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News Review

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HCV ADVOCATE WEEKLY NEWS REVIEW: A Review of HCV, HBV and HIV/HCV Coinfection Related News and Highlights

Week Ending: December 12th, 2003

Alan Franciscus
Editor-in-Chief

To download pdf version click here


In This Issue:

Company in Hepatitis Case Violated Rules

Study Probes A-B Residents' Health

Fludarabine May Place Patients at Risk Of Hepatitis B From Virus Reactivation

Changes in Formularies May Lead to Discontinuation of Drug Therapy New Findings Suggest

Stealth Merger: Drug Companies and Government Medical Research

Liver Transplant Thwarted by Blackout Succeeds on 2nd Try

Access To Clean Needles - A Health Issue

Micrologix licenses Hepatitis B Compound to Spring Bank Technologies

Organetix, Inc. Announces Positive Test Results for Hepatitis C Treatment

Insulin Resistance, Chronic Hepatitis C and Fibrosis Progression

Judge Rules for HIV Patient in Transplant

Lamivudine Controls Viral Replication in Relapsed Hepatitis B Patients Although Resistance Eventually Develops

Hepatitis C Virus-Positive Renal Donations Heighten Mortality Risk

Organetix, Inc. Commences Production of A4+L, Proprietary Liver Product


December 6th, 2003

Company in Hepatitis Case Violated Rules
By Olga R. Rodriguez

Source: Associated Press

MONTERREY, Mexico (AP) - U.S. inspectors visiting green-onion producers in northwestern Mexico found that one of the four companies linked to a deadly U.S. hepatitis outbreak failed to meet hygiene standards, Mexican officials said Friday.

Javier Trujillo, undersecretary for food safety and quality in Mexico's Ministry of Agriculture, said Dos M Sales de Mexico, a company located near the border city of Mexicali, in Baja California state, was washing its scallions with water from a nearby reservoir, rather than with purified drinking water, as required.

"The deficiencies where found at the company's packing operation but that is not conclusive proof that this was the origin of the hepatitis outbreak in the United States," Trujillo said.

The other three companies linked to the outbreak that killed three people and sickened more than 600 in Pennsylvania are Agricola La Laguna, a.k.a. Sun Fresh, of Ensenada; Tecnoagro International in San Luis Rio Colorado and Ensenada, and Agro Industrias Vigor in Tijuana, Ojos Negros and San Quintin, Baja California.

The probe by three inspectors from the U.S. Food and Drug Administration and one from U.S. Centers for Disease Control and Prevention - accompanied by Mexican officials - started Monday, and will continue next week when inspectors will visit scallion-exporting companies not linked to the hepatitis A outbreak, Trujillo said.

But Trujillo said the FDA rushed to judgment by publicly identifying suspected companies before completing an investigation that followed the green-onions through the supply chain.

"The hypothesis that the outbreak could have originated in Mexico is one, but there is also the likelihood of contamination in the transportation, or at the restaurant," Trujillo said. "It's really surprising that the FDA would only emphasize the hypothesis of contamination at the point of origin."

Ellen Morrison, director of the Office of Crisis Management for the FDA, said the FDA has been very careful with the investigation and sent the inspection team to Mexico only after not finding sources of contamination at the different restaurants.

She said it's premature to speak of the inspectors' findings while the investigation is in progress.

The hepatitis strains found in the rash of illnesses among customers at a Chi-Chi's restaurant at the Beaver Valley Mall northwest of Pittsburgh are very similar to those found in smaller outbreaks that occurred in Tennessee and Georgia in September. Those earlier outbreaks were traced to three companies known to have supplied Mexican green onions in those states. It is unclear whether they are the same companies currently being investigated.

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Study Probes A-B Residents' Health
By Josh B. Wardrop / Staff Writer

Residents of Allston-Brighton are some of the healthiest in all of Boston's various neighborhoods - even if they're not necessarily the happiest, according to a study by the Boston Public Health Commission.

The recent study, based on the 2000 Census, hospital discharge files and a survey of Allston-Brighton residents, found that rates of infant mortality, low birth weight, hepatitis C, AIDS, HIV and sexually transmitted diseases were all significantly lower in Allston-Brighton than in Boston as a whole.

The study was intended to measure how Allston-Brighton stacked up against 15 other Boston neighborhoods, and against the city as a whole, in terms of public health issues such as hospitalization rates, causes of death and incidence rates for certain diseases and health problems.

"We go all over the city once a year," said Barbara Ferrer, deputy director of the commission, as she presenting the results Monday at St. Elizabeth's Hospital. "This gives us an opportunity to share information about your neighborhood, and hear from you regarding what health issues you're concerned about."

For the most part, the results of the BPHC study - based on numbers from the year 2001 - revealed that Allston-Brighton is one of the healthier communities in Boston. In fact, Allston-Brighton had the second-lowest rates of infant mortality (babies who die before their first birthday) with only four deaths per 1,000 births. Only East Boston had a lower percentage. And the STD rate for diseases such as gonorrhea, syphilis and chlamydia - 192 cases per 100,000 residents - was lower than any community except West Roxbury.
According to Ferrer, the study was age-adjusted, so the high concentration of young and healthy college students in Allston-Brighton does not explain the high marks. "The college-age community was allowed for in this process," she said.

The overall positive results were tempered by a few categories in which Allston-Brighton compared unfavorably with the rest of Boston. Hospitalization for matters related to psychoses, for example, accounted for the second highest-number of hospitalizations in both A-B and Boston as a whole, after pregnancy. However, the hospitalization rate for psychoses, - seven hospitalizations per 1,000 people - was about 40 percent higher in A-B than in Boston as a whole. Ferrer admitted that the high concentration of halfway houses in A-B may have had some bearing on those numbers, "especially if they report those homes as their legal residence."

Depression also seems to strike A-B residents in slightly greater numbers than those in other neighborhoods. The BPHC study revealed that 10 percent of reporting A-B residents said that they felt sad, blue or depressed for 15 or more days out of the month, which was higher than the 8 percent for Boston as a whole.

And obesity - a pandemic problem in America today - is certainly a concern here in Allston-Brighton as well. According to the BPHC study, 35 percent of A-B adult residents are overweight or obese, which Ferrer terms "a high rate, but actually one of the lowest in the city." The rate for Boston as a whole is 47 percent, with communities like Hyde Park, Mattapan and South Boston reaching 60 percent or higher.

The high obesity numbers were attributed to a lack of exercise. Approximately 58 percent of A-B adult residents reported engaging in no physical exercise or in exercise of less than 30 minutes a day, five times a week. This was roughly equal to the numbers for Boston as a whole.

The leading causes of death in Allston-Brighton were heart disease, at 188 deaths per 100,000 residents, followed by cancer at 181 deaths per 100,000 residents. For Boston as a whole, cancer was the leading cause while heart disease came second.

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Fludarabine May Place Patients at Risk Of Hepatitis B From Virus Reactivation
By Jill Taylor

Fludarabine, alone or in combination with other (non-steroid) antineoplastic drugs, is a powerful trigger of severe hepatitis due to hepatitis B (HBV) reactivation in HBsAg-positive and anti-HBc-positive patients, say Italian researchers.

Previous studies have shown that chemotherapy can cause hepatitis flare-up through viral reactivation in patients with past virus contact. An effect of fludarabine, a nucleoside analog effective in treating indolent non-Hodgkin's lymphoma (NHL), is profound and prolonged immunosuppression with a decrease of CD4+ and CD8+ lymphocytes, which predisposes to opportunistic infections.

However, little data exists regarding the genotype of reactivated viruses. Dr. Marco Picardi of Federico II University Medical School, Naples, Italy, and colleagues performed a prospective study on HBV reactivation and reactivated virus genotype in NHL patients undergoing fludarabine-based chemotherapy.

The study included 40 consecutive adult patients with grade I follicular, nodal small lymphocytic or marginal zone B-cell NHL. Patients received diagnostic tests prior to each treatment course, and monthly after chemotherapy completion.

Prior to starting chemotherapy, patients were assessed for HBsAg, HBeAg, and for antibodies against HBs, HBe, HBc, Hä, HCV, HAV, cytomegalovirus, Epstein Barr virus and herpes simplex virus. HBV-DNA and HCV-RNA were measured by a quantitative polymerase chain reaction procedure.

Pre-treatment assessment of viral serological status showed that 12 patients were HBV-positive, 6 were HCV-positive, and the others were seronegative for both viruses. Among HBV-positive patients, 4 were healthy carriers of HBsAg, 2 were anti-HBc-positive without anti-HBs, and the remaining 6 were anti- HBs-positive (together with anti-HBe and/or anti- HBc).

Hepatitis flare-up occurred in 4 HBsAg-positive patients and in 1 anti-HBc-positive patient from between 1 and 4 months after chemotherapy, when the CD4/CD8 ratio was still inverted. HBV reactivation occurred in all 5 instances.

Lamivudine was used as first-line treatment in all 5 cases of hepatitis. Of these patients, 2 responded to treatment, 1 died of acute liver failure, and 2 had persistent severe hepatitis.

Interestingly, a rough correlation was observed between clinical response to lamivudine and the degree of genomic mutations of the corresponding etiological viral isolate. HBV genome sequencing demonstrated that deviation from the closest related published sequences was 1.0% and 1.1% in lamivudine-responsive patients, and 1.5%, 1.8%, and 1.7% in lamivudine-resistant patients.

The high rate of genome mutations and amino acid substitutions at critical conserved domains and prolonged CD4 depletion may be important factors for viral reactivation, hepatitis severity, and lack of response to lamivudine, the researchers conclude.
Haematologica 2003;88:1296-1303.

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Changes in Formularies May Lead to Discontinuation of Drug Therapy New Findings Suggest
Source: Health Daily News

Switching from a one-tier to a three-tier formulary has a large effect on specific drug use while resulting in increased out-of-pocket expenditures for enrollees, according to a study appearing in the Dec. 4 issue of The New England Journal of Medicine.

Researchers compared patterns of utilization and spending for two large employers one year before and one year after the employers implemented a three-tier formulary in 2000.

Employer 1 switched from a one-tier formulary to a three-tier formulary and increased copayments across all tiers. Employer 2 made a more moderate change from a two-tier to a three-tier formulary that involved increases in the copays for only the nonpreferred brand name drugs that were assigned to tier three.

Separate comparison groups of enrollees covered by employers that had a stable two-tier formulary throughout the study period were identified for both employers.

Results showed that many enrollees covered by Employer 1 stopped taking necessary drugs. Sixteen percent of patients using tier three ACE inhibitors for cardiovascular disease stopped taking the therapy versus 6 percent in the comparison group; 21 percent of patients using cholesterol-lowering statins halted therapy versus 11 percent in the comparison group; and 32 percent stopped taking proton-pump inhibitors (PPIs) versus 19 percent in the comparison group.

The findings also showed a major shift in spending from the plan to the enrollee with large increases in copays. Some employees even switched the drug they were taking to a drug in a lower tier; 41.6 percent, 49.4 percent and 35.1 percent of Employer 1's enrollees initially taking tier three ACE inhibitors, statins and PPIs, respectively, switched to a drug of a lower tier after the policy change. In the comparison group, the respective rates were 4.2 percent, 17.3 percent and 1.5 percent.

For enrollees of Employer 2, the effects of formulary administration were much smaller. Employer 2's enrollees were more likely to switch from a non-preferred brand name drug to a less expensive brand name or generic drug. Nearly 41 percent, 48.5 percent and 17.6 percent of patients taking ACE inhibitors, statins or PPIs, respectively, switched to a lower-tiered drug versus 14.9 percent, 8 percent and 2.1 percent in the comparison group who switched.

"As three-tier formularies become increasingly prevalent, we need much greater knowledge about these details in order to reap the advantages in cost savings without causing deleterious consequences for patients," the researchers said.

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December 7th, 2003

Stealth Merger: Drug Companies and Government Medical Research
Some of the National Institutes of Health's top scientists are also collecting paychecks and stock options from biomedical firms. Increasingly, such deals are kept secret

By David Willman, Los Angles Times Staff Writer

BETHESDA, Md. — "Subject No. 4" died at 1:44 a.m. on June 14, 1999, in the immense federal research clinic of the National Institutes of Health.

The cause of death was clear: a complication from an experimental treatment for kidney inflammation using a drug made by a German company, Schering AG.

Among the first to be notified was Dr. Stephen I. Katz, the senior NIH official whose institute conducted the study.

Unbeknown to the participants, Katz also was a paid consultant to Schering AG.

Katz and his institute staff could have responded to the death by stopping the study immediately. They also could have moved swiftly to warn doctors outside the NIH who were prescribing the drug for similar disorders. Either step might have threatened the market potential for Schering AG's drug. They did neither.

Questioned later, Katz said that his consulting arrangement with Schering AG did not influence his institute's decisions. His work with the company was approved by NIH leaders.

Such dual roles — federal research leader and drug company consultant — are increasingly common at the NIH, an agency once known for independent scientific inquiry on behalf of a single client: the public.

Two decades ago, the NIH was so distinct from industry that Margaret Heckler, secretary of Health and Human Services in the Reagan administration, could describe it as "an island of objective and pristine research, untainted by the influences of commercialization."

Today, with its senior scientists collecting paychecks and stock options from biomedical companies, the NIH is no longer an island.

Interviews and corporate and federal records obtained by the Los Angeles Times document hundreds of consulting payments to ranking NIH officials, including:

• Katz, director of the NIH's National Institute of Arthritis and Musculoskeletal and Skin Diseases, who collected between $476,369 and $616,365 in company fees in the last decade, according to his yearly income-disclosure reports. Some of his fees were reported in ranges without citing exact figures. Schering AG paid Katz at least $170,000. Another company paid him more than $140,000 in consulting fees. It won $1.7 million in grants from his institute before going bankrupt last year.

• Dr. John I. Gallin, director of the NIH's Clinical Center, the nation's largest site of medical experiments on humans, who has received between $145,000 and $322,000 in fees and stock proceeds for his consulting from 1997 through last year. In one case, Gallin co-wrote an article highlighting a company's gene-transfer technology, while hiring on as a consultant to a subsidiary of that company.

• Dr. Richard C. Eastman, the NIH's top diabetes researcher in 1997, who wrote to the Food and Drug Administration that year defending a product without disclosing in his letter that he was a paid consultant to the manufacturer. Eastman's letter said the risk of liver failure from the drug was "very minimal." Six months later, a patient, Audrey LaRue Jones, who was taking the drug in an NIH study that Eastman oversaw, suffered sudden liver failure and died. Liver experts found that the drug probably caused the liver failure.

• Dr. Ronald N. Germain, deputy director of a major laboratory at the National Institute of Allergy and Infectious Diseases, who has collected more than $1.4 million in company consulting fees in the last 11 years, plus stock options. One of the companies collaborated with his laboratory on research. The founder of another of the companies worked with Germain on a separate NIH-sponsored project.

• Jeffrey Schlom, director of the National Cancer Institute's Laboratory of Tumor Immunology and Biology, who has taken $331,500 in company fees over 10 years. Schlom helped lead NIH-funded studies exploring wider use for a cancer drug — at the same time that his highest-paying client was seeking to make the drug through genetic engineering.

• Jeffrey M. Trent, who became scientific director of the National Human Genome Research Institute in 1993 and, over the next three years, reported between $50,608 and $163,000 in industry consulting fees. Trent, who accepted nearly half of that income from a company active in genetic research, was not required to file public financial-disclosure statements as of 1997. He left the government last year.

Hidden From View
Increasingly, outside payments to NIH scientists are being hidden from public view. Relying in part on a 1998 legal opinion, NIH officials now allow more than 94% of the agency's top-paid employees to keep their consulting income confidential.

As a result, the NIH is one of the most secretive agencies in the federal government when it comes to financial disclosures. A survey by The Times of 34 other federal agencies found that all had higher percentages of eligible employees filing reports on outside income. In several agencies, every top-paid official submitted public reports.

The trend toward secrecy among NIH scientists goes beyond their failure to report outside income. Many of them also routinely sign confidentiality agreements with their corporate employers, putting their outside work under tight wraps.

Gallin, Germain, Katz, Schlom and Trent each said that their consulting deals were authorized beforehand by NIH officials and had no adverse effect on their government work. Eastman declined to comment for this article.

Dr. Arnold S. Relman, the former editor of the New England Journal of Medicine, said that private consulting by government scientists posed "legitimate cause for concern."

"If I am a scientist working in an NIH lab and I get a lot of money in consulting fees, then I'm going to want to make sure that the company does very well," Relman said.

Relman and others in the field of medical ethics said company payments raised important questions about public health decisions made throughout the NIH:

• Will judgment calls on the safety of individual patients be affected by commercial interests?

• Can study participants trust that experimental treatments are chosen on merit and not because of officials' personal financial interests?

• Will scientists shade their interpretations of study results to favor their clients?

• Will officials favor their clients over other companies that seek NIH grants or collaborations?

Conflict-of-interest questions also arise in the potentially lucrative awarding of patents.

Thomas J. Kindt, the director of in-house research at the National Institute of Allergy and Infectious Diseases, accepted $63,000 in consulting fees from a New York biotechnology company, Innovir Laboratories, and wound up an inventor on one of its patents.

Asked why the government received no consideration, Kindt said that he had contributed to the "basic idea" while using vacation time.

"No work was done on it as a government employee," said Kindt, whose annual salary at the NIH is $191,200. His consulting with Innovir was approved by NIH officials, Kindt said.

Others worry that the private arrangements can undermine the public interest.

"The fact that paid consulting is happening I find very disturbing," said Dr. Curt D. Furberg, former head of clinical trials at the National Heart, Lung and Blood Institute. "It should not be done."

Private consulting fees tempt government scientists to pursue less-deserving research and to "put a spin on their interpretation" of study results, he said.

"Science should be for the sake of gaining knowledge and looking for the truth," Furberg said. "There should be no other factors involved that can introduce bias on decision-making."

Dr. Ruth L. Kirschstein, who as the deputy director or the acting director of the NIH since 1993 has approved many of the top officials' consulting arrangements, said she did not believe they had compromised the public interest. "I think NIH scientists, NIH directors and all the staff are highly ethical people with enormous integrity," she said. "And I think we do our business in the most remarkable way."

In response to The Times' findings, Kirschstein said, she would "think about" whether administrators should learn more about a company's ties to the NIH before approving the consulting arrangements.

"Systems can always be tightened up," Kirschstein said on Oct. 29. "And perhaps, based on this, we will do so."

On Nov. 20, NIH Director Elias A. Zerhouni told agency leaders that he would form a committee to help "determine the appropriateness" of employees' consulting and other outside arrangements.

"I believe we can improve our performance by subjecting ethics deliberations to a more transparent process," Zerhouni said in a memo.

In a brief telephone interview last week, Zerhouni said he wanted the NIH "to manage not just the reality, but the perception of conflict of interest."

"If there is something that could be viewed as improper, I think we need to be able to advise our scientists not to get into these relationships," he said. "My sense is our scientists are people of goodwill."

Temptations Abound
The NIH traces its beginnings to the Laboratory of Hygiene, founded in 1887 within a Navy hospital on Staten Island in New York. It became the federal government's first research institution for confronting such epidemic diseases as cholera, diphtheria, tuberculosis and smallpox.

The laboratory's success convinced Congress of its value in seeking cures for diseases.

In 1938, the renamed National Institute of Health moved to its present, 300-acre headquarters in Bethesda, about nine miles north of the White House.

The agency's responsibilities — and prominence — have grown steadily.

In 1948, four institutes were created to support work on cardiac disease, infectious diseases, dental disorders and experimental biology. "Institute" in the agency's name became "Institutes."

President Nixon turned to the NIH in 1971 to lead a war on cancer. The agency has led the government's fight against AIDS. Two years ago, President Bush enlisted the NIH to help counter biological terrorism.

Republican and Democratic administrations have boosted spending for the 27 research centers and institutes that compose today's NIH. Since 1990, the annual budget has nearly quadrupled, to $27.9 billion this fiscal year.

Senior NIH scientists are among the highest-paid employees in the federal government.

With billions of dollars in product sales potentially at stake for industry, and untold fortunes riding on biomedical stock prices, commercial temptations abound:

Researchers poised to make a breakthrough in their NIH labs can, the same day, land paid consulting positions with companies eager to exploit their insights and cachet. Many companies cite their connections to NIH scientists on Web sites and in news releases, despite an agency rule against the practice. Selection of a company's products for an NIH study can provide a bankable endorsement — attracting investors and boosting stock value. If the study yields positive results, the benefits can be even greater.

Conflicts of interest among university medical researchers have received wide attention in recent years. U.S. Rep. W.J. "Billy" Tauzin (R-La.) also raised questions recently about cash awards that several nonprofit institutions made to a previous director of the National Cancer Institute.

The consulting deals between drug companies and full-time, career employees at the NIH, however, have gone all but unnoticed.

The wide embrace of private consulting within the NIH can be traced in part to calls from Congress for quicker "translation" of basic federal research into improved treatments for patients.

And for decades industry has pressed for more access to the government's scientific discoveries.

As the number of government-held patents soared, companies sought legislation encouraging commercialization of federally funded inventions. The proponents said the changes also would make U.S. firms more competitive with foreign companies whose research and development programs were subsidized by their governments.

Laws enacted in the 1980s for the first time authorized formal research collaborations between companies and scientific arms of the government, including the NIH. Starting in late 1986, in-house researchers at the NIH were permitted to arrange cooperative research agreements with companies. The agreements were intended to benefit both sides while advancing scientific discovery.

Other changes in law permitted the government agencies, and the researchers, to share in future patent royalties for inventions.

The new laws said nothing about government employees being hired by the companies.

Yet by the end of the 1980s, more companies were putting NIH researchers on their payrolls, albeit within limits imposed by the NIH.

Agency leaders in the 1990s began weakening those restrictions.

In November 1995, then-NIH Director Harold E. Varmus wrote to all institute and center directors, rescinding "immediately" a policy that had barred them from accepting consulting fees and payments of stock from companies.

The changes, he wrote, would bring the NIH ethics rules more in line with new, less stringent, executive branch standards. Loosening of restrictions on employees' outside pursuits was occurring throughout the government. And with biomedical companies ready to hire, few were better positioned to benefit than employees at the NIH.

Varmus' memo — which until now has not been made public — scuttled other restraints affecting all employees, including a $25,000 annual limit on outside income, a prohibition on accepting company stock as payment and a limit of 500 hours a year on outside activities.

His memo also offered a narrowed definition of conflict of interest:

Employees had been barred from consulting for any company that collaborated with their NIH lab or branch. But Varmus said the ban would be applied only if the researcher was personally involved in the company's collaboration with the agency.

Furberg, the former NIH official, said Varmus' actions invited, at minimum, appearances of conflict of interest.

"I'm amazed at what he did," said Furberg, a professor at Wake Forest University. "And to do it in secrecy I find very objectionable. This is a critical change in the NIH policy."

In 1999, Varmus wrote a letter to the institute directors that cautioned them to "avoid even the appearance of a conflict of interest." But in an attachment to the letter, he told them that employees "may briefly discuss or mention current work" to outsiders, in effect giving agency scientists permission to reveal their unpublished, confidential research.

Varmus, now president and chief executive of the Memorial Sloan-Kettering Cancer Center in New York, declined to be interviewed for this article. His spokeswoman, R. Anne Thomas, said that Varmus, who in 1989 shared a Nobel Prize for research into the genetic basis of cancer, believed that NIH employees should take personal responsibility for avoiding conflicts of interest, regardless of what agency rules allow.

Kirschstein, after taking over as Varmus' interim successor at the NIH three years ago, said in a May 2000 speech to medical researchers that conflicts of interest posed "a major concern."

"While the federal government was once the dominant force for supporting clinical research, today we share the arena with biotechnology companies, pharmaceutical firms and many others — all interested in the possibility of financial gain from their research.

"Profit raises issues of public trust," she said. "When scientific inquiry generates findings that can make a profit for the researcher and the institution, their images become clouded."

Yet officials have lifted controls on consulting even as industry's stake in NIH research has deepened. When Zerhouni, the current NIH director, appeared before the House Subcommittee on Environment, Technology and Standards last year, he cited 274 ongoing research and development agreements between the federal agency and industry.

At the same time, NIH leaders have moved to what they describe as "managing" conflicts of interest. Employees are allowed to consult if they receive prior clearance from an administrator at their institute or, in the case of most institute directors, from NIH headquarters.

An Honor System
Potential conflicts are typically addressed by allowing employees to sign "recusals." Under these agreements, NIH employees pledge not to participate in decisions affecting an outside client. Agency officials, Kirschstein said, rely on an honor system to enforce recusals and other conflict-of-interest rules.

The Times found instances in which the recusals did not work as intended.

In the mid-to-late 1990s, Eastman, the diabetes researcher, participated in a series of decisions affecting the drug company employing him as a consultant, despite having signed a recusal. Separately, Katz, the director of the arthritis institute, signed a recusal involving his client, Schering AG, which nevertheless supplied the NIH with the drug involved in the kidney patient's death in 1999.

Katz said that he did not know at the time that Schering AG was the maker of the drug his institute was testing.

Compliance with the recusals can, itself, undercut the interests of the NIH and taxpayers, who support the agency. When heads of institutes and laboratories recuse themselves, they sometimes constrain their ability to carry out their government duties.

Kirschstein, who for the last eight years has personally reviewed requests from the institute directors to consult privately for pay, said she tended to approve the deals, unless she saw "real conflict."

"I've disapproved some — and I've approved many," she said.

In her view, recusals have worked "extremely well" in avoiding conflicts of interest.

Other present and former officials say it is difficult, if not impossible, for researchers to keep separate their confidential government information when they consult for companies.

"You can't police the thing," Philip S. Chen Jr., a senior advisor in the NIH director's office who has served as an agency scientist or administrator since the 1950s, said in an interview last year. "The rules are there — whether they follow the rules is another thing."

A former NIH director voiced surprise at the agency's loosened approach to conflicts of interest.

"There has been a lot of relaxation," said Dr. Bernadine P. Healy, who served as director from 1991 to 1993. Before, Healy said in an interview, "there were very strict ethics rules for NIH scientists. You couldn't have virtually any connection with a company if your institute was in any way doing research involving their products."

At least one vestige of the old days remains.

During last year's holiday season, workers were advised to refuse gifts from outsiders worth more than $20.

"Just a reminder," ethics coordinator John C. Condray wrote, introducing a five-page memo, "that sometimes gifts and events can create the appearance of a lack of impartiality."

Fewer Public Filings
While making it easier for scientists to cut consulting deals, the NIH has made it harder for the public to find out about them.

The Ethics in Government Act requires yearly financial-disclosure reports from senior federal employees. This year, employees paid $102,168 or more generally must disclose outside income by filing a "278" form, which is available for public review. Other employees may file a "450" form — which does not specify the amount of money received from an outside party and is kept confidential.

At the NIH, 2,259 employees make more than $102,168, according to data provided by the NIH. Those records show that 127 of the employees — about 6% — are filing disclosure forms available to the public.

From 1997 through 2002, the number of NIH employees filing public reports of their outside income dropped by about 64%, according to the agency records. Most of those employees have switched to filing the confidential 450 form.

At the National Institute of Allergy and Infectious Diseases — which researches treatments for AIDS and other life-threatening maladies — only three officials file public reports revealing their outside income, according to NIH records.

Officials at the NIH said that an advisory legal opinion from the U.S. Office of Government Ethics gave them the discretion to bypass public disclosure.

Issued in 1998, the opinion said that the threshold for public disclosure was to be set, not by a federal employee's actual salary, but by the low end of his or her pay grade. If the minimum salary in an employee's grade is beneath the $102,168 threshold, he or she is exempt from filing a public report.

The NIH has shifted many of its high-salaried employees into pay plans with minimums that dip below the threshold.

For instance, two prominent NIH laboratory leaders, Schlom and Germain, make $180,400 and $179,900, respectively. Within roughly the last year, NIH changed each of their pay plans, and they now are exempt from public disclosure.

They file confidential forms, which instruct employees to not specify the dollar amounts they receive from outside parties.

Asked why the NIH has assigned highly paid staff to plans that eliminate public disclosure of employees' outside income, an NIH spokesman, John Burklow, provided a written response:

"The primary benefit of the alternate pay plans is to attract and retain the best scientists in a highly competitive environment."

Said Donald Ralbovsky, another NIH spokesman: "What it really boils down [to] is that fewer people are filing 278s because of changes in pay plans."

The shift imparts an implicit message to employees, said George J. Galasso, a former NIH researcher and administrator who retired in 1996:

"If you've got something to hide, you file a 450. If you don't, you file a 278."

Make-or-Break Grants
As director of the National Institute of Arthritis and Musculoskeletal and Skin Diseases, Katz is one of the few at the NIH who still must file public financial-disclosure reports.

Katz, 62, is paid $200,000 a year — more than members of Congress, justices on the Supreme Court and the vice president.

His institute leads the government's research into the causes, treatment and prevention of disorders of the joints, bones and overall muscle-skeletal system.

With a yearly institute budget of $485.4 million, Katz's decisions are watched closely by industry. The director's office decides how much of the budget will be spent on grants and contracts coveted by companies.

And Katz has been available for outside consultation: From 1993 through 2002, Katz took between $476,369 and $616,365 in fees from seven biotech and pharmaceutical companies, according to his annual disclosure statements. He consulted while chief of the dermatology branch at the National Cancer Institute and continued after becoming arthritis institute director in 1995.

Katz said that his private consulting broke no rules and that he relied in part on Varmus' 1995 memo while entering arrangements with companies.

"The consultations provided my global knowledge as a dermatologist and research scientist," Katz said in written responses to questions from The Times. "I have always received official permission to perform these consultations and have performed these consultations outside of my normal NIH work schedule and according to strict government guidelines and rules."

One of his clients was Advanced Tissue Sciences Inc.

The struggling biotech company in San Diego hired Katz as a consultant in 1997, a year after he had announced a new NIH research initiative for bone and connective-tissue repair.

Advanced Tissue installed Katz on its scientific advisory board and paid him fees between $142,500 and $212,500 from 1997 through 2002, according to his income-disclosure reports.

During that time, Katz's institute pledged $1.7 million in small-business research grants to the company. The company announced nearly every grant in a news release; Advanced Tissue's president termed the grants "an endorsement by the government."

In his written response, Katz said that he had signed a recusal "withdrawing myself from any interactions between Advanced Tissue Sciences and the government to remove any real or potential conflict of interest." The grants were awarded following evaluations by NIH reviewers outside of Katz's institute.

Responsibility for administering the grants to Advanced Tissue was delegated to one of his subordinates, Katz said.

The NIH policy manual says officials may not take fees from companies seeking or receiving agency grants "if the employee is working on or involved in these matters" or "supervising others who work on these matters."

Katz said his subordinate "handled all decisions regarding these grants without informing me."

However, Advanced Tissue kept him apprised as NIH grants were obtained, a company executive said.

"He was informed," said Anthony J. Ratcliffe, the firm's vice president for research until its collapse a year ago. "We would have made a written report to the SAB [scientific advisory board] members twice a year. There would have been a report to the SAB meetings on all grants, all grant activities."

Ratcliffe said the company dealt with Katz's potential conflict of interest by paying him in fees alone, and not stock options. Both men said Katz did not advise the company on the NIH grants.

His consultations, Katz said, were limited to his scientific expertise and "never involved, directly or indirectly, the preparation or discussion of material which could relate to any financial dealings between [Advanced Tissue] and the NIH."

Kirschstein, the senior NIH official who each year approved Katz's consulting with Advanced Tissue, said she did not learn the company held grants with the arthritis institute until The Times inquired.

"I didn't even know there were grants," Kirschstein said.

As it turned out, the grants would be among the few positive financial developments for Advanced Tissue.

By December 2001, its cumulative net operating losses were approximately $292.7 million. Barely a year later, the company entered bankruptcy and shut its doors, having collected about $1.5 million of the $1.7 million in small-business research grants.

Life-and-Death Decisions
While Katz was consulting for Advanced Tissue, he also was on the payroll of Schering AG, which made Fludara, a drug that his research staff was using as an experimental treatment for autoimmune diseases.

From the time he began consulting for Schering AG in 1996 through 2002, Katz collected between $170,000 and $240,000 in fees from the company, his disclosure reports show.

In his responses to questions, Katz said that he "first became aware" that Fludara was a Schering AG product when The Times made inquiries.

Fludara had been approved by the Food and Drug Administration in 1991 to treat leukemia, but the company wanted to expand its use to other diseases, a goal the NIH studies could advance.

Two people died in the studies conducted by Katz's institute.

In one study using Fludara to treat muscular disorders, a patient suffered what agency researchers reported in July 1998 as a "sudden death … not thought to be drug related."

The second fatality, indisputably, resulted from the treatment. It involved "Subject No. 4," who had enrolled in a separate study, designed to treat kidney inflammation related to lupus, a disease of the immune system.

Schering AG provided Katz's institute with a supply of Fludara and with analyses of patients' blood samples through its U.S. affiliate, Berlex Laboratories, records and interviews show. The company also contributed a total of $60,000 to the institute to support the research, eliciting a July 1, 1998, thank-you letter from Katz.

Participants entering the study were warned of some risks. The NIH advised them that Fludara might cause damage to their blood cells and that, as a result, "blood transfusions may be required."

That is what befell Jamie Ann Jackson, identified in NIH documents as "Subject No. 4."

Jackson, a registered nurse, lived with her husband, their two daughters and a son in Plainville, Mass., about 37 miles southwest of Boston. She received four transfusions between March and May of 1999, yet grew sicker.

On June 1, trembling with chills, Jackson was admitted to the NIH Clinical Center in Bethesda. Within days, lab results confirmed that she was in the grip of graft-versus-host disease. The graft of outside material — in this instance, blood from a transfusion — attacks and overwhelms the immune system and organs of the new host.

Fatal in about 90% of cases, the malady had been documented in leukemia and other cancer patients who took Fludara. For that reason, the risk of graft-versus-host disease was noted in the product labeling — as was a warning about irradiating transfusions as a prevention.

But the NIH doctors did not specify that transfusions should be irradiated for patients in the lupus study. In an interview, Dr. John H. Klippel, then the institute's clinical director, said he could not recall whether he or his colleagues took stock of the label warning.

In Britain, authorities were more cautious, recommending that blood transfusions for all patients taking Fludara be irradiated. The British recommendations were described in 1996 in The Lancet, a medical journal with an international circulation.

Two weeks after being admitted to the NIH Clinical Center, 42-year-old Jamie Ann Jackson died.

"Steve Katz was notified almost immediately," Klippel said.

Katz's subordinates warned the remaining patients and their personal doctors about the death and, for the first time, advised them to irradiate any transfusions. The FDA was informed.

But the NIH office responsible for conducting an inquiry into research deaths was not promptly notified.

And while Katz's institute stopped enrolling recruits, the treatment of those already in the study continued for nine months after Jackson's death.

After five of the other 12 patients given Fludara experienced abnormal changes in their blood, increasing their risk of infection, the experiment was stopped, 20 months before its scheduled conclusion.

'Absolutely No Role'
While Fludara's use for anything other than leukemia remained experimental, an increasing number of doctors were prescribing it "off-label" for diseases of the immune system, including rheumatoid arthritis.

Yet the NIH was slow in warning them about the lethal, but preventable, problem of graft-versus-host disease.

It was not until October 2000, 16 months after Jackson died, that doctors from the NIH briefly summarized the death in Transfusion, the journal of the American Assn. of Blood Banks.

Meanwhile, three articles written by NIH doctors and published from March 2000 through May 2001 referred to the agency's work with Fludara without mentioning the risk of graft-versus-host disease or the death in their study.

In an article published in the May 2001 issue of the journal Pharmacotherapy, the doctors, three from Katz's institute, wrote that Fludara "was well tolerated" and thanked the company for providing the drug and "analytical support."

Not until last week — 4 1/2 years after the event — did the same doctors appear as authors of a full-length article describing Jackson's death. It was published in Transfusion.

In his responses to The Times, Katz said that, to his knowledge, "all matters concerning the adverse event were handled according to standard operating procedures."

Katz said that he had signed a recusal, pledging not to participate in matters involving Schering AG. He said he had nothing to do with initiating the study, "was not advised that it was ongoing and had absolutely no role in overseeing its conduct."

The Times documented three instances in which he discussed the study: The July 1998 letter acknowledging the company's first half of the $60,000 donation; the June 1999 phone call from Klippel notifying him of the death; and a meeting in April 2000 with Kirschstein to discuss the fatality and his institute's response to it.

Katz confirmed all three incidents in a series of e-mail exchanges.

He said he wrote the letter without realizing that Berlex Laboratories was the American arm of Schering AG.

"At that time, I was unaware of any relationship between Berlex Laboratories and Schering AG and was, therefore, unaware that my sending the thank you letter might present any conflict of interest."

Katz declined to identify when he learned that Berlex was the U.S. affiliate of Schering AG.

The relationship between Schering AG and Berlex has not been a secret. News articles describe Berlex as Schering AG's U.S. business unit. The Berlex and Schering AG Web sites make clear the affiliation. In 1998 — two years after Katz was hired — Berlex accounted for 17% of Schering AG's net global sales.

Oliver Renner, a spokesman in Berlin for Schering AG, said: "Berlex Laboratories is a fully owned subsidiary of Schering AG. We are distributing our products under the name of Berlex in the United States. We also conduct research and development work through our Berlex entities."

Katz, asked about the phone call he received when Jackson died, said he did not then realize what company made the study drug. Although the study was ongoing, he said he did nothing in response to being notified of the death.

"No further action was required or undertaken by me," Katz said.

He said he remained uninformed about Schering AG's connection to the study when he met with Kirschstein in April 2000.

"The reason that I did not exclude myself from any contact regarding the lupus [clinical] trial was that I was unaware, and no one on the staff brought to my attention, that the trial had any relationship to Schering AG," Katz said. He noted that the arthritis institute first used Fludara for lupus in 1993, before he arrived as director.

Representatives of Schering AG said the company did nothing out of the ordinary in collaborating with the NIH — and in hiring Katz.

"The discovery and development of new pharmaceuticals often involves a combination of government and private industry efforts," the company said in a statement. "It is also a common practice for pharmaceutical companies to work with many leading external experts…. In keeping with this practice, we have a consulting agreement with a Dr. Stephen Katz from the NIH involving his expertise in the field of dermatology."

Schering AG is no longer pursuing development of Fludara as a treatment for autoimmune diseases.

Kirschstein, the NIH official who approved Katz's consulting for Schering AG, said she had not known its drug was being tested by his institute.

Kirschstein said she did recall being visited by Katz and his top aide in April 2000. The NIH's human protection office had just opened an internal review of the lupus-related study, questioning the researchers' failure to protect against graft-versus-host disease, as well as their failure to report the death to agency investigators in a timely fashion.

"Dr. Katz and his scientific director came to me … to tell me about a study in which a drug was used and there was a death," Kirschstein said. "They did not tell me the name of the drug, and did not tell me much about the study, but told me that they and the [department] were looking into it."

In a follow-up letter two years later, the internal review absolved the institute of responsibility for Jackson's death. Her husband has filed a wrongful-death lawsuit against the government in U.S. District Court. The lawsuit does not refer to Katz.

Jackson's mother, Carmella Tarte, said time had not eased her grief.

"We all went to the hospital, but we never even got to talk to her," Tarte said in an interview. "It's been four years and, well, Thanksgiving was just another day, you know? She has children she didn't see graduate."

About This Report
In late 1998, the Los Angeles Times began examining payments from drug companies to employees of the National Institutes of Health and the agency's research collaborations with industry. This report is based on records from the federal government and from companies, as well as scores of interviews.

In early 1999, the newspaper first sought income-disclosure reports for all eligible employees of the 27 research institutes and centers of the NIH. The newspaper, as of this month, had filed 36 requests with the NIH for documents under the Freedom of Information Act.

According to NIH staff, the agency has provided documents totaling 13,784 pages, including annual financial-disclosure reports, memos and internal e-mails.

A significant number of NIH employees had by this year stopped filing yearly income reports that are open to public inspection. To assess the relative extent of public financial disclosure at the NIH, The Times in July queried dozens of other federal agencies under the Freedom of Information Act.

Other documentation, describing products and hundreds of research collaborations between the NIH and industry, was retrieved from company and NIH Web sites, from filings with the Securities and Exchange Commission, and from lawsuits filed in federal and state courts. Other related documents were obtained from the Food and Drug Administration under the Freedom of Information Act.

Contributors
Times researcher Janet Lundblad in Los Angeles assisted in this report. Researchers Robert Patrick and Christopher Chandler in Washington also contributed.

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Liver Transplant Thwarted by Blackout Succeeds on 2nd Try
By Denise Grady
Source: NY Times

Since the middle of August, every time the telephone rang, Delyla Torres hoped it would be Mount Sinai Hospital, calling to tell her a liver was on the way and it was time for her transplant.

On Wednesday the call finally came. Ms. Torres, whose transplant was canceled at the last minute when the power failed on Aug. 14, got a new liver.

Her surgeon, Dr. Sasan Roayaie, said the operation took about six hours and went well. He expected Ms. Torres, 49, to make a good recovery. The liver she received had been removed that morning from a patient who died in Buffalo.

In a telephone interview on Wednesday shortly before the surgery, Ms. Torres said she felt elated but also nervous as she waited in a hospital room with her son, 21, and her daughter, 31. "It's hard to believe I'm here," she said. "But it's scary. I'm praying."

Last night, Ms. Torres began experiencing some difficulties breathing, and doctors shifted her condition to guarded from stable, said Mel Granik, a hospital spokesman.

Ms. Torres had cirrhosis and liver cancer, caused by hepatitis C. As she waited, for weeks and then months, for another liver, she grew more anxious and her health declined. She thought about death. A transplant was her only hope, but she feared the cancer would spread before an organ became available, making her ineligible for the operation. She underwent treatments in which doctors tried to contain the tumor by heating it and choking off its blood supply.

She had first been put on the transplant waiting list last May. A liver, also from a deceased patient in Buffalo, became available on Aug. 14.

That afternoon, as Ms. Torres lay on a gurney waiting to be wheeled into the operating room at Mount Sinai, the lights went out, in what became the largest blackout in North America. Though the hospital had its own generator, Dr. Roayaie (pronounced roy-EYE) decided it was not safe to begin such a long, complicated operation on backup power.

With little time to spare, since a liver is good for only 16 hours once it is removed from a donor, the organ meant for Ms. Torres was sent on to Pittsburgh, the nearest transplant center with full power and a patient who had the right blood type, B. The patient was Clifton Birr, 52, a Vietnam veteran who also had hepatitis C and cirrhosis.

Ms. Torres's name went back on the regional waiting list — but she lost her first-place slot. Patients sicker than she was, people facing death from liver failure, had moved ahead of her. Livers are in short supply, and patients with the most urgent need get transplants first. Nationwide, 17,266 people are waiting for transplants, and only 3,777 have received them so far this year. Hepatitis C, caused by a blood-borne virus, is the leading reason for liver transplants in the United States.

Dr. Roayaie said: "I wouldn't have thought she would have to wait for so long. The list is so unpredictable."

Despite the delay, he said, the outlook for Ms. Torres is good, though, like virtually all recipients who have had hepatitis C, she is at risk that the virus will infect her new liver.

Mr. Birr, who said it had troubled him that his good fortune had come at someone else's expense, was delighted to hear that Ms. Torres finally got her transplant.

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Access To Clean Needles - A Health Issue
Source: PressofAtlanticCity.com

The shame of it is that it seemed as though there was a real chance this time.

But once again, New Jersey has missed an opportunity to pass legislation that the scientific and medical communities, backed by volumes of research, insist would save lives.

A bill that would have legalized the possession and over-the-counter sale of hypodermic needles and syringes was pulled from consideration last week in the Senate Commerce Committee.

Proponents say they will address criticisms by the state Attorney General's Office and reintroduce the bill in the next legislative session. But in the meantime, those caught in the sickness of drug addiction will continue to share whatever needles are available - and the HIV, Hepatitis C and other deadly infections they carry.

New Jersey now has a governor who supports the general idea of access to clean needles. Former opponents of the concept, including Sen. William Gormley, R-Atlantic, supported the bill. The legislation itself avoided the divisive issue of needle-exchange programs and was crafted so that it would not cost the state anything.

But New Jersey remains one of the last states that still refuses to admit that this is a health issue, not a debate on the evils of drug use.

The argument against access to needles has an element of common sense: Illegal drug use is bad, and supplying needles to addicts condones drug use. The Republican legislative team from Ocean County tried to frame the issue as part of the war against drugs and cited a Vancouver study that claims there is no evidence that needle programs are effective.

But the moral high ground crumbles under the weight of research that has convinced the Centers for Disease Control, the American Medical Association, the National Academy of Sciences and the state Health Department that the availability of clean needles does not create drug addicts.

But more importantly, the research shows that access to clean needles slows the spread of AIDS and other diseases, saving money spent on health care in the process. Nationally, 25 percent of HIV infections are related to shared needles. In New Jersey, the rate is 46 percent.

Those statistics translate to real people. They may be drug addicts, but we should not turn our backs on people who need the protection that this type of legislation can easily provide.

Needle-access proponents promise to push their bill again. They are confident they can address the Attorney General's Office's concerns, which include the proper disposal of needles, preventing clean needles from being sold in illicit markets and providing literature about drug counseling and treatment.

Legislators should do whatever it takes to get some sort of program in place. More stalling in this case will only cost more lives.

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December 09, 2003

Micrologix licenses Hepatitis B Compound to Spring Bank Technologies: US$2.6 Million NIH Grant Funding Approved for Development

VANCOUVER, BC, and MILFORD, MA, PRNewswire-FirstCall/ -- Micrologix Biotech Inc., a developer of anti-infective drugs (TSX: MBI; OTC: MGIXF), has completed a license agreement with Spring Bank Technologies, Inc. (Spring Bank) of Milford, MA, under which Spring Bank acquired exclusive worldwide rights to MBI-1313, a nucleotide analogue under development as a treatment of Hepatitis B Virus (HBV) chronic infections. As part of the development agreement, Spring Bank has received a US$2.6 million grant from the National Institutes of Health (NIH) to advance development of the compound.

Under the terms of the agreement, Micrologix will receive up to US$3.5 million in milestone payments during development of the compound, collect royalties upon commercialization, and obtain an equity position in Spring Bank. Spring Bank will take over and fund all development of MBI-1313 and assume responsibility for patent prosecution. Further terms of the agreement were not disclosed.

Last year, Micrologix acquired the rights to a portfolio of over 1,200 analogues for HBV and Hepatitis C Virus (HCV), including MBI-1313 for HBV, as part of the asset acquisition of Origenix, a Quebec-based biotechnology company focused on the development of antiviral drugs.

Jim DeMesa, M.D., President & CEO of Micrologix stated, "This agreement represents another example of our commitment to leverage our broad intellectual property portfolio through selected early stage alliances to help augment future value creation, while allowing us to more effectively develop other assets in our pipeline. This agreement, combined with our other hepatitis programs, validates our acquisition of the Origenix anti-viral portfolio and underscores the value of the assets we acquired. Ultimately, our intent would be to have multiple such out-license arrangements, thereby maximizing our chances for several commercial opportunities."

"We are pleased to complete this license agreement with Micrologix for MBI-1313 for the treatment of chronic Hepatitis B infection", said Kris Iyer, Chief Scientific Officer, Spring Bank Technologies. "Chronic Hepatitis B infection is a major global health problem that will require novel therapeutic approaches. We are excited to be working in collaboration with the NIH, and are gratified by their continued support for the development of this novel molecule. The $2.6 million NIH grant awarded Spring Bank will fund ongoing preclinical development leading to IND submission, with additional potential future funding for early clinical studies."

About MBI-1313
MBI-1313 is a -nucleotide analog originally discovered by Dr. Iyer and developed in collaboration with the NIH, Georgetown University (Dr. Brent Korba) and Utah State University (Dr. John Morrey). The molecule has shown high potency against HBV in in vitro assays and has demonstrated efficacy in an established animal model of HBV infection.

Background on Hepatitis B (HBV)
There are approximately 350 million people worldwide with chronic hepatitis B virus infection, of whom approximately 33% have potentially progressive and life-threatening liver disease associated with their chronic HBV infection. Chronic hepatitis B can lead to cirrhosis, liver failure and liver cancer. Globally, hepatitis B accounts for over one million deaths annually, making it the ninth leading cause of death worldwide

About Spring Bank
Spring Bank, a privately held biotechnology company based in Milford, Massachusetts, is focused on the discovery and development of novel drugs for the treatment of infectious disease. Dr. R. P. Iyer, Vice President and Chief Scientific Officer has published 90 papers in nucleic acids chemistry and small molecule chemistry and is an inventor in 30 issued and filed patents. He has been involved in the discovery and development of a number of compounds against infectious diseases and other therapeutic areas.

About Micrologix
Micrologix Biotech Inc. is engaged in the research, development, and commercialization of drugs that advance therapy, improve health, and enrich lives. The Company's focus is toward anti-infective drug development with three product candidates in human clinical development, multiple product opportunities in preclinical development, and several early-stage technologies in various stages of research and evaluation.

Certain statements in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. Forward-looking statements in this release include, but are not limited to, Micrologix receiving up to US$3.5 million in milestone payments during development of the compound, collecting royalties upon commercialization. These statements are only predictions and actual events or results may differ materially. Factors that could cause such actual events or results expressed or implied by such forward-looking statements to differ materially from any future results expressed or implied by such statements include, but are not limited to: early stage of development; technology and product development; dependence on and management of current and future corporate collaborations; future capital needs; uncertainty of additional funding; no assurance of market acceptance; dependence on proprietary technology and uncertainty of patent protection; intense competition; manufacturing and market uncertainties; and government regulation. These and other factors are described in detail in the Company's Annual Information Form and Annual Report on Form 20-F, forthcoming news releases and other filings with the Canadian securities regulatory authorities and the U.S. Securities & Exchange Commission. Forward-looking statements are based on our current expectations and Micrologix is not obligated to update such information to reflect later events or developments.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
Source: Micrologix Biotech Inc.

CONTACT: Investor & Media Relations Contacts: Jonathan Burke, Micrologix
Biotech Inc., Telephone: (604) 221-9666 Extension 241, Toll Free:
1-800-665-1968, Email: jburke@mbiotech.com; Shayne Payne or Dian Griesel,
Ph.D, The Investor Relations Group, Telephone: (212) 825-3210, Email:
theproteam@aol.com; Doug Jensen, Spring Bank Technologies, Telephone:
(334) 382-4347, Email: djensen@springbank.us;
To request a free copy of this organization's annual report, please go to
http://www.newswire.ca/ and click on reports@cnw.

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December 9th, 2003


Organetix, Inc. Announces Positive Test Results for Hepatitis C Treatment

NEW YORK--(BUSINESS WIRE)--12/09/2003--Organetix, Inc.(www.organetixinc.com) (OTCBB:OGTX) announced that previous testing of Organetix' A4+L has demonstrated positive results in treating patients suffering from Hepatitis C.

Dr. Jose Cabanillas along with two independent doctors, Joseph Nystrom, M.D. from Florida and Dr. Hugo Marquez S. from Lima conducted the tests on Hepatitis C patients from Canada. The following was their conclusion:

"Most importantly, all patients reported dramatic improvement in symptomatology. We expect further prospective study and follow-up to demonstrate continued improvement in all parameters."

Dr. Cabanillas' research is based on the success of treating numerous individuals with Hepatitis C for more than a decade. Testimonials of patient success stories using the liver product to treat Hepatitis C have been documented in the Canadian media. Various stories have been documented by the Vancouver Sun, The Province (also a Vancouver newspaper) and the Canadian Broadcasting Corporation (CBC) - Radio Division in Canada.

CBC Radio in Canada released an investigative story on Hepatitis C patients treated with the liver product in October 2002. The story received the Dan McArthur Award for investigative journalism by the Radio and Television News Directors Association in May of 2003.

Research indicates that A4+L appears to be regenerating liver tissue which allows the liver to begin functioning again despite years of damage from the virus. As a result, this liver product may be useful for all liver disorders. Studies have indicated that A4+L is capable of eliminating most of the symptoms associated with Hepatitis C quickly and effectively, without any known side effects. By contrast, current therapies for Hepatitis C can typically cause serious side effects for its users.

To date, there are three major companies that share the existing multi-billion dollar Hepatitis C market: Schering-Plough, Genta, and Roche. Worldwide drug sales for Hepatitis C rose from $900 Million in 1998 to several Billion less than two years later. It is estimated that the market for such drugs may exceed $6 Billion by 2004.

Dr. Cabanillas, a Medical Advisor to Organetix, has been a speaker at conferences and seminars and has several credited publications in relevant journals. He recently lectured to Cornell University's pre-med students at their bio-diversity laboratory in Punta Cana, Dominican Republic.

About Organetix, Inc.

Organetix, Inc. is a biotechnology company that is in the process of treating patients with a unique nutraceutical that appears to relieve symptoms of Hepatitis C without any known side effects. Organetix has the exclusive worldwide rights for this liver product. Hepatitis C is a life-threatening, blood-borne, liver disease that is caused by a virus. It is estimated that millions of individuals worldwide are infected with Hepatitis C making it one of the greatest public health threats faced in recent years.

Statements contained in this press release, which are not historical facts, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based largely on the Company's expectations and are subject to a number of risks and uncertainties beyond the Company's control, including but not limited to economic, competitive and other factors affecting the Company's operations, management team effectiveness, expansion strategies, available financing, market prices and recovery costs, government regulations involving the Company, facts and events not known at the time of this release, and other factors discussed in the Company's filings with the Securities and Exchange Commission.

These statements are not guarantees of future performance and readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company undertakes no obligation to update publicly any forward-looking statements.

CONTACT:J.R. Axelrod & Company 516-791-0000 ext. 102.

SOURCE: Organetix, Inc.

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December 10th, 2003


Insulin Resistance, Chronic Hepatitis C and Fibrosis Progression
Source: www.gastrohep.com

Hepatitis C virus may induce insulin resistance irrespective of the severity of liver disease, find researchers in the December issue of Gastroenterology.

Chronic hepatitis C virus infection is associated with an increased prevalence of type 2 diabetes.

In this study, researchers from Australia assessed whether virus-induced insulin resistance was a mechanism for fibrogenesis in chronic hepatitis C virus infection.
The team evaluated 250 hepatitis C virus-infected subjects.

They examined the relationship between histological findings, and anthropometric and biochemical data, including insulin resistance. Insulin resistance was determined by the homeostasis model assessment (HOMA-IR).

The team also compared fasting serum insulin, C peptide, and HOMA-IR levels in 121 hepatitis C virus patients with stage 0 or 1 hepatic fibrosis and 137 healthy volunteers.

Insulin resistance was an independent predictor of the degree of fibrosis.

The researchers found that hepatitis C virus-infected subjects with stage 0 or 1 hepatic fibrosis had higher levels of insulin, C peptide, and HOMA-IR than the controls.

In the 250 hepatitis C virus patients, viral genotype and portal inflammation were univariate predictors of HOMA-IR.

Using multiple linear regression analysis, the team identified BMI, previous failed antiviral treatment, portal inflammatory grade, and genotype 3 status as independent predictors of HOMA-IR. Patients with genotype 3 had significantly lower HOMA-IR than other genotypes. The team also found that HOMA-IR was an independent predictor for the degree of fibrosis, as well as the rate of fibrosis progression.

Dr Jason Hui’s team concluded, “Hepatitis C virus may induce insulin resistance irrespective of the severity of liver disease, and this effect seems to be genotype specific”.
“Further, our findings support the hypothesis that insulin resistance may contribute to fibrotic progression in chronic hepatitis C virus infection”.
Gastroenterol 2003; 125(6): 1695-1704

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Judge Rules for HIV Patient in Transplant
Source: The Associated Press

PITTSBURGH (AP) -- An HIV-positive man in need of a liver transplant was wrongly denied coverage under the state's Medicaid program, an administrative law judge ruled.

William Jean Gough's liver is deteriorating because of hepatitis C. The 46-year-old was accepted as a strong candidate for the lifesaving operation in August by Pittsburgh's Thomas E. Starzl Transplant Institute.

The state Department of Public Welfare, which oversees the state's Medicaid program, denied coverage for Gough, saying that infection with the AIDS virus is a life-limiting condition that rules out a transplant.

In a ruling made public Wednesday, Judge Bernadene Kennedy dismissed the state's argument, saying that scientific advances allow people with HIV to live full lives.

Gough “could live 10, 20, 30 years or more with a liver transplant,” Kennedy wrote. “Given his ability to successfully control his HIV, the appellant may live a prolonged life and maintain quality of life equivalent to non-HIV transplant patients.”

The judge expedited the case because Gough's condition worsens by the day and he could be ineligible for a transplant if his liver deteriorates too much.

Doctors said the Altoona man could die in nine to 12 months without a transplant. The average wait is six to 12 months.

`”I've struggled with this disease for many years and you've got to have hope,” Gough said Wednesday. “I just think it's a lack of education in our health care system. It seems to me the state's working off of old criteria.”

The Department of Public Welfare will not appeal the judge's ruling, spokeswoman Stephanie Suran said.

It is the second time in two months that Lambda Legal, a gay legal rights group, has successfully argued that patients with HIV should not be excluded from transplants just because they are HIV-positive.

In October, Kaiser Permanente, one of the nation's largest health maintenance organizations, approved a kidney transplant for an HIV-positive man in Denver, reversing an earlier decision. The HMO initially refused John Carl's request for a new kidney, saying a transplant on someone with the AIDS virus is too risky because drugs used to prevent rejection of a new organ can jeopardize their already weakened immune systems.

On the Net:
Lambda Legal: http://www.lambdalegal.org

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December 11th, 2003


Lamivudine Controls Viral Replication in Relapsed Hepatitis B Patients Although Resistance Eventually Develops
By Emma Hitt, PhD

Lamivudine can control viral replication in HBeAg-negative chronic hepatitis B patients who have relapsed, but viral resistance eventually develops, new research suggests.

Long-term use of lamivudine appears to be safe in patients with HBeAg-negative chronic hepatitis B, although the emergence of lamivudine-resistant hepatitis B virus (HBV) mutants is a concern.

In a previous study, Grazia Niro, MD, with the Hospital Casa Sollievo della Sofferenza IRCSS, San Giovanni Rotondo, Italy, and colleagues demonstrated that combining lamivudine with interferon could prevent the emergence of lamivudine-resistant mutations. In that study, no patient receiving combination therapy developed YMDD mutants during therapy, whereas 19% of patients treated with lamivudine alone experienced a virological breakthrough.

In the current study, the researchers evaluated the benefits of long-term re-treatment with lamivudine monotherapy in 36 HBeAg-negative chronic hepatitis B patients, 20 of whom relapsed after a previous course of lamivudine monotherapy and 16 who relapsed after combination therapy with lamivudine plus interferon.

The researchers conducted biochemical and virological tests every 3 months. They also sequenced the region coding for the YMDD amino acid motif at baseline and breakthrough.

The length of re-treatment averaged 24 months. The virological response peaked at 6 months (94.4%), and declined to 66.7% and 50% at 12 and 24 months, respectively. The rates of breakthrough were 2.9%, 31.4%, and 48.6% at 6, 12 and 24 months, respectively.

By the second year, 62.5% and 40% in the lamivudine/interferon and lamivudine group, respectively were considered responders (P = .10). The 18 responders at month 24 were on therapy after 25 to 51 months of treatment. The researchers report that 14 maintained a response, 9 of them from the lamivudine/interferon group and five from the lamivudine group.

"For the first time, these results establish the benefit of re-treatment with lamivudine monotherapy for anti-HBe-positive patients," Dr. Niro and colleagues note.

They conclude that re-treatment with lamivudine can control viral replication, and the effect is maintained for the initial 12 months in two-thirds of patients, but the subsequent response declines due to the development of viral resistance.
Aliment Pharmacol Ther 2003;18:933-940.

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December 12th, 2003


Hepatitis C Virus-Positive Renal Donations Heighten Mortality Risk
Drug Week

According to published research from the United States, "kidneys from donors who are positive for hepatitis C virus (DHCV) have recently been identified as an independent risk factor for mortality