Companies thriving on public's anxiety

Some drug makers don't mind a little fear in the market.

Take, for instance, the experience of Anbex Inc. of New York, which sells potassium iodide tablets meant to protect the thyroid gland from absorbing radiation. Sales rose steadily between the attacks of Sept. 11 and the invasion of Iraq, amid fears of attacks on domestic nuclear power plants. But orders have fallen off since then, and company president Alan Morris worries that consumers have grown complacent. He recently sent direct-mail samples of his tablets to try to stimulate demand.

''I don't need a war, I just need some anxiety," Morris said.

Similar thinking has gripped many drug makers as they make progress on a growing number of drugs and vaccines developed in the area of biodefense.

So far nearly all the revenue in this area comes from the government, such as research funding from the Pentagon or the National Institutes of Health, or from direct sales to federal stockpiles. Some estimate total government spending in the area at $4 billion.

But to varying degrees the companies involved are also starting to look ahead to the day when they might also sell their pills to the general public following regulatory approvals. Their commercial model is Bayer AG's Cipro, a general antibiotic that had its revenue rise 10 percent in 2001 when it became well known as a treatment for anthrax. ''What every company wants is a commercial market, whether it's instead of, or in addition to the government opportunity," said Una Ryan, chief executive of Avant Immunotherapeutics Inc. of Needham.

For example, Avant's vaccine research includes several projects on anthrax funded by a Pentagon contractor or the NIH, but Ryan said Avant aims to retain some rights to market the resulting products commercially as well, selling to foreign governments as well as to individuals. Ryan said she hasn't thought through exactly what an advertising campaign for these treatments might look like, pending regulatory approvals, but mentioned obvious markets would be travelers going to exotic locales where they might encounter the rare disease.

Executives at Acambis Inc. the British drug maker with a major office in Cambridge, also have thought ahead to how they might make commercial use of the smallpox vaccines the company is developing; they recently polled 2,000 people in the United States to help develop marketing plans. Christian Loucq, the company's vice president for marketing, said one finding was that people considering getting a smallpox vaccination tended to have higher incomes.

Barring some unforeseen event that drives up demand, the total market for the vaccine might be no more than 1 percent of the US population, not a major revenue opportunity compared with the 209 million smallpox vaccine doses the company is supplying to the federal government. Loucq declined to discuss how the company might go about selling the drug, however, partly because the FDA frowns on such comments before the drug receives approvals. ''It's a very touchy subject," he said.

Officially, government public health specialists don't want consumers to stockpile medicines, partly because of worries they'll be stored beyond their expiration dates, kept in the wrong conditions, or mishandled in other ways that would create a false sense of security.

Also, there's no guarantee that these treatments would work against a certain agent, said Von Roebuck, a spokesman for the Centers for Disease Control in Atlanta. ''We never know what we're facing until we're facing it, and then it might be something more severe," Roebuck said. ''That's why we're really hesitant to say, 'This is what you should have in your medicine cabinet,' " he said.

That hasn't stopped a variety of companies from stepping up to offer pills linked to biodefense, generating a series of warning letters from the US Food & Drug Administration aiming to stop smaller companies from marketing pills that claim to treat smallpox or Severe Acute Respiratory Syndrome (SARS). Other warnings have been aimed at advertisers of potassium iodide pills -- known by their chemical symbol KI -- meant to block the absorption of radiation by the thyroid gland, one of the most vulnerable organs. Long opposed by the nuclear power industry, which feared the pills would hurt its public image, KI found a new popularity after the FDA approved new dosage levels following the Sept. 11 attacks.

In addition to Anbex, other companies also jumped in, including KI4U Inc. of Texas. Other new KI suppliers failed to get approvals from the FDA, however, and the agency sent several warning letters to firms noting their claims didn't add up.

For instance, in a June 10, 2003, letter to Regency Medical Research Ltd. of Phoenix, the sellers of a nasal spray, ''KI-Spray", the agency wrote, ''We are unaware of any evidence that establishes that this drug is generally recognized as safe and effective for the intended use," adding the company was making false statements on its website. (A Regency spokeswoman declined to discuss how the company has responded.)

In Wellesley, Coley Pharmaceutical Group chief executive Robert L. Bratzler said his company has hopes that an inhalable product it is developing for the Pentagon will have some commercial applications, too. Last October, the company received a $5.9 million grant from a NIH biodefense partnership program. The idea is to create a treatment that would stimulate a user's immune system to fend off all types of viral, bacterial, and perhaps fungal infectious agents for around a week. Though it might not be developed and approved for another five years, Bratzler said he has every intention of marketing it if possible.

''It's commercially a no-brainer," he said. ''If the government will pay for it and its central to our core mission, we'll undertake it," he said.

Ross Kerber can be reached at kerber@globe.com.