The US Biotechnology Industry
A Market Report
March 2013
Bureau AWEX – New York
Edith Mayeux, Attaché économique et commercial
Patrizia Venditti, Assistante commerciale
2
Contents
I. INDUSTRY OVERVIEW AND MARKET SEGMENTATION................................................ 3
II. THE US BIOTECH LANDSCAPE............................................................................................... 5
III. RESEARCH & DEVELOPMENT..............................................................................................
DRUG DEVELOPMENT AND APPROVAL PROCESS........................................................
R&D SPENDING.......................................................................................................................
ACTIVE CLINICAL TRIALS...................................................................................................
6
6
8
9
IV. BLOCKBUSTER BIOLOGICS IN 2011 - 2012.........................................................................
TOP NINE CATEGORIES OF BIOLOGIC DRUGS IN TEMRS OF US SALES IN 2011....
COMPANIES WITH THE TOP SALES OF BIOLOGIC DRUGS IN 2011...........................
2012 MARKS A BIG YEAR FOR NOVEL DRUGS APPROVAL........................................
TOP SELLING BIOLOGICS OF 2012.....................................................................................
11
12
14
15
20
V. THE US IN-VITRO DIAGNOSTIC TESTS MARKET............................................................ 21
VI. CURRENT TRENDS................................................................................................................... 22
MERGERS & ACQUISITIONS...............................................................................................
STRATEGIC ALLIANCES......................................................................................................
VENTURE CAPITAL...............................................................................................................
FEDERAL FUNDING..............................................................................................................
U.S. CONGRESS' SEQUESTRATION FISCAL POLICY.....................................................
R&D OUTSOURCING............................................................................................................ .
PERSONALIZED MEDICINE.................................................................................................
PATENT CLIFF: GENERICS POISED TO CAPTURE MOST OF SALES.........................
BIOSIMILARS: FDA INITIATES PLAN TO SPEED UP APPROVAL PROCESS............
22
23
25
27
29
29
30
30
31
VII. FDA REGULATIONS............................................................................................................... 33
BIOLOGICAL PRODUCTS.................................................................................................... 33
IN-VITRO DIAGNOSTIC PRODUCTS REGULATION...................................................... 40
3
I. Industry Overview and Market Segmentation
The biosciences as an “industry” maintain a unique set of characteristics. They represent a varied set of
companies that span manufacturing, services and research activities, a highly skilled workforce, and a whole
range of products and services classified among nearly 30 industry segments. Much more than other sectors,
the biosciences are dynamic and evolve with the latest research and scientific discoveries with tremendous
widespread impact on food, medicine, and alternative fuels. The common link among this diverse set of
companies is an application of knowledge as to how living organisms function. The biosciences transcend
industry classification, making the sector difficult to define. The existing federal statistical system does not
identify one single industry code that encompasses all bioscience activities; therefore, defining the industry
requires a careful examination of all industries engaged in bioscience-related activity. In assisting numerous
states and regions in developing their bioscience industry base, Battelle has identified four major subsectors
that represent the core of current and likely future bioscience economic activity.1 The four major subsectors
of the biosciences include the following:

Agricultural Feedstock and Chemicals, involving industries, for example, that utilize advances in
biochemistry and biotechnology for producing products involved in crop protection, advanced seed,
agricultural processing, bio-fuels, biodegradable materials from plant-based feedstock, sustainable
industrial oils, lubricants and enzymes and bio-based catalysts for industrial processes.

Drugs and Pharmaceuticals, involving industries that produce vaccines, biopharmaceuticals,
and tissue and cell culture media.

Medical Devices and Equipment, involving industries that produce a variety of biomedical
products such as surgical instruments, orthopedic implants, bio-imaging equipment, dental
instruments, and patient care products (such as walkers, wheelchairs and beds).

Research, Testing, and Medical Laboratories, involving emerging companies working to
develop and commercialize new drug discovery/delivery systems and gene and cell therapies as
well as more service-oriented firms involved in pre-clinical drug development, clinical trials, and
research/laboratory support services. While primarily focused on human health, these companies also
include those that are focused on research and testing for agriculture and veterinary uses.
For this fifth biennial report, Battelle and BIO have worked together to re-examine which detailed
industries are best understood to comprise the bioscience industry. This examination has led to the inclusion
of a new fifth subsector for the bioscience industry in light of the changing nature of bioscience technology
and applications. This new subsector is categorized as bioscience-related distribution. Increasingly
bioscience-related distribution involves specialized approaches such as cold storage and highly regulated
__________________
1
Battelle/BIO 2012 State Bioscience Industry Development Report
4
product monitoring, and new technologies for distribution such as automated pharmaceutical distribution
systems. These include three detailed distribution industries: one associated with medical equipment and
device distribution; another with drug distribution; and a third with agricultural-related chemicals and seed
distribution. Each of these bioscience-related industries are becoming integral in the primary production of
bioscience goods in an age of advanced logistics and the increasing specialized nature of biosciences product
development.
Research and economic activity within a fifth center of bioscience activity might include academic health
centers, research hospitals, and other research-driven institutions. Many U.S. hospitals partner with
universities and other research institutes to further advances in the biosciences with a particular focus on
healthcare applications. Unfortunately, current industrial classifications and available data do not allow for
an isolation of these research-oriented establishments outside of the larger hospitals sector. Though it cannot
be reliably quantified, the sector should be recognized as an important element of the bioscience industry
cluster.
The bioscience subsectors each operate in distinct markets, with their own sets of product and service
offerings, suppliers, and regulatory environments. To varying degrees, the subsectors do intersect in
beneficial ways. For example, bioscience research directly impacts the development of new drugs and
devices and leads to new uses for agricultural feedstocks; testing laboratories enable breakthroughs in
medical devices; and agricultural research contributes to further innovation in drugs and pharmaceuticals as
well as research and testing. This report will focus on the drugs & pharmaceuticals subsector.
Source: Battelle/BIO 2012 State Bioscience Industry Development Report
5
II. The US Biotech Landscape
The US biotech industry remains the benchmark in international terms. It is considered to be the most
successful in the world and it is likely to maintain this leading position for the foreseeable future. The
vibrant R&D environment and access to venture capital from investors have been the key to its success over
the years. Growing at about an annual rate of 9%, the industry in 2011 included about 1,870 companies of
all sizes with combined annual revenues over $58.8 billion and total market capitalization of about $278
billion. Forecasts predict the worth of the industry revenues to touch US $95 billion by 2013.2
Top US Biotech Companies Ranked by 2012 Revenue
Company
Sales 2011
$17.27 billion
Amgen
$14.19 billion
Baxter
$9.70 billion
Gilead Sciences
$5.52 billion
Biogen Idec Inc.
$5.51 billion
Celgene Corp
$3.80 billion
Life Technologies Corp
$1.53 billion
Vertex Pharmaceuticals
$1.38 billion
Regeneron Pharmaceuticals, Inc.
$926.36 mil
Cubist Pharmaceuticals, Inc.
$916.08 mil
United Therapeutics Corp
Sources: http://www.genengnews.com and http://www.hoovers.com
US biotechnology at a glance, 2010 - 2011 (US $b)
2011
Public company data
Revenues
58.8
R&D expense
17.2
Net Income
3.3
Market capitalization
$278.0
Number of employees
98,560
Financing
Capital raised by public companies
25.4
Number of IPOs
10
Capital raised by private companies
4.4
Number of companies
Public companies
318
Private companies
1,552
Public and private companies
1,870
Source: Ernst & Young
Numbers may appear inconsistent because of rounding.
________________
2
RNCOS report "Healthcare Industry: US Biotech Market Analysis", December 2010
2010
61.1
17.2
5.2
$292.1
113,010
% change
-4%
0%
-36%
-5%
-13%
17.1
15
4.4
49%
-33%
-1%
320
1,594
1,914
-1%
-3%
-2%
6
The landscape for US biotech will continue to be a challenging one. For many smaller companies, raising
capital has become quite difficult, and the results are appearing in restructurings, layoffs, bankruptcies and
delistings on stock exchanges. According to the Biotechnology Industry Organization (BIO), there were
20% fewer active public US biotech companies in 2009 with total of 85 companies no longer listed. While
almost half are accounted for by acquisition, the other half are missing in action either bankrupted, liquidated
or "inactive", meaning they no longer report results to market authorities. At the other end of the spectrum,
several mature, successful biotechs were acquired by big pharma companies during 2012, and the merger &
acquisition trend will continue to be the preferred exit strategy in 2013 as well.
Demand for biotechnology research in the fields of medicine, agriculture, food, and science is driven by
insurers' willingness to pay for new medical treatments, the global need to produce more food for a rapidly
expanding population, and scientists' desire to find solutions for complex scientific and medical issues.
Funding for biotech research is often provided by venture capital funds hoping to cash in on new products.
The profitability of individual companies depends on the discovery and effective marketing of new products.
Because the market for potential products is so large, small biotechnology companies can co-exist
successfully with large ones if they have expertise in a particular line of research. The industry is capital
intensive: average annual revenue per worker is more than $350,000. Biotech firms face stiff competition
from pharmaceutical and other companies seeking to be first with a new product or discovery.
III. Research & Development
Drug Development and Approval Process
The biopharmaceutical development process is research-intensive in nature, requires significant investments
of time and money, and has uncertain outcomes. It begins with the identification and investigation of disease
targets and often includes the screening of thousands of compounds. Promising drug candidates then
undergo substantial preclinical and clinical testing prior to regulatory review by the FDA. The chart below
highlights the US drug development and approval process, illustrating the activities that occur during the
estimated 10 to 15 years needed for a new drug to reach the market.
Once a new compound has been identified in the laboratory, medicines are developed as follows:
● Preclinical Testing - A pharmaceutical company conducts laboratory and animal studies to show
biological activity of the compound against the targeted disease, and the compound is evaluated for safety.
● Investigational New Drug Application (IND) - After completing preclinical testing, a company files an
IND with the U.S. Food and Drug Administration (FDA) to begin to test the drug in people. The IND
becomes effective if FDA does not disapprove it within 30 days.
The IND shows results of previous experiments; how, where and by whom the new studies will be
conducted; the chemical structure of the compound; how it is thought to work in the body; any toxic effects
found in the animal studies; and how the compound is manufactured. All clinical trials must be reviewed
and approved by the Institutional Review Board (IRB) where the trials will be conducted. Progress reports on
clinical trials must be submitted at least annually to FDA and the IRB.
7
US Drug Development and Approval Process
Source: www.innovation.org

Clinical Trials, Phase I - These tests involve about 20 to 100 normal, healthy volunteers. The tests
study a drug’s safety profile, including the safe dosage range. The studies also determine how a drug is
absorbed, distributed, metabolized, and excreted as well as the duration of its action.

Clinical Trials, Phase II - In this phase, controlled trials of approximately 100 to 500 volunteer patients
(people with the disease) assess a drug’s effectiveness.

Clinical Trials, Phase III - This phase usually involves 1,000 to 5,000 patients in clinics and hospitals.
Physicians monitor patients closely to confirm efficacy and identify adverse events.

New Drug Application (NDA)/Biologic License Application (BLA) - Following the completion of all
three phases of clinical trials, a company
analyzes all of the data and files an NDA or BLA with FDA if the data successfully demonstrate both
safety and effectiveness. The applications contain all of the scientific information that the company has
gathered. Applications typically run 100,000 pages or more. The average review time for the 26 new
therapeutics approved by the FDA in 2007 was 11.1 months.

Approval - Once FDA approves an NDA or BLA, the new medicine becomes available for physicians
to prescribe. A company must continue to submit periodic reports to FDA, including any cases of adverse
reactions and appropriate quality-control records. For some medicines, FDA requires additional trials
(Phase IV) to evaluate long-term effects.
8
R&D Spending
Pharmaceutical and biotechnology companies are beefing up their R&D spending after remaining stable
during 2011 and 2012. EvaluatePharma, a pharma and biotech research firm, estimates R&D expenditures
will top $136 billion in 2013, up from $134 billion the previous year. R&D investments are on track to
exceed $149 billion by 2018, according to the analysts.
Source: http://www.genengnews.com
9
Active Clinical Trials
America's biopharmaceutical research companies have 907 biologics targeting more than 100 diseases,
according to a new report by the Pharmaceutical research and Manufacturers of America (PhRMA). The 907
medicines and vaccines in development include:

338 cancer therapeutics that target several different types of solid tumors, leukemia and lymphoma.
Monoclonal antibodies account for 170 of the 338 products in development.

176 candidates in development for an array of infectious diseases, including 134 vaccines.

71 medicines for autoimmune diseases, such as lupus, multiple sclerosis and rheumatoid arthritis.

58 treatments for cardiovascular diseases, such as congestive heart failure and stroke.

Other diseases include diabetes, digestive disorders, genetic disorders, neurologic and respiratory
disorders.
The report finds that the greatest amount of research is in monoclonal antibodies (mAbs), with 338 separate
mAbs in development, and vaccines, with 250 vaccines in clinical trials or under review at FDA.
Biologic Medicines in Development - by Therapeutic Category
Some medicines are listed in more than one category
Autoimmune Disorders
Blood Disorders
Cancer/Related Conditions
Cardiovascular Disease
Diabetes/Related
Conditions
Digestive Disorders
Eye Conditions
Genetic Disorders
Infectious Diseases
Musculoskeletal Disorders
Neurologic Disorders
Respiratory Disorders
Skin Diseases
Transplantation
Other
Source: http://phrma.org
10
Approved biotechnology medicines already treat or help prevent heart attacks, stroke, multiple sclerosis,
leukemia, hepatitis, congestive heart failure, lymphoma, kidney cancer, cystic fibrosis, and other diseases.
These medicines use many different approaches to treat disease as do medicines currently in the pipeline.
According to the report, there are 338 monoclonal antibodies, a laboratory-made version of the naturally
occurring immune system protein that binds to and neutralizes foreign invaders; 250 vaccines, a biological
preparation that improves immunity to a particular disease; 30 antisense drugs, medicines that interfere with
the communication process that tells a cell to produce an unwanted protein; and 10 interferons, proteins that
interfere with the ability of a cell to reproduce.
Biologic Medicines in Development - by Product Category
Antisense
Cell Therapy
Gene Therapy
Growth Factors
Interferons
Monoclonal Antibodies (mAb)
Recombinant Hormones/Proteins
RNA Interference
Vaccines
Other
Source: http://phrma.org
The practice of medicine has changed dramatically over the years through pioneering advances in
biotechnology research and innovation, and patients continue to benefit from the treatments that are being
developed. As medicines that address significant unmet needs are developed, future innovations in
biotechnology research will bring exciting new advances to help more patients.
11
IV. Blockbuster biologics in 2011 - 2012
In the United States, spending on expensive biologic drugs3 is growing more than ten times faster than
spending on traditionally-developed “small molecule”drugs.4
Global biologic drug sales are expected to reach nearly $200 billion by 2015, up from $138 billion in 2010.5
Currently, just under half of biologic drug spending is concentrated in the United States.6
According to a recent report from Nature Biotechnology, the US biotech sector grew modestly in 2011, with
total sales reaching $53.8 billion, or a 4.9% increase over 2010 sales (Fig. 2a). Driven by rising uptake of
monoclonal antibodies (mAbs) and insulin products, this increase was slightly better than the overall
pharmaceutical sector, which experienced growth of 3% in 2011.
The outlook for 2012-2013 seems to be improving, as several promising products, which are driving the
current growth, reach the market (Fig. 2b). However in the long term, the sector faces increasing difficulties
with reimbursement and the potential launch of biosimilars, which could impose downward pressure on unit
sales and pricing in this sector.
Figure 2: Growth trends in the United States biotech market for biologic drugs (2007–2011)
(a) Total sales and growth rate trends. (b) Quarterly sales growth for biologic drugs (2007–Q2 2012)
Source: Nature Biotechnology, "What's fueling the biotech engine - 2011 to 2012," Volume 30, Number 12, December 2012.
____________________
3
Biologic drug prices are an average of 22 times higher than traditional drug prices. A.D. So and S.L. Katz, "Biologics
Boondoggle," New York Times, March 7, 2010.
4
IMS Institute for Healthcare Informatics, "The Use of Medicines in the United States: Review of 2010," April 2011.
5
IMS Institute for Healthcare Informatics, "The Global Use of Medicines: Outlook Through 2015," May 2011.
6
IMS Institute for Healthcare Informatics, "The Use of Medicines in the United States: Review of 2010," April 2011.
12
In 2011, mAbs maintained their ranking as the best-selling class of biologics, with US sales reaching ~$20.3
billion, a 10.1% growth over their 2010 sales (Fig. 3), keeping companies with mAb products in the lead in
revenues (Fig. 5). There are now 36 US Food and Drug Administration (FDA) approved mAbs, sales of
which constitute ~38% of the total biologics market. Four new entrants to the market contributed $2 billion
in sales, whereas the three top-selling mAbs (Humira, Remicade and Rituxan) sold north of $3 billion each.
A second notable development has been the impressive growth in the market for recombinant hormones,
with insulin analogs accounting for three-quarters of sales. Finally, there has been a contraction of the
market for growth factors; in fact, it has almost halved, from $14.1 billion in 2006 to $7.9 billion last year.
ESAs (erythropoiesis-stimulating agents) continue to be the sector's downfall, and likely will continue to be
in the coming years as more competing products reach the market.
Figure 3: Top nine categories of biologic drugs in terms of US sales in 2011
(a) US sales ($ billions) of these drug categories. (b) Growth rates of the categories in 2010 and 2011. The red boxes indicate the
categories showing the fastest growth rate during that period. Manufacturers of therapeutic enzymes do not break out US sales, so
those sales were estimated assuming 20–30% of worldwide sales were generated in the United States.
Source: Nature Biotechnology, "What's fueling the biotech engine - 2011 to 2012," Volume 30, Number 12, December 2012.
13
Ten mAb products constitute 86% of the total sales of this sector (Fig. 4). Among them, six products
experienced high double-digit growth, whereas four products either did not change or decline in sales.
Figure 4: Trends in US sales of mAbs
(a) 2011 sales for US markets for mAbs ($ billions). 'Others', all mAbs with sales <$300 million per year. (b) Trends in US sales
show Humira leading, Stelara rising and Herceptin lagging.
Source: Nature Biotechnology, "What's fueling the biotech engine - 2011 to 2012," Volume 30, Number 12, December 2012.
Sales trends (Fig. 5) over the past five years reveal that several companies have outperformed their
counterparts and growth of the sector as a whole. Since 2006, Genentech has grown its US sales by nearly
$5 billion, from $7 billion to $11.8 billion, largely from expanding indication of its top-selling drug, Rituxan,
Avastin and from sales of Lucentis . Roche's acquisition of Genentech in 2009 has catapulted the big
pharma company to 2nd place overall in US biologic sales (before the merger, the Swiss company has US
sales of only $0.5 billion for interferons).
14
Figure 5: Companies with the top sales of biologic drugs in 2011
(a) Total US sales (in $ billions) of the top 13 companies. (b) Annual growth rates of the top ten companies. Red boxes indicate
companies that had biologics sales growth of >10%. Genentech comprised $11.8 billion of Roche's $12.3 billion of US sales. For
the purpose of this analysis, Rituxan US sales have been split equally between Genentech and Biogen Idec; Erbitux US sales were
split 40/60 between Lilly and BMS.
Source: Nature Biotechnology, "What's fueling the biotech engine - 2011 to 2012," Volume 30, Number 12, December 2012.
Two other companies that have seen impressive growth and movement up the rankings are Novo Nordisk
and Sanofi. Novo has grown its US sales from $1.7 billion five years ago to 4 billion in 2011. Sanofi has
shown even greater growth, moving from 7th place in 2006 to 5th place in 2011, with sales of insulin
(Lantus) boosting revenues in the United States from $1.3 billion to $3.9 billion. The addition of the
Genzyme franchise, with its cadre of enzyme replacement therapies, could further add to Sanofi's bottom
line.
15
2012 Marks a Big Year for Novel Drugs Approvals
According to the Biotechnology Industry Organization there were a total of 40 novel drugs approvals in
2012, an increase of 29% from the robust 31 approvals in 2011. The top three therapeutic areas (cancer,
cardiovascular, and metabolic) accounted for 60% of novel drug approvals. The majority of approvals (70%)
were small molecule New Drug Applications (NDAs) approved through FDA's Center for Drug Evaluation
and Research (CDER).
Source: http://www.biotech-now.org
On the biologics front, it was not antibodies that stole the show last year, but rather therapeutic enzymes and
synthetic peptides. Among enzymes approved was Jetera, a recombinant protease from Belgium-based
Thrombogenics that can be used to treat vision distortions. Protalix and Pfizer brought forward the first
enzyme derived from plant cells. This recombinant enzyme, now branded as Elelyso, can now be used to
treat adult Type 1 Gaucher Disease. Another recombinant enzyme, a carboxypeptidase named Voraxaze
from BTG International, was approved for lowering methotrexate levels in patients undergoing
chemotherapy.
The first FDA approval of a synthetic peptide for
respiratory distress syndrome (RDS) in premature
infants was granted to Discovery Labs for Surfaxin. In
the first half of 2012, the media and Wall Street
spotlight focused on peptides heading into competitive
markets: Amylin's (now Bristol-Myers Squibb)
Bydureon, a long acting GLP-1 agonist for Type 2
Diabetes and Affymax's Omontys, a long acting
erythropoiesis-stimulating agent for the treatment of
anemia due to chronic kidney disease in patients on
dialysis.
Only two new monoclonal antibodies were approved in
2012 - Genentech's (Roche's) Perjeta, a new anti-Her-2
antibody that blocks dimerization, and Human Genome
Sciences' Abthrax Mab for Anthrax.
Source: http://www.biotech-now.org
16
Orphan and rare diseases also took the stage in
2012, with 15 molecules approved under the
FDA's Orphan designation. Late in December,
small biotech Aegerion won its first FDA
approval for Juxtapid to treat homozygous
familial hypercholesterolemia, a rare genetic
disorder that causes unmanageable cholesterol
levels. It was Vertex that kicked off the year
for the rare disease space with Kalydeco, used
for a specific mutation in Cystic Fibrosis
patients. The rare occurrence of multi-drug
resistant tuberculosis can now be treated with
Jannsen's (JNJ's) approved Sirturo. Novartis
also added to the orphan portfolio with a
somatostatin analog (Signifor) for Cushing's
Disease patients unable to undergo pituitary
surgery or whose surgeries were not successful.
Source: http://www.biotech-now.org
A Total of 40 Novel Drug Approvals for the year 2012
Drug
Company
Approved Indication
1. Voraxaze (enzyme)
BTG International
Lowers the blood level of the
chemotherapy drug methotrexate
2. Picato (small molecule)
Leo Pharma
Treats actinic keratosis, a precancerous
skin condition, faster than previous
treatments
3. Inlyta (small molecule)
Pfizer
cKIT inhibitor for advanced kidney cancer
4. Bydureon (peptide)
Amylin Pharmaceuticals/
Bristol-Myers Squibb
A weekly injectable GLP-1 mimetic for T2
diabetes
5. Erivedge (small molecule)
Curis/Genentech
Smoothened receptor antagonist targeting
hedgehog signaling for treatment approved
for metastatic basal cell carcinoma
6. Kalydeco (small molecule)
Vertex Pharmaceuticals
Potentiator of CFTR that treats a rare form
of cystic fibrosis in people with the G551D
mutation in CFTR
7. Zioptan (small molecule)
Merck
Treats elevated eye pressure in people at
risk for glaucoma
8. Surfaxin (peptide)
Discovery Laboratories
The first FDA-approved synthetic peptide
for respiratory distress syndrome in
premature infants
17
9. Gintuit (cell-based)
Organogenesis, Inc.
Cell-based scaffold for mucongingival
conditions in adults
10. Omontys (peptide)
Affymax
Pegylated analog of erythropoietin, first
new treatment for anemic kidney patients
11. Stendra (small molecule)
Vivus
The first new Erectile dysfunction drug in a
decade, a faster-acting PDE5 inhibitor
12. Elelyso (enzyme)
Protalix/Pfizer
The first plant cell-based enzyme
replacement therapy for the treatment on
Adult type 1 Gaucher Disease
13. Perjeta (mab)
Roche/Genentech
Anti-Her-2 antibody that blocks
dimerization for the first line treatment in
breast cancer
14. Menhibriz (vaccine)
GSK
Combination vaccine to prevent
meningococcal disease and Haemophilus
influenzae type b in children
15. Belviq (small molecule)
Arena/Eisai
5HT-2c agonist for obesity, the first weight
loss drug approved by the FDA in over a
decade
16. Myrbetriq (small
molecule)
Astellas
β3 adrenergic receptor agonist for
overactive bladder by improving bladder
storage
17. Qsymia (small molecule)
Vivus
Weight loss pill that combines phentermine
(for norepinephrine release) and topiramate
(an antiepilelptic drug)
18. Kyprolis (small molecule)
Onyx
Proteasome inhibitor for patiets with
multiple myeloma who have failed other
treatments
19. Tudorza Pressair (small
molecule)
Forest Laboratories
Inhaled muscarinic antagonist for
bronchospasm associated with COPD,
including chronic bronchitis and
emphysema
20. Vascepa (small molecule)
Amarin
Ultra-concentrated form of omega-3 fatty
acid (fish oil) for patients with high
triglycerides
21. Marqibo (small molecule)
Talon
Nanoparticle-encapsulated vincristine
sulfate (liposome injection) for Acute
Lymphoblastic Leukemia
18
22. Stribild (small molecule)
Gilead
Four drugs in one pill for once per day HIV
treatment
23. Linzess (peptide)
Ironwood/Forest
Laboratories
Peptide agonist of guanylate cyclase 2C for
irritable bowel syndrome with constipation
and chronic constipation
24. Xtandi (small molecule)
Medivation
Androgen receptor antagonist for
metastatic castration-resistant prostate
cancer who have previously received
docetaxel
25. Bosulif (small molecule)
Pfizer
Bcr-abl kinase inhibitor for chronic
myelogenous leukemia
26. Stivarga (small molecule)
Bayer
VEGFR,TIE2 tyrosine kinase inhibitor for
metastatic colorectal cancer
27. Aubagio (small molecule)
Sanofi
Dihydroorotate dehydrogenase inhibitor for
relapsing forms of multiple sclerosis
28. Jetrea (enzyme)
Thrombogenics
Recombinant protease with activity against
fibronectin and laminin to treat
symptomatic vitreomacular adhesion,
distortion of vision
29. Fycompa (small
molecule)
Eisai
Glutamate receptor antagonist for the treatment
of refractory partial-onset seizures (epilepsy)
30. Synribo (small molecule)
Teva
Ribosome inhibitor for chronic myeloenous
leukemia
31. Xeljanz (small molecule)
Pfizer
JAK inhibitor for 2nd line treatment for
rheumatoid arthritis - oral
32. Cometriq (small
molecule)
Exelixis
c-MET, VEGFR2 inhibitor for medullary
thyroid cancer that has metasticized
33. Iclusig (small molecule)
Ariad
Tyrosine kinase inhibitor for chronic
myelogenous leukemia (CML) resistant or
intolerant to other TKIs
34. Signifor (small molecule)
Novartis
Somatostatin analog for Cushing’s Disease
patients unable to undergo pituitary surgery
or whose surgeries were not successful
35. Abthrax (mab)
Human Genome Sciences/
GSK
Monoclonal antibody for the treatment of
inhaled anthrax
19
36. Gattex (peptide)
NPS Pharmaceuticals
GLP-2 analog for short-bowel syndrome,
helping their bodies better absorb nutrients
37. Juxtapid (small molecule)
Aegerion
MTP (microsomal triglyceride transfer
protein) inhibitor for HoFH (homozygous
familial hypercholesterolemia, a rare
genetic disorder that causes unmanageable
cholesterol levels
38. Eliquis (small molecule)
Bristol-Myers Squibb,
Pfizer
Factor Xa inhibitor used as an
anticoagulant for patients with the heart
rhythm disorder atrial fibrillation
39. Sirturo (small molecule)
Janssen/J&J
Mycobacterial ATP synthase inhibitor for
pulmonary multi-drug resistant tuberculosis
40. Fulyzaq (small molecule)
Salix Pharmaceuticals
Chloride channel inhibitor for the
symptomatic relief of non-infectious
diarrhea in adult patients with HIV/AIDS
on anti-retroviral therapy
Sources: http://www.biotech-now.org
Biologics take top spots in best selling drugs of 2012
Genetic Engineering News recently published an article titled "Top 20 Best Selling Drugs of 2012", in which
they laid out the top sellers for the year. Of the top twenty spots, eight were captured by biologics.
Other highlights for biologics included:

The top three best selling drugs were biologics - Humira, Remicade and Enbrel, and all are involved
in the treatment of arthritis.

Every biologic on the list had sales that were up in 2012.

The biggest sales increases were for Lantus (Sanofi) with an increase in sales of 19.3% and Humira
(abbVie) also up 19.3% from 2011.

Biologics to treat cancer were also at the top of the list with Roche's Rituxin, Herceptin, and Avastin
in fifth, seventh and ninth place respectively.
20
Top Selling Biologics of 2012
Rank Biologic
Expression
System
Company
2012
Worldwide
Sales in
Millions
Approved Indication
1
Humira
(adalimumab)
CHO
Abbott
Laboratories
9,265
RA; juvenile rheumatoid
arthritis; Crohn's disease;
PA; psoriasis; ankylosing
spondylitis
2
Remicade
(infliximab)
Murine
Myeloma
J&J and Merck
8,215
RA; Crohn's disease;
psoriasis; ulcerative
colitis; ankylosing
spondylitis; Behçet
syndrome; PA
3
Enbrel
(etanercept)
CHO
Amgen and Pfizer
7,963
RA; psoriasis; ankylosing
spondylitis; PA; juvenile
rheumatoid arthritis
4
Rituxin
(rituximab,
MabThera)
CHO
Roche and
Biogen Idec
7,285
Non-Hodgkin's
lymphoma; RA; chronic
leukocytic leukemia
/small cell lymphocytic
lymphoma; antineutrophil
cytoplasmic antibodies
associated vasculitis
5
Lantus (insulin
glargine)
E.coli
Sanofi
6,648
Once daily treatment for
diabetes
6
Herceptin
(trastuzumab)
CHO
Roche
6,397
Breast cancer; gastric
cancer
7
Avastin
(bevacizumab)
CHO
Roche
6,260
Colorectal cancer; non–
small cell lung cancer;
renal cell cancer; brain
cancer (malignant
glioma; anaplastic
astrocytoma,
glioblastoma multiforme)
8
Neulasta
(pegfilgrastim)
E.coli
Amgem
4,092
Neutropenia/leukopenia
caused by cancer
chemotherapy
RA, rheumatoid arthritis; PA, psoriatic arthritis; MS, multiple sclerosis. Source: BioMed Tracker.
Source: Genetic Engineering News, "Top 20 Best Selling Drugs of 2010", March 5, 2013.
21
V. The US In-vitro Diagnostic (IVD) Tests Market
According to RNCOS's new report "US Diagnostic Market Outlook 2014," the US represents world's largest
and one of the most developed diagnostic markets accounting for 47% of the total global IVD market in
2011. The European region accounted for 31% of the global IVD market with Germany accounting for the
largest share of 23.24% followed by France (16.89%) and Italy (16.41%). Huge investment in research and
developments and commercially successful innovations in diagnostic industry has helped the US to
outperform other prominent diagnostic markets including EU, Japan etc. Looking ahead, the US is expected
to maintain its position of the world's largest IVD market, growing at a moderate CAGR of around 9.3%
during 2010-2014. Favorable reimbursement policies for clinical lab testing, increasing awareness about
early disease detection, and aging population that demands increased diagnostic testing will be the main
growth drivers.
Another report “The World Market for Molecular Diagnostics” released by Kalorama Information predicts
the world market for molecular diagnostic tests will grow 11% annually, reaching $8.085 billion U.S.
dollars in 2015. Back in 1995, the market for these nascent tests was estimated to comprise just 2% of the
total in vitro diagnostic (IVD) market or $360 million. Today that number stands at $4.765 billion. The
report highlights the primary growth drivers for molecular diagnostics, and describes challenges facing the
IVD industry in the future. It attributes the continued growth in the market to the introduction of numerous
assays over the past 5 years, as well as publication of the Human Genome Project and advances in
functional genomics, bioinformatics, miniaturization, and microelectronics. At the same time, demand for
testing has been fueled by an increase in cancer patients, proliferation of infectious diseases and growing
interest in parental gene carrier analysis. Especially notable is the fact that many of these complex tests
have been commercialized as proprietary lab-developed tests offered by reference labs and companysponsored lab services.
But major challenges obstruct use of molecular diagnostic assays, including getting stakeholders, payers,
physicians, researchers, and regulators to work together to close the gap between research and clinical
applicability. Physician education is also lacking, and reimbursement problems threaten further
implementation of these tests.
More than 75% of the molecular diagnostics market is controlled by nine companies: Roche Diagnostics,
Qiagen, Gen-Probe, Abbott Diagnostics, Siemens, Becton Dickinson, Cepheid, bioMérieux, and Beckman
Coulter.7 Roche is the undisputed market leader with almost 30% share and an unparalleled product
portfolio, which includes molecular diagnostic tests for oncology, virology, microbiology, and blood
screening.
Sales of molecular diagnostic tests for infectious diseases generate approximately 60% of overall molecular
diagnostics market revenues.8 Market participants largely focus on developing and marketing infectious
___________________
7
Genetic Engineering & Biotechnology News, "Infectious Disease Molecular Diagnostics: Market Review and Opportunities,"
(Vol. 31, No. 20), November 15, 2011.
8
Genetic Engineering & Biotechnology News, "Infectious Disease Molecular Diagnostics: Market Review and Opportunities,"
(Vol. 31, No. 20), November 15, 2011.
22
disease molecular diagnostics, which primarily include tests for human immunodeficiency virus (HIV),
HPV, hepatitis B and C (HBV/HCV), and CT/NG. With the exception of the HPV molecular diagnostics
market, most of these testing areas are very mature with growth rates settling around 5%.9 HPV testing,
however, remains an enormous market opportunity with growth rates expected to remain as high as 20%
through 2014.10
VI. Current Trends
Mergers & Acquisitions
From a strictly numbers point of view,
last year's results are pretty obvious.
As the accompanying chart on the
right indicates, 2012 was the slowest
in 5 years in terms of both number of
deals and dollars on the table. As it
shows, 2011 had 70 more deals worth
nearly 40% more than in 2012. And
the big year in the last 5 years was
2009, when there were not only 25
more deals, 169 vs 146, but the values
were much higher. M&A activity in
2009 totaled $142 billion compared to
just $57 billion in 2012.
The appetite for buying mature
companies continued in 2012 as
companies with their most advanced
therapeutic products in Phase II trials
and those with marketed products
made up the larger percentages of
deals, 35% and 45% respectively, than
they had in the past 5 years.
___________________
9
Genetic Engineering & Biotechnology News, "Infectious Disease Molecular Diagnostics: Market Review and Opportunities,"
(Vol. 31, No. 20), November 15, 2011.
10
Genetic Engineering & Biotechnology News, "Infectious Disease Molecular Diagnostics: Market Review and Opportunities,"
(Vol. 31, No. 20), November 15, 2011.
23
Top 10 Biopharma M&A Deals 2012
1. Gilead Sciences/Pharmasset
2. Bristol-Myers Squibb, AstraZeneca/Amylin
3. Watson Pharmaceuticals/Actavis
4. GalxoSmithKline/Human Genome Sciences
5. Dainippon Sumitomo Pharma/Boston Biomedical
6. Valeant Pharmaceuticals/Medicis Pharma
7. Bristol-Myers Squibb/Inhibitex
8. Private equity consortium/Par Pharmaceutical
9. Novartis/Fougera Pharma
10. AstraZeneca/Ardea Biosciences
Source: http://www.fiercepharma.com
Strategic Alliances
In 2012, the number of significant deals based on headline value has been limited, with just seven deals
exceeding USD 1 billion.
The leading partnering deal during the period was the pact between AstraZeneca and Bristol-Myers Squibb
for collaborative R&D and marketing of a diabetes portfolio that BMS is acquiring as a result of its recent
acquisition of Amylin. This deal has a headline value of USD 3.4 billion, which represents the cash payment
from AstraZeneca to BMS for the rights to the diabetes portfolio.
The next deal of significance drops in value to USD 1.75 billion. This is the collaborative agreement between
Genmab and Jassen Biotech for antibody development using Duobody technology.
Values drop off further with the tenth top deal at 945 million between Jassen Biotech and Astellas for the
licensing, development and marketing agreement of ASP015.
The reasons behind the limited number of high value deals are multifold but all originate from the credit
crisis that emerged in 2008. With less cash available for investment in the sector, smaller companies have
had to redirect their efforts for financing from venture capital to the partner companies themselves. This has
allowed licensees to push down upfront prices paid for new compounds and technologies and backload deals
by limiting payments to late stage milestones and royalties on product sales.
24
Top 10 Pharma/Biotech Partnering Deals of 2012
Partners
Date
Bristol-Myers Squibb,
AstraZeneca, Amylin
Pharmaceuticals
June 2012
3.4
Collaborative R&D and marketing
agreement for diabetes product portfolio
Genmab, Jassen Biotech
July 2012
1.75
Collaboration agreement for antibody
development using Duobody technology
Allergan, Molecular Partners
August 2012
1.5
Collaborative R&D, licensing and
marketing agreement for MP0260 and
DARP in products
Abbott, Galapagos
Feb 2012
1.35
Collaborative R&D and licensing
agreement for GLPG0634
Gilead Sciences, Macrogenics
Sept 2012
1.15
Development and marketing agreement
for Dual-Affinity Re-Targeting (DART)
products
Genmab, Jassen Biotech
August 2012
1.14
Licensing agreement for daratumumab
Macrogenics, Servier
September
2012
1.1
Option, development and marketing
agreement for Dual-Affinity ReTargeting (DART) products
Merck & CO, Endocyte
April 2012
1.0
Development and marketing agreement
for Vintafolide
Menarini, Oxford
BioTherapeutics
Oct 2012
1.0
Development and manufacturing
agreement for antibody based anticancer
drugs
Jassen Biotech, Astellas
Oct 2012
945 mil
Source: http://www.currentpartnering.com
Value,
($bn)
Subject
Licensing, development and marketing
agreement for ASP015
25
Venture Capital
Investment in biotechnology by venture capitalist declined 15% in dollars with volume flat in 2012.
According to the MoneyTree Life Sciences 2012 Report released by PricewaterhouseCoopers and the
National Venture Capital Association, biotechnology was the second largest investment sector for the year
which totaled $4.1 billion
and 466 deals. The Medical
Device industry fell 13% in
dollars and 15% in deals in
2012, finishing the year
with $2.4 billion going into
313 deals. The Life Sciences
sector (Biotech and Medical
Devices combined)
accounted for 25% of all
venture capital dollars
invested in 2012 compared
to 26% in 2011. Much of
the decline for the year
occurred in first-time
financings where both
Biotechnology and Medical
Devices saw the lowest
number of deals since 1995.
source: https://www.pwcmoneytree.com
The top three metropolitan regions receiving Life
Sciences venture capital funding during 2012 were San
Francisco Bay ($1.7 billion), San Diego Metro ($709
million), and NY Metro ($415 million). In Q4, the top
five metropolitan regions receiving funding were San
Francisco Bay ($588), Boston ($278), NY Metro
($214), San Diego Metro ($142), and the Great Lakes
($94 million).
According to the Chicago real estate group Jones Lang
LaSalle's 2012 report issued on life sciences clusters,
biomedical clusters in several smaller U.S. cities are
gaining influence at the expense of some of the major
capitals for Big Pharma. San Diego scored the biggest
upset—placing second in the latest nationwide ranking
of the most-active life sciences hubs (behind No. 1
Boston). In its jump from No. 7 in the 2011 rankings,
San Diego surpassed both Los Angeles and San
Francisco, displacing the New Jersey-New York City
region—which fell to No. 7 in the 2012 rankings.
26
The Chicago real estate firm says its rankings are based on a weighted score derived from four criteria: the
percentage of employees in the region who are working in life sciences, hospital, and medical fields; the
percentage of life sciences establishments; federal NIH funding; and venture capital funding.
The biggest reason cited for the reshuffling of U.S. life sciences clusters, however, is the so-called “patent
cliff.” Anticipating a big downturn in revenue (as much as $30 billion, by some estimates) as brand-name
drug patents expire in 2013, Big Pharma companies consolidated their operations last year. As a result, their
“right-sizing” is boosting activity in smaller markets like Raleigh-Durham, NC, Philadelphia, and San Diego,
where there are premium academic resources, a well-educated workforce, and comparatively lower overhead
costs.
Top Venture Capital Firms
1. Domain Associates
2. HealthCare Ventures
3. Polaris Venture Partners
4. MPM Capital
5. Alta Partners
6. ARCH Venture Partners
7. Flagship Ventures
8. SV Life Sciences Advisers
9. Sanderling Ventures
10. Kleiner Perkins Caufield & Byers
11. InterWest Partners
12. Sofinnova Ventures
13. Burrill & Company
14. New Enterprise Associates
15. OrbiMed Advisors
16. Quaker BioVentures
17. Venrock Associates
Source: http://www.fiercebiotech.com
Top 15 Biotech Venture Capital Deals , 1st half of 2012
1. Intrexon - $75M
2. Tesaro - 58.3M
3. Celladon - 53M
4. Sangart - 50M
5. Global Blood Therapeutics - 40.7M
6. Astute Medical - 40.45M
7. OvaScience - 38.56M
Source: http://www.fiercebiotech.com
8. Alder Biopharmaceuticals - 38M
9. Aragon Pharmaceuticals - 37.7M
10. SFJ Pharmaceuticals - 35M
11. Eleven Biotherapeutics - 25.5M
12. Kolltan Pharmaceuticals - 25M
13. PhaseBio Pharmaceuticals - 23.2M
14. PTC Therapeutics - 23M
15. Applied Proteomics - 22.5M
27
Federal Funding
The National Institutes of Health (NIH) is one of the world’s foremost research agencies. It is made up of 27
different components called Institutes and Centers, and each has its own specific research agenda. All but
three receive their funding directly from Congress and administrate their own budgets.
The NIH invests more than $30.9 billion annually in medical research. More than 80 percent of the NIH’s
funding is awarded through almost 50,000 competitive grants to more than 300,000 researchers at more than
2,500 universities, medical schools, and other research institutions in every state and around the world.
According to the California Biomedical Industry 2013 Report, California has led the U.S. in NIH funding.
The biomedical industry in California as well as the research institutes and scientists depend on NIH grants
for much of their work. The government investment is translated directly into biomedical jobs and revenue
for the state and medical products and health
care innovations for Californians and the
world.
The top ten California research universities
and organizations received more than $2.5
billion in NIH funding through mid-October
2012. Total NIH grants awarded to
California organizations are $3.3 billion.
The top 10 California universities and
private research institutions received more
than $2.5 billion in NIH funding through
mid-October 2012. Altogether, NIH grants
awarded to California organizations totaled
more than $3.33 billion, on par with 2011
awarded levels. Nationally, California
received the most SBIR and STTR NIH
funding in 2012, more than $1.27 million,
which is 60% more than Massachusetts, and
215% more than New York.
28
Another major biotech cluster is the Greater Boston area. Home to many leading biotech companies,
universities, and private research institutes, the area has seen a bit of a “biotech boom” for startups over the
past decade due to a growth of funding sources for R&D facilities and emerging companies. In fact, in 2011,
Life Sci VC declared Boston #1 Cluster for Early Stage Biotech, explaining, “More seed and early stage
funding is flowing into life science companies into the Greater Boston area than any other part of the country
over the past two years.” The company also added that Big Pharma in particular is expanding in the area
while they are having mass layoffs across the globe and in most regions of the US.
According to the Life Sciences Cluster 2012 Report published by Jones Lange LaSalle, Greater Boston is the
leading recipient NIH funding continuing to beat every other city in the nation extending its streak to 17
years with $23.4 billion in total awards over that time. It is also the home to the top five NIH-funded
universities (Harvard, University of Massachusetts, Boston University, MIT and Tufts). The Greater Boston
life sciences industry includes geographic markets that are both established and emerging. Cambridge is
Massachusetts' core life sciences cluster. Here, large biopharma companies intermingle with start-ups, who
29
begin here and grow until they are acquired or relocate as they outgrow space options. While Cambridge is a
mature market, there are multiple emerging markets outside of the city attracting attention. These emerging
clusters include the Greater Boston Suburbs, the Seaport District and the Longwood Medical and Academic
Area.
As the clock ticks on Congress’ agreement to temporarily avert the fiscal cliff, there is high concern that
part of a resolution may include drastic cuts to investments in early stage research, the fuel of
Massachusetts’ economic engine. On the chopping block, should across-the-board cuts be
implemented, $2.4 billion in National Institutes of Health funding, a significant share of which comes
to Massachusetts academic medical centers, research institutions and early-stage companies to
undertake some of the most complicated medical research out there.11
U.S. Congress’ sequestration fiscal policy
Layoffs, hiring freezes and cutbacks are already starting at major medical research institutions as they face
the impending across-the-board cuts to the federal budget known as sequestration. The advancement of
medical cures and the careers of countless scientists are at stake.
The National Institutes of Health will be forced to reduce its spending by 5.1 percent, or about $1.6 billion
this year, if President Barack Obama and Congress don't strike a deal. Research labs in universities across
America are bracing for the cuts, which they say will slow down progress on vital projects.
A slow-down in drug approval process may also take effect in 2013 should the FDA's budget be decreased
due to the sequestration.
R&D Outsourcing
As biopharmaceutical companies look to cut costs and improve speed-to-market, more of them plan to
outsource R&D and clinical trials and shift this work overseas to places such as China and India, finds a
survey released by global consulting firm Booz & Company. This study confirms that outsourcing will
become an increasingly important part of the competitive landscape and provides key insights into why and
how the outsourcing process will radically evolve in the next two to three years. For example, many
biopharmaceutical companies will begin outsourcing formerly core activities such as clinical trial monitoring
and protocol development to contract research organizations (CROs). This shift will be driven by new
service offerings in real-time data processing and virtual platforms that allow people around the world to
securely access clinical data in real time. Outsourcing more of these critical activities along the entire R&D
spectrum will transform the nature of outsourcing relationships. To see a full copy of the study, please visit:
http://www.booz.com/media/uploads/BoozCo-BayBio-Outsourcing-Life-Sciences.pdf
______________________

boston.com, "NIH funding cuts will harm Massachusetts" January 31, 2013.
30
Personalized Medicine
Since the mapping of the human genome in 2003, the pace of discovery, product development, and clinical
adoption of what we know as personalized medicine has accelerated. Personalized medicine may be
considered an extension of traditional approaches to understanding and treating disease, but with greater
precision. A profile of a patient’s genetic variation can guide the selection of drugs or treatment protocols
that minimize harmful side effects or ensure a more successful outcome. It can also indicate susceptibility
to certain diseases before they become manifest, allowing the physician and patient to set out a plan for
monitoring and prevention. Physicians will be able to go beyond the “one size fits all” model of medicine to
make the most effective clinical decisions for individual patients.
Pharmaceutical and biotechnology companies are increasingly turning to personalized medicine in order to
improve the drug development process and also to speed up the approval of new drugs. One of the biggest
challenges for the biotechnology and pharmaceutical companies in the 21st century will be to develop and
deliver drugs that fit the individual patient’s biology and pathophysiology. This change from blockbuster
medicine to personalized medicine will, to a large extent, influence the way that drugs are going to be
developed, marketed and prescribed in the future.
According to a recent report "Personalized Medicine Market Worldwide (2010 - 2015)" issued by Research
and Markets, the personalized medicine market worldwide is projected to grow 11.56% annually and reach
U.S. $148.4 billion by 2015.12 The fastest growth is expected to come from the proteomics and genomics
segment. Targeted biologics is one of the most exciting areas of therapeutic medicine and may represent one
in every four newly commercialized drugs in the future. It is expected to grow steadily with a compound
annual growth rate of 10%.13
Patent Cliff: Generics Poised to Capture Most of Sales
During the past five years, the use of generic small molecules has increased dramatically in the United
States. In 2011, 80% of all prescriptions in the country were generics, compared with 67% in 2007.14
Because of several imminent patent expirations in the next three years, it is projected that by 2015, 86% of
all small-molecule prescriptions in the United States will be filled by generics. Such high use of generics is
likely to steal share from biologics and require cost and comparative effectiveness data to justify their use in
approved indications.15
______________________
Research
13
and Markets, "Personalized Medicine Market Worldwide (2010 - 2015)," February 17, 2011.
Research and Markets, "Personalized Medicine Market Worldwide (2010 - 2015)," February 17, 2011.
14
IMS Institute for Healthcare Informatics, "The Use of Medicines in the United States: Review of 2011," April 2012.
15
Nature Biotechnology, "What's fueling the biotech engine - 2010 to 2011," Volume 29, Number 12, December 2011.
31
Biosimilars: FDA Initiates Plan to Speed Up Approval Process
The FDA recently launched a first-ever plan to speed up the approval of biosimilar drugs in the U.S. as part
of the health care overhaul proposed by President Obama over two years ago. The new initiative represents
another effort to bring down the astronomical costs of healthcare. Biosimilar drugs are drugs that are
cheaper versions of expensive, complex medicines that are made from biological matter, i.e. biologics.
Biosimilar drugs are like generic drugs; the latter are copies of much simpler medicines.
These more complex drugs include Erythropoietin for anemia, Remicade for rheumatoid arthritis and
Herceptin for cancer. These complex drugs are quite expensive, costing the federal medical system billions
of dollars, thus providing a compelling reason for the FDA to institute guidelines for the facilitation of
cheaper alternatives.
The new plan creates a shorter approval process by relying on existing information and data provided by the
previously-approved more expensive drugs. In other words, the companies creating the biosimilar drugs
piggyback on the experience of the manufacturers of the pre-existing, more expensive versions.
The U.S. is not a trailblazer in this regard, however. The European Union already has several biosimilar
drugs available for sale.
The FDA’s new initiative will have far-reaching results since biologics are some of the biggest-selling
medicines today. Two years ago, almost half of the top selling drugs in the U.S. were biologics.
Erythropoietin has $3.3 billion in U.S. sales alone.16 The market for biosimilar drugs is astronomical. In
eight years it is expected to reach $8 billion.17 Their sales are expected to outstrip that of generic versions of
simpler drugs because biosimilar drugs cost only 10% to 20% less than the original versions to manufacture,
whereas generic versions of simpler drugs are up to 90% cheaper to produce. As for the patents now existing
on the biologics, they are set to expire in another eight years.
Drug makers are not sitting on their hands in light of the FDA’s new initiative, though. Instead, companies
like Merck & Co., Pfizer and Novartis are developing biosimilar drugs in order to take advantage of the great
demand for these drugs. Amgen recently announced that it was going to develop biosimilar drugs along with
Watson Pharmaceuticals, a generic drug maker.
The biggest challenge facing makers of biosimilar drugs is that biologics are more complex than other drugs,
so making an identical generic version is not possible, at least for now. The technical side of the drugs’
creation is not the only challenge facing drug manufacturers. The manufacturers must also deal with
financial and commercial concerns. Specifically, drug manufacturers must acquire the skills necessary to
market lower-cost medicines to hospitals, health insurers and others. Also, manufacturing biosimilars is by
no means cheap, and drug manufacturers will have to find innovative ways of generating the necessary
capital, including partnering with already-existing generic drug manufacturers.
______________________
Martindale.com,
"FDA Initiates Plan to Speed Up Approval of Biosimilar Drugs", February 29, 2012.
Martindale.com,
"FDA Initiates Plan to Speed Up Approval of Biosimilar Drugs", February 29, 2012.
32
Also, on the technical side, the biosimilar drugs will be comparable to the drugs they seek to copy, but they
will not be identical. Therefore, a pharmacist could not simply switch out the copycat for the original drug.
Hence, the manufacturers of biosimilars will have their work cut out for them convincing doctors that their
copies are effective—something which is less of an issue with generic versions of simpler drugs since the
latter are more competitive from a pricing standpoint.
Although, the FDA’s latest action is designed to make certain drugs cheaper, drug manufacturers are figuring
out ways to profit from the new plan. It will be interesting to see the changes this initiative creates to the
landscape of drug manufacturing in the years to come.
33
VII. FDA Regulations
Biological Products
Both the FDA’s Center for Drug Evaluation and Research (CDER) and Center for Biologics Evaluation and
Research (CBER) have regulatory responsibility for therapeutic biological products, including premarket
review and oversight. The categories of therapeutic biological products regulated by CDER (under the FDC
Act and/or the PHS Act, as appropriate) are the following:
 Monoclonal antibodies for in vivo use.
 Most proteins intended for therapeutic use, including cytokines (e.g., interferons), enzymes (e.g.
thrombolytics), and other novel proteins, except for those that are specifically assigned to the
Center for Biologics Evaluation and Research (CBER) (e.g., vaccines and blood products). This
category includes therapeutic proteins derived from plants, animals, humans, or microorganisms,
and recombinant versions of these products. Exceptions to this rule are coagulation factors (both
recombinant and human-plasma derived).
 Immunomodulators (non-vaccine and non-allergenic products intended to treat disease by
inhibiting or down-regulating a pre-existing, pathological immune response).
 Growth factors, cytokines, and monoclonal antibodies intended to mobilize, stimulate, decrease or
otherwise alter the production of hematopoietic cells in vivo.
Categories of Therapeutic Biological Products Remaining in CBER
 Cellular products, including products composed of human, bacterial or animal cells (such as
pancreatic islet cells for transplantation), or from physical parts of those cells (such as whole
cells, cell fragments, or other components intended for use as preventative or therapeutic
vaccines).
 Gene therapy products. Human gene therapy/gene transfer is the administration of nucleic acids,
viruses, or genetically engineered microorganisms that mediate their effect by transcription and/or
translation of the transferred genetic material, and/or by integrating into the host genome. Cells
may be modified in these ways ex vivo for subsequent administration to the recipient, or altered
in vivo by gene therapy products administered directly to the recipient.
 Vaccines (products intended to induce or increase an antigen specific immune response for
prophylactic or therapeutic immunization, regardless of the composition or method of
manufacture).
 Allergenic extracts used for the diagnosis and treatment of allergic diseases and allergen patch
tests.
 Antitoxins, antivenins, and venoms
34
 Blood, blood components, plasma derived products (for example, albumin, immunoglobulins,
clotting factors, fibrin sealants, proteinase inhibitors), including recombinant and transgenic
versions of plasma derivatives, (for example clotting factors), blood substitutes, plasma volume
expanders, human or animal polyclonal antibody preparations including radiolabeled or
conjugated forms, and certain fibrinolytics such as plasma-derived plasmin, and red cell reagents.
Please refer to the Transfer of Therapeutic Biological Products to the Center for Drug Evaluation and
Research at http://www.fda.gov/oc/combination/transfer.html for updates that further define the categories of
biological products that are regulated by CDER and CBER.

Establishment Registration
Blood Establishments - All owners or operators of establishments that manufacture blood products
are required to register with the FDA, pursuant to section 510 of the Federal Food, Drug, and
Cosmetic Act, unless they are exempt under 21 CFR 607.65. A list of every blood product
manufactured, prepared, or processed for commercial distribution must also be submitted. Products
must be registered and listed within 5 days of beginning operation, and annually between November
15 and December 31. Blood product listings must be updated every June and December.
Human Cells, Tissues and Cellular and Tissue-Based Products (HCT/Ps) Establishments Establishments that manufacture HCT/Ps that are regulated solely under section 361 of the PHS Act
and the regulations in part 1270 are required to register and list under 21 CFR Part 1271 in 2001.
Establishment that manufacture HCT/Ps that are: 1) Drug, 2) Medical Devices, 3) Biological
Products, 4) Hematopoietic stem cells from peripheral and cord blood, 5) Reproductive cells and
tissues; or 6) Human heart valves and human dura mater, are required to register with FDA and list
HCT/Ps using the registration and listing procedures in 21 CFR part 1271, subpart B. HCT/P
establishments that only manufacture HCT/Ps currently under IND or IDE do not need to register and
list their HCT/Ps until the investigational HCT/P is approved through a Biologics License
Application (BLA), a New Drug Application (NDA), or a Premarket Approval Application (PMA);
or cleared through a Premarket Notification Submission 510(k).

Investigational New Drug Application - A drug that passes animal safety studies may move into human
testing following the submission of an investigational new drug (IND) application to the FDA. Most
studies, or trials, of new products may begin 30 days after the agency receives the IND. During this time,
FDA has an opportunity to review the IND for safety to assure that research subjects will not be
subjected to unreasonable risk.
Almost every new drug goes through multiple clinical trials, beginning with early studies (Phase I) in
small groups of patients to test safety. Larger mid-stage trials (Phase II) examine safety and obtain
preliminary efficacy data. The final stage of pre-market testing (Phase III) seeks to gather convincing
efficacy data in the specific patient population the drug's developer hopes to treat.
There are three IND types:
o
An Investigator IND is submitted by a physician who both initiates and conducts an
investigation, and under whose immediate direction the investigational drug is administered or
35
dispensed. A physician might submit a research IND to propose studying an unapproved drug,
or an approved product for a new indication or in a new patient population.
o
Emergency Use IND allows the FDA to authorize use of an experimental drug in an emergency
situation that does not allow time for submission of an IND in accordance with 21CFR , Sec.
312.23 or Sec. 312.34. It is also used for patients who do not meet the criteria of an existing
study protocol, or if an approved study protocol does not exist.
o
Treatment IND is submitted for experimental drugs showing promise in clinical testing for
serious or immediately life-threatening conditions while the final clinical work is conducted and
the FDA review takes place.
There are two IND categories:
o
o
Commercial
Research (non-commercial)
The IND application must contain information in three broad areas:
o
Animal Pharmacology and Toxicology Studies - Preclinical data to permit an assessment as to
whether the product is reasonably safe for initial testing in humans. Also included are any
previous experience with the drug in humans (often foreign use).
o
Manufacturing Information - Information pertaining to the composition, manufacturer,
stability, and controls used for manufacturing the drug substance and the drug product. This
information is assessed to ensure that the company can adequately produce and supply
consistent batches of the drug.
o
Clinical Protocols and Investigator Information - Detailed protocols for proposed clinical
studies to assess whether the initial-phase trials will expose subjects to unnecessary risks. Also,
information on the qualifications of clinical investigators--professionals (generally physicians)
who oversee the administration of the experimental compound--to assess whether they are
qualified to fulfill their clinical trial duties. Finally, commitments to obtain informed consent
from the research subjects, to obtain review of the study by an institutional review board (IRB),
and to adhere to the investigational new drug regulations.
All Biological IND submissions must be made in triplicate and should be addressed as follows:
Center for Biologics Evaluation and Research
HFM-99, Room 200N
1401 Rockville Pike
Rockville, MD 20852-1448
Tel: (301)827-1800

Biologics License Application - Biological products are approved for marketing under the provisions of
the Public Health Service (PHS) Act. The Act requires a firm who manufactures a biologic for sale in
interstate commerce to hold a license for the product. A biologics license application is a submission that
contains specific information on the manufacturing processes, chemistry, pharmacology, clinical
36
pharmacology and the medical affects of the biologic product. If the information provided meets FDA
requirements and the establishment passes the inspection, the application is approved and a license is
issued allowing the firm to market the product. Form 356h specifies the requirements for a BLA. This
includes:
o
Applicant information
o
Product/Manufacturing information
o
Pre-clinical studies
o
Clinical studies
o
Labeling
Some responsibilities of a licensed biologics manufacturer include:
o
complying with the appropriate laws and regulations relevant to their biologics license and
identifying any changes needed to help ensure product quality
o
reporting certain problems to FDA’s Biological Product Deviation Reporting System
o
reporting and correcting product problems within established timeframes
o
recalling or stopping the manufacture of a product if a significant problem is detected



Post-Approval - Every approved drug comes with an official product label, in a standardized format,
whose contents are developed by the FDA and the company marketing the drug. The label contents
include the approved indication, as well as a description of the drug, its side effects, dosage, clinical trial
summaries and other information useful to physicians. Although doctors may prescribe a therapy "offlabel" for indications not expressly approved by the FDA, manufacturers are prohibited from marketing
off-label indications, and insurance does not always cover such uses.
The story does not end with approval and labeling. Companies often conduct additional Phase II and
III trials in other indications and may apply for approval through a supplemental BLA. If approved, the
new indication is added to the product label.
Companies also conduct Phase IV trials to refine knowledge about the drug. In addition, drug makers
are required by law to report adverse events to the FDA, and they are subject to ongoing
manufacturing and marketing rules.
General Biological Product Standards

Potency - Tests for potency shall consist of either in vitro or in vivo tests, or both, which have been
specifically designed for each product so as to indicate its potency in a manner adequate to satisfy the
interpretation of potency given by the definition in 600.3(s) of this chapter.
37

General Safety Test - A general safety test for the detection of extraneous toxic contaminants shall be
performed on biological products intended for administration to humans. The general safety test shall
be conducted upon a representative sample of the product in the final container from every final
filling of each lot of the product. If any product is processed further after filling, such as by freezedrying, sterilization, or heat treatment, the test shall be conducted upon a sample from each filling of
each drying chamber run, sterilization chamber, or heat treatment bath.

Sterility Test

Purity - Products shall be free of extraneous material except that which is unavoidable in the
manufacturing process described in the approved biologics license application. In addition, products
shall be tested as provided in paragraphs (a) and (b) of this section.

Identity - The contents of a final container of each filling of each lot shall be tested for identity after
all labeling operations shall have been completed. The identity test shall be specific for each product
in a manner that will adequately identify it as the product designated on final container and package
labels and circulars, and distinguish it from any other product being processed in the same laboratory.
Identity may be established either through the physical or chemical characteristics of the product,
inspection by macroscopic or microscopic methods, specific cultural tests, or in vitro or in vivo
immunological tests.

Constituent Materials -

Total Solids in Serums - Except as otherwise provided by regulation, no liquid serum or antitoxin
shall contain more than 20 percent total solids.

Permissible Combinations - Licensed products may not be combined with other licensed products
either therapeutic, prophylactic or diagnostic, except as a license is obtained for the combined
product. Licensed products may not be combined with non-licensable therapeutic, prophylactic, or
diagnostic substances except as a license is obtained for such combination.

Cultures

Labeling Standards
 Container Label
(a) Full label - The following items shall appear on the label affixed to each container of a product
capable of bearing a full label:
(1) The proper name of the product;
(2) The name, address, and license number of manufacturer;
(3) The lot number or other lot identification;
(4) The expiration date;
38
(5) The recommended individual dose, for multiple dose containers.
(6) The statement: "`Rx only'" for prescription biologicals.
(7) If a Medication Guide is required under part 208 of this chapter, the statement required under
208.24(d) of this chapter instructing the authorized dispenser to provide a Medication Guide to
each patient to whom the drug is dispensed and stating how the Medication Guide is provided,
except where the container label is too small, the required statement may be placed on the
package label.
(b) Package label information - If the container is not enclosed in a package, all the items required for
a package label shall appear on the container label.
(c) Partial label - If the container is capable of bearing only a partial label, the container shall show as
a minimum the name (expressed either as the proper or common name), the lot number or other lot
identification and the name of the manufacturer; in addition, for multiple dose containers, the
recommended individual dose. Containers bearing partial labels shall be placed in a package which
bears all the items required for a package label.
(d) No container label - If the container is incapable of bearing any label, the items required for a
container label may be omitted, provided the container is placed in a package which bears all the
items required for a package label.
(e) Visual inspection - When the label has been affixed to the container a sufficient area of the
container shall remain uncovered for its full length or circumference to permit inspection of the
contents.
 Package Label
The following items shall appear on the label affixed to each package containing a product:
(a) The proper name of the product;
(b) The name, address, and license number of manufacturer;
(c) The lot number or other lot identification;
(d) The expiration date;
(e) The preservative used and its concentration, or if no preservative is used and the absence of a
preservative is a safety factor, the words "no preservative";
(f) The number of containers, if more than one;
(g) The amount of product in the container expressed as (1) the number of doses, (2) volume, (3)
units of potency, (4) weight, (5) equivalent volume (for dried product to be reconstituted), or
(6) such combination of the foregoing as needed for an accurate description of the contents,
39
whichever is applicable;
(h) The recommended storage temperature;
(i) The words "Shake Well", "Do not Freeze" or the equivalent, as well as other instructions, when
indicated by the character of the product;
(j) The recommended individual dose if the enclosed container(s) is a multiple-dose container;
(k) The route of administration recommended, or reference to such directions in an enclosed
circular;
(l) Known sensitizing substances, or reference to an enclosed circular containing appropriate
information;
(m) The type and calculated amount of antibiotics added during manufacture;
(n) The inactive ingredients when a safety factor, or reference to an enclosed circular containing
appropriate information;
(o) The adjuvant, if present;
(p) The source of the product when a factor in safe administration;
(q) The identity of each microorganism used in manufacture, and, where applicable, the production
medium and the method of inactivation, or reference to an enclosed circular containing
appropriate information;
(r) Minimum potency of product expressed in terms of official standard of potency or, if potency is a
factor and no U.S. standard of potency has been prescribed, the words "No U.S. standard of
potency."
(s) The statement: "`Rx only'" for prescription biologicals.
 Proper name; package label; legible type
(a) Position - The proper name of the product on the package label shall be placed above any
trademark or trade name identifying the product and symmetrically arranged with respect to
other printing on the label.
(b) Prominence - The point size and typeface of the proper name shall be at least as prominent as the
point size and typeface used in designating the trademark and trade name. The contrast in color
value between the proper name and the background shall be at least as great as the color value
between the trademark and trade name and the background. Typography, layout, contrast, and
other printing features shall not be used in a manner that will affect adversely the prominence of
the proper name.
40
(c) Legible type - All items required to be on the container label and package label shall be in legible
type. "Legible type" is type of a size and character which can be read with ease when held in a
good light and with normal vision.
 Divided manufacturing responsibility to be shown
If two or more licensed manufacturers participate in the manufacture of a biological product, the
name, address, and license number of each must appear on the package label, and on the label of the
container if capable of bearing a full label.
 Name and address of distributor
The name and address of the distributor of a product may appear on the label provided that the
name, address, and license number of the manufacturer also appears on the label and the name of
the distributor is qualified by one of the following phrases: "Manufactured for _____", "Distributed
by ______", "Manufactured by _____ for _____", "Manufactured for _____ by ____",
"Distributor: _____", or "Marketed by _____". The qualifying phrases may be abbreviated.
 Bar code label requirements
Biological products must comply with the bar code requirements at 201.25 of this chapter. However,
the bar code requirements do not apply to devices regulated by the Center for Biologics Evaluation
and Research or to blood and blood components intended for transfusion. For blood and blood
components intended for transfusion, the requirements at 606.121(c)(13) of this chapter apply
instead.
In-vitro Diagnostic (IVD) Products Regulation

Establishment Registration - Manufacturers (both domestic and foreign) and initial distributors
(importers) of medical devices must register their establishments with the FDA. All establishment
registrations must be submitted electronically unless a waiver has been granted by FDA. All registration
information must be verified annually between October 1st and December 31st of each year. In addition
to registration, foreign manufacturers must also designate a U.S. Agent. Beginning October 1, 2007,
most establishments are required to pay an establishment registration fee. Please find below the schedule
of registration fees for fiscal years 2013 through 2017.
Year FY 2013
Fee $2,575
FY 2014
FY 2015
FY 2016
FY 2017
$3,200
$3,750
$3,872
$3,872
More information about FDA establishment registration can be found at:
http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/Overview/default.htm#reg.
41

Classification of IVD Products - FDA classifies IVD products into Class I, II, or III according to the
level of regulatory control that is necessary to assure safety and effectiveness. The classification of an
IVD (or other medical device) determines the appropriate premarket process.
Class I Devices: include commodity products such as stethoscopes, scalpels, and other commodity
products that pose relatively little patient risk. Makers of these products need only register their
establishment, conform to Good Manufacturing Practices (GMP) and notify the FDA at least 90 days
before they start marketing the devices. GMP's are standards set by the FDA for ensuring manufacturing
quality. More information about GMP requirements can be found at:
http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/PostmarketRequirements/QualitySy
stemsRegulations/default.htm.
Class II Devices: include devices that present a moderate degree of risk to the patient. Examples include
x-ray machines, endoscopes, and surgical lasers. Manufacturers have to provide the FDA with some
evidence of safety and efficacy and meet certain performance standards. In addition, they are responsible
for post-market surveillance and maintenance of patient registries.
Class III Devices: these are sophisticated products that present significant risk to patients and must go
through extensive clinical trials before undergoing FDA reviews. Included in this category are life
supporting devices, such as implantable cardiac pacemakers, angioplasty catheters, stents, and similar
devices that prevent potentially dangerous medical conditions such as heart attacks and cardiac
arrhythmias.

Premarket Notifications - Premarket notifications are also known as 510(K). This is a more commonly
used filing and applies to devices that are Substantially Equivalent (SE) to approved products already on
the market. Many Class I devices are exempt from the 510(K) process, although other regulations apply.
Once the device is determined to be SE, it can then be marketed in the U.S. The SE determination is
usually made within 90 days and is made based on the information submitted by the submitter. Detailed
information about the 510(K) process can be found at:
http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/Overview/default.htm#reg
In many cases, descriptive data and a labeling review are sufficient, though some devices may require
further clinical studies to support a 510(K). Before marketing a device, each submitter must receive an
order, in the form of a letter, from FDA which finds the device to be substantially equivalent and states
that the device can be marketed in the U.S. This order "clears" the device for commercial distribution.
The submitter may market the device immediately after 510(K) clearance is granted.

Premarket Applications - Premarket applications (PMA) apply to most Class III devices due to the level
of risk. PMA is the most stringent type of device marketing application required by FDA. The applicant
must receive FDA approval of its PMA application prior to marketing the device. PMA approval is
based on a determination by FDA that the PMA contains sufficient valid scientific evidence to assure that
the device is safe and effective for its intended use(s). An approved PMA is, in effect, a private license
granting the applicant (or owner) permission to market the device. The PMA owner, however, can
authorize use of its data by another.
42
FDA regulations provide 180 days to review the PMA and make a determination. In reality, the review
time is normally longer. Before approving or denying a PMA, the appropriate FDA advisory committee
may review the PMA at a public meeting and provide FDA with the committee's recommendation on
whether FDA should approve the submission. After FDA notifies the applicant that the PMA has been
approved or denied, a notice is published on the Internet (1) announcing the data on which the decision is
based, and (2) providing interested persons an opportunity to petition FDA within 30 days for
reconsideration of the decision.
On October 26, 2002 the Medical Device User Fee and Modernization Act of 2002 was signed into law.
This law authorizes FDA to charge a fee for medical device product reviews. These fees apply to
Premarket Approvals (PMAs), Product Development Protocols (PDPs), Biologics Licensing
Applications (BLAs for certain medical devices reviewed by FDA's Center for Biologics Evaluation and
Research), certain supplements, and Premarket Notification 510(k)s.
The fee must be paid for the above listed applications, unless the applicant is eligible for a waiver or
exemption. Small businesses may qualify for a reduced fee. Payment must be received on or before the
time the application is submitted. If the applicant has not paid all fees owed, FDA will consider the
application incomplete and will not accept it for filing.
FY 2013 Device Review User Fees (U.S. Dollars)
Application
Standard Fee Small Business
Premarket Application (PMA, PDP, BLA, PMR)* $248,000
$62,000
First premarket application from firms with
gross receipts or sales ≤ $30 million
Not Applicable Fee is Waived
Panel-track Supplement
$186,000
$46,500
Efficacy Supplement (for BLA)
$248,000
$62,000
180-day Supplement
$37,200
$9,300
Real-time Supplement
$17,360
$4,340
Annual Report
$8,680
$2,170
30-day Notice
$3,968
$1,984
* PMA=Premarket Approval; PDP=Product Development Protocol; BLA=Biologics License Application;
PMR=Premarket Report (for a reprocessed device)
Source: www.fda.gov
The following types of applications require no fee.




Special PMA Supplements-Changes Being Affected
PMA Manufacturing Site Change Supplements
Humanitarian Device Exemption (HDE)
BLA for a product licensed for further manufacturing use only.
43
The following exemptions or waivers apply.
Fee Exemptions and Waivers (No Fee for These)
Category

Exemption or Waiver
First premarket approval submission (PMA,
PDP, BLA, or premarket report) from a small
business with gross receipts or sales <$30
million.
One-time waiver of the fee that would otherwise
apply.
Any application for a device intended solely
for pediatric use.
Exempt from any fee. If an applicant obtains an
exemption under this provision, and later
submits a supplement for adult use, that
supplement is subject to the fee then in effect for
an original premarket application.
Any application from a State or Federal
Government entity.
Exempt from any fee unless the device is to be
distributed commercially.
Labeling Requirements - The label for IVD's must state the following information, except in cases
where it is not applicable. In addition, all information must appear on the outside container or wrapper,
or be easily legible through the outside container or wrapper. If the presence of any label information
will interfere with the test, the information may appear on the outside wrapper or container instead of the
label. If the immediate containers are too small, or otherwise unable to bear labels with sufficient space,
then the required labeling as listed below annotated with an asterisk (*) may appear on the outer container
labeling only.
Label requirements for the immediate container:
o
The established and proprietary names of the product, e.g., cholestrolometers;
* o
The intended use or uses, e.g., pregnancy detection, diabetes screening, etc.;
* o
A statement of warnings or precautions for users listed in 16 CFR part 1500
(hazardous substances) and any other warnings appropriate to user hazards, and a
statement "For In Vitro Diagnostic Use";
o
o
Name and place of business of the manufacturer, packer, or distributor;
Lot or control number traceable to the production history
- Multiple unit products must have traceability of the individual units;
- Instrument lot numbers must allow for traceability of subassemblies; and
- A multiple unit product that requires use of its components as a system should have the
same lot number, or other suitable uniform identification, on all units.
44
For Reagents:
o
Established (common or usual) name;
o
Quantity, proportion, or concentration of all active ingredients: e.&., mg., weight per unit
volume, mg./dl etc., and for reagents derived from biological materials the source and
measure of its activity, e.g., bovine, I.U., etc.;
o
Storage instructions, i.e., temperature, humidity, etc.;
o
Instructions for manipulation of products requiring mixing or reconstitution;
o
Means to assure that the product meets appropriate standards of purity, quality, etc., at the
time of use, including one or more of the following:
1. expiration date (date beyond which the product is not to be used);
* 2. statement of any visual indication of alteration;
* 3. instructions for a simple check to assure product usefulness;
* - The net quantity of contents.
Label requirements for inserts and outer packaging:
Labeling must contain in one place the following information in the format and order listed below,
except where information is not applicable, or as specified in a standard for a particular product class.
If the device is a reagent intended as a replacement in a diagnostic system, labeling may be limited to
that information necessary to adequately identify the reagent and to describe its use in the system. If
the device is a multiple purpose instrument used for diagnostic purposes, and not committed to
specific diagnostic procedures or systems, labeling can be restricted to those points annotated by an
asterisk (*).
*
o The proprietary and established product name;
*
o The intended use of the product and whether it is a qualitative or quantitative
type of procedure, e. g., screening, physician's office, home use, etc. ;
o Summary and explanation of the test, including a short history containing methodology
and the special merits and limitations of the test;
o The chemical, physical, physiological, or biological principles of the procedure.
For Reagents:
o The common name, if any, and quantity, proportion, or concentration or each reactive
ingredient; and for biological material, the source and measure of its activity;
45
o Appropriate cautions or warnings listed in 16 CFR Part 1500; the statement: "For In Vitro
Diagnostic Use;" and any other limiting statements appropriate to the intended use of the
product;
o Adequate directions for reconstitution, mixing, dilution, etc.;
o Appropriate storage instructions;
o A statement of purification or treatment required for use; and
o Physical, biological, or chemical indications of instability or deterioration.

Exemptions from Labeling Requirements - Shipments or other deliveries of IVD devices are exempt
from label and labeling requirements in the above headings and from standards listed under Part 861
provided the following conditions are met:
o A shipment or delivery for an investigation subject to Part 812, Investigational Device
Exemption (IDE), if the device is in compliance with the subject IDE; or
o A shipment or delivery for an investigation that is not in compliance with Part 812 (most IVD
are exempt from the IDE because of the following labeling) if the following conditions are
met:
- A product in the laboratory research phase, not represented as an IVD, that is prominently
labeled: "For Research Use Only. Not for use in diagnostic procedures;" and
- A product that is being shipped or delivered for product testing prior to full commercial
marketing that is prominently labeled: "For Investigational Use Only. The performance
characteristics of this product have not been established.

Investigational Device Exemption (IDE) - An investigational device exemption (IDE) allows the
investigational device to be used in a clinical study in order to collect safety and effectiveness data
required to support a Premarket Approval (PMA) application or a Premarket Notification [510(K)]
submission to the FDA. Clinical studies are most often conducted to support a PMA. Only a small
percentage of 510(K)'s require clinical data to support the application. Investigational use also includes
clinical evaluation of certain modifications or new intended uses of legally marketed devices. All
clinical evaluations of investigational devices, unless exempt, must have an approved IDE before the
study is initiated. Many IVDs are exempt from IDE requirements.