Biotech and Pharma

Herpes vaccine company backed by Peter Thiel vows future testing will follow FDA guidelines after offshore trial sparks ethics furor

Key Points
  • Rational Vaccines conducted a clinical trial for its herpes vaccine in 2016 without oversight by the FDA or another traditional body.
  • Critics said it was unethical for Rational Vaccines to run such an unmonitored clinical trial.
  • Thiel invested $4 million in the company at the end of August, almost a year after the trial ended.
Peter Thiel
Saul Loeb | AFP | Getty Images

The CEO of a herpes vaccine company at the center of a controversy over an offshore clinical trial on Friday said that future testing of the drug will follow U.S. Food and Drug Administration oversight rules, as demanded by a new group of financial backers that includes venture capitalist Peter Thiel.

In an impassioned interview, Rational Vaccines Chief Agustin Fernandez said he feared the great promise of the vaccine developed by the late university professor William Halford was being overshadowed by criticism over Halford's decision to test the drug using American patients on the West Indian nation of St. Kitts and Nevis without monitoring by the FDA or an institutional review board (IRB), as is traditional.

"I just need to defend my friend, who is dead," Fernandez told CNBC. "Your kids will not know herpes, your grandkids will not know herpes because of Bill."

"People are missing the story here. They're defaming a dead scientist, [who] is really a hero," said Fernandez, a Hollywood movie producer who co-founded Rational Vaccines with Halford in 2015 out of a shared desire to help herpes sufferers.

As many as 1 in every 6 people between the ages of 14 and 49 has genital herpes, according to the federal Centers for Disease Control and Prevention.

Agustin Fernandez (III)
Source: Rational Vaccines

"This guy is eradicating herpes: Let's talk about that," he said of Halford, a Southern Illinois University professor who died in June of brain cancer. "Nobody's saying that we've lost one of the greatest scientific minds in America."

Fernandez spoke two days after health regulators in St. Kitts said they were investigating the 2016 vaccine trial after learning it was conducted in that nation without prior approval.

"The Ministry of Health will always ensure that all research involving human participants follow international standards, which protect the safety and security of persons involved," regulators said.

Rational Vaccines last October announced that its "potentially revolutionary Theravax vaccine" had achieved groundbreaking results in its Phase 1 clinical trial.

Fernandez said the trial had shown the drug's promise both as a vaccine that would prevent herpes infections and as a therapeutic treatment to alleviate the often painful outbreak of sores that people with herpes can suffer.

Fernandez also said that he now understands it is necessary from now on to conduct further trials following FDA oversight standards if Rational Vaccines hopes to market the vaccine in the United States.

"As a businessman, and as my investors [require] ... we need the FDA," Fernandez said.

Fernandez, who is not a scientist or an expert on pharmaceuticals, said he did not know at the time that Halford's decision to conduct that trial of the vaccine in St. Kitts in 2016 with 20 American patients would end up drawing the ire of medical ethicists.

Nor did Fernandez know, he said, that it was traditional for such drug trials to be monitored either by the FDA or by an institutional review board.

"I didn't know what an IRB was," Fernandez said.

William Halford, PhD
Source: Rational Vaccines

But he said that this past spring — about six months after the first trial was concluded — when Halford and he met with Thiel's representative to discuss Thiel investing in the vaccine's development, the representative "yelled" at Halford for arguing that his decision to do the testing without FDA monitoring was motivated by a desire to help herpes sufferers without unnecessary delay.

Thiel's rep "said, 'We want to help people too, but we want to help a billion people, and we need to go through the FDA,' " Fernandez recalled.

The PayPal co-founder Thiel and a group of other investors committed $7 million to Rational Vaccines on Aug. 23, with the condition that future testing of the vaccine comply with FDA standards, Fernandez said.

Thiel, who did not respond to a request for comment from CNBC, himself invested $4 million, according to Fernandez.

Last Sunday, a story by Kaiser Health News focused on Thiel's investment and highlighted the fact that the 2016 trial "did not rely on traditional U.S. safety oversight."

The article noted that "Thiel has been a vocal critic of the FDA, claiming in an interview that its approval process was so unwieldy 'you would not be able to invent the polio vaccine today.'"

Jonathan Zenilman, chief of the infectious disease division of Johns Hopkins Medical Center, told Kaiser Health News, referring to the vaccine trial, "What they're doing is patently unethical."

"There's a reason why researchers rely on these protections," Zenilman said. "People can die."

An FDA spokeswoman told CNBC, "The FDA does not comment on individual cases or speculate on hypothetical situations."

"However, generally speaking, the FDA believes that the oversight of clinical investigations, including review by an IRB, is critically important and notes it is a regulatory requirement for clinical investigations subject to FDA regulations," the spokeswoman said.

But Fernandez told CNBC, "I wasn't aware of an ethical problem then, and I'm not aware of an ethical problem now."

Asked why Halford decided to do the clinical tests without traditional monitoring, Fernandez said, "The truth is, only Dr. Halford can answer that."

Fernandez speculated that Halford, who was terminally ill for years, was trying to help a number of herpes sufferers, particularly after being asked for help from two such people who ended up committing suicide.

"I'm suggesting that he, in his conscience, felt that he would move as quickly as possible and not have another death on his head," Fernandez said.

"He was fighting cancer the entire time," Fernandez said. "He knew he was never going to make a dime from this."

"Whatever Bill did, he did for the greater good."

Fernandez said Halford told participants in the trial that the trial was not approved by the FDA and required them to each sign an informed consent form to participate.

"The narrative that is out there is that this guy duped some people into getting injections and they are victims," Fernandez said. "And that is not the case."

Fernandez said that all of the participants in the trial were suffering from chronic herpes outbreaks, and a number of them were suffering outbreaks even while taking the herpes treatment drug Valtrex.

One of those participants, a 48-year-old truck driver from New Jersey named Richard Mancuso, told CNBC that he had sought to participate in the trial after suffering from two to three herpes outbreaks every month for the prior 20 years.

Mancuso said he was interviewed by Halford for three hours before Halford agreed to admit him to the trial, and that the professor told him that "you really have to think about this seriously, because there are risks involved, this is an experimental vaccine, and I cannot make any promise."

"He was really clear what the situation was," Mancuso said of Halford.

Mancuso told CNBC on Friday that he did not recall Halford informing him that FDA or IRB monitoring was traditional for a clinical trial. However, after this article first appeared, he said he had confirmed that disclosure was on the consent form that Halford had him sign before admitting him to the trial.

Mancuso received three injections during separate visits to St. Kitts. He said his outbreaks began tapering off, and that he last had an outbreak on March 27.

"Oh, my God, he gave me my life back," said Mancuso when asked what he thought of Halford. "It doesn't get much better than that."

Mancuso said he gets "a little upset over" criticism of Halford's decision to conduct the trial without FDA monitoring. He has posted a video response to the Kaiser Health News story on his Facebook page.

"He knew he had very little time to help people," Mancuso told CNBC. "Nobody has $5 billion and 15 years to get a vaccine approved. ... He's a professor; he's on a professor's salary."

The Southern Illinois University School of Medicine, where Halford worked, when asked for comment by CNBC, referred to a statement the school issued earlier this week.

"Rational Vaccines licensed the patent rights from SIU School of Medicine to advance the clinical application of the vaccine and is required to abide by all applicable laws and regulations in pursuit of those development objectives," the school said in that statement.

"The 2016 clinical trial was conducted solely by Rational Vaccines. Dr. Halford's involvement was as the Chief Scientific Officer of Rational Vaccines, not as a faculty member of SIU School of Medicine. The company ran the clinical trial independently of SIU involvement."

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