mutant army.