Frankly, I’m satisfied he’s going to serve time. Angry that our judicial system can’t penalize him with a longer sentence given the repeated widespread impact his actions have had on our industry. Amazed at his gall to repeat his offenses. Unforgiving that he blames his bipolar disorder for his misdeeds.

Blech’s troubles began in September 1994 when his investment boutique, D. Blech & Co., suffered a liquidity crisis as capital reserves dipped below federally regulated levels and ceased trading activities on Nasdaq. The news sent the stock prices of numerous Blech-financed biotech start-ups spiraling down in an already bear market. His company’s portfolio of 11 biotech firms lost more than $168 million in market capitalization in one day.

Blech, who founded his investment firm in 1990, was touted as the financial “white knight” of biotech start-ups. Four years later when his empire crumbled, some of his brokers not only received rubber paychecks, but they also were left without even the most basic tools of the trade, including telephones. It was really sad.

His former brokers said he ran “a sleazy boiler room operation,” pressuring them to get clients to buy newly issued shares in companies underwritten by Blech and urged them just as strongly to advise those clients not to sell if the price started rising.

As the years stretched on, it only got messier.

A Florida attorney for former D. Blech & Co. employees was sentenced to five months in prison for obstructing an SEC investigation in 1997. Lloyd Schwed, of Jupiter, Fla., pleaded guilty in November 1996 to withholding and agreeing to destroy tapes subpoenaed by the SEC. Schwed represented the 10 former brokers in complaints filed against Blech. The brokers were ultimately awarded hundreds of thousands of dollars in damages stemming from the collapse of Blech’s business.

In 1997 he was charged with scheming to defraud Bear Sterns & Co., which provided clearing services for securities transactions made by Blech’s brokerage firm. But the judge felt sorry for him and refused to accept a guilty plea when he learned Blech was on meds for manic-depression.

Too bad. Because he turned right around and did it again. Blech made major stock purchases in three companies in 1997 ‑ Gene-Medicine Inc., Escalon Medical Corp. and Homecom Communications Inc ‑ without having enough assets to pay for them.

Who would stop this guy? U.S. District Judge Colleen McMahon slammed the gavel down this week.

The Associated Press reported that McMahon repeatedly scolded Blech during sentencing, which includes four years plus $1.3 million forfeiture. She called him a “serial stock manipulator” because he committed the same crime four times even after being granted leniency when he swore he wouldn’t commit another crime. Hooray for a strong judge.

So, almost two decades since the troublemaking started, I say good riddance, David Blech.

The invasion of the multidrug-resistant superbugs is not a nightmare in the making. It’s already here. And it could be years before a new superhero lands in Metropolis to knock out the worst of the worst of these villains that are set on world domination.

In a twist on the usual comic book tale, the super-resistant strains of CRE, malaria and tuberculosis threatening the world today are not the work of a mad scientist scheming away in a remote underground lab. They are a force of nature – helped along by our over-reliance on cheap, decades-old anti-infectives.

But scientists could hold the answer to stopping the bad guys in their tracks. “All” they need to do is identify a superhero, or discover a form of kryptonite, to strip the nasty bugs of their power. The trouble is that many of the scientists who know these bugs, and the big pharma firms the scientists work for, are ignoring the problem.

That wasn’t always the case. In years gone by, big pharma was on the frontlines of the pathogen battle. Then the generics took over the fight, and the cost and time involved in developing new drugs soared. As a result, big pharma retreated – to a hero-for-hire industry that’s focused on blockbuster drugs that can command high prices, multiple indications and long-term use.

Unfortunately, the heroes that chase down superbugs, especially those terrorizing developing countries, don’t fit that costume. They have to be affordable. And their use has to be limited, so there can be no indiscriminate prescribing, off-label promotion or expanded indications. Otherwise, the bugs will learn the secrets of their powers and devise a way around them.

When big pharma scientists redirected their X-ray vision to blockbuster drugs, they created a brain drain in the R&D necessary to identify a new breed of superheroes to take on drug-resistant bugs. Some of the missing-in-action scientists were the ones who had discovered useful molecules and figured out how the bugs evolve their super resistance. When they fled Metropolis, they took that knowledge with them.

It will take many, many years to overcome the brain drain, Helen Boucher, director of the Infectious Diseases Fellowship Program at Tufts Medical Center, told BioWorld. “If we ever can,” she added.

Meanwhile, as biotech startups scramble to find the money and race against the clock to fill in the knowledge gaps to develop a new brand of hero that might appear on the scene in another decade or so, the world continues to face emerging strains of virile superbugs that make yesterday’s superhero anti-infectives look like impotent has-beens.

Partnering, networking and making new friends are all top-of-the-agenda for the biopharma industry’s largest U.S. gathering. As you’re preparing to join 16,500+ of your colleagues at the 2013 BIO International Convention in Chicago, we’d like to introduce you to a few standouts featured in the stories below. Also, come meet the BioWorld people, who are pretty interesting, too, at booth 1573. Plus, you can collect BioWorld’s giveaway, which is both practical and sentimental. For 15 years, Publisher Donald R. Johnston has masterminded the creation of our lids. It’s a hotly sought after gift, so come early before we run out.

Avalon’s Lichter: ‘Laid-Back’ Savvy Keeps Deal Flow Strong

When it comes to getting venture capital deals done, the science and the financial terms naturally take center stage, but the personalities of the players need to mesh, too, for the best outcomes.

Women Leaders in Biotech: ‘Walls Are Coming Down’

The glass ceiling is shattered, and barriers to women’s participation in the biotech industry have fallen at every level, including the highest. That is the happy testimony of four leading women in biotech slated to present at BIO 2013, including Rachel King, co-founder of GlycoMimetics Inc.; Leslie Williams, president and CEO of ImmusanT Inc., Jessica Flechtner, vice president of research at Genocea Biosciences Inc.; and Denise Pollard-Knight, managing partner with Phase4 Ventures.

CEOs of Newly Public Biotechs Balance Work and . . . More Work

The initial public offering window may be creaking open for biotech – thanks in part to the new emerging growth company designation included in last year’s JOBS Act – but running a publicly listed small biotech requires as much dedication as ever. Among speakers at BIO 2013 are two CEOs who can attest to that, having helmed their respective companies through the process in the past year – Dave Pritchard of KaloBios Pharmaceuticals Inc. and Lonnie Moulder of Tesaro Inc.

Unconventional Paths Give Young Standouts a Step Up

Among the thousands of interesting people who will be attending the 2013 BIO International Convention in Chicago are young standouts who are already making their mark in biotech, including Josh Sommer, Isaac Kinde, Laura Deming and Andina Mangubat

Navigating Successful Biotechs: CEOs Need to be Visionaries

It takes a special kind of person to be able to help navigate a biotechnology company from its early stages, with all its attendant hopes and dreams into the reality of a truly therapeutic product organization, which generates revenue and builds value for its shareholders. The job description calls for visionaries with business savvy and the ability to keep a positive attitude even when bumps in the road are encountered. BioWorld Today caught up with two such visionaries: Kleanthis Xanthopoulos, president and CEO of Regulus Therapeutics Inc., and Ingmar Hoerr, CEO of CureVac GmbH.

Mukherjee regaled the audience with an apocryphal tale of a historian who was asked to predict the future of the Soviet Union and answered that “in the Soviet Union, the future is quite easy to predict. The problem is the past. The past keeps changing.”

That problem, he said, is also one in cancer research – faced with a cancer cell, we have ever-changing notions of how it got to be that way. Mukherjee traced the dominant theory of cancer’s natural history from the 1860s, when Rudolf Virchow first argued that dysregulated cell division is the root cause of cancer, to the notion now taking root that cancer is an organismal disease that involves changes to the microenvironment and the immune system of the cancer patient as well as to the genes and genomes that make up the cancerous cells.

Along the way, he shared fascinating stories of cancer and its treatments. The first chemotherapy was a chemical cousin of notorious World War I weapon mustard gas; pioneering surgeon and Johns Hopkins University co-founder William Halsted was addicted to both cocaine and morphine, which in his day was used to treat cocaine addiction; in the 1960s, philanthropist and medical research champion Mary Lasker thought that the cancer problem would be wrapped up by 1985.

At BioWorld, we’ve recommended The Emperor of all Maladies before, of course. It’s too much in our sweet spot not to. But good advice never gets old, and so if you have not read the book, it is still worth heading to your local bookstore, or library, and picking up a copy.

The Ingelwood, Calif.-based firm said it was changing its name to “AmaginAb,” because most of the successful firms in biotech have names that start with the letter ‘A” and “we were forced to acknowledge that we might never get acquired with a name that starts with ‘I’,” said CEO Christian Behrenbruch.

Plus, the new name better reflected its “overall awesomeness.”

But never fear. ImaginAb is really keeping its name, so don’t rush to update your Outlook contacts or rolodexes. The firm said it opted for this April Fools’ Day stunt because “we are hiring and wanted your attention.”

Well played, ImaginAb. Well played.

Of course, we realize that bad mutations can happen to good cells. The idea that most mutations are actually bad for an organism is a basic tenet of evolutionary theory. But then, the theory goes, the bad mutations get weeded out because their owners are now at a disadvantage.

By and large, of course, the reason we think of evolution like that is because it’s true. But every now and then, I come across papers that bring home the fact that evolution is also very complex, and not necessarily a one-way street toward the better.

Two such papers recently have made this point. One showed that evolution can let cells permanently acquire things that are bad for them – in this case, mutations that slow their growth. The other, while it does not deal directly with evolution, suggests that processes such as inflammation can evolve into different directions for reasons that remain mysterious to us.

The first paper, published a few weeks back, deals with so-called passenger mutations, and shows that instead of being neutral, they in fact put a drag on cancer cell growth.

In their work, the authors showed what senior author Leonid Mirny called a “counterintuitive” truth: that “in an evolutionary process, you can accumulate mutations that are bad for you.” That is exactly what happens to cancer cells, where driver mutations that give the cells a growth advantage can take passenger mutations that give them a disadvantage along for the ride.

The second paper does not deal directly with evolution at all. Instead, its authors showed that the inflammatory processes that happen in mice are very different from those that happen in humans.

You can find the details here and here. But basically, it appears that humans have a much stronger inflammatory response to bacteria.

Why? Because they evolved that way. Well, yeah, but why?

“The assumption is that there has to be some advantage to the way we do it,” co-first author Shaw Warren told BioWorld Today when his paper came out. “But the fact of the matter is that no one has been able to make a convincing case for what that advantage might be.”

If the sequester stayed in place, NIH Director Francis Collins said the agency would give “hundreds and hundreds” fewer grants than it would have awarded otherwise, slowing down important research. Speaking at a news conference, Collins said the NIH was trying to avoid employee furloughs, but he couldn’t promise they wouldn’t occur.

That’s when someone asked a question that others were likely thinking: “Doesn’t the NIH have any fat it can trim?”

“No,” was the reply, especially since the sequester was falling on the heels of several years of nearly flat budgets for the agency. Collins pointed out that because of those flat budgets, the NIH has lost about 20 percent of its spending power in recent years.

Collins painted a similarly bleak picture last year when he testified before a House subcommittee. Even without the sequester, researchers had only a 17 percent chance of getting NIH grant funding, one of the lowest rates in history, he told the Energy and Commerce’s Health Subcommittee. In years past, a researcher had a 30 percent chance at funding.

Today, the average age of a researcher getting a first grant is 43. That fact is enough to send young scientists into other careers, depleting the next generation of researchers and jeopardizing the nation’s status as a leader in medical R&D.

While the numbers are discouraging, there is something that would enable the NIH to fund more researchers and stretch its limited research dollars, even under sequestration. The solution? Limit the indirect costs universities can take from agency grants to cover facilities and administration (F&A).

While many foundations spend less than 25 percent of their grants on indirect costs, some universities are spending up to 95 percent on overhead, Rep. Tim Murphy (R-Pa.) said at the subcommittee hearing last year. Repeating a previous conversation with Collins, Murphy listed several private universities that charge excessive indirect costs on NIH grants but spend little of their own money on research. For instance, Harvard University, which has an endowment bigger than the NIH budget, applied 75 percent of its NIH funding to overhead costs and spent zero of its own funding, the congressman said.

Such practices aren’t limited to NIH grants, as the F&A rates for research grants are calculated in accordance with federal-wide guidelines issued by the Office of Management and Budget. “F&A cost rates are negotiated and established by the federal government to ensure that they are fair and equitable and that the federal government pays its fair share of these costs,” NIH told BioWorld recently.

Given current budget constraints and the fact that many universities are making money by licensing the intellectual property resulting from NIH-funded research, it may be time to rethink the government’s “fair share” of those F&A costs. Putting tighter caps on indirect costs would give the NIH more money to fund its core mission of research rather than subsidizing universities that will profit from that research.

Editor’s note: How much NIH grant money should go toward indirect costs such as facilities and administration? Cast your vote at bioworld.com. Look for our poll on the bottom, right side.

It’s no surprise, then, that the prospect of a new treatment for people with medically refractory epilepsy would be greeted with great enthusiasm. As an adjunct to AEDs, the responsive neurostimulator system, or RNS, under development by Mountain View, Calif.-based NeuroPace, is designed to detect abnormal electrical brain activity and deliver electrical stimulation to regulate brain activity before a seizure develops. The RNS could become the first electrical stimulation device approved by the FDA in epilepsy since vagus nerve stimulation was green-lighted in 1997.

But the results of the Feb. 22 FDA adcom meeting evaluating the NeuroPace RNS raise troubling questions about regulatory decisions in epilepsy care. As reported in Medical Device Daily, the FDA briefing documents submitted for the Neurological Devices Panel of the Medical Devices Advisory Committee meeting indicated that a pre-specified statistical analysis plan of NeuroPace’s prospective, randomized, double-blind, sham-stimulation-controlled pivotal study called for the use of a generalized estimating equation (GEE) model and required that superiority be demonstrated based on a reduction in the frequency of total disabling seizures during the blinded evaluation periods (BEP).

However, neither the study protocol nor the statistical analysis plan “explicitly stated” which of two methods would be used to estimate standard error, producing what the FDA called “distinctly different p-values” for the primary efficacy endpoint. The agency and sponsor concurred that an alternative model was needed, agreeing to use the Poisson regression model. Although the FDA recommended that monthly seizure counts be used, NeuroPace chose the daily model, with the expectation that many seizure-free days would occur in the treatment group and there would not be a clinically meaningful way to group data.

That premise seemed reasonable, since seizure activity can vary from day to day. However, the observed variability in the study exceeded the expected variability in daily seizure counts following a Poisson distribution. NeuroPace then made ad hoc modifications, reverting to monthly seizure counts along with the use of a negative binomial distribution to analyze the returns. According to the FDA, NeuroPace had to add an adjustment for clinical co-variates along with the other modifications to achieve statistical significance for the primary efficacy endpoint.

With these modifications, the pivotal study showed a statistically significant 37.9 percent reduction in seizure frequency in the treatment group compared to a 17.3 percent reduction in the control group during the three-month BEP. Long-term results showed median seizure frequency reductions of 44 percent and 53 percent, respectively, at one and two years post-implant.

Statistical Qualms Bubble Up

In its briefing docs, the FDA argued that some alternative post-hoc GEE models did not achieve statistical significance, none of the pre-specified secondary endpoints achieved statistical significance and no observed data analyses achieved statistical significance. Moreover, response to the device varied by the number of seizures seen at baseline, and findings from the treatment arm may have benefited from two patients on the sham arm with a different response pattern than others in the trial.

Despite these statistical qualms, 12 of 13 adcom members agreed there was “reasonable assurance” that the NeuroPace RNS system is effective for patients meeting the criteria for the proposed indication: adults with partial onset seizures from no more than two foci who are refractory to two or more AEDs. One panelist – a statistician – abstained. The panel voted unanimously that the system is safe, and 11 members concurred that the RNS benefits outweighed the risks, with two abstentions.

I understand the genuine desire to offer hope to epilepsy patients with uncontrolled seizures. My husband developed epilepsy at age 15 a year after a serious head injury, and he is not seizure-free after 40 years on various combinations of AEDs and a left temporal lobectomy.

But should the FDA permit statistical manipulation in epilepsy that would likely raise eyebrows in other indications? At BioWorld Today, I write about the development of drug therapies designed to treat individuals with cancer, hemophilia, multiple sclerosis, Alzheimer’s disease and many other poorly treated diseases. I understand the desire to bring new treatment options to patients with agonizing conditions. I really do.

I also see countless drugs rejected by the FDA when efficacy is not assured, even when safety is unquestioned. And, compared to medical management, the implantation of a deep brain stimulator is not inherently safe. Up to one in five patients could be expected to have a serious adverse event related to implantation and related medical procedures, according to the FDA’s own risk/benefit analysis of the RNS. Shouldn’t the burden of proof for such a device be even higher than that of a drug?

Above All, Demonstrate Efficacy

With respect to epilepsy, quality of life implications often are cited as a compelling reason for drug or device approval, with patients seemingly willing to accept a higher risk threshold in return for the prospect of improved seizure control. In my view, that premise should be predicated on demonstrated efficacy. In the real world, physicians are quick to suggest new treatments, and patients often are desperate. Few have the benefit of advocates with neurological expertise who can provide an unvarnished appraisal of a newly approved therapy. I wake up every morning with someone who has run the epilepsy treadmill, trying therapies touted for their efficacy that proved futile, and worse.

The NeuroPace RNS may, indeed, help some epilepsy patients, which would be a terrific outcome for the developer and the epilepsy community, alike. However, that claim seems far from proven, which should give the FDA pause in approving its usage without additional study. Individuals with epilepsy deserve treatments that offer true hope, not outcomes derived on the basis of statistical tinkering.

Editor’s note: To read more about Marie and Chuck Powers’ experiences with epilepsy and an unusual condition that surfaced after a temporal lobectomy ‑ prosopagnosia ‑ visit her personal blog, About Face.

Although Omontys is not a biosimilar, the unexpected postmarketing reports of serious hypersensitivity reactions linked to the erythropoiesis-stimulating agent (ESA) served as a reminder of the variability of biologics, their sensitivity to minute manufacturing changes and the difficulty of catching a rare safety signal in the full-blown biologic development process – let alone an abbreviated biosimilar path. It also evoked memories of a similar incident a number of years ago in which an increase in pure red-cell aplasia linked to Eprex, another ESA, was attributed to a change in rubber stoppers in the drug vials.

Both incidents should give the FDA pause about its approach to biosimilar approval. Because of the variability of biologics, biotechs and patient advocacy groups have urged the agency to require safety data for biosimilars. While the agency maintains that patient safety is its primary concern with any drug, it insists that since the reference biologic has demonstrated safety and efficacy, all a biosimilar must do is demonstrate similarity to the reference drug. The goal is not to require redundant clinical trials that would be expensive, unnecessary and unethical, according to the agency.

In light of the Omontys and Eprex recalls, the FDA, at the least, should require that marketed biologics and biosimilars have packaging identical to that used in clinical trials and be manufactured at the same facility, under the same processes, as that of the trial drug.

Neither the FDA nor most biotechs want the biosimilar path to fail. But they understand the complexities of making biologics, and they know that one disaster now could doom or indefinitely delay the new approval path.

Unfortunately, people not so familiar with the differences between biologics and small molecule drugs, which are far less complex than biologics, too often equate biosimilars with generics. Since generics are unquestionably accepted as equivalent to small molecule reference drugs, they can be substituted automatically for the brand drug at the pharmacy. Thus, they account for about 80 percent of the prescription drugs dispensed in the U.S. Many generics advocates envision the same success for biosimilars – if the FDA would just start approving them.

Yet even generics have had equivalency problems. Last year, the FDA found that a generic bupropion, approved based on extrapolated data, wasn’t comparable to GlaxoSmithKline plc’s antidepressant Wellbutrin XL 300 mg (bupropion). That incident raised questions about the use of extrapolated data for both generics and biosimilars.

Other generic equivalency issues were raised last year in a Government Accountability Office (GAO) report, which questioned the substitution of generics for some indications. The GAO cited a study that found patients on selective serotonin reuptake inhibitors (SSRIs) who switched to cheaper substitutes mid-treatment averaged $881 more in total health care costs than those who stayed on the more expensive brand SSRI due to a higher rate of hospitalizations and emergency room visits.

Another study referenced in the GAO report looked at the annual health care costs for kidney transplant patients treated with narrow therapeutic index immunosuppressants. Researchers found that patients on the generic needed higher doses of the drug or an additional immunosuppressant to maintain their new kidneys as compared with those on the brand drug.

Such issues could be magnified for biosimilars, given all that scientists don’t know yet about biologics. That, coupled with the public’s tendency to consider biosimilars as just more generics, should set off other alarms for makers of reference biologics. Some courts – most recently, the Alabama Supreme Court – have held brand drugmakers liable for adverse events caused by generics, which share the same labeling as the brand drug. Recognizing all that can go wrong in the manufacture of a biologic, makers of a reference biologic don’t want to be on the legal hook for a biosimilar that a judge or jury mistakenly equates with a generic.

Editor’s note: Need more information about biosimilars? Check out The Biosimilars Game: A Scorecard for Opportunities, Threats and Critical Strategies, a new report by BioWorld Data. Call for details (800) 477-6307.

However, even as scientists carefully and methodically approach whole genome sequencing to see if it has value for patients, some patients are taking matters into their own hands, hoping that running their own personal Human Genome Project will turn up the kind of answers that their doctors can’t give them.

Lukas Wartman is patient zero of the cure by sequencing movement. Wartman was researching acute lymphoblastic leukemia when, in a deeply ironic twist of fate, he fell ill with it. Wartman’s colleagues decided to search his entire genome sequence in the hopes of finding the gene behind the cancer. Using resources at Washington University, scientist Timothy Ley and colleagues sequenced the genes of his cancer cells and healthy cells, and also ran an RNA analysis.

Miraculously, the project turned up an answer ‑ a gene normally associated with kidney cancer ‑ and there was a new drug targeting that gene malfunction. Wartman went into remission and was stable at last report a year later.

The first complete human genome sequence was completed by National Human Genome Research Institute and Celera Corp. in 2003 at a cost of over $3 billion. The technology has reached a point where it is now feasible to run multiple full genome sequences to diagnose one patient, and, perhaps spurred by Wartman’s success, a number of vendors are ramping up sequencing services for the clinical market.

Leading the pack is Illumina Inc., which rolled out a clinical individual genome sequencing service in September 2012.

Science fiction writer Jay Lake has become an early adopter of Illumina’s offering, branded TruSight IGS Rapid TAT Whole-Genome Sequencing. Diagnosed with colon cancer in 2008, Lake has run through the available treatment options, and is hoping that whole genome sequencing of his cancer will lead to a treatment to put him in remission.

With rapid turnaround service, Illumina sequencing is priced at $13,000. The analysis would be a large, additional cost. As a friend of Jay, I encouraged him to pursue sequencing, and set up a fundraiser to allow his community of friends and fans help him with the cost of sequencing, as well as the miscellaneous costs associated with long term serious illness. The response was swift and overwhelming, and the fundraiser quickly topped its goal of $20,000. Extra funds beyond the goal have allowed Lake to explore multiple analysis options, and the possibility of RNA expression analysis.

A number of other commercial vendors and academic laboratories are exploring clinical genomic sequencing services. Representatives of Science Exchange encouraged Jay to post his sequencing job where he could receive multiple bids for sequencing.

Elizabeth Iorns, a representative of Science Exchange, said many of its providers are CLIA certified, and that the group is planning to expand into clinical services in partnership with Cancer Commons, a nonprofit open science initiative working toward bringing next-generation genomics technologies to patients.

It’s not clear whether whole genome sequencing will benefit patients with cancer, or any disease, or if it will continue to be more beneficial and cost effective to screen for specific, known mutations. The success in Lukas Wartman’s case is encouraging. However, one other early adopter of sequencing technology, Steve Jobs, didn’t fare as well. In a biography published after his death, it was revealed that Jobs spent about $100,000 on sequencing for his cancer, but was not able to find the kind of target that would have cured his disease.