A pharmaceutical firm that Greenwood found in default over repayment of incentives was attempting a feat that no other business has accomplished: getting federal approval for a generic biological drug.
Elona Biotechnologies had trouble attracting investors in its bid to become the first company to get U.S. Food and Drug Administration approval to sell a generic version of insulin, Greenwood Mayor Mark Myers said. The approval was a crucial step for Elona and, until they got it, they had no product to bring in the level of income that they would have needed to repay the city’s $6.4 million loan for a new generic insulin production facility.
No generic biological drugs have been approved yet for sale in the United States, although a few have been allowed in Europe, FDA spokeswoman Sandy Walsh said.
Generic versions of synthetic drugs such as Lipitor and Prozac may be common, but making generic biological drugs such as insulin wasn’t even a possibility until the law changed a few years ago, said Dr. Eric Ruderman, a medical doctor and professor at Northwestern University.
Biological drugs are made from living things such as bacteria and not from combining chemicals the way other drugs are.
Getting approval for a generic biological drug would be costly and challenging, especially since the FDA hasn’t determined exactly how much testing is required, Ruderman said.
Elona was an established and successful company that had been in Greenwood for 13 years before it crafted a proposal to build a 50,000-square-foot plant to make generic insulin, Johnson County Development Corp. president and chief executive officer Cheryl Morphew said.
The company just couldn’t get the investors needed to make it through the lengthy and extensive process of testing a drug in order to win permission to sell it in the United States, she said.
Greenwood is trying to get back $8.4 million in incentives that were given two years ago, partly because a group of investors and scientists tried to get the company to relocate to Florida, Morphew said.
The business, founded by former Eli Lilly and Co. scientists in 1997, ran a small lab that provided researchers at other pharmaceutical companies with refined biological material they used to find cures and develop new drugs.
The company also had been working since 2006 to develop a generic insulin and other generic biological drugs.
“It’s a great company, and it wasn’t a startup,” Morphew said. “They were folks from Lilly and had science behind it. Sadly, it just didn’t come to fruition and blew up during the process.”
Elona’s venture hinged on getting FDA approval to sell the drugs, but the company no longer has enough money to pursue the process, Myers said.
Greenwood had given the company a $1.5 million zero-interest loan to help with expenses related to getting FDA approval, but that wouldn’t have covered the full cost, said Indianapolis attorney Wendy Brewer, who was hired by the city to handle the default.
“It’s a lengthy process,” she said. “That was supposed to kick-start part of the process.”
Getting FDA approval for a generic biological drug requires clinical trials and far more testing than for generic forms of synthetic drugs, Ruderman said.
For generic versions of synthetic drugs, companies just have to prove they are chemically identical to the brand-name versions and can get FDA approval by showing lab results.
But with biological drugs, they have to prove that they have the same protein structure, that they’re interchangeable with brand names, that they absorb and metabolize the same, and that they’re safe to use, he said. Costly clinical trials are required.
“There’s a perception that generic (biological drugs) would be easy money,” he said. “But the approval pathway is challenging and complicated, and the guidelines aren’t even finalized. You could start down the path to develop a biological drug and later find out that you don’t have all the data.”
The FDA is still developing guidelines because the idea of generic biological drugs is relatively new, Ruderman said. Patents had protected insulin and other biological drugs, and they only recently have started to expire.
In 2010, federal law also changed to allow the creation of generic bioengineered drugs, as part of a push to reduce health care costs, he said.
Companies have since requested about 50 meetings with the FDA to discuss the possibility of making such drugs and have filed 13 applications, Walsh said. The agency came up with a draft of potential guidelines last year, but they’re still under review.
No generic biological drug has been approved yet for sale in the United States, and the FDA can’t predict when the first will hit the U.S. market, she said.