Cuba-U.S. Life Sciences Collaborations Grow Slowly as Embargo Remains

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Cuba

U.S.-Cuba relations are thawing, but the U.S. trade embargo against Cuba remains in force. Uncertainty about when and if it will be lifted likely discourages biopharmas from making large investments in potential partnerships with Cuban governmental entities and companies. However, there are incentives to pursue collaboration through mechanisms that currently exist because of Cuba's potential to be a new export market for biopharma products and as a source of valuable technologies.

By John T. Aquino

Aug. 22 — The U.S.-Cuba relationship for life sciences collaborations is a work-in-progress, as life sciences leaders battle uncertainty that they say discourages investment and slows innovation.

The door to biopharma collaborations in Cuba may have opened a bit. The Obama administration loosened U.S. travel and some trade restrictions concerning Cuba, with the president symbolically visiting the country in March. On June 14, the U.S. and Cuba signed a memorandum of understanding that “establishes coordination across a broad spectrum of public health issues, including global health security, communicable and non-communicable diseases, research and development and information technology.”

There's still a hitch though, because while U.S.-Cuba relations have improved, the trade embargo against Cuba remains in effect, and its removal would require congressional action.

During his visit to Cuba, President Barack Obama joined Cuban President Raul Castro in calling for removal of the embargo. Congressional insiders, however, told Bloomberg BNA that this is unlikely to happen in this election year and while Republicans control either the House or the Senate. Senate Majority Leader Mitch McConnell (R-Ky.) has said he would resist efforts to remove the embargo. The Cuban American delegation in Congress, which includes Sens. Marco Rubio (R-Fla.) and Ted Cruz (R-Texas), has even opposed the Obama administration's steps to ease trade and travel restrictions on Cuba.

And so, life sciences company and association executives interviewed by Bloomberg BNA said that U.S. companies wishing to export drugs to Cuba or engage in collaboration projects with the government and companies there must go through the often slow process of obtaining licenses from the U.S. Treasury Department's Office of Foreign Assets Control ( OFAC ). U.S. companies that have obtained licenses to import products or collaborate have tended to be small to mid-size.

These executives, who spoke on background since information about pending deals tends to be closely guarded, said the pace of export and collaboration could pick up speed as interest in existing Cuban products builds and U.S.-Cuban relations continue to thaw enough for more and larger companies to invest in partnerships.

Embargo Provisions

The U.S. embargo against Cuba is a commercial, economic and financial embargo imposed by the U.S. on Cuba on Oct. 19, 1960, on all imports except for non-subsidized sale of food and medicines.

The U.S. hasn't physically blocked trade with Cuba since the Cuban missile crisis of October-November 1962, when it found that Cuba was housing nuclear missiles from the Soviet Union. However, the “embargo” that continues in place basically limits U.S. companies from conducting business with Cuban interests and is enforced by a number of statutes ( see box).

U.S. Statutes Enforcing Cuba Embargo

  •  Congress specifically enacted sanctions on Cuba through provisions in the Cuban Democracy Act of 1992 (CDA, Pub. L. No. 102-484, Title XVII), which prohibits U.S. companies' foreign subsidiaries from engaging in trade with Cuba and entry into the U.S. by any seagoing vessel to load or unload general freight if it has been involved in trade with Cuba within the previous 180 days.
  •  The Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 (Pub. L. No. 104-114), which codified the economic embargo, including all restrictions under OFAC's Cuba Asset and Control Regulations (CACR, 31 C.F.R. Part 515), and prohibits the president from eliminating the embargo regulations without making a determination that a transition government is in power in Cuba.
  •  The Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA, Pub. L. No. 106-387, Title IX), which includes prohibitions on U.S. credit extensions to Cuba, such as financing for purchases, and requires “payment of cash in advance” or third-country financing for the exports. The TSRA, however, allows the sale of agricultural goods and medicine to Cuba for humanitarian reasons.

The medicines exception to the embargo was eliminated in 1964. In 1975, Treasury liberalized its regulations to allow case-by-case licensing.

If the embargo is lifted and Cuba's national economic regulations are adjusted to facilitate business with U.S. companies, it will provide more opportunities for U.S. entities to export their biopharmaceutical products to Cuba. But it will also provide them with the opportunity to import and collaborate on Cuba-developed drugs.

Even if the embargo remains in force, Commerce Secretary Penny Pritzker said April 4 that the steps Obama has taken to ease trade and travel restrictions with Cuba would be very hard for the next administration to reverse.

Cuba Created Own Industry

One perhaps unexpected result of the U.S. embargo and its economic consequences is that Cuba was forced to create its own medical research and biotech industry, which has resulted in medical advances.

Cuba now produces 70 percent of its pharmaceuticals, according to research by John Kirk, professor of Latin American studies at Dalhousie University in Halifax, Nova Scotia. The findings were published in Cuban Medical Internationalism: Origins, Evolution, and Goals , which Kirk co-authored with H. Michael Erisman of Indiana State University.

According to a 2012 report by the Brookings Institution, the Cuban biotech industry employs about 10,000 people, of whom more than 3,000 have university degrees, more than 500 have master's degrees and more than 250 have Ph.D.s in science. Their work is done in about 15 separate facilities that operate in concert but apparently semi-autonomously.

Some developing nations say that Cuba has been setting an example for them. Lamenting Nigeria's inability to produce its own vaccines, for example, Lucy Ogbadu, director-general of Nigeria's National Biotechnology Development Agency, said on March 16, “So, we have approached Cuba for [assistance] knowing that eight out of the 11 vaccines that are involved in the national immunization programs in Cuba are produced in Cuba. Even with her third world country status, Cuba has gone far and nothing stops Nigeria from following suit.”

CimaVax Cancer Vaccine

Cuba has produced a number of drugs and vaccines that have generated interest from U.S. states, American Indian nations and U.S. nonprofits and companies.

The cancer immunotherapy vaccine CimaVax was the result of a 25-year research project at Cuba’s Center of Molecular Immunology (CMI). The focus of CimaVax is on the role of the body's epidermal growth factor (EGF) system in the development of cancer. The EGF system drives the proliferation of cells that occurs in cancer when ligands—specialized molecules that circulate in the blood and other places—bind with EGF receptors on the surface of cells. In the U.S. and Europe, researchers attempted to prevent ligands and EGF receptors from binding by targeting the receptor side with EGFR inhibitors. CimaVax instead blocks the ligands.

CimaVax has gone through two trial phases in Cuba and is currently undergoing a third. CimaVax has been approved in Venezuela and Peru, with clinical trials underway in Europe and Malaysia. There are agreements in place to test it in the U.S. at the Roswell Park Cancer Institute in Buffalo, N.Y., subject to the approval of an investigational new drug application by the U.S. Food and Drug Administration.

According to Roswell, which received a license from the OFAC to work with Cuba’s CMI on CimaVax, it has begun the process of filing an IND with the FDA. A Roswell spokesman told Bloomberg BNA in a June interview that because the existing data from the drug are from a country with which the FDA has had no relations, it likely will be five years until approval.

CimaVax was reported to have been a topic of discussion during a 2015 visit to Cuba by representatives from Roswell, Pfizer and Regeneron organized by New York Gov. Andrew Cuomo (D). A Regeneron spokeswoman told Bloomberg BNA in a July 28 phone interview that the company's chief executive officer was invited to participate in the trip because of his status in the business community of the state and not necessarily because the company had any interest in working with Cuba. A Pfizer spokeswoman declined Bloomberg BNA's request for comment in an Aug. 15 e-mail.

Roswell announced at the 2016 Biotechnology Innovation Organization International Convention in San Francisco the formation of Global Biotechnology & Cancer Therapeutics (GBCT) , a for-profit spin-off of the institute that will guide and support biotech and life-sciences startups. The institute said GBCT will utilize strong local and international partnerships to help inventors raise startup capital, obtain FDA approval and license inventions through Roswell’s Office of Technology Transfer.

Heberprot-P for Diabetic Foot Ulcers

Heberprot-P was developed by scientists at the Center for Genetic Engineering and Biotechnology (CIGB) in Cuba as a therapy for diabetic foot ulcers. It contains EGF to be applied by intra-lesional injections directly in the wound site, and has been found to promote granulation and healing in advanced diabetic foot ulcers.

In 2008, Heber Biotec, marketer for the CIGB, launched the product on the international market. In addition to Cuba, it's in use in Argentina, Colombia, Costa Rica, the Dominican Republic, Ecuador, Guatemala, Kuwait, Mexico, Paraguay, Peru, the Philippines, Russia, Turkey, Uruguay, Venezuela and Vietnam. Heberprot-P is protected by World patent WO PCT/CU2002/000011.

According to Bill Haseltine, former CEO of Human Genome Sciences who wrote the 2012 Brookings report, HGS had tried without success to create a similar drug.

Pierre M. LaRamée, executive director of the Oakland, Calif.-based advocacy group Medical Education Cooperation with Cuba (MEDICC), wrote earlier this year that 3,000 people have limbs amputated annually in the U.S. due to diabetic foot ulcers, and that half will die within five years of losing their limbs. Heberprot-P has been shown to reduce the risk of amputation by at least 70 percent, LaRamée said in the article published in the January-April 2016 MEDICC Review, an international journal of Cuban health and medicine.

The St. Regis Mohawk Tribe in Akwesasne, N.Y., has shown great interest in working with Cuba on the drug. According to the tribe, Native Americans experience an 11.4 percent prevalence of diabetes. The community of Akwesasne has a diabetic population of 16.4 percent. In comparison, the state of New York has 9.7 percent disease prevalence. Tribe members visited Cuba in April hoping to arrange for access to Heberprot-P for the tribe.

In May, the OFAC granted Poland, Ohio-based Mercurio Biotec a license to import Heberprot-P for clinical trials in the U.S.

On July 20, U.S. Reps. Barbara Lee (D-Calif.) and Karen Bass (D-Calif.) requested U.S. executive action to enhance health cooperation between the U.S. and Cuba and to remove red tape that's limiting the availability of Heberprot-P in the U.S., which they said is being especially affected by the embargo.

Hep B Vaccine, Cancer Treatments

Paris-based Abivax acquired the rights to a hepatitis B vaccine known as ABX203 (HeberNasvac) in 2015 from the CIGB and is running a phase IIb/III trial in the Asia Pacific. The vaccine is made up of HBc and HBs recombinant proteins to trigger an immune response.

The study was designed to determine whether ABX203 can control viral load for a “much longer period of time” when compared to the standard of care. However, a recent “futility study” found that the trial is unlikely to reach its primary endpoint, the company said in a statement, and future development of the drug is under review.

Even so, Cuban regulatory authorities granted the company's first marketing authorization application for ABX203 in December 2015, the statement said.

Racotumomab (trade name Vaxira) is a therapeutic cancer vaccine for the treatment of solid tumors that operates differently from CimaVax and is currently under clinical development by Recombio, an international public-private consortium that includes CIM and researchers from Buenos Aires University and the National University of Quilmes in Argentina.

The vaccine is designed to induce the patient's immune system to generate a response against a cancer-specific molecular target with the purpose of blocking tumor growth, slowing disease progression and ultimately increasing patient survival. Roswell also has expressed an interest in racotumomab.

Licensing Approach Isn't Easy

Obtaining an OFAC license is the main path to working with Cuban entities on their medical inventions and discoveries. But securing the license hasn't been easy.

According to MEDICC, the OFAC denied a license for trials and sales of Heberprot-P in 2010 to the New Jersey-based Healiance, a subsidiary of the Austria-based Digen Pharmaceuticals. In 2014, the agency agreed to grant Healiance a license for clinical trials but not sales, even if the FDA approved the drug.

In its decision, the OFAC appeared to reject the argument in a December 2013 letter to Treasury Secretary Jack Lew that was initiated by Lee and signed by 111 members of Congress. They asked the agency to license not only trials for Heberprot-P, but sales as well, if trial outcomes and the FDA's assessment were positive.

“OFAC has granted similar authorizations in the past,” the letter reminded Lew, “for example in 2004, OFAC granted [such] a license to a company for a cancer vaccine developed by a Cuban research institute.”

In 2002, California-based CancerVax Corp. applied for an OFAC license for three experimental anti-cancer drugs being developed by Cuba's CMI. The OFAC granted the license in 2004.

In order to pay $6 million in licensing payments to Cuba over three years, CancerVax devised a complex scheme. It arranged deals that involved payment in soybeans through a U.S. agricultural commodities firm and U.S. medical companies providing Cuba with medicine and medical goods. Once the drugs were approved by the FDA, the company would have made additional payments of up to $35 million.

CancerVax ultimately decided not to proceed with the clinical trials. In 2008, CancerVax agreed to a reverse merger with Micromet.

Cuban Scientists, U.S. Patents

Cuban scientists, despite the embargo, have kept in touch with the U.S. life sciences industry. Several were panelists at BIO international conventions in 2002 and 2016. And they have been able to obtain U.S. patent protection for their inventions. President John F. Kennedy exempted intellectual property such as patents from the trade embargo on Cuba in 1962 because they are protected by international treaties.

A Bloomberg BNA search of the U.S. Patent and Trademark Office database for pharmaceutical, biologic, vaccine and diagnostics patents issued since 1976 found 36 for Cuban inventors and entities that are widely referenced by other patents.

For the some of the patents, Cuban scientists were part of teams that included scientists from the U.S. and other countries.

Group Urges Presidential Action

A February MEDICC white paper outlined steps the U.S. could take to foster U.S.-Cuban cooperation in the life sciences.

MEDICC argued that, under the CACR (economic embargo law) and Export Administration Regulations (EAR), the U.S. president has the authority to license U.S. companies, institutions and individuals to engage in categories of transactions, or specific transactions, that are otherwise prohibited by the embargo. These licenses would be in addition to and extensions and elaborations of those currently being issued by the CAFC. “There is no statutory restraint on the President’s licensing authority other than in four areas, none of which constrain the President’s discretion in ways relevant here,” MEDICC wrote.

The MEDICC steps included the U.S. president issuing general authorizations for:

  •  Cuban-developed pharmaceutical and other medical products to be subject only to the same rigorous regulatory tests as those from other countries, eliminating the extra steps now imposed by the embargo, which would include authorization for U.S. pharmaceutical companies to freely negotiate terms and conditions with the Cuban parties as they do with other foreign institutions, and general post-regulatory approval authorization to market these products in the U.S.;
  •  U.S. entities to pursue research and joint ventures with Cuban entities and, as it is done in the telecommunications sector, this would include general authorization for exports to and investment in Cuban health and medical research centers, companies and institutions, as well as permission to establish subsidiaries and offices in Cuba; and
  •  U.S. pharmaceutical and medical equipment companies and U.S. academic institutions to include Cuban medical centers in trials that adhere to U.S. regulatory standards, including customary payment for services rendered by Cuban health authorities and institutions.

The white paper concluded, “While the U.S. embargo on Cuba still must be lifted, the President has the authority to take the actions outlined [here], to make sure it doesn’t stand in the way of U.S. institutions and companies that make safeguarding health their business. Both Cuba and the U.S. have expertise and experience to offer each other and to improve health worldwide.”

To contact the reporter on this story: John T. Aquino in Washington at jaquino@bna.com

To contact the responsible editor for this story: Randy Kubetin at rkubetin@bna.com

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