FDA ruling on Aussie biotech could boost congressman’s investment

An Australian biotech company whose largest shareholder is a U.S. congressman has the greenlight to begin human trials in the U.S. for a drug to treat advanced multiple sclerosis.

The Food and Drug Administration's decision is the first step in a long approval process demonstrating a new drug's safety and effectiveness before regulators allow it to go on the market. In Innate Immunotherapeutics' case, it could help the company achieve its stated goal of striking a merger or partnership deal with a larger drugmaker.

Drugs to treat multiple sclerosis, which are taken for life, are some of the most expensive offerings in the U.S., costing about $5,000 a month, or $60,000 a year.

Regulators' action "means you can do clinical studies. It doesn't increase the likelihood of approval and it doesn't mean the FDA is inclined to approve the drug," said Ken Kaitin, director of the Tufts Center for the Study of Drug Development in Massachusetts.

Rep. Chris Collins (R-N.Y.), who owns a 16.8 percent stake of the company, is also a member of Innate's board. The Buffalo-area representative has helped draw other U.S. investors into Innate, including political donors and others with whom he has personal or professional connections.

The Office of Congressional Ethics is investigating Collins' role, The Buffalo News reported last month.

Innate drew intense public scrutiny earlier this year after Health and Human Services Secretary Tom Price — previously a Republican member of Congress from Georgia — was identified as a shareholder after President Donald Trump nominated him to head up the department that includes the FDA. Price said he learned about the company from Collins.

The secretary sold his shares after he joined HHS.

CEO Simon Wilkinson said the company hopes the FDA will recognize the preliminary trials that Innate has done in other countries so that it can begin late-stage trials in the U.S.

Since the agency did not have any jurisdiction over those trials, it might require Innate to conduct early-stage research in this country, Kaitin said.

"The FDA can basically do whatever they want in this case," he said.

Innate's most recent trial, which included 93 participants in Australia and New Zealand, finished in April, and the company expects to announce the results by September.

Innate's shares rose about 2 percent in Australian trading Wednesday after the company announced the FDA decision.​