The rejection by the European Medicines Agency (EMEA) of ATryn has given the biotech industry some unappetising food for thought.
Be it recombinant proteins in milk, polyclonal antibodies in eggs or digestive enzymes in corn, the potential of transgenic animals and plants for the cheap and efficient production of biopharmaceuticals is huge, leading to sales of more than $12bn (€10bn) by 2012 according to market research firm Kalorama.
Nevertheless, fourteen years after GTC Biotherapeutics saw the birth of its first transgenic goat, the first application submitted by any company to any US or European regulatory authority for the approval of a recombinant therapeutic protein produced transgenically has not had a happy ending, subject to appeal at least.
European regulators decided last week not to allow GTC to market ATryn, an anti-clotting agent produced in transgenic goats, in the EU, on the basis that not enough surgical cases were brought before them - they got five out of the twelve requested - and the fact that results from patients treated in a compassionate use programme and at childbirth could not be accepted.
The news caused jitters among biotech firms who have invested hundreds of millions in transgenic drugs and so the EMEA quickly went out of its way to stress that "the grounds for refusal have nothing to do with the use of a transgenic animal."
However, this does not change the fact that big pharma was apprehensive about transgenic drugs even before the ruling and despite the significant savings and reliability that transgenic technology promises.
"The full realisation of transgenically produced pharmaceuticals depends on the convergence of continued successful and innovative research and development activities, on a favourable regulatory climate and on public acceptance," says Anne Anscomb who has written a report entitled 'Transgenic animals and plants in pharmaceutical research and manufacturing' for Kalorama.
"The bar has been set very high for the regulatory approval of transgenically produced pharmaceuticals."
Indeed, one only has to look at the kind of companies investing in drugs on a transgenic platform, all small specialised firms like Pharming, Hematech and Avigenics, to see that the extra risk of having to license a drug from a transgenic plant or animal gives big multinationals the regulatory heebie-jeebies.
Yet see which companies have antibodies in the market derived from transgenic rodents and you will spot the names of GlaxoSmithKline, Roche and Elli Lilly, highlighting the obstacles, both scientific and societal, between cell lines taken from a mouse and a cow genetically altered to produce a protein in its milk.
"ATryn may have been a specialised drug for a rare hereditary disease but it is a stepping stone, getting that first drug manufactured by an animal or a plant approved," explains GTC spokesman Thomas Newberry, who says the company will now put all other projects on hold to concentrate on its appeal to the EMEA.
"More than $200m have been invested in ATryn and we do not believe that anything significant can be changed in the technology of the drug that would help it pass regulatory scrutiny. We will pursue the appeal with the European regulators but if it is turned down we are very confident about the drug's prospects with the FDA, so why bother with Europe?"
Since the cost of producing biopharmaceuticals in bacterial or mammalian cell culture bioreactor facilities or through cell lines is much higher than in transgenic technology, some biotech companies are unlikely to give up the race.
Scale is also an important consideration, with expression levels of 2 to 10 grams of recombinant protein per litre of milk being readily achievable in transgenic livestock, as opposed to highly optimised cell cultures that can typically generate 0.2 to 1 gram per litre of culture medium, according to the Kalorama report.
"I see no reason why not to be optimistic about the future of transgenic technology since European regulators made it clear they were not objecting to the platform itself," says Elliott Fineman, CEO of Planet Biotechnology which hopes to get its plant-produced drug CaroRX approved by regulators.
"I believe the industry consists of intelligent people who assess the risks of each drug individually and make informed judgements, we definitely believe in our product."
CaroRX, a tooth decay drug, has completed Phase I/IIa clinical trials under a US FDA-approved Investigational New Drug (IND) application and the company believes it can have it in the market within three years.
But what about the long term, will the EU and the US accept the next wave of growth in the biotechnology sector, whose sales are projected to surpass $52bn by 2010, since this expansion will result in crop plants such as corn and tobacco transgenically altered to produce pharmaceuticals and industrial enzymes?
"It remains to be seen," says Anscomb.
"The main challenge for the transgenic pharma market is overcoming the scepticism that persists about the viability and safety of transgenic crops and animals."
Of course this scepticism goes beyond the public mind to the mind of many pharma decision makers.
Still Anscomb believes that although ATryn's disappointment may cast a passing cloud over transgenics, it's doubtful the rejection will cause a major setback to this nascent industry.
She says that drugs made in transgenic plants and animals are here to stay, so any lack of progress in clinical trials or regulatory delays can only hinder but not stifle the growth of this promising market.
It appears that when it comes to transgenics the cash cow is there, it just remains to be seen who milks it first.