Select Developments in Biotechnology Law and the Biotechnology Industry

Patent for New Muscular Dystrophy Treatment

Muscular dystrophy can be a heart-wrenching condition, as it progressively destroys quality of life—and even life itself—through weakening, damaging, and even killing muscle tissue. The condition is perhaps best known to U.S. citizens through the Jerry Lewis Muscular Dystrophy Association (MDA) telethons, which certainly were an annual feature of this writer's childhood television viewing.

Recently, Cleveland, Ohio-based Milo Biotechnology received patent number 8,895,309 for a gene therapy designed to reverse muscular dystrophy. The therapy has showed promise in early clinical tests involving (at present) three types of muscular dystrophy. The patent is assigned to Nationwide Children's Hospital in Columbus, Ohio (where the therapy covered by the patent was developed) and is licensed to Milo Biotechnology.

Astrazeneca Expands Manufacturing in Maryland to Better Link Research and Manufacturing

British drugmaker AstraZeneca announced that it is expanding its Maryland manufacturing operations by enlarging a production facility at MedImmune, a Maryland-based subsidiary. The $200 million expansion will add 300 workers and will let more of MedImmune's manufacturing be carried out near its research labs. According to MedImmune Chief Operating Officer Matt Bell, proximity between research and manufacturing facilities is critical for biotechnology companies because the line between R&D and manufacturing is thinner for biotechnology than for many other industries. The manufacturing process is often kept firmly in mind during drug development, for example, and since small changes in production methods can have enormous impacts on the effect of biotechnology products, it's critical to make sure that the production process doesn't change a drug's effectiveness.

AstraZeneca's new expansion is not atypical; overall, Maryland has been adding biotechnology manufacturing capacity and jobs. For example, biotechnology manufacturing jobs in the state have increased by 28% over the last decade. Biotechnology manufacturing jobs are highly coveted by states, since they command higher wages and are less-easily offshored than less-specialized manufacturing jobs. Maryland and neighboring Virginia and Washington, D.C. boast a number of top-notch universities, making for a more highly educated workforce available, an asset to biotechnology companies.

Roche to Acquire Austrian Biotechnology Company for its BI-Specific Antibody Research

Why make when you can buy? That's a common question for businesses, since it's often better to acquire someone else's already-developed—or at least in-development—product or technology rather than invest in developing it yourself from scratch. The question is particularly important in the pharmaceutical world, where long research and development times means that acquiring a company with a head start in a promising area can shave years off time-to-market. Recently, Roche answered the “make or buy” question by choosing to buy: it announced an agreement to acquire a privately held Austrian biotechnology company, Dutalys GmbH. Dutalys specializes in bi-specific antibodies, which—as the term “bi-specific” implies—bind to two different antigens, not just one, with the potential to increase effectiveness. The deal is structured with around one-third of the payment being “upfront” to Dutalys shareholders, and around two-thirds being paid over time based on the achievement of certain milestones or goals—a common way to structure the acquisition of privately held business, to incentivize the acquisition's key stakeholders to keep their collective eye on the prize.

Federal Circuit Applies Association for Molecular Pathology V. Myriad Genetics to Declare Isolated Short Primers Derived from Genomic DNA to be Patent-Ineligible Subject Matter

The U.S. Supreme Court's decision in Association for Molecular Pathology v. Myriad Genetics (“Myriad”) continues to reverberate through U.S. patent law—especially biotechnology-related patent law. On December 17, 2014, for example, the Federal Circuit applied the Supreme Court's Myriad reasoning in University of Utah Research Foundation et al. v. Ambry Genetics Corp. to hold that isolated short primers derived from genomic DNA, as well as certain diagnostic claims, were patent-ineligible subject matter.

The primers in question were short, synthetic, single-stranded DNA molecules, which serve as a starting point for DNA synthesis. Unfortunately for the patent holder (Myriad Genetics, which is continuing to test the boundaries of the Myriad ruling), the Federal Circuit stated that DNA “can only be patent eligible as a composition of matter if it has a unique structure, different from anything found in nature”—which Myriad's primers did not. Myriad's two main arguments—that the primers were synthetically replicated, like the cDNA allowed as patentable in Myriad; and that single-stranded DNA is not found in nature—were unavailing:

• It's not enough that a product or material be “synthesized”—it also has to differ in some material way from something found in nature. Unlike the cDNA in the Myriad case, which excluded introns found in naturally occurring DNA, the primers in the instant matter were the same as natural DNA.

While the effects of this decision—as the full effects of Myriad and its other progeny—remain to be seen, it's certainly not a decision offering encouragement to the biotechnology industry, since it excludes from patentability yet more biotechnology products.

European Union Report Shows Pharmaceuticals and Biotechnology is the Top Industrial Sector for R&D Spending

The 2014 EU Industrial R&D Investment Scoreboard published by the European Commission shows that the Pharmaceutical and Biotechnology sector invested €98bn in R&D, while the industrial sector with the next-highest R&D spend, Technology Hardware and Equipment, spent almost 13% less, or €85bn. That finding makes sense, of course: a (if not “the”) key factor for the health of a pharmaceutical or biotechnology company is its “pipeline” of new drugs, compounds, and therapies, and those come from research and development.

The report also showed that U.S. companies in R&D heavy sectors are outspending their European counterparts by a factor of roughly 2.3; that is, U.S. companies are collectively spending two-and-a-third times as much on R&D as like European companies. That finding, also, makes sense: since the U.S. economy is substantially healthier at present than European economies, U.S. companies are in the enviable position of being able to spend more.

New Jersey Company Looking to Bring Recombinate Technology to Production of the FLU Vaccine

The most traditional way to produce the flu vaccine is by injecting viruses into chicken eggs. The process is well understood and, as can be seen from the fact that it's been in use for more than 70 years, is comparatively simple. But it's also fairly slow; can be subject to variations in quality; and is capital intensive—none of which makes it an ideal solution for a fast-moving (and mutating) target like the flu.

Vaxinnate, a Cranbury, New Jersey biotechnology firm, thinks there's a better way: the use of recombinant technology, which the U.S. Food and Drug Administration (FDA) approved for use in creating flu vaccines in 2013. According to Vaxinnate Chief Executive Officer Wayne Pisano, the use of recombinant technology for vaccine production offers a number of advantages, such as:

• Higher yields—the ability to make several times as many doses as a comparable non-recombinant production facility;

However, don't expect to see Vaxinnate vaccines on the market in time for 2015's flu season—given the need for extensive testing, including vital (but time-consuming) human testing, Vaxinnate's flu vaccine is not expected to be ready for widespread distribution until 2019.

Indian Institute of Technology Launches Biotech Incubator

Reinforcing the importance placed on biotechnology as growth sector in India, the Indian Institute of Technology, Madras has launched a biotechnology incubator, with the goal of incubating 50 companies per year. Biotech start-ups need the support—they're “hothouse flowers” compared to many other technology-based firms, with long breakeven time frames (typically 10 years or more, as compared to, for example, an IT start-up, which might reach breakeven in four years or less) and frequently the requirement for expensive equipment. Incubators, which help nascent companies get started along the road to sustainability, can play an important role in fostering an industry's growth, since many of the most innovative ideas and products come from small start-ups.