Legislators approve next phase of SC’s first funding of pharmaceutical research
By Jessica Holdman
SCDailyGazette.com
COLUMBIA – An international trio of chemists — two from Germany and one from the Czech Republic — paired with a doctor from New York to develop a treatment for the symptoms of COVID-19.
But the drug is being tested in South Carolina, where officials hope the research will help grow a bioscience industry in the state.
Funding pharmaceutical research is a first for the Palmetto State.
In 2022, legislators agreed to set aside $27 million from the state’s share of federal pandemic aid for the Medical University of South Carolina to test a COVID-19 treatment. But they put a clause in the budget requiring separate approvals for each step in the process.
The university is overseeing a clinical trial on behalf of drug developer OCI Biotech Limited, which has operations in Europe. So far, legislators have given permission for MUSC to spend $13.1 million of the total for Phase 1, broken into two parts.
With the initial $8.3 million allowed last year, the partners tested the drug to ensure the formula would stay stable and pure throughout the manufacturing process.
Now it’s time to test it on humans, starting mostly with residents of South Carolina’s Upstate.
“The benefits for the state of South Carolina could be transformative,” Dr. David Cole, president of MUSC, told members of the Legislature’s financial oversight board last year when he came seeking the first tranche of money for the clinical trial process.
Representatives of the university returned to the Statehouse two weeks ago for its second funding round. With $4.8 million newly approved to complete phase one, testing will move to human volunteers to determine safe dosages and effectiveness.
Lawmakers see the partnership as a jumping off point to get involved with more companies conducting early-stage development of new pharmaceuticals.
“The COVID-19 pandemic made it clear that we can no longer rely on foreign countries to provide us with life-saving medical supplies,” said Brandon Charochak, a spokesman for the governor’s office. “The MUSC clinical trial provides South Carolina with a significant opportunity to bring additional pharmaceutical manufacturing to our state.”
How it started
While the drug is intended to combat COVID, its journey to South Carolina started long before the pandemic.
According to MUSC, the scientific team at OCI spent 10 years discovering and developing the treatment for lung inflammation.
It does not kill the COVID-19 virus but rather treats the respiratory symptoms, helping patients survive the breathing problems experienced by many who contract it. Doctors could eventually use the drug to treat lung inflammation associated with other diseases.
The team, according to documents supplied to legislators, included:
- Roland Franke, a German biochemist with a doctoral degree from the Massachusetts Institute of Technology and 20 years of experience in the pharmaceutical industry, particularly cancer drugs.
- Rolf Jessberger, a German chemist and director of the Institute of Physiological Chemistry at Technische Universitat Dresden.
- Dr. Tom Sakmar, a physician and former acting president of Rockefeller University in New York, who studied at the University of Chicago and received clinical and research training from Massachusetts General Hospital, Harvard Medical School and the Massachusetts Institute of Technology.
- Jaroslav Frantisek, a pharmaceutical executive from the Czech Republic with 24 years of experience.
When it came time to move from lab-based studies to human testing, the group started looking for partners.
The first question was how they would make and deliver the treatment. That brought OCI to Nephron Pharmaceuticals in Lexington County, which makes generic drugs to treat a multitude of respiratory illnesses.
Nephron CEO Lou Kennedy said she was introduced to OCI through SC Bio, a life sciences industry group in the state. OCI wanted to hear about Nephron’s experience operating a pharmaceutical facility in South Carolina. Through those meetings, OCI learned of Nephron’s expertise in respiratory medicine and a partnership formed.
“It just sort of happened,” Kennedy, past chairwoman of SC Bio’s board, told the S.C. Daily Gazette on Monday. “It was organically hatched.”
Kennedy said Nephron started receiving shipments of OCI’s formula, which starts as a powder made at one of OCI’s labs in Europe. (The group of scientists has labs in both Italy and the Czech Republic.) Nephron liquifies the powder, and the liquid drug is administered through a nebulizer, which turns it into an ultra-fine mist breathed in by a patient.
After teaming up with Nephron, OCI then tapped MUSC to run clinical trials as the group seeks U.S. Food and Drug Administration approval for the drug. MUSC said it vetted OCI, and the preliminary studies on the drug were promising.
Finally, the new partners needed a way to pay for this next step in the drug development process. It turned to the state government, which received billions in federal relief dollars in the wake of the COVID-19 pandemic.
It is unclear to the Gazette exactly where the idea for the state to pay for it originated.
Kennedy, former chairwoman of the state Chamber of Commerce, was part of Gov. Henry McMaster’s accelerateSC task force, which he formed to make recommendations on how to best use the federal pandemic aid. But its final report, issued in August 2021, says nothing about funding clinical trials.
The unusual allocation was part of the House’s budget proposal two years ago, which the Senate agreed to in negotiations.
Funding sources
In the United States, the largest funders of clinical trials are the companies that develop them.
After that comes federal agencies, particularly the National Institutes of Health. In an effort to up its spending power in recent years, the agency has pumped hundreds of millions of dollars into 60 regional consortiums around the country, which in neighboring states includes the Georgia Clinical & Translational Science Alliance and North Carolina Translational and Clinical Sciences Institute.
Charitable organizations — the Susan G. Komen foundation for example — also offer funding.
“Financial support for clinical trials can and does come from many sources. Each year, MUSC performs many research trials from almost every funding source imaginable,” MUSC’s Dr. Charlie Strange, who is running the clinical trial, and MUSC Chief Innovation Officer Dr. Jesse Goodwin, wrote in an email to the S.C. Daily Gazette.
But South Carolina has never previously directly funded a clinical trial at MUSC through the state budget.
“If we’re gambling with the state’s money, what’s our reward? What do we get out of it?” Senate Finance Chairman Harvey Peeler, R-Gaffney, asked last year when the committee he leads was asked to OK the first distribution.
MUSC’s Cole acknowledged the financial risk.
“There are no guarantees that this will happen. But the way I frame this is that this is significant risk with significant upside,” he told Peeler and other members of the Legislature’s Joint Bond Review Committee.
Cole said it could strengthen the pharmaceutical and bioscience industries in the state — sectors South Carolina has sought to grow for years — bringing more high-paying jobs and attracting highly-educated experts in those fields.
“We’ve had huge success with advanced manufacturing. That’s awesome, ” he said. “But we really need a diverse economy.”
What’s next
Should the drug eventually receive FDA approval, it’s expected to be manufactured here — first by Nephron and eventually by OCI, which is considering a site in the Lowcountry for a manufacturing plant of its own.
The medical school’s Zucker Institute for Innovation Commercialization also holds intellectual property and other revenue sharing agreements with OCI, though the terms of those agreements were not immediately available.
But first and foremost, according to MUSC, are the anticipated health benefits for South Carolinians suffering from respiratory viruses such as COVID-19.
South Carolina, like many states without a city that ranks among the largest nationwide, has lagged in access to clinical trials compared to places like New York and Chicago.
Rep. Gilda Cobb-Hunter, D-Orangeburg, who also sits on the legislative oversight panel, called the partnership a potential “game changer.”
Over the coming months, paid volunteers who have signed on with Velocity Clinical Research — headquartered in Durham, N.C. — will be the first to take the drug.
The company has offices in Spartanburg, Columbia, Anderson, Greenville, Gaffney, and Union where the trial will take place. Those who agree to participate will be monitored for any potential side effects the drug may cause.
MUSC did not respond to questions from the Gazette on how much participants will be paid or how many volunteers are needed.
Jessica Holdman writes about the economy, workforce and higher education. Before joining the S.C. Daily Gazette, she was a business reporter for The Post and Courier.
S.C. Daily Gazette is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.
