Notes

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Leveraging Clinical Trials into Larger Marketshare. Douglas S. Kalman MS, RD, FACN Director, Nutrition Miami Research Associates www.miamiresearch.com

Quality Control - Your First Step Many companies ascribe to only use manufacturers whom are GMP certified. Look for OSHA and FDA approved Test-retest of each batch Standardized product (have your raw material suppliers ensure product stabilization). Ingredient control.

Quality Control - con’t If not a vitamin or mineral have each ingredient  tested (toxicology, 1/2 life, etc.). Prove safety. Work with an independent laboratory (Covance, SaniPure, etc.) Use literature as secondary ingredient support.

The FTC & Dietary Supplements FTC & FDA working together. FDA responsible for product labeling FTC responsible for claims in advertising FTC will defer to FDA when deeming an ad as an “unqualified claim”. FTC will go after ad agencies, distributors, retailers, infomercial producers, etc.

The FTC & Dietary Supplements Express versus Implied Claims You are are responsible for the accuracy. Don’t give 1/2 of the story. Qualify your claim Need to inform consumers of safety concerns.

FTC & Dietary Supplements Fine print disclosures may not be adequate. Substantiating claims: Type of Product Type of Claim The Benefits of a Truthful Claim Cost/feasibility of Developing Substantiation Consequences of a False Claim What Experts Believe to be Reasonable.

FTC & Dietary Supplements What is “Competent and Reliable Scientific Evidence”? Defined by the FTC as “tests, analyses, research, studies or other evidence-based  on the expertise of professionals in the relevant area, that have been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.”

FTC & Dietary Supplements Substantiation: No fixed formula, however, must consider: Level of Support (x # of studies) Amount and Type (#, RDBCT, open-label, in vitro, epidemiologic evidence, etc.). The Quality of the Evidence (RDBCT, protocol design, length of study, mechanism of action, power/effect size, statistical results, etc.) Published vs. in-house The Totality & Relevance of the Evidence - consistent study results vs. inconsistent findings, etc.

The FTC & Dietary Supplements In reality - what does this mean? November 30, 2000 letter to Jonathan W. Emord Esq. From Donald Clark (FTC) states: FTC believes there is significant guidance for “Competent and Reliable Evidence”. Points to FTC vs. Schering (1994) consent order dictated that “at least two well controlled, double blinded studies” would be necessary to substantiate weight loss and appetite suppressant claims…[118 FTC 1030 at 1127 (1994 Consent order)]

FTC & Dietary Supplements Claims based on Consumer Experience use a disclaimer…results may vary… Expert endorser - must be an expert in the field (I.e., neurologist & migraines, etc.). Do not hide financial relationships. Traditional Use claims Unclear, Ads must be easy to understand for the consumer Still needs substantiation

FTC & Dietary Supplements Consumer Testimonials Endorsements an endorsement means any advertising message an expert is an individual, group or institution possessing, as a result of experience, study or training, knowledge of a particular subject, which knowledge is superior to that generally acquired by ordinary individuals. Both very tricky, be clear, avoid deceptive tactics. Disclose financial arrangements

FTC & Dietary Supplements Use DSHEA disclaimer in advertising 3rd Party Literature Has an impact on consumer perception. Scientific journal articles are exempt from DSHEA if they are not used in a misleading manner. Lanham Act issues?

FTC & Dietary Supplements Health Claims - authorized by the FDA (I.e., calcium and osteoporosis) Structure/function Claims fall within statements of nutritional support No FDA pre-authorization approval needed. You must notify the FDA if labeling claims will be made (see The TAN Sheet for more information) Utilize 1-877-FTC-HELP for guidance

FTC & FDA Websites http://www.ftc.gov/bcp/conline/pubs/buspubs/dietsupp.htm http://vm.cfsan.fda.gov/~dms/supplmnt.html http://www.cfsan.fda.gov/~dms/ds-ingrd.html http://www.cfsan.fda.gov/~dms/ds-labl.html#structure http://www.cfsan.fda.gov/~dms/ds/labl.html http://www.ftc.gov/bcp/conline/pubs/buspubs/dietsupp.htm Use these to learn specific guidelines and processes that the FDA & FTC is asking of the Industry.

FTC Report - Sept. 2002 Analysis of Current Trends: Weight Loss Advertising. Many branded products named, some Rx products named Offenders: testimonials (165 of 300 ads viewed) all had at least 1 violation of FTC/FDA Guidelines! Fast and Guaranteed - too good to be true? No Diet Needed, Natural, No exercise, ugh! http://www.ftc.gov/bcp/reports/weightloss.pdf

FTC Actions - Weight Loss Cases by Decade

FTC - on your side Don’t miss the upcoming workshop. Designed to help companies reduce (eliminate?) deceptive advertising claims. FTC expected to take aggressive action after the Sept. 2002 report. Nov. 19, 2002 @ FTC Headquarters: 600 Pennsylvania Ave. NW Washington DC Call Brenda Mack 202-326-2182 for more info.

The Need for Research “Scientifically Designed” ¹ Safe & Effective. Research validated products can ­ consumer confidence. Published, peer-reviewed research builds medical understanding and backing. Research can yield safer & more efficacious products.

Utilizing Clinical Research Identify what you want to demonstrate. Work to identify who are the “experts”. Are there previous studies? Same dose and makeup? Single ingredient vs. multiple ingredient products. Types of studies to consider.

Building your Case Always remember Safety before Efficacy Safety:  Defined as lack of a negative impact on blood pressure, heart rate, EKG, liver function, kidney function, immune system, hemoglobin/hematocrit, subjective complaints, serious adverse events, quality of life and other overt parameters. Short-term vs. “long” term Safety parameters can change with long term studies (> 12 weeks)

Constructing Your Study Single ingredient vs. multiple Do you have to clinically test every ingredient in your product or can you test the finished product? Best bet: test your finished product in the EXACT medium that you wish to sell it. Utilize an independent researcher or group. There is a strike against the Industry. Maxim: if you are going to sell it to a human, test it in a human.

Types of Studies Finished product: RDBCT w/ crossover, RDBCT, SBCT, Open label, Pilot trial, Proof of Concept, etc. Collect Adverse Events data. Published, well-designed studies in respected journals make better substantiation than abstracts, unpublished data or in-house data. Marketing should reflect the research “within the confines tested” Changing the formula by even 1 ingredient or botanical source can negate the study(s) that you may use to promote the product.

Outcome Parameters In Weight Loss Research, we look for: Change in body weight Change in food intake Change in appetite Change in body composition Effect of/on diet & exercise Changes in lipids, glucose Changes in Mood states, Quality of Life Study duration

Putting out a RFP Have a product, want it tested. Consider contracting with a CRO to design the RFP, protocol, manage the study, monitor the study, analyze the study, write a report. Can contact various Universities or Teaching Hospitals Best bet (most economical) contract with a CSO (such as Miami Research) to organize (protocol, price control, run and interpret) the clinical trial. Contact all and see which gives you the best bid for services offered.

Enjoy the Benefits By sponsoring R&D you can expect to: Collect proof of concept data. Further knowledge into product validation. Create a pool of Intellectual Property. Consider Method & Use Patents. Have the option of out-licensing. Retain financial control.

Product Specific Research May allow for better “FDA-FTC” view of your products and marketing. Can enjoy developing a brand name. Truthful advertising (convey what the research has found). Allows for the discarding of 3rd party work. Builds consumer confidence.

Developing your Network Internal R&D should be MS level or above in the sciences. Internal R&D is good, but not enough. External Advisory board should be formed. Conflicts of interest. Expect the unexpected.

The Network - con’t. Internal + external should have good academic/institutional familiarity. Become intimate with published research. Utilize the internet. Express interest in wanting to develop the product and relationships. Legal factors.

Network Resources Can build relationships at scientific meetings (ACSM, ACON, FASEB, DIA, etc.). Invite “academics” to you for a “think tank”. Utilize services of those who already have established networks. Offer Graduate Student research grants

Affording to Sponsor Research Study finances are dependent upon # of subjects, # of tests, # of personnel needed, study duration, etc. This is part of the R& D process. In pharmaceuticals, R&D is tax credible (credits). No company has exploited the IRS allowable Research and Development Tax Credit to date. The cost of one study may equal the price of a 1-page ad in a larger circulation magazine. Budget ahead.

R & D Tax Credits In Canada this is known as the Scientific Research & Experimental Development Program (SRED) - www.rc.gc.ca/sred/ SRED states that for every $1.00 spent on R&D, you get $0.35 back. Public companies can only get a 20% limit. SRED allows overhead claims (R&D personnel), 35% granted. Provinces also allow an additional 10% credit You can get as much as $0.68 back per $1.00 spent on R&D.

R & D Tax Credit - Canada  The Iwasan Consulting Corporation appears to be the leaders in helping Canadian companies take knowledge of Tax Credits due and available. Iwasan Consulting & Associates Unit 205 - 14980 - 104th Avenue Surrey, B.C. Canada V3R 1M9 Tel: (604) 581-6900 Fax: (604) 581-4666 Toll Free: 1-800-661-4463

Tax Credits - USA Slight differences in tax credits for large (>500 employees) versus small companies. To qualify: R&D expenditures must be technological in nature AND expected to be useful to the taxpayer (new or improved products) Research does not need to be successful Per IRS, research must be to extend, expand, refine knowledge Research needs to rely on principles of physical/biological sciences

Tax Credits - USA Additionally, research must constitute a process of experimentation intended to lead to new or improved functions, performance, reliability, or quality for the taxpayer’s products. Sounds like R & D departments need to be renamed, streamlined and mission focused in the Dietary Supplement/Nutraceutical industry.

Tax Credits - USA In-house defined: Wages paid or incurred to employees for qualified services. Amount paid for supplies used in the conduct of qualified research (includes patent expenses). Contract Research Expenses - Can claim 65% if a solo project (one center) and 75% in the case of collaborative research (gray term) on any amount paid for qualified research. Section 174 of IRS Code.

Tax Credits R &D - USA The IRS allows for Tax Credit equal to 20% of incremental R&D expenditures. Alternative credit is available, this usually is 2.65 to 3.75% of R & D expenditures exceeding one percent gross receipts. Each state also allows R&D Tax Credits. Your company can enjoy Federal and State Tax Credits for defined R&D.

Who can help you? The premier R & D “tax credit” company: Global R&D Consulting Group, Inc. 555 North Point Center East 4th Floor Alpharetta, GA 30022 866-770-5577 email: pmalewski@globalr-d.com Other offices in Montreal & Toronto.

Other Methods of Support Consider hiring or partnering to achieve a Small Business Innovation Research Grant (SBIR). SBIR’s are three Phase programs. You can obtain more than $500,000 in funding. Federally run - Department of Education www.ed.gov/offices/oeri/sbir/about.html

SBA Grants Companies can also work with: US Small Business Administration Office of Technology 409 3rd Street, SW Washington DC 20416 202-205-6450 1-800-8-ASK-SBA www.sba.gov/sbir/indexprograms.html

SBIR Grants Underutilized! Phase I - feasibility study to examine the merit of an idea. $75,000 award - 6 months per award. Phase II - to expand on Phase I and to pursue development. Awards up to 2 years and $500,00. Phase III - is to commercialize the idea. To date only MTI Biotech has taken advantage of this type of grant. The government is paying for MTI to expand the IP on HMB based products!

SBIR Eligibility The company must be at least 51% American owned and independently operated Must be locate din the U.S. Must be FOR PROFIT and employ < 500 people. The principal researcher’s primary employment is with the small business during the project. In reality~24% of proposals receive funding (combined I & II). $6.8 M was granted in 2001.

Gaining Capital A suite of IP can allow your company to build a branded line. IP Suite is defined as in-house research (part of your dossier), unpublished research, published studies, patent filings, issued patents, etc. This can all be used for commercialization OR technology transfer to a larger company or pharmaceutical industry.

Owned Data is Best The work that your R&D team does counts. External studies aid in offense & defense of your product (marketing, attacks in the media, FTC inquiry, strategic alliances). Using 3rd party literature opens up a can of worms (were the studies of the same exact product, product blend, dose, racemic mixture, etc.). Again, utilize the FTC Guidelines for Advertising as a means to bolster your companies image.

Patents Must be new (improvement or novel or unexpected). In general you can patent a Dietary Supplement/Nutraceutical (composition). You can patent the method to product that supplement. Better patents have human data and not 3rd party literature proving their utility.

Patents Defined: “invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent”. Composition of Matter: chemical compositions, ingredients. Process: industrial or technological methods.

Patents Utility: defines usefulness of a patented invention. An absolute requirement in determining patentability for a utility patent application. The invention must contain one of the three basic conditions of patentability. A patent is not available for any invention that does not perform some useful function of positive benefit to society. Utility patents: The largest group of patent type. According to 35 USC 101; utility patents are subdivided into mechanical, electrical and chemical categories.

Patent, then Profit A patent is your only protection against theft of your invention. In general, patents are for 20 years from the data filed. Utilize “provisional patent filing” to extend that benefit by 1 more year. Note on product label. With patent(s) in place, no one can copy, imitate, manufacture or sell your product without your consent. License patents, get royalties. If you do not defend your patents, they are worthless.

Patent/IP Transfer US Patent Office list of Registered Attorneys and Patent Agents - http://www.uspto.gov/web/offices/dcom/olia/oed/roster/. ImagiNutrition (Anthony Almada) 949-363-5858 Book “Patent it Yourself” by David Pressman Esq. Weaver & Amin www.weaveramin.com 312-701-0844 Karen Weaver. Littman Law (1-800- 4- PATENT).

Patent/IP Transfer Example: Laguna Niguel, CA (September 18, 2002) – IMAGINutrition, Inc. announced today that they have orchestrated a patent/distribution agreement between Lonza, Inc., based in Basel, Switzerland, and Hamari Chemicals, Ltd., based in Osaka, Japan. The technology transfer will provide Lonza with an exclusive distribution agreement to market PepZin GI™, a patented (composition of matter) zinc-carnosine complex, in North America and Europe. In Japan, PepZin GI™ has been used for over a decade as an ulcer-healing drug under the generic name Polaprezinc. Lonza will be marketing PepZin GI™ as a dietary ingredient in a variety of sales channels in the nutrition industry.

Putting it all Together Want a product for weight loss. Do literature search. Narrow scope of mechanism (stimulant vs. non-stimulant). Decide on ingredient(s). Determine if all are DSHEA approved (not needing a NDI approval). Contract for a “Proof of Concept” study.

Putting it all Together Analyze results for safety & effectiveness. If effective, consider initiating patent. Contract for larger RDBCT Publish results. Utilize findings in advertising within guidelines set forth by FTC. Be innovative. Sponsor follow-up studies (confirmatory and new “indications”).

Putting it all together Coordinate your press releases to coincide with the publication of your sponsored work. Utilize conferences for PR on the studies. The follow-up studies are a must - establishes more safety & efficacy data.  Work with an established scientific advisory board.

Resources Miami Research Associates! Association of Clinical Research Professionals www.acrpnet.org Text: Guide to Clinical Trials by Bert Spilker. Lippincott Williams & Wilkens. Drug Information Association www.diahome.org

Case Study # 1 Leading ephedra/based weight loss product. Wants to expand safety data Contracts for a clinical trial Major outcome parameters Add IP to other product specific published studies. Accepted for publication in a High Impact Journal (Oct issue; Int J Obesity).

Case Study # 2 Weight loss product What are the steps you would take prior to FDA market notification? How would you determine safety? How would you determine efficacy? What are the steps for research, costs? Patent? Publish? How would you market the product and study results?

Case Study # 3 Food item What kind of study would be best? What parameters would you measure for? Who is best qualified to conduct the study? What impacts the study costs? Is this patentable? How should this be conveyed to the consumer? Publish or “in-house”?

What to be Aware Of Lanham Act A federal regulation governing trademarks, service marks and unfair competition. Its two basic purposes are to eliminate deception and unfair competition in the marketing of goods and services, and to protect marks against the use of confusingly similar marks by others.