FDA Dental-Kit Decision Tumbles Xytronyx Stock

Friday’s announcement that the Food and Drug Administration won’t immediately clear Xytronyx’s periodontal disease detection kit for the domestic market sent the San Diego-based company’s stock tumbling.

The biomedical company’s stock gained back $3 to $16.25 on Monday during American Stock Exchange trading, but Xytronyx failed to recoup most of the ground lost on Friday when the company tumbled $14.25 to $13.25 after word of the FDA’s decision.

Although Xytronyx officials did not return telephone calls Monday, some biotech industry observers viewed the FDA’s decision as further proof that the FDA’s regulatory review process is in need of an overhaul.

That belief is driven by the fact that Xytronyx, and Colgate-Palmolive, its exclusive worldwide distributor, are shipping nearly 50,000 PerioGard Periodontal Tissue Monitor kits to dentists in Denmark, Italy and Greece, where the product is cleared for use.

“It’s ridiculous that European and Japanese patients and their doctors have more flexibility (than domestic patients) when it comes to (using) these new products,” said Forrest Anthony, president of the Assn. of Biotechnology Cos., a Washington, D.C.-based trade group.

Proponents of the lengthy and expensive FDA approval process, which can last as long as 10 years and cost manufacturers as much as $50 million depending on the product, say the reviews are necessary to safeguard Americans’ health.

The Xytronyx kits include a strip that, when pressed against teeth and gums, detects periodontal diseases. FDA officials last week cited “several deficiencies” in the company’s application for delaying approval of the kits, Xytronyx officials said Friday in a prepared release.

Xytronyx’s disease detection kits are “a good example” of a product that is not being sold in the U.S. market, despite having successfully completed regulatory reviews in foreign countries, said Anthony, who is also chief executive officer of Quality Biotech Inc., a New Jersey-based quality assurance testing laboratory.

Delays in the introductions of new diagnostic and therapeutic drugs “can even be more shocking” when U.S. regulators are slower than their European counterparts to approve drugs to treat life-threatening diseases, Anthony said.

Although few biotech observers would do away with comprehensive FDA reviews, some worry that the process is sapping the sometimes precarious financial health of the nation’s biotech start-ups.

Cash-strapped companies in the biotech industry generally “can’t afford” to wait years for the slow-moving FDA to approve their products, Anthony said. “If the biotech industry in the U.S. is going to flourish, we’re going to have to shorten the FDA approval cycle,” Anthony said.

The alternative to a faster review process is losing the nation’s lead over foreign competitors in the fast-paced biotech industry, Anthony said. “It’s another example of discovered (in the U.S.) but commercialized and used abroad,” Anthony said.

Yet, despite a growing public awareness of the increasingly vital role that biotechnology is playing in the medical arena, “the FDA, in recent years, has been slowing down” its new-drug review process, said Bruce Merchant, vice president of San Diego-based Viagene, which is developing therapeutic drugs for people with AIDS.

“In Europe, though, the process is speeding up,” Merchant said. “And we’re now seeing some efforts to make the approach in this country more similar to those in leading European countries.”

Biotech companies--and large, U.S.-based pharmaceutical manufacturers--do their best to move products through European reviews in order to generate revenue while products are winding their way through the U.S. process.

“We’re interested in establishing a presence in Europe at an early stage of our company,” said David Kabakoff, president and chief executive of Corvas International, which has established a research and development center in Belgium. On Monday, Corvas signed a collaborative research and development agreement with Centocor, a Malvern. Pa.-based biotechnology company.

Corvas, which is pursuing monoclonal antibody-based drugs, hopes to eventually use that office to speed its European product reviews. “Anything that facilitates approvals is a plus,” Kabakoff said.

Biotech and drug industry observers said that European regulators have trimmed the time it takes to review new drugs by contracting parts of their complex reviews to outside laboratories. European regulators also give drug manufacturers wider leeway when it comes to using data gathered for use by regulators in other countries.

There has been--and continues to be--opposition in the United States to those kinds of steps.

A Congressional coalition that includes Sen. Edward Kennedy and Reps. John D. Dingell (D-Mich.) and Henry A. Waxman (D-Los Angeles) last week argued against portions of a President’s Council on Competitiveness report that calls for a sweeping, 11-point plan to accelerate the FDA’s drug approval process.

The legislators have applauded the council’s goal of speeding the review process for drugs that would treat life-threatening diseases. But they voiced opposition to speeding the process for other drugs, and slammed the use of outside laboratories and the utilization of data generated by foreign regulators.

Biotech industry executives, however, offer a dramatically different view of the council’s recommendations.

“If efficiently and thoroughly implemented, this set of recommendations would represent the most sweeping and fundamental change in the (FDA) regulatory environment in the past 50 years,” Merchant said.

The council’s recommendations are “really quite revolutionary . . . they would change the way the FDA does business,” Anthony said. “It would begin to cut down on approval time . . . which would do more for the biotech industry and investors than any other event that I can think of.”

But biotech executives also are urging legislators to increase funding for the FDA, according to Martin Nash, chief operating officer of NeuroTherapeutics, a San Diego-based company. The FDA’s inflation-adjusted budget has actually declined over the past decade, even as the complexity of the Administration’s job has increased dramatically, Nash said.

Mainstream drug manufacturers have, for decades, been pressing the FDA to speed its review process. But past attempts generally have failed, according to industry observers.