News Article -- November 04, 2008

Biodefense Q&A Series with Dr. House: Part 2 - Biodefense Industry Trends

Q: What trends have you noticed in the biodefense industry?
A: One of the encouraging signs I’ve seen lately is companies working together to share information. For example, the Alliance for Biosecurity, of which DVC is a founding member. One benefit of the Alliance is that government officials from disparate agencies, including The Department of Health and Human Services (HHS), Biomedical Advanced Research Development Authority (BARDA) and the White House, come together to hear views from biodefense industry thought leaders.

Q: Are government contracting requirements a big barrier to entry?
A: There are at least three large barriers that I know of. First, the ultimate uncertainty of the market is a big barrier to entry, as are government regulations. When the government does business, it is covered by the Federal Acquisition Regulation (FAR), which is designed to prevent fraud and abuse in government contracting. The FAR is very important, but it tends to slow progress; traditional pharma and biotech companies are used to being more agile and responding more quickly to change than government contracting regulations allow, which can lead to frustration and reluctance to pursue government contracts.

The second barrier is that there is no commercial market for the vast majority of biodefense countermeasures, so you’re subject to making large quantities of a product to go into storage until it is needed; at present, there’s no continuous flow of manufacturing, as with most other drugs and vaccines that have an established and ongoing commercial market.

Finally, since the government is the primary—if not the only—customer, the funding environment can be difficult to predict. Funding cycles are generally very long, and even follow-on contracts do not often happen quickly (or at all). This makes it exceptionally difficult to make long-range plans necessary for most businesses.

Q: How does DVC compete in this tough market?
A: DVC’s business model is based on working with other companies to help them develop their products. We are a service company, not a product company. One of our major strengths is government contracting, so we help our partners, which include both small and large companies, navigate that complex environment and ultimately advance development of their products. In addition, the success of our company is not tied to one or two products, so we minimize risks this way.

Q: What are other companies struggling with in the course of developing their products?
A: It’s been a good entrée into working with the government for a lot of DVC partners. In a lot of cases, government regulations are not really compatible with industry business models. Companies with exciting technologies, particularly small companies, struggle with these requirements. Large companies often find it difficult to adhere to the very specific conditions of how the contract will be managed, as their business models are generally not set up to accommodate government contracting.

One issue that has affected all biodefense-related companies has been the challenge of developing products which can never be tested for efficacy in humans. Such products will depend on the U.S. Food and Drug Administration's (FDA) Animal Rule for licensure; this mechanism allows for efficacy testing to be conducted primarily in animals, with the results requiring a “bridge” back to human clinical data such as immunogenicity. The problem is, no company has done this successfully for a biopharmaceutical product such as a vaccine, so there’s no road map for doing so, and no specific guidance from the Agency on exactly what data will be required to fulfill the requirements to demonstrate such efficacy. As one might expect, it can be a costly gamble in terms of both time and expense if the course of development turns out to be the wrong one.

Q: How can the government improve the biodefense industry?
A: They’ve already taken a huge step in the right direction. The new BARDA director, Dr. Robin Robinson, is the right man at the right time to lead that agency. He has been in industry and at the helm of the government’s pandemic flu efforts for the last few years. BARDA needs to be funded to start making headway on more countermeasures. Biodefense is one of many competing and urgent priorities; still, as a country, we must be ready to face this challenge.


This is the second of a three-part Q&A series with Dr. House. Look for the third installment to be added soon.

Related Links:

Learn more about Dr. Robert V. House, DVC President.

Read more about the Biodefense Q&A Series Part 1.

Find out more about DVC's capabilities.

View additional biodefense resources.