CubaNews / August 2004
By Larry Luxner
On Jul. 15, California-based CancerVax announced it had won Treasury Depart-ment approval to develop three experimental cancer drugs in a venture with a Havana lab — marking the first time the Bush administration has given its blessing to a deal involving Cuba’s blossoming biotech industry.
Exactly two weeks later, Spanish oil conglomerate Repsol-YPF S.A. said it had found high-grade petroleum in an offshore exploratory well north of Pinar del Río province, but not in sufficient quantities to be commercially viable.
That certainly made for a busy month for Cuba-watchers — not to mention the growing backlash in Miami sparked by the Bush administration’s increasingly anti-Castro rhetoric as U.S. elections loom only three months away.
On Jul. 7, the House of Representatives voted to reverse new U.S. restrictions on sending gift parcels to Cuba which had taken effect only a week before. By a vote of 221-194, the House adopted an amendment sponsored by Rep. Jeff Flake (R-AZ) prohibiting the Commerce Department from enforcing the new restrictions.
Indeed, the White House realizes that it may have gone too far.
In his eagerness to please the most hardline elements of the Cuban exile community in Miami, President Bush has enraged thousands of more moderate Cuban-Americans with his new rules — especially the one allowing family visits to Cuba only once every three years, instead of once a year as before (see page 3).
Come Nov. 2, many of those Cubans may punish Bush by voting Democratic, throwing the election to John Kerry in a reversal of 2000.
Yet Florida politics had little to do with approval of the CancerVax deal by the State De-partment and ultimately by Treasury’s Office of Foreign Assets Control (OFAC), say observers.
“The OFAC license for CancerVax should not be seen by anyone as a change in U.S. policy,” said John Kavulich, president of the US-Cuba Trade and Economic Council Inc. “It was simply the result of an existing precedent and the Bush administration weighing the equation of preventing a potential health-care benefit due to politics, and some child dying, and having to explain that rationale to the parents.”
Under the deal, CancerVax’s U.S. unit, Tarcanta Inc., and its Irish affiliate, Tarcanta Ltd., “obtained exclusive rights to complete the clinical development of three specific active immunotherapeutic product candidates that target the epidermal growth factor receptor signaling pathway for the treatment of cancer.”
The EGFR signaling pathway is known to be an important factor in cancer cell growth in a number of solid tumors related to lung, breast, prostate and ovarian cancers (see CubaNews, July 2004, page 1).
If clinical studies prove successful, the drugs may become available as early as 2008. The deal obligates CancerVax to make access and technology transfer payments of around $6 million over the next three years to CIMAB S.A., the commercial arm of Cuba’s state-run Centro de Imunología Molecular.
Once the three product candidates win ap-proval for sale in the U.S., Europe and Japan, CancerVax will make additional payments of up to $35 million — which would be partially paid in food, medicines or medical supplies.
“I really think the reason we were able to receive this license is because the treatment of cancer and disease transcends politics,” said CancerVax CEO David Hale, speaking to the South Florida Sun-Sentinel. “We had support from a number of congressmen and women who felt the potential benefits to mankind outweighed the political issues and were supportive. We really didn’t have opposition from anyone we talked to, even those people who were strongly anti-Castro.”
Five years ago, OFAC under the Clinton ad-ministration allowed SmithKline Beecham — now known as GlaxoSmithKline — to develop a meningitis-B vaccine in conjunction with Havana’s Finlay Institute. That vaccine is now undergoing human testing.
Both Treasury and State say the U.S. government is open to considering similar drug deals, but that it will continue to restrict the flow of U.S. currency to Cuba.
More significant than any biotech deal would be a major oil discovery off Cuba’s Gulf of Mexico coast. But that appears unlikely, given the results of Repsol-YPF’s seven weeks of drilling using a $195,000-a-day Norwegian oil rig sunk in water more than a mile deep.
“The first well drilled in Cuba has met partially our expectations,” said Repsol’s chief operating officer Ramón Blanco in a conference call with investors. “The existence of a petroleum system has been confirmed. Nevertheless, the well has been considered non-commercial and, at this stage, the group is defining future exploration activities in the area.”
A Repsol spokesman elaborated on that, saying “it’s a mixed result. We confirmed that there was oil, which is a good thing, but what we found wasn’t of the quality we want.” Repsol-YPF has six undersea exploration blocs, with a total of 10,702 sq kms northwest of Cuba. Company officials say they’ll evaluate their studies over the next 10 months, with future drilling expected after a year.
But even if oil is found, experts say it would require $1 billion in investment before large-scale production could begin.
“If commercially viable oil deposits are lo-cated, there would be pressure by U.S. oil companies to be able to access the product and provide equipment and services,” Kavulich told CubaNews.
But he adds that a major oil find won’t necessarily be good news for the Cuban people. “The more Cuba becomes economically less dependent on the importation of oil, the less likely there will be any political or econo-mic change in Cuba,” he said. “Castro will use any derived financial benefit to further entrench the existing political system.”