IBA-ABC Merger To Gather Biotechs Under One Roof

One big, happy family of firms is the goal; but skeptics foresee internal squabbling An impending merger of the Industrial Biotechnology Association and the Association of Biotechnology Companies will enable the biotech industry to speak with one voice, say those instrumental in forming the unified group. Observers say they expect the combined association to send a clearer message to Congress about what the industry hopes to accomplish, and to provide expanded networking opportunities for its grass-roots membership. Yet skeptics are wondering if the disparate biotech constituencies represented by these two organizations, which have feuded in the past, will be able to set aside their differences to join in a truly united effort. Further fueling skepticism in some quarters is the fact that the man appointed as president of the merged organization, Carl B. Feldbaum, former chief of staff to Sen. Arlen Specter (R-Pa.), has no direct biotech experience-- although those responsible for hiring Feldbaum say his extensive experience in Washington, D.C., makes him an asset to the new group (see story on page 6). IBA, with 150 member companies, and ABC, whose 340 members include biotech firms as well as noncorporate entities such as universities and research institutes, announced their plans to merge late last month. The unified trade association, to be called the Biotechnology Industry Organization (BIO), will officially come into existence July 1, pending ratification of the action by the membership of the two groups at their respective annual meetings. The ABC meeting will be held in April; IBA's was scheduled for February 17-19, with ABC board members invited to attend. At press time, the results of the IBA ratification vote were unknown. Says IBA chairman Stephen A. Duzan, chairman and chief executive officer of Seattle-based Immunex Corp., "In order for the industry to remain a world leader, we really had to have a strong trade association. This was an important step in that process." Some observers believe that the merger will have a positive effect in the lab as well as in the global marketplace. Jeff Davidson, executive director of the Pennsylvania Biotechnology Association (PBA), says that BIO's conventions will provide "a more effective environment for scientists in the lab. They can [now] attend meetings and network with colleagues in the entire industry," rather than only half of it. BIO's new president says he intends to visit these bench scientists at their companies. "I'm going to get to as many as I can, to visit them in their offices and labs," Feldbaum says. "I don't want to become Beltway-ridden. Those I can't get to, I intend to have long, detailed, substantive conversations with." Members of the committee that hired Feldbaum say that this ability to converse with constituents and legislators will serve him well in his new position. "He has great technology assimilation and communication skills," says ABC president Thomas G. Wiggans, chief operating officer at CytoTherapeutics Inc. of Providence, R.I. But others doubt that Feldbaum has the proper training for the job. "You like to see a certain kind of background," says one industry insider, speaking on condition of anonymity. Those who have worked with both IBA and ABC in the past are hailing the merger. Peter Feinstein, executive officer of the Massachusetts Biotechnology Council (MBC) and president of Feinstein Partners, a biotech consulting firm in Cambridge, Mass., says the merger "eliminates confusion about who represents the industry's interests in Washington." This added lobbying strength would trickle down to bench scientists, as well, Davidson notes. If legislators are more inclined to look favorably upon a united biotech industry, and if scientists in the field are better able to interact with each other, he says, biotech researchers "will be more empowered to do the things they already do." Moreover, says MBC's Feinstein, "It has been problematic dealing with these two separate organizations. Every time we've dealt with one, we had to consider how that would affect our relationship with the other." In the past, "IBA would come out with one position on a patent issue, and ABC would come out with another position," says Virginia Orn-dorff, director of biotechnology programs for the Colorado Advanced Technology Institute (CATI) in Denver. "It was easy to not pay any attention to either one." Carl B. Feldbaum, who began his new job as president of the fledgling Biotechnology Industry Organization (BIO) February 8, is no stranger to Washington, D.C. Since 1988, he has been chief of staff for Sen. Arlen Specter (R-Pa.). Prior to that appointment, he was founder and president of Palomar Corp., an independent national security consulting firm in Rosslyn, Va. He has also served as an assistant to the Secretary of Energy in the Carter administration and inspector general for defense intelligence in the Ford and Carter administrations, and was an assistant special prosecutor with the Watergate Special Prosecution Force. Feldbaum, 49, has no direct biotechnology experience, although he did receive a B.A. in biology from Princeton University in 1966, and was elected to Sigma Xi for his biochemistry research. And, says Association of Biotechnology Companies president Thomas G. Wiggans, chief operating officer of CytoTherapeutics Inc. of Providence, R.I., "he convinced [the search committee] that he remembered some of it--which is more than I can say for myself, sometimes." Wiggans adds that "the search committee voted unanimously for him," selecting him over "a dozen or more serious candidates." What's significant, says Feldbaum, who has a law degree from the University of Pennsylvania, is that he's experienced at "translating science and technology to lawmakers and policymakers." For example, he says, while a Watergate prosceutor he organized a "technical team of physicists and recording engineers" to analyze an 18 1/2-minute gap in the Nixon tapes, and he's assisted Specter with his work as a member of the Senate appropriations committee for the Department of Health and Human Services as well as the Senate Committee on Aging. But Feldbaum is unknown in the biotech community. Understandably, industry insiders who will have to work with him are loath to voice their doubts on the record, but several, speaking on condition of anonymity, have reservations about his ability to be an effective leader for BIO. "I've never heard of him in my life- -nor has anyone I know," says one. Another, calling the appointment "totally out of the blue," says, "I don't know whether this guy can really make something happen." Yet, says Jeff Davidson, executive director of the Pennsylvania Biotechnology Association, "we didn't expect him to clone many genes, anyway. He has the kind of experience that is probably most important for the kinds of policy decisions coming for the biotech industry." Search committee member Samuel H. Ronel, president of Interferon Sciences Inc. of New Brunswick, N.J., says that Feldbaum's lack of biotech experience "certainly was something that was discussed." But ultimately, Ronel says, the committee realized that "we have a sufficient number of people who could help him on these issues." One industry skeptic doubts that Hillary Rodham Clinton, appointed by President Bill Clinton to revise United States health care policy, will look favorably upon a former aide to Republican Specter: "It doesn't make any political sense." Yet Feldbaum stresses that he's worked in Democratic as well as Republican administrations. And James McCam-ant, editor of the Berkeley, Calif.-based Medical Technology Stock Letter, says that Feldbaum's Specter affiliation "is not necessarily a disadvantage. A group like [BIO] has to work with both parties." Says Ronel: "We were extremely favorably impressed by [Feldbaum's] personality. Conviviality ... is necessary to head our organization, with so many prominent people in it." Adds Peter Feinstein, executive officer of the Massachusetts Biotechnology Council, "If they've found someone whom both sides [the Association of Biotechnology Companies and the Industrial Biotechnology Association] are comfortable with, that's very important." --B.S. ABC executive director William E. Small says the merger "is like the left hand and the right hand joining." While ABC's primary focus has been on educational programming and networking, Small says, IBA has concentrated more on lobbying and the legislative arena. But although the two groups had been discussing unification since 1989, it took a long time to bring them together. A year ago, for example, Small told The Scientist, "We have different agendas, and different needs" (Notebook, The Scientist, March 30, 1992, page 4), referring to the separate missions of the associations. IBA traditionally has focused on the concerns of larger, more established firms, whereas ABC's mandate has been "to handle the interests of emerging organizations, [which were] not necessarily those the larger companies were facing," such as financial problems, says Samuel H. Ronel, president of Interferon Sciences Inc. of New Brunswick, N.J., who served as ABC's president in its formative years, 1986-88. Those instrumental in bringing about the merger say it was finally able to happen because the differences between the two groups have eroded. "Many of our members are `graduating' from emerging to established company status," Ronel says, and therefore need to pay "more attention to regulatory issues and political issues than before. It doesn't make sense to have two separate lobbying organizations." "The organizations began working together off and on for several years," says Wiggans, adding that collaborative efforts "began in earnest this year," making a merger seem logical. But some insiders are wondering whether the two groups will really be able to unite. "With two different organizations, there is a built-in tendency to worry about people not agreeing," says one observer, speaking on condition of anonymity. "You're stuck with some of the classic battles." One such battle has concerned the Orphan Drug Act, which provides market exclusivity for the first company to develop a drug benefiting a United States patient population of 200,000 or fewer. Amend- ments to the act proposed last year by Sens. Howard Metzenbaum (D-Ohio) and Nancy Kassebaum (R-Kans.) would have eliminated a company's market exclusivity when cumulative sales hit $200 million. IBA testified before the Senate Committee on Labor and Human Resources that the act "should not be altered according to political whims," according to an April 1992 IBA newsletter. ABC, on the other hand, issued a press release last month quoting Wiggans as saying, "In the case of drugs that are the subject of multiple [competing] sponsorships, [the Food and Drug Administration] should have adopted more liberal criteria to allow the multiple sponsors access to marketing approval." IBA's position on the Orphan Drug Act prompted several companies to resign from the association, including Genetics Institute Inc. (GI) of Cambridge, Mass. In December 1991, GI lost a lengthy patent battle with Amgen Inc. of Thousand Oaks, Calif., over erythropoietin, the protein used to stimulate the body's production of red blood cells, a treatment for patients with severe anemia. GI was also unsuccessful in its court battle to rescind FDA's award of orphan drug designation to Amgen for erythropoietin. GI executive vice president Garen G. Bohlin says "we haven't come to a decision" on whether GI will join BIO. "On balance, I think it's good for the industry to try to forge a consensus on some issues. We would like to be a part of that effort," he says, but he adds that GI must first determine whether "the new organization can provide a proper forum for us. We would have some concerns on whether the merged organization would be effective, given its sheer size and the number of [members] with potentially differing viewpoints." IBA's Duzan downplays the significance of such disputes. "There [have been] two or three issues of a public policy nature that the companies had different positions on that created more of a perception of widespread disagreement than actually was the case," he says. On points of contention like the Orphan Drug Act, ABC's Wiggans says, "a compromise will be reached so a position can be taken by the [new] organization--or, if no compromise can be reached, no position will be taken." In order to alleviate start-up companies' fears that "they'd be swallowed up," says IBA's Duzan, "what Tom Wiggans and I did was

IBA-ABC Merger To Gather Biotechs Under One Roof

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