[Federal Register Volume 85, Number 240 (Monday, December 14, 2020)]
[Notices]
[Pages 80878-80883]
[FR Doc No: 2020-27391]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90597; File No. SR-EMERALD-2020-15]

Self-Regulatory Organizations; MIAX Emerald, LLC; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fee Schedule To Adopt a One-Time Membership Application Fee,
Application Programming Interface (``API'') Testing and Certification
Fees, and Network Connectivity Testing and Certification Fees

December 8, 2020.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 25, 2020, MIAX Emerald, LLC (``MIAX Emerald'' or
``Exchange''), filed with the Securities and Exchange Commission
(``Commission'') a proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange is filing a proposal to amend the MIAX Emerald Fee
Schedule (the ``Fee Schedule'') to establish: (1) One-time membership
application fees for new MIAX Emerald Members; \3\ and (2) per-instance
Application Programming Interface (``API'') Testing and Certification
fees and Network Connectivity Testing and Certification fees for
Members and non-Members.
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    \3\ The term ``Member'' means an individual or organization
approved to exercise the trading rights associated with a Trading
Permit. Members are deemed ``members'' under the Exchange Act. See
Exchange Rule 100 and the Definitions section of the Fee Schedule.
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    The text of the proposed rule change is available on the Exchange's
website at http://www.miaxoptions.com/rule-filings/emerald, at MIAX's
principal office, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule to establish: (1)
One-time membership application fees for new MIAX Emerald Members based
upon the applicant's status as either an Electronic Exchange Member
(``EEM'') \4\ or as a Market Maker; \5\ and (2) per-instance API
Testing and Certification fees and Network Connectivity Testing and
Certification fees for Members and non-Members.
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    \4\ ``Electronic Exchange Member'' or ``EEM'' means the holder
of a Trading Permit who is not a Market Maker. Electronic Exchange
Members are deemed ``members'' under the Exchange Act. See Exchange
Rule 100 and the Definitions section of the Fee Schedule.
    \5\ The term ``Market Makers'' refers to ``Lead Market Makers'',
``Primary Lead Market Makers'' and ``Registered Market Makers''
collectively. See Exchange Rule 100 and the Definitions section of
the Fee Schedule.
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    MIAX Emerald commenced operations as a national securities exchange
registered under Section 6 of the Act \6\ on March 1, 2019.\7\ The
Exchange adopted its transaction fees and certain of its non-
transaction fees in its filing SR-EMERALD-2019-15.\8\ In that filing,
the Exchange expressly waived, among other fees, the one-time
membership application fee and per-instance API Testing and
Certification fees and Network Connectivity Testing and Certification
fees, both for Members and non-Members, in order to provide an
incentive to prospective market participants to become Exchange Members
and for prospective Members and non-Members to connect to MIAX Emerald
as soon as possible. At that time, the Exchange waived the one-time
membership application fee and per-instance API Testing and
Certification fees and Network Connectivity Testing and Certification
fees for the Waiver Period,\9\ and stated that it would provide notice
to market participants when the Exchange intended to terminate the
Waiver Period.
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    \6\ 15 U.S.C. 78f.
    \7\ See Securities Exchange Act Release No. 84891 (December 20,
2018), 83 FR 67421 (December 28, 2018) (File No. 10-233) (order
approving application of MIAX Emerald, LLC for registration as a
national securities exchange).
    \8\ See Securities Exchange Act Release No. 85393 (March 21,
2019), 84 FR 11599 (March 27, 2019) (SR-EMERALD-2019-15) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Establish the MIAX Emerald Fee Schedule).
    \9\ ``Waiver Period'' means, for each applicable fee, the period
of time from the initial effective date of the MIAX Emerald Fee
Schedule until such time that the Exchange has an effective fee
filing establishing the applicable fee. The Exchange will issue a
Regulatory Circular announcing the establishment of an applicable
fee that was subject to a Waiver Period at least fifteen (15) days
prior to the termination of the Waiver Period and effective date of
any such applicable fee. See the Definitions Section of the Fee
Schedule.
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    On September 15, 2020, the Exchange issued a Regulatory Circular
which announced that the Exchange would terminate the Waiver Period
for, among other fees, the one-time membership application fee and per-
instance API Testing and Certification fees and Network Connectivity
Testing and Certification fees for Members and non-Members, beginning
October 1, 2020.\10\
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    \10\ See MIAX Emerald Regulatory Circular 2020-41 available at
https://www.miaxoptions.com/sites/default/files/circular-files/MIAX_Emerald_RC_2020_41.pdf.
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    The Exchange initially filed its proposals to establish the one-
time membership application fee and per-instance API Testing and
Certification fees and Network Connectivity Testing and Certification
fees on October 1, 2020.\11\ The First Proposed Rule Changes were
published for comment in the Federal Register between October 20-21,
2020.\12\ On November 25, 2020, the Exchange withdrew the First
Proposed Rule Changes and refiled its proposal to establish the one-
time membership application fee and per-instance API Testing and
Certification fees and Network Connectivity Testing and Certification
fees.\13\
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    \11\ See Securities Exchange Act Release Nos. 90183 (October 14,
2020), 85 FR 66607 (October 20, 2020) (SR-EMERALD-2020-09) (Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Its Fee Schedule To Adopt Application Programming Interface
(``API'') Testing and Certification Fees and Network Connectivity
Testing and Certification Fees); 90196 (October 15, 2020), 85 FR
67064 (October 21, 2020) (SR-EMERALD-2020-11) (Notice of Filing and
Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee
Schedule To Adopt One-Time Membership Application Fees and Monthly
Trading Permit Fees). The Exchange's prior proposals to establish
the one-time membership application fee and per-instance API Testing
and Certification fees and Network Connectivity Testing and
Certification fees are collectively referred to herein as the
``First Proposed Rule Changes.'' The Exchange notes that it will
refile its proposal to establish monthly Trading Permit fees in a
separate filing.
    \12\ See id.
    \13\ See Comment Letter from Joseph W. Ferraro III, SVP, Deputy
General Counsel, the Exchange, dated November 20, 2020, notifying
the Commission that the Exchange will withdraw the First Proposed
Rule Changes.

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One-Time Membership Application Fee
    The Exchange proposes to assess a one-time membership application
fee based upon the applicant's status as either an EEM or as a Market
Maker. The Exchange proposes that applicants for MIAX Emerald
membership as an EEM will be assessed a one-time application fee of
$2,500. The Exchange proposes that applicants for MIAX Emerald
membership as a Market Maker will be assessed a one-time application
fee of $3,000. The difference in the proposed membership application
fee to be charged to EEMs and Market Makers is because of the
additional review and resources involved in processing a Market Maker's
application, as Market Makers have greater and more complex obligations
with respect to doing business on the Exchange.\14\ MIAX Emerald's
proposed one-time membership application fees are the same as the one-
time application fees in place at the Exchange's affiliate, Miami
International Securities Exchange, LLC (``MIAX'') ($2,500 for an EEM
and $3,000 for a MIAX Market Maker),\15\ and similar to or less than
application fees for the Cboe Exchange, Inc. (``Cboe'') ($3,000 for an
individual applicant and $5,000 for an applicant organization) \16\ and
Nasdaq ISE, LLC (``Nasdaq ISE'') ($7,500 per firm for a primary market
maker, $5,500 per firm for a competitive market maker, and $3,500 per
firm for an electronic access member).\17\ Below is the table showing
the proposed one-time membership application fees for EEMs and Market
Makers:
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    \14\ See Chapter VI of the Exchange's rules, generally.
    \15\ See MIAX Fee Schedule, Section (3)(a).
    \16\ See Cboe Fees Schedule, p. 9, Cboe Trading Permit Holder
Application Fees.
    \17\ See Nasdaq ISE, Options Rules, Options 7, Pricing Schedule,
Section 9. Legal and Regulatory A. Application.

------------------------------------------------------------------------
                                                            Application
                   Type of membership                           fee
------------------------------------------------------------------------
Electronic Exchange Member..............................       $2,500.00
Market Maker............................................        3,000.00
------------------------------------------------------------------------

API Testing and Certification Fees for Members
    The Exchange also proposes to adopt an API Testing and
Certification fee for Members. An API makes it possible for Member
software to communicate with MIAX Emerald software applications, and is
subject to Member testing with, and certification by, MIAX Emerald. API
testing and certification includes, for EEMs, testing all available
order types, new order entry, order management, order throughput and
mass order cancellation. For Market Makers, API testing and
certification also includes testing of all available quote types, quote
throughput, quote management and cancellation, Aggregate Risk Manager
settings and triggers, and confirmation of quotes within the trading
engines.
    The API Testing and Certification fees for Members are based upon
the type of interface that the Member has been credentialed to use. The
Exchange proposes to adopt an API testing and certification fee for
EEMs (other than Clearing Firms): (i) Initially per API for Financial
Information Exchange (``FIX'') \18\ ports, FIX Drop Copy (``FXD'') \19\
ports and Clearing Trade Drop (``CTD'') \20\ ports in the month the EEM
has been credentialed to use one or more ports in the production
environment for the tested API, and (ii) each time an EEM initiates a
change to its system that requires testing and certification. The
Exchange proposes to adopt an API testing and certification fee for EEM
Clearing Firms (i) initially per API in the month the EEM Clearing Firm
has been credentialed to use one or more CTD Ports in the production
environment, and (ii) each time an EEM Clearing Firm initiates a change
to its system that requires testing and certification.
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    \18\ ``FIX Port'' means an interface with MIAX Emerald systems
that enables the Port user to submit simple and complex orders
electronically to MIAX Emerald. See the Definitions section of the
Fee Schedule.
    \19\ The FIX Drop Copy (``FXD'') Port is a messaging interface
that will provide a copy of real-time trade execution, trade
correction and trade cancellation information to FXD Port users who
subscribe to the service. FXD Port users are those users who are
designated by an EEM to receive the information and the information
is restricted for use by the EEM. FXD Port Fees will be assessed in
any month the Member is credentialed to use the FXD Port in the
production environment. See the Definitions section of the Fee
Schedule.
    \20\ ``CTD Port'' or ``Clearing Trade Drop Port'' provides an
Exchange Member with a real-time clearing trade updates. The updates
include the Member's clearing trade messages on a low latency, real-
time basis. The trade messages are routed to a Member's connection
containing certain information. The information includes, among
other things, the following: (i) Trade date and time; (ii) symbol
information; (iii) trade price/size information; (iv) Member type
(for example, and without limitation, Market Maker, Electronic
Exchange Member, Broker-Dealer); and (v) Exchange MPID for each side
of the transaction, including Clearing Member MPID. See the
Definitions section of the Fee Schedule.
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    The Exchange proposes to adopt an API testing and certification fee
for Market Makers: (i) Initially per API for CTD and MIAX Emerald
Express Interface (``MEI'') \21\ ports in the month the Market Maker
has been credentialed to use one or more ports in the production
environment for the tested API and the Market Maker has been assigned
to quote in one or more classes, and (ii) each time a Market Maker
initiates a change to its system that requires testing and
certification. The Exchange also proposes that API Testing and
Certification fees will not be assessed in situations where the
Exchange initiates a mandatory change to the Exchange's System \22\
that requires testing and certification. The Exchange proposes to
assess Member API Testing and Certification fees of $1,000 for EEMs and
$2,500 for Market Makers. Below is the proposed table for API Testing
and Certification fees for Members:
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    \21\ The MEI is a connection to the MIAX Emerald System that
enables Market Makers to submit simple and complex electronic quotes
to MIAX Emerald. The Exchange offers Full Service MEI Ports, which
provide Market Makers with the ability to send Market Maker simple
and complex quotes, eQuotes, and quote purge messages to the MIAX
Emerald System. Full Service MEI Ports are also capable of receiving
administrative information. Market Makers are limited to two Full
Service MEI Ports per Matching Engine. The Exchange also offers
Limited Service MEI Ports, which provide Market Makers with the
ability to send simple and complex eQuotes and quote purge messages
only, but not Market Maker Quotes, to the MIAX Emerald System.
Limited Service MEI Ports are also capable of receiving
administrative information. Market Makers initially receive two
Limited Service MEI Ports per Matching Engine. See the Definitions
section of the Fee Schedule.
    \22\ The term ``System'' means the automated trading system used
by the Exchange for the trading of securities. See Exchange Rule
100.

------------------------------------------------------------------------
                                                        API testing and
                    Type of member                     certification fee
------------------------------------------------------------------------
Electronic Exchange Member...........................          $1,000.00
Market Maker.........................................           2,500.00
------------------------------------------------------------------------

API Testing and Certification Fee for Non-Members
    The Exchange proposes to adopt an API Testing and Certification fee
for Third Party Vendors,\23\ Service Bureaus \24\ and other non-Members
(such as clearing firms): (i) Initially per API for FIX, FXD, CTD and
MEI ports in the month the Third Party Vendor, Service Bureau or non-
Member has been credentialed to use one or more ports in the production
environment for the tested API, and (ii) each time a Third Party
Vendor, Service Bureau, or other non-Member initiates a change to its
system that requires testing and certification. The Exchange also

proposes that API Testing and Certification fees will not be assessed
to non-Members in situations where the Exchange initiates a mandatory
change to the Exchange's System that requires testing and
certification.
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    \23\ Third Party Vendors are subscribers of MIAX Emerald's
market and other data feeds, which they in turn use for
redistribution purposes. See the Definitions section of the Fee
Schedule.
    \24\ ``Service Bureau'' means a technology provider that offers
and supplies technology and technology services to a trading firm
that does not have its own proprietary system. See the Definitions
section of the Fee Schedule.
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    The Exchange proposes to assess non-Member API Testing and
Certification fees of $1,200 for Third Party Vendors, Service Bureaus
and other non-Members. Below is the proposed table for API Testing and
Certification fees for non-Members:

------------------------------------------------------------------------
                                                        API testing and
                      Non-member                       certification fee
------------------------------------------------------------------------
Third Party Vendors and Service Bureaus and other non-         $1,200.00
 Members.............................................
------------------------------------------------------------------------

    The proposed higher fee charged to Third Party Vendors, Service
Bureaus and non-Members reflects the greater amount of time spent by
MIAX Emerald employees testing and certifying non-Members. It has been
MIAX Emerald's experience that Member testing takes less time than non-
Member testing because Members have more experience testing these
systems with exchanges, resulting in generally fewer questions and
issues arising during the testing and certification process. Also,
because Third Party Vendors and Service Bureaus are redistributing data
and reselling services to other Members and market participants, the
number and types of scenarios that need to be tested are more numerous
and complex than those tested and certified for a single Member.
    The Exchange believes it is necessary to charge an API Testing and
Certification fee to Members and non-Members because of the time and
resources spent to ensure that Member and non-Member APIs function
correctly to prevent any System malfunction. Further, the Exchange
believes the price differential in API Testing and Certification fees
for Members and non-Members is not unfairly discriminatory because, in
the Exchange's experience, Member testing takes less time than non-
Member testing as Members have more experience testing these systems
with exchanges, resulting generally in fewer questions and issues
arising during the testing and certification process.
Network Connectivity Testing and Certification Fee for Members
    The Exchange established electronic communication connections with
Members and now proposes to assess Members a Network Connectivity
Testing and Certification fee for each 1 Gigabit (``Gb'') connection
and 10 Gb ultra-low-latency (``ULL'') connection. The Exchange proposes
to assess a Member Network Connectivity Testing and Certification fee:
(i) Initially per connection in the month the Individual Firm has been
credentialed to use any API or market data feeds in the production
environment utilizing the tested network connection, and (ii) each time
an individual firm initiates a change to its system that requires
network connectivity testing and certification. Network Connectivity
Testing and Certification fees will not be assessed in situations where
the Exchange initiates a mandatory change to the Exchange's system that
requires testing and certification. Member Network Connectivity Testing
and Certification fees will not be assessed for testing and
certification of connectivity to the Exchange's Disaster Recovery
Facility.
    The Exchange proposes to assess Members a Network Connectivity
Testing and Certification Fee of $1,000 per 1Gb connection and $4,000
per 10Gb ULL connection. Below is the proposed table for Member Network
Connectivity Testing and Certification fees:

------------------------------------------------------------------------
                                                1 Gigabit    10 Gigabit
               Type of member                    fee per     ULL fee per
                                               connection    connection
------------------------------------------------------------------------
Individual Firm.............................    $1,000.00     $4,000.00
------------------------------------------------------------------------

    The proposed fee amounts are identical to the fees currently
assessed for the same services at the Exchange's affiliates, MIAX and
MIAX PEARL, LLC (``MIAX PEARL''). The Exchange notes that the Emerald
Express Network Interconnect (``EENI'') \25\ is a network
infrastructure which provides Members and non-Members network
connectivity to the trading platforms, market data systems, test
systems, and disaster recovery facility of the Exchange. When utilizing
a Shared \26\ cross-connect, the EENI can also be configured to offer
network connectivity to the trading platforms, market data systems,
test systems, and disaster recovery facilities of the Exchange's
affiliates, MIAX and MIAX PEARL. Members utilizing a single, Shared
cross-connect to connect to the trading platforms, market data systems,
test systems, and disaster recovery facilities of the Exchange, MIAX
and MIAX PEARL will only be assessed one Network Connectivity Testing
and Certification fee per connection tested, regardless of the trading
platforms, market data systems, test systems, and disaster recovery
facilities accessed via such connection.
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    \25\ ``EENI'' means the Emerald Express Network Interconnect,
which is a network infrastructure which provides Members and non-
Members network connectivity to the trading platforms, market data
systems, test systems, and disaster recovery facilities of MIAX
Emerald. When utilizing a Shared cross-connect, the EENI can also be
configured to offer network connectivity to the trading platforms,
market data systems, test systems, and disaster recovery facilities
of MIAX and MIAX PEARL. When utilizing a Dedicated cross-connect,
the EENI can only be configured to offer network connectivity to the
trading platforms, market data systems, and test systems of MIAX
Emerald. The EENI consists of the low latency and ultra-low latency
connectivity options set forth in the Exchange's Fee Schedule. See
the Definitions section of the Fee Schedule.
    \26\ ``Shared'' (cross-connect) means cross-connect that
provides network connectivity to the trading platforms, market data
systems, test systems, and/or disaster recovery facilities of MIAX
Emerald, MIAX and MIAX PEARL via a single, shared connection. The
following connections can be Shared across MIAX Emerald, MIAX and
MIAX PEARL: 1 Gigabit, 1 Gigabit Disaster Recovery, and 10 Gigabit
Disaster Recovery. See the Definitions section of the Fee Schedule.
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Network Connectivity Testing and Certification Fee for Non-Members
    MIAX Emerald established electronic communication connections with
Service Bureaus, Extranet Providers and other non-Members, and now
proposes to assess a Network Connectivity Testing and Certification fee
for each 1Gb connection and 10Gb ULL connection. The Exchange proposes
to assess a non-Member Network Connectivity Testing and Certification
fee: (i) Initially per connection in the month the Service Bureau,
Extranet Provider or other non-Member has been credentialed to use any
API or market data feeds in the production environment using the tested
network connection, and (ii) each time the Service Bureau, Extranet
Provider or other non-Member initiates a change to its system that
requires network connectivity testing and certification. Network
Connectivity Testing and Certification fees will not be assessed in
situations where the Exchange initiates a mandatory change to the
Exchange's system that requires testing and certification. Non-Member
Network Connectivity Testing and Certification fees will not be
assessed for testing and certification of connectivity to the
Exchange's Disaster Recovery Facility.
    The Exchange proposes to assess non-Members a Network Connectivity
Testing and Certification Fee of $1,200 per 1Gb connection and $4,200
per 10Gb ULL connection. Below is the proposed table for non-Member
Network Connectivity Testing and Certification fees:

------------------------------------------------------------------------
                                                1 Gigabit    10 Gigabit
                 Non-member                      fee per     ULL fee per
                                               connection    connection
------------------------------------------------------------------------
Service Bureau/Extranet Provider and other      $1,200.00     $4,200.00
 non-Members................................
------------------------------------------------------------------------

    The EENI is also available to non-Member subscribers. For non-
Member subscribers, when utilizing a Shared cross-connect, the EENI can
also be configured to offer network connectivity to the trading
platforms, market data systems, test systems, and disaster recovery
facilities of the Exchange's affiliates, MIAX and MIAX PEARL.
Accordingly, non-Members utilizing Shared cross-connects to connect to
the trading platforms, market data systems, test systems, and disaster
recovery facilities of the Exchange and its affiliates, MIAX and MIAX
PEARL, will only be assessed one Network Connectivity Testing and
Certification fee per connection tested, regardless of the trading
platforms, market data systems, test systems, and disaster recovery
facilities accessed via such connection. The Member and non-Member
Network Testing and Certification fees represent installation and
support costs incurred by the Exchange as it works with each Member and
non-Member to make sure there are appropriate electronic communication
connections with MIAX Emerald. The Exchange's affiliates, MIAX and MIAX
PEARL, charge the same fees for the same services for their Members and
non-Members.\27\ The Exchange proposes to assess a higher Network
Connectivity Testing and Certification fee to non-Members than to
Members, similar to how MIAX and MIAX PEARL assesses such fees to their
Members and non-Members. The higher fee charged to non-Members reflects
the greater amount of time spent by MIAX Emerald employees testing and
certifying non-Members. It has been MIAX Emerald's experience that
Member network connectivity testing takes less time than non-Member
network connectivity testing because Members have more experience
testing these systems with exchanges as generally fewer questions and
issues arise during the testing and certification process.
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    \27\ See MIAX Fee Schedule, Sections 4(c) and 4(d); see also
MIAX PEARL Fee Schedule, Sections 4(c) and 4(d).
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2. Statutory Basis
    The Exchange believes that its proposal to amend its Fee Schedule
is consistent with Section 6(b) of the Act \28\ in general, and
furthers the objectives of Section 6(b)(4) of the Act \29\ in
particular, in that it is an equitable allocation of reasonable dues,
fees and other charges among its members and issuers and other persons
using its facilities. The Exchange also believes the proposal furthers
the objectives of Section 6(b)(5) of the Act in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest and is not designed to permit unfair discrimination between
customers, issuers, brokers and dealers.
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    \28\ 15 U.S.C. 78f(b).
    \29\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes the proposed one-time membership application
fee is reasonable, equitable and not unfairly discriminatory because it
is a one-time, de minimis fee that is reasonably related to (and
designed to recover) the Exchange's cost associated with reviewing and
approving membership applications, which consists primarily of the time
and resources of Exchange personnel to process the membership
application and conduct the new member on-boarding process. The
Exchange's process for reviewing and approving potential new Members
involves several steps and participation from personnel in multiple
Exchange departments, as follows: (i) Reviewing prospective Member
information included in various membership forms, including, where
necessary, possibly consulting with FINRA, pursuant to the Exchange's
Regulatory Services Agreement; (ii) the on-boarding process, where
Exchange personnel contacts the firm for an introductory meeting with
the Exchange's Business Team to discuss goals, answer questions and
schedule the technical on-boarding meeting; (iii) the technical on-
boarding meeting where the Exchange's on-boarding team and Trading
Operations Team guides the firm through the on-boarding process with
Exchange personnel available to discuss network connectivity, APIs,
Exchange functionality and operational issues; and (iv) follow-ups with
the Trading Operations Team to coordinate testing, as necessary, until
the firm is active in the Exchange's live trading environment.\30\ The
Exchange tracks the number of hours spent by Exchange personnel
providing the aforementioned services per membership application. Based
on the Exchange's average cost per full-time employee (``FTE''), the
Exchange represents that its cost to provide this service is reasonably
related to (and often exceeds) the amount of the membership application
fee the Exchange proposes to charge for such service. Accordingly, the
proposed fee would enable the Exchange to recover a material portion of
such cost.
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    \30\ See the Exchange's Membership and Technical Onboarding
process, available at https://www.miaxoptions.com/membership/emerald.
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    The Exchange believes the difference in the proposed membership
application fee to be charged to EEMs and Market Makers is an equitable
allocation of reasonable dues and fees pursuant to Section 6(b)(4) of
the Act \31\ because of the additional review and resources involved in
processing a Market Maker's application as opposed to an EEM's
application, as Market Makers have greater and more complex obligations
with respect to doing business on the Exchange.\32\
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    \31\ 15 U.S.C. 78f(b)(4).
    \32\ See supra note 14.
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    The Exchange believes its proposal to adopt API Testing and
Certification fees and Network Connectivity Testing and Certification
fees for Members and non-Members is an equitable allocation of
reasonable dues and fees pursuant to Section 6(b)(4) of the Act \33\
because it is a per-instance, de minimis fee that is reasonably related
to (and designed to recover) the Exchange's cost associated with
providing such API Testing and Certification services and Network
Connectivity Testing and Certification services, which consists
primarily of the time and resources spent to ensure that Member and
non-Member APIs and connectivity function correctly to prevent any
System malfunction. The Exchange tracks the number of hours spent by
Exchange personnel providing the aforementioned services per billable
instance. Based on the Exchange's average cost per FTE, the Exchange
represents that its costs to provide these services are reasonably
related to (and often exceed) the amount of the respective testing and
certification fees the Exchange proposes to charge for such service.
Accordingly, the proposed fees would enable the Exchange to recover a
material portion of such costs.
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    \33\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    Further, the Exchange believes the price differential in API
Testing and Certification fees and Network Connectivity Testing and
Certification fees for Members and non-Members is not unfairly
discriminatory because, in the Exchange's experience, Member testing
utilizes less Exchange resources and employee time than non-Member
testing as Members have more

experience testing these systems with exchanges, resulting generally in
fewer questions and issues arising during the testing and certification
process. Also, with respect to API testing and certification, because
Third Party Vendors and Service Bureaus are redistributing data and
reselling services to other Members and market participants the number
and types of scenarios that need to be tested are more numerous and
complex than those tested and certified for Members. The Exchange
believes its proposed API Testing and Certification fees and Network
Connectivity Testing and Certification fees are reasonable and well
within the range of non-transaction fees assessed among other
exchanges, including the Exchange's affiliates, MIAX and MIAX
PEARL.\34\
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    \34\ See supra notes 15, 16 and 17.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
Intra-Market Competition
    The Exchange believes that the proposed fees do not put any market
participants at a relative disadvantage compared to other market
participants. The proposed fees would apply to all new Exchange Members
and those firms looking to establish APIs and network connectivity in
the same manner. Market participants may not only choose whether to
become Exchange Members at all, but may choose to become members at
competing options exchanges instead.
    The Exchange also believes that the proposed fees neither favor nor
penalize one or more categories of market participants in a manner that
would impose an undue burden on competition. To the extent that various
market participants are charged different fees for the one-time
membership application and per-instance API and network connectivity
testing, those distinctions are not unfairly discriminatory and do not
unfairly burden one set of market participants over another. The
difference in the proposed membership application fee to be charged to
EEMs and Market Makers is because of the additional review and
resources involved in processing a Market Maker's application, as
Market Makers have greater and more complex obligations with respect to
doing business on the Exchange.\35\ The proposed higher fee charged to
Third Party Vendors, Service Bureaus and non-Members reflects the
greater amount of time spent by MIAX Emerald employees testing and
certifying non-Members. It has been MIAX Emerald's experience that
Member testing takes less time than non-Member testing because Members
have more experience testing these systems with exchanges, resulting in
generally fewer questions and issues arising during the testing and
certification process. Also, because Third Party Vendors and Service
Bureaus are redistributing data and reselling services to other Members
and market participants, the number and types of scenarios that need to
be tested are more numerous and complex than those tested and certified
for a single Member. The higher fee charged to non-Members reflects the
greater amount of time spent by MIAX Emerald employees testing and
certifying non-Members. It has been MIAX Emerald's experience that
Member network connectivity testing takes less time than non-Member
network connectivity testing because Members have more experience
testing these systems with exchanges as generally fewer questions and
issues arise during the testing and certification process. MIAX
Emerald's proposed one-time membership application fee and per-instance
API Testing and Certification fee levels and Network Connectivity
Testing and Certification fee levels, as described herein, are
comparable to fee levels charged by other options exchanges for the
same or similar services, including those fees assessed by the
Exchange's affiliates, MIAX and MIAX PEARL.\36\
---------------------------------------------------------------------------

    \35\ See supra note 14.
    \36\ See supra notes 15, 16 and 17.
---------------------------------------------------------------------------

    The Exchange believes that the proposed API Testing and
Certification fees and Network Connectivity Testing and Certification
fees do not place certain market participants at a relative
disadvantage to other market participants because the fees do not apply
unequally to different size market participants, but instead would
allow the Exchange to charge for the time and resource necessary for
API testing and certification and network connectivity testing and
certification for Members and non-Members to ensure proper functioning
of all available order types, new order entry, order management, order
throughput and mass order cancellation (as well as, for Market Makers,
all available quote types, quote throughput, quote management and
cancellation, Aggregate Risk Manager settings and triggers, and
confirmation of quotes within the trading engines). Accordingly, the
proposed API Testing and Certification fees and network connectivity
testing and certification fees do not favor certain categories of
market participants in a manner that would impose a burden on
competition.
Inter-Market Competition
    The Exchange believes the proposed API Testing and Certification
fees and Network Connectivity Testing and Certification fees do not
place an undue burden on competition on other SROs that is not
necessary or appropriate. The Exchange believes that the proposed fees
do not impose a burden on competition or on other exchanges that is not
necessary or appropriate because of the availability of numerous
substitute options exchanges. There are 15 other options exchanges
where market participants can become members.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act,\37\ and Rule 19b-4(f)(2) \38\ thereunder.
At any time within 60 days of the filing of the proposed rule change,
the Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act. If the Commission takes such
action, the Commission shall institute proceedings to determine whether
the proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \37\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \38\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or

     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-EMERALD-2020-15 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-EMERALD-2020-15. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-EMERALD-2020-15 and should be submitted
on or before January 4, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\39\
---------------------------------------------------------------------------

    \39\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-27391 Filed 12-11-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 75, Number 233 (Monday, December 6, 2010)]
[Notices]
[Pages 75682-75689]
[FR Doc No: 2010-30441]

-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2000-N-0163; Formerly Docket No. 2000N-1219]

Reclassification of Category IIIA Biological Products, Bacterial
Vaccines and Related Biological Products; Implementation of Efficacy
Review; Final Order; and Delmont Laboratories, Inc.: Denial of Request
for a Hearing, and Revocation of License

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice; final order.

-----------------------------------------------------------------------

SUMMARY: The Food and Drug Administration (FDA) is issuing a final
order pursuant to the reclassification procedures under the biologics
regulations; denying the request by Delmont Laboratories, Inc.
(Delmont), for a hearing on FDA's proposal to revoke Delmont's license
based on the proposed reclassification of its product, Polyvalent
Bacterial Antigens with ``No U.S. Standard of Potency,'' Staphage
Lysate[supreg] (SPL) (hereinafter referred to as SPL) into Category II
(unsafe, ineffective, or misbranded); and revoking Delmont's U.S.
License No. 299. The final order finalizes the proposed order published
in the Federal Register of May 15, 2000 (65 FR 31003) (May 2000
proposal), to reclassify Category IIIA bacterial vaccines and bacterial
antigens into Category I or Category II.

DATES: The final order reclassifying Delmont's SPL into Category II,
and Sanofi Pasteur Inc.'s (Sanofi's) Tetanus Toxoid Adsorbed and
Tetanus and Diphtheria Toxoids Adsorbed For Adult Use (DECAVAC\TM\)
into Category I for both primary immunization and booster use is
effective December 6, 2010. The revocation of Delmont's license (U.S.
License No. 299) is effective December 6, 2010.

FOR FURTHER INFORMATION CONTACT: Stephen Ripley, Center for Biologics
Evaluation and Research (HFM-17), Food and Drug Administration, 1401
Rockville Pike, Suite 200N, Rockville, MD 20852-1448,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Background on the Efficacy Review Process

    In the Federal Register of February 13, 1973 (38 FR 4319), FDA
issued procedures for the review by independent advisory panels of the
safety, effectiveness, and labeling of biological products licensed
before July 1, 1972. These procedures were later codified in Sec.
601.25 (21 CFR 601.25) (38 FR 32048 at 32052, November 20, 1973). Under
Sec.  601.25, FDA assigned responsibility for the initial review of
each of the biological product categories to a separate independent
advisory panel consisting of qualified experts. Each panel was charged
with preparing for the Commissioner of Food and Drugs an advisory
report which was to: (1) Evaluate the safety and effectiveness of the
biological products for which a license had been issued; (2) review
their labeling; and (3) identify the biological products that are safe,
effective, and not misbranded. Each advisory panel report was also to
include recommendations classifying the products reviewed into one of
three categories.
     Category I, designating those biological products
determined by the panel to be safe, effective, and not misbranded.
     Category II, designating those biological products
determined by the panel to be unsafe, ineffective, or misbranded.
     Category III, designating those biological products
determined by the panel not to fall within either Category I or
Category II on the basis of the panel's conclusion that the available
data were insufficient to classify such biological products, and for
which further testing was therefore required. Category III products
were assigned to one of two subcategories. Category IIIA products were
those that would be permitted to remain on the market pending the
completion of further studies. Category IIIB products were those for
which the panel recommended license revocation on the basis of the
panel's assessment of potential risks and benefits.
    In accordance with Sec.  601.25, after reviewing the conclusions
and recommendations of the review panels, FDA would publish in the
Federal Register a proposed order containing: (1) A statement
designating the biological products reviewed into Categories I, II,
IIIA or IIIB; (2) a description of the testing necessary for Category
IIIA biological products; and (3) the complete panel report. Under the
proposed order, FDA would propose to revoke the licenses of those
products designated into Category II and Category IIIB. After reviewing
public comments, FDA would publish a final order on the matters covered
in the proposed order.
    Two original advisory panels reviewed the four Category IIIA
products that are the subject of this final order. The advisory panel
for Bacterial Vaccines and Bacterial Antigens with

``no U.S. Standard of Potency'' (the Original Antigen Panel) reviewed
Delmont's SPL product. The advisory panel for Bacterial Vaccines and
Toxoids with Standards of Potency (the Original Toxoid Panel) reviewed
Sanofi's Tetanus Toxoid Adsorbed and Tetanus and Diphtheria Toxoids
Adsorbed For Adult Use products. The above definition of Category IIIA
was applied at the time of each advisory panel's review and served as
the basis for their recommendations.
    In the Federal Register of October 5, 1982 (47 FR 44062), FDA
revised Sec.  601.25 and codified Sec.  601.26 (21 CFR 601.26) to
establish procedures to reclassify those products in Category IIIA into
either Category I or Category II based on available evidence of safety
and effectiveness. Under Sec.  601.26, Category IIIA products that
would be reclassified included products that an advisory panel had
recommended be assigned to Category IIIA, that FDA had proposed to
place into Category IIIA, or for which FDA had issued a final order
reclassifying the products into Category IIIA.
    Under the procedures specified in Sec.  601.26, FDA appointed an
advisory panel and used existing advisory panels to review Category
IIIA products and to make recommendations to reclassify each Category
IIIA product into Category I or Category II. FDA assigned the
reclassification review of bacterial vaccines and bacterial antigens
with ``no U.S. standard of potency'' to the Vaccines and Related
Biological Products Advisory Committee (VRBPAC). FDA also assigned the
reclassification review of bacterial vaccines and toxoids with
standards of potency to the VRBPAC.
    During the reclassification review process, interested persons were
permitted to attend meetings, appear before the advisory panels, and
submit data to the panels for review. The advisory panels then
submitted reports to FDA that recommended the reclassification of each
Category IIIA product into either Category I or II. According to Sec.
601.26, after reviewing the conclusions and recommendations of the
advisory panels, FDA must publish in the Federal Register a proposed
order containing: (1) A statement designating the products as Category
I or Category II, (2) a notice of availability of the full panel
report, (3) a proposal to accept or reject the findings of the advisory
panels, and (4) a statement identifying those products that FDA
proposes to permit to remain on the market because of a compelling
medical need and because no suitable alternative exists as described in
Sec.  601.26(d)(4).

II. Category IIIA Products Subject to This Final Reclassification Order

    FDA published the May 2000 proposal to reclassify Category IIIA
bacterial vaccines and bacterial antigens into Category I or Category
II. FDA based the proposed order on its review of all the evidence, and
considered the findings and recommendations of the VRBPAC. The proposed
order also announced FDA's intent to revoke the biologics licenses for
those bacterial vaccines and bacterial antigens that FDA proposed
reclassifying into Category II.
    FDA agreed with VRBPAC's recommendations and proposed that
bacterial vaccines and toxoids with standards of potency be classified
into two separate categories based upon their use as either a primary
immunogen or as a booster immunogen. FDA proposed that some bacterial
vaccines with standards of potency be classified into Category II for
use as a primary immunogen, but into Category I for use as a booster
immunogen.
    FDA further proposed that bacterial vaccines and bacterial antigens
with ``no U.S. standard of potency'' be classified into Category II for
all labeled indications, agreeing with the VRBPAC's recommendations.

A. Category IIIA Products That FDA Had Proposed To Reclassify Into
Category II

    Five manufacturers of Category IIIA products that VRBPAC
recommended for reclassification into Category II were subject to the
May 2000 proposal (Table 1 of this document). After publication of the
May 2000 proposal, four of the five manufacturers voluntarily submitted
to FDA requests for revocation of their licenses for the applicable
products. Subsequently, FDA revoked these licenses. Therefore, no
further action is required on these manufacturers' products. The
reclassification of the Category IIIA product of the remaining
manufacturer, Delmont, is discussed in a later section of this
document.

              Table 1--Category IIIA Products That FDA Had Proposed To Reclassify Into Category II1
----------------------------------------------------------------------------------------------------------------
        Manufacturer/License No.                     Product(s)                Proposed Category II indication
----------------------------------------------------------------------------------------------------------------
Bioport Corporation, No. 1260...........  Diphtheria and Tetanus Toxoids    Primary immunogen.
                                           Adsorbed \2\.
                                          Tetanus Toxoid Adsorbed \2\.....
Delmont Laboratories, Inc., No. 299.....  Polyvalent Bacterial Antigens     All labeled indications.
                                           with ``No U.S. Standard of
                                           Potency'' Staphage
                                           Lysate[supreg] (SPL).
Hollister-Stier Laboratories LLC, No.     Polyvalent Bacterial Vaccines     All labeled indications.
 1272.                                     with ``No U.S. Standard of
                                           Potency'' (Bacterial Vaccines
                                           Mixed Respiratory (MRV or
                                           MRVI), Bacterial Vaccines for
                                           Treatment, Special Mixtures)
                                           \3\.
Sanofi Pasteur Inc., No. 1725...........  Tetanus Toxoid \4\..............  Primary immunogen.
Wyeth Laboratories, Inc., No. 3.........  Tetanus and Diphtheria Toxoids    Primary immunogen.
                                           Adsorbed (Adult Use) \5\.
----------------------------------------------------------------------------------------------------------------
\1\ FDA is not relisting in this document the licenses FDA listed in and revoked before the May 2000 proposal.
\2\ The licenses for these products were transferred from Michigan Department of Public Health, No. 99, to
  BioPort Corporation, License No. 1260 on November 12, 1998. The licenses were subsequently revoked by FDA on
  November 20, 2000, at the request of the manufacturer (66 FR 29148 at 29149, May 29, 2001).
\3\ The licenses for these products were transferred from Bayer, Inc., No. 8 to Hollister-Stier, LLC, No. 1272
  on June 2, 1999. The licenses were subsequently revoked by FDA on August 3, 2000, at the request of the
  manufacturer (66 FR 29148 at 29149, May 29, 2001).
\4\ The license for this product was transferred from Merrell-National Laboratories Division of Richardson-
  Merrell, Inc. (License No. 101) to Connaught Laboratories, Inc. (License No. 711) on January 3, 1978; from
  Connaught Laboratories, Inc. (License No. 711) to Aventis Pasteur, Inc. (License No. 1277) on December 9,
  1999; and from Aventis Pasteur, Inc. (License No. 1277) to Sanofi Pasteur Inc. (License No. 1725) on December
  19, 2005. The license for this product was subsequently revoked by FDA on July 16, 2009, at the request of the
  manufacturer.
\5\ The license for this product was revoked by FDA on May 30, 2002, at the request of the manufacturer.

Delmont Laboratories, Inc., SPL
    On August 9, 2000, Delmont submitted to FDA a response to FDA's May
2000 proposal to reclassify SPL into Category II. Information regarding
Delmont's response and FDA's actions are discussed in section III of
this document.

B. Category IIIA Products That FDA Had Proposed To Reclassify Into
Category I

    Four manufacturers of Category IIIA products, recommended by VRBPAC
for reclassification into Category I for both primary and booster
immunization, were subject to the May 2000 proposal (Table 2 of this
document). After publication of the May 2000 proposal, three of the
four manufacturers voluntarily submitted to FDA requests for revocation
of their licenses. FDA subsequently revoked these licenses. Therefore,
no further action is required on these manufacturers' products. The
reclassification of the Category IIIA products of the remaining
manufacturer, Sanofi, is discussed in this section of this document.

Table 2--Category IIIA Products That FDA Had Proposed to Reclassify Into
        Category I for Both Primary and Booster Immunization \1\
------------------------------------------------------------------------
        Manufacturer/License No.                    Product(s)
------------------------------------------------------------------------
Lederle Laboratories, Division,          Tetanus Toxoid.\2\
 American Cyanamid Company, No. 17.
                                         Diphtheria and Tetanus Toxoids
                                          and Pertussis Vaccine
                                          Adsorbed.\2\
                                         Diphtheria and Tetanus Toxoids
                                          Adsorbed.\2\
                                         Tetanus and Diphtheria Toxoids
                                          Adsorbed (Adult Use).\2\
                                         Tetanus Toxoid Adsorbed.\2\
Sanofi Pasteur Inc., License No. 1725..  Tetanus Toxoid Adsorbed.\3\
                                         Tetanus and Diphtheria Toxoids
                                          Adsorbed (Adult Use).\3\
Swiss Serum and Vaccine Institute        Tetanus Toxoid Adsorbed.\4\
 Berne, No. 21.
Wyeth Laboratories, Inc., No. 3........  Diphtheria and Tetanus Toxoids
                                          Adsorbed.\5\
                                         Tetanus Toxoid.\5\
                                         Tetanus Toxoid Adsorbed.\5\
                                         Diphtheria and Tetanus Toxoids
                                          and Pertussis Vaccine
                                          Adsorbed.\5\
------------------------------------------------------------------------
\1\ FDA is not relisting in this document the licenses FDA listed in and
  revoked before the May 2000 proposal.
\2\ The licenses for these products were revoked by FDA on March 4,
  1994, July 24, 2002, May 10, 2002, May 10, 2002, and May 22, 2002,
  respectively, at the request of the manufacturer.
\3\ The licenses for these products were transferred from Merrell-
  National Laboratories Division of Richardson-Merrell, Inc. (License
  No. 101) to Connaught Laboratories, Inc. (License No. 711) on January
  3, 1978; from Connaught Laboratories, Inc. (License No. 711) to
  Aventis Pasteur, Inc. (License No. 1277) on December 9, 1999; and from
  Aventis Pasteur, Inc. (License No. 1277) to Sanofi Pasteur Inc.
  (License No. 1725) on December 19, 2005.
\4\ The license for this product was revoked by FDA on August 29, 2000,
  at the request of the manufacturer.
\5\ The licenses for these products were revoked by FDA on May 30, 2002,
  May 30, 2002, May 30, 2002, and October 15, 2002, respectively, at the
  request of the manufacturer.

1. Sanofi Pasteur Inc., Tetanus Toxoid Adsorbed
    The Original Toxoid Panel recommended that all licensed and
marketed tetanus toxoid products be classified into Category I for
booster immunization (50 FR 51002, December 13, 1985). The Original
Toxoid Panel reviewed Sanofi's Tetanus Toxoid Adsorbed product and
recommended that the product be placed into Category I for booster use
and Category IIIA for primary immunization (50 FR 51002 at 51029). FDA
agreed with the Original Toxoid Panel's recommendations to classify
this product into Category I for booster use and Category IIIA for
primary immunization (50 FR 51002 at 51105 and 51106). The VRBPAC
reviewed the Category IIIA primary immunization indication for Sanofi's
Tetanus Toxoid Adsorbed. Based on additional data from a clinical study
performed by the firm, the VRBPAC recommended that the product be
placed into Category I for primary immunization. (See Ref. 1, at pages
19 and 20). FDA agrees with the Original Toxoid Panel's and VRBPAC's
recommendations and is reclassifying Sanofi's Tetanus Toxoid Adsorbed
product into Category I for both primary immunization and booster use.
2. Sanofi Pasteur Inc., Tetanus and Diphtheria Toxoids Adsorbed (Adult
Use)
    The Original Toxoid Panel reviewed Sanofi's Tetanus and Diphtheria
Toxoids Adsorbed (Adult Use) and recommended that the product be placed
into Category I for booster immunization and Category IIIA for primary
immunization (50 FR 51002 at 51040). FDA agreed with the Original
Toxoid Panel's recommendations to classify this product into Category I
for booster use and Category IIIA for primary immunization (50 FR 51002
at 51105 and 51106). The VRBPAC reviewed the Category IIIA primary
immunization indication for Sanofi's Tetanus and Diphtheria Toxoids
Adsorbed (Adult Use). Based on additional data from a human clinical
study performed by the firm, the VRBPAC recommended that the product be
placed into Category I for primary immunization. (See Ref. 1, at pages
21 and 22). FDA agrees with the Original Toxoid Panel's and VRBPAC's
recommendations and is therefore reclassifying Sanofi's Tetanus and
Diphtheria Toxoids Adsorbed For Adult Use product into Category I for
both primary immunization and booster use.

III. Denial of a Hearing on Proposed License Revocation--Delmont
Laboratories, Inc.

A. Notice of Opportunity for a Hearing

    On August 9, 2000, Delmont submitted to FDA a written comment
opposing FDA's May 2000 proposal to reclassify its product, SPL, into
Category II. Delmont proposed, instead, reclassifying SPL into Category
I and submitted information supporting its proposal. FDA carefully
considered the information that Delmont provided and found that the
information did not support a reclassification of SPL into Category I.
    Accordingly, a Notice of Opportunity for Hearing (NOOH) on a
proposal to revoke the license for Delmont's SPL was published in the
Federal Register of February 26, 2003 (68 FR 8908). In the NOOH, FDA
provided a detailed analysis and discussion of the information that
Delmont submitted in its response to FDA's May 2000 proposal. Further,
in the NOOH, FDA

advised Delmont that a request for a hearing should identify the
specific fact or facts that are genuine, substantial, and in dispute
(Sec.  12.24(b)(1) (21 CFR 12.24(b)(1)). FDA put Delmont on notice that
mere allegations or denials are not enough to obtain a hearing (Sec.
12.24(b)(2)). FDA also put Delmont on notice that the Commissioner
would deny a hearing request if the Commissioner concluded that the
data and information submitted are insufficient to justify the factual
determination urged, even if accurate (Sec.  12.24(b)(3)).

B. Delmont's Hearing Request

    On April 28, 2003, Delmont submitted to FDA a letter objecting to
FDA's proposal to revoke its license and requested a hearing. In the
letter, Delmont did not submit any evidence that raised a genuine and
substantial issue of fact justifying a hearing. Instead, Delmont
resubmitted data on SPL that it previously submitted to FDA and made
procedural arguments for why it is entitled to a hearing. Specifically,
Delmont argued that FDA applied the wrong effectiveness standard when
evaluating the studies that Delmont previously submitted, and that FDA
used incorrect procedures when proposing to reclassify SPL and to
revoke Delmont's license.

C. Commissioner's Determination That Delmont Has Not Justified a
Hearing

    As explained in subsection 1 in this section of this document, FDA
applied the correct effectiveness standard to SPL. In subsection 2 in
this section of this document, we explain that SPL does not satisfy
that standard. Specifically, this document explains why most of the
data on which Delmont relies came from studies that do not meet that
standard either because they were not human studies or were not
adequately controlled studies. For the few studies that were controlled
or even partially controlled, this document explains why they did not
show that SPL is effective. Therefore, Delmont fails to raise a genuine
and substantial issue of fact regarding the effectiveness of SPL for
resolution at a hearing. Moreover, the procedural objections that
Delmont raises do not create a basis for a hearing (Sec.  12.24(b)(1)).
These arguments are discussed in subsection 3 of this section of this
document.
1. Biologics Effectiveness Standard
    Under FDA regulations, codified from the final rule published on
February 13, 1973 (38 FR 4319 at 4322), biologics manufacturers, like
Delmont, whose products were licensed before 1972, must prove that
their products are effective by submitting data from ``controlled
clinical investigations'' as defined in Sec.  314.126 (21 CFR 314.126)
(``Adequate and well-controlled studies''), unless FDA waives that
requirement (Sec.  601.25(d)(2)). To obtain a waiver, the sponsor must
show that controlled clinical investigations are ``not reasonably
applicable to the biological product or essential to the validity of
the investigation, and that an alternative method of investigation is
adequate to substantiate effectiveness'' (Sec.  601.25(d)(2)) (emphasis
added).
    Delmont attempted to argue that FDA should not have applied that
standard to SPL. Instead of arguing that controlled clinical
investigations are not reasonably applicable to SPL or essential to the
validity of SPL investigations, and instead of advancing an alternative
method of investigation and explaining why it would be adequate to
substantiate SPL's effectiveness, Delmont simply argued that FDA should
never require data from controlled clinical investigations for
biologics. The basis for its argument is the following statement in the
preamble to FDA's proposed reclassification rule for Category IIIA
products (46 FR 4634 at 4635, January 16, 1981): ``While it is clear *
* * that the applicable statutory requirement for potency in the Public
Health Service Act has been interpreted as requiring that a product be
effective, the specific statutory criteria governing new drugs,
`adequate and well-controlled clinical studies,' have not been applied
to biological drugs.''
    FDA's final reclassification rule for Category IIIA products (47 FR
44062 at 44067, October 5, 1982), however, confirmed that FDA ``does
indeed consider controlled clinical studies to be the preferred form of
evidence for documenting a product's effectiveness.'' Furthermore, FDA
clarified that ``unless unusual circumstances justify a special
exemption for a particular product,'' controlled clinical
investigations are required to establish effectiveness (47 FR 44062 at
44067).
    In this case, Delmont did not attempt to show that SPL meets the
criteria for a special exemption, namely, that an alternative method of
investigation is adequate to substantiate SPL's effectiveness, and that
controlled clinical investigations are either inapplicable to SPL or
not essential to the validity of the investigation. In fact, Delmont
sponsored a controlled clinical trial of SPL (in patients suffering
from the disease hidradenitis suppurativa), but as FDA explained at
length in the February 26, 2003, NOOH, the data showed no statistically
significant difference between SPL and a placebo. Therefore, the data
were inadequate to demonstrate that the product was effective. See 68
FR 8908 at 8909.
    Clearly, FDA applied the correct standard when evaluating SPL.
2. Application of the Standard to SPL
    Since FDA's biologics review began, Delmont has submitted to FDA
data on SPL at four different times: (a) Before 1978, as part of FDA's
initial biologics review process; (b) between January and May 1978, to
convince FDA to classify SPL into Category IIIA rather than IIIB so
that Delmont could continue marketing SPL while obtaining data from
effectiveness studies; (c) in 1983, as part of FDA's reclassification
procedures; and (d) in 1994, to supplement its reclassification data
with the results of studies that were incomplete in 1983. As discussed
in turn below, none of the data are sufficient to demonstrate that SPL
is effective.
a. Pre-1978 Data
    As part of FDA's initial biologics review process, Delmont
submitted data to the Original Antigen Panel. The Original Antigen
Panel issued a report, which is published in the Federal Register of
November 8, 1977 (42 FR 58266 at 58270), that analyzed in detail all
the studies that Delmont had submitted, and described deficiencies in
each one. Based on that analysis, the Original Antigen Panel concluded
that Delmont had provided ``no substantial evidence of safety or
effectiveness,'' and ``no evidence presumptive of safety'' (42 FR 58266
at 58285). Consequently, the Original Antigen Panel recommended that
FDA classify SPL into Category IIIB and revoke Delmont's license (42 FR
58266 at 58285). In the Federal Register of November 8, 1977, FDA
issued a proposed order notifying Delmont that it agreed with the
Original Antigen Panel's findings and that it intended to revoke
Delmont's license (42 FR 58266 at 58318). As discussed in subsection
b.iii of this section of this document, FDA ultimately classified SPL
into category IIIA based on additional safety data that Delmont
submitted (44 FR 1544 at 1548, January 5, 1979), but FDA agreed with
the Original Antigen Panel's criticisms of SPL's effectiveness data (44
FR 1544 at 1546, comment 5) and ordered Delmont to complete and submit
the effectiveness testing that the Original Antigen Panel had
recommended (44 FR 1544 at 1548).

b. January to May 1978 Data
i. Delmont's Hearing Request
    In response to FDA's revocation proposal (42 FR 58266), Delmont
requested a hearing on whether FDA should classify SPL into Category
IIIA or IIIB, and submitted to FDA additional data on January 8, 1978,
February 7, 1978, March 31, 1978, and May 26, 1978. Those submissions
are all currently in the public docket relating to this matter, Docket
No. 2000N-1219, as attachments to Delmont's April 28, 2003, hearing
request. None of the data satisfied the controlled clinical
investigations standard for proving effectiveness, as discussed in
subsection b.iii of this section of this document, even though FDA
eventually determined that the safety data were sufficient to classify
SPL into Category IIIA to allow Delmont to continue marketing SPL while
obtaining effectiveness data.
ii. Deficiencies in Delmont's Data
(1). January 8, 1978, Submission
    In a letter dated January 8, 1978 (Docket No. 2000N-1219, Item
SUP1, Tab C to Delmont's April 28, 2003, hearing request), Delmont
submitted to FDA additional study reports. Delmont stated that the
reports ``show that no risk to human safety can result from continued
marketing of SPL for a limited period while further studies are
conducted.'' As to effectiveness, however, Delmont said only that the
study reports ``demonstrate that further studies of SPL in accordance
with FDA requirements for clinical investigations will very likely
provide substantial evidence that the product is effective for its
labeled indications * * *.'' Therefore, Delmont admitted that the data
it was submitting were collected from studies that were not conducted
in accordance with FDA requirements for clinical investigations.
    Most of those studies failed to satisfy FDA's controlled clinical
investigations standard because they were preclinical studies not
performed on humans, and therefore, were not clinical investigations.
Specifically, those reports were as follows: ``Chronic Toxicity Test of
SPL in Rats'' (Fujino, et al.) (Ref. 2); ``Acute and Subacute Toxicity
Tests of SPL'' (Fujino, et al.) (mice and rats) (Ref. 3);
``Teratologenicity Study of SPL in Rats and Rabbits'' (Hachihiko
Hirayama) (Ref. 4); ``Effect of SPL on the Development of Skin Lesion
in Mice after Inoculation with Herpes Simplex Virus'' (Department of
Microbiology, School of Medicine, Kyushu University) (Ref. 5);
``Chemotactic Accumulation of Macrophages in the Peritoneal Cavity
after Inoculation of SPL and their Antitumor Activity'' (Department of
Microbiology, School of Medicine, Kyushu University) (mice) (Ref. 6);
and ``S-27: Summary of Results of Tests Conducted at Fuji-Zoki
Pharmaceutical Research Division'' (safety tests in mice and guinea
pigs) (Ref. 7).
    Two other studies that Delmont included in its January 8, 1978,
submission, ``Susceptibility of Staphylococcus aureus Clinical Isolates
to Gratia Bacteriophage'' (Shigeno, et al.) (Ref. 8) and ``Influence of
Staphage Lysates (SPL) on Immune Responses In Vitro'' (Mitsuma, et al.)
(Ref. 9), do not qualify as controlled clinical investigations because
they were in vitro studies. Moreover, the limited data contained in the
abstracts that Delmont submitted to FDA on these two studies limit
their usefulness for any purpose. Therefore, they are not adequate to
support reclassifying SPL into Category I.
    Delmont also submitted two reports on studies of SPL in humans,
``Immunopotiator Activity of Staphage Lysate (Mudd)'' (Azuma, et al.)
(Ref. 10) and ``Immunochemotherapy for Infections--With Particular
Reference to Staphage Lysate'' (Tsuda, et al.) (Ref. 11). Neither of
those qualifies as a controlled clinical investigation, for a number of
reasons. First, neither study was controlled as required in FDA's 1979
final order, which included Delmont's product in Category IIIA (44 FR
1544 at 1548). A fundamental characteristic of controlled clinical
investigations is that they ``use a design that permits a valid
comparison with a control to provide a quantitative assessment of drug
effect'' (Sec.  314.126(b)(2)). A control is necessary to ``distinguish
the effect of a drug from other influences, such as spontaneous change
in the course of the disease, placebo effect, or biased observation''
(Sec.  314.126(a)). While different types of controls are permitted
under different conditions, neither study reports that the
investigators used controls.
    Second, both a protocol and a study result report should contain a
clear statement of the objectives of the investigation and a summary of
the methods of analysis (Sec.  314.126(b)(1)). Delmont did not submit
the protocol for either study, and the resulting reports for the two
studies did not explain how the investigators measured or analyzed the
results of treating their study subjects with SPL. Although the Tsuda
study report (see Ref. 11) contains a summary of clinical results in
Table 8, which lists the investigators' assessments of subjects'
responses to SPL--either ``Excellent,'' ``Greatly improved,'' or
``Unimproved''--the study does not state what criteria were used to
reach those assessments. Moreover, as the report itself admits, ``no
conclusive statement can be made here because of the relatively small
series studied.'' Clearly, the reports do not provide ``sufficient
details of the study design, conduct, and analysis to allow critical
evaluation and a determination of whether the characteristics of an
adequate and well-controlled study are present'' (Sec.  314.126(a)).
    The studies also failed to meet other characteristics of a
controlled investigation. The study reports fail to show that the
``method of selection of subjects provides adequate assurance that they
have the disease or condition being studied or evidence of
susceptibility and exposure to the condition against which prophylaxis
is directed'' (Sec.  314.126(b)(3)). In the Tsuda study (see Ref. 11)
the diseases being studied were chronic intractable staphylococcal
infections or other viral infections. In the Azuma study (see Ref. 10),
the condition being studied was defensive capacity against infection
generally. However, neither study report showed how the subjects were
selected to meet these criteria. Similarly, the studies fail to show
that the ``method of assigning patients to treatment and control groups
minimizes bias and is intended to assure comparability of the groups
with respect to pertinent variables'' (Sec.  314.126(b)(4)); fail to
show that ``[a]dequate measures [were] taken to minimize bias on the
part of the subjects, observers, and analysts of the data'' (Sec.
314.126(b)(5)); fail to demonstrate that the ``methods of assessment of
subjects' response [were] well-defined and reliable'' (Sec.
314.126(b)(6)); and fail to provide ``an analysis of the results of the
study adequate to assess the effects of the drug'' (Sec.
314.126(b)(7)). Clearly, then, these two studies do not meet the
criteria for controlled clinical investigations.
    Finally, Delmont submitted what it described as a protocol for ``a
study based on short- and long-term surveillance of patients receiving
SPL therapy under the care of Arthur G. Baker, M.D.'' The study had not
begun, and Delmont had no results to report at that time. Therefore, it
did not contribute to the effectiveness assessment.
    In summary, none of the submissions that Delmont included with its
January 8, 1978, letter constituted controlled clinical investigations.
Thus, they were insufficient to establish SPL's effectiveness at that
time.

(2). February 7, 1978, Letter
    On February 7, 1978, Delmont sent to FDA additional data to support
its request for a hearing on whether to classify SPL into Category IIIA
or IIIB (Docket No. 2000N-1219, Item SUP1, Tab D to Delmont's April 28,
2003, hearing request). Delmont categorized much of the data and
reports as safety data, but did include a set of attachments that it
labeled ``Effectiveness Data.'' Delmont divided those attachments into
``Controlled Studies,'' and ``Other Efficacy Data.'' The Controlled
Studies section contains only a protocol for a study that was then in
early stages, and does not contain a report on the results of that
study. Thus, Delmont admitted that its February 7, 1978, submission did
not contain effectiveness data that met the controlled clinical
investigations standard.
    The ``Other Efficacy Data'' section was divided into two
subsections: ``Studies in Humans'' and ``Studies in Animals.'' The
first paper in the human studies subsection, Salmon G.G. and M.
Symonds, ``Staphage Lysate Therapy in Chronic Staphylococcal
Infections,'' (Ref. 12), is a duplicate of a published article that
Delmont had submitted to the Original Antigen Panel in 1977. The
Original Antigen Panel rejected that article, stating that in the
article ``patients are said to have recovered because of antibody
induction but no data demonstrating such responses are provided'' (42
FR 58283). The next three reports were duplicates of reports that
Delmont had submitted with its January 8, 1978, letter, which are
deficient for the reasons discussed previously in this section of this
document. Finally, Delmont submitted two summaries of case studies,
``Immune Stimulation Therapy for Inflammatory Disease of the Gut,''
(Ref. 13) and ``Immune Stimulation for Aphthous (Herpetic) Stomatitis &
Rhinitis,'' (Ref. 14) that Dr. Dale Rank had sent to Delmont. These
reports contain little information, and therefore do not ``provide
sufficient details of study design, conduct, and analysis to allow
critical evaluation and a determination of whether the characteristics
of an adequate and well-controlled study are present'' (Sec.
314.126(a)). Moreover, the terse case reports of Dr. Rank's patients
contain no indication that any type of control was used.
    Therefore, none of Delmont's February 7, 1978, submissions
satisfied the controlled clinical investigations standard.
(3). March 31, 1978, Letter
    On March 31, 1978, Delmont sent to FDA another letter (Docket No.
2000N-1219, Item SUP1, Tab E to Delmont's April 28, 2003, hearing
request). That letter served primarily to answer questions that FDA had
raised about the animal studies in Delmont's January 8, 1978,
submission. The letter also included three new reports. One reported on
tests in rabbits and another reported the results of in vitro assays,
neither of which constituted controlled clinical investigations in
humans. The letter also included a one-page ``report of a double blind,
placebo controlled trial for evaluation of SPL as a treatment for
warts, dated March 7, 1978.'' The one-page summary clearly did not
``provide sufficient details of study design, conduct, and analysis to
allow critical evaluation and a determination of whether the
characteristics of an adequate and well-controlled study are present,''
as Sec.  314.126(a) requires, for many reasons. Among them are that it
provided: No patient recruitment details on their diagnoses, as Sec.
314.126(b)(3) requires; no explanation of patient inclusion and
exclusion criteria (Sec.  314.126(b)(3)); no description of patient
randomization procedures (if performed), as Sec.  314.126(b)(4)
requires; and no clinical descriptions or associated clinical
measurements for the endpoints of ``Excellent,'' ``Good,'' and ``No
change,'' as Sec.  314.126(b)(6) and (b)(7) require. Thus, Delmont's
March 31, 1978, submissions did not satisfy the controlled clinical
investigations standard.
(4). May 26, 1978, Letter
    In a letter dated May 26, 1978 (Docket No. 2000N-1219, Item SUP1,
Tab F to Delmont's April 28, 2003, hearing request), Delmont submitted
one last supplement to its comments on FDA's proposal to classify SPL
into Category IIIB. The letter stated that ``[t]his information further
supports Delmont's position, set out in its January 8, 1978, comments,
that SPL is safe and that an opportunity should be provided for the
completion of clinical studies to provide additional information
demonstrating the product's effectiveness.'' Thus, Delmont acknowledged
that its May submissions did not demonstrate SPL's effectiveness.
    The first set of documents contains case reports on 50 patients
that Dr. Arthur Baker had treated with SPL. Delmont submitted those
individual case reports to ``show that no allergic reactions or adverse
effects were observed in any of the patients who received SPL over
extended periods of time.'' Delmont did not include a study result
report analyzing the data for effectiveness.
    The second set of documents consists of protocols for two clinical
studies of SPL that Dr. John Silva was conducting. One was then
underway at the Department of Veterans Affairs hospital in Biloxi, MS
and the second had not begun. Delmont did not submit any effectiveness
data from the ongoing study. Instead, it submitted a letter from Dr.
Silva stating that no allergic reactions or other adverse effects had
been observed. Therefore, the information related to safety rather than
efficacy.
iii. FDA's 1979 Final Order on SPL
    On January 5, 1979 (44 FR 1544), FDA published a final order
formally classifying into Category IIIA those products, including
Delmont's SPL, for which the data were insufficient to determine their
safety and effectiveness, but which FDA would allow to remain on the
market pending completion of testing. That final order confirmed that
the Commissioner agreed with the Original Antigen Panel's conclusions
and recommendations about all the deficiencies in the Category IIIA
data (44 FR 1544 at 1546, comment 5). It further confirmed that the
manufacturers of those products had to submit data from controlled
clinical investigations, and that their products could not remain in
category IIIA indefinitely (44 FR 1544 at 1545 to 1548).
    That final order also expressly confirmed that SPL was subject to
the same requirement. The order stated as follows: ``Because data
submitted by Delmont Laboratories, Inc., have been found to be adequate
to reclassify its staphage lysate types I and [III] combined, License
No. 299, from Category IIIB to IIIA, the requirements concerning
completion of testing and labeling apply to these products'' (44 FR
1544 at 1548) (emphasis added). The order also made clear that those
testing requirements were the ones that the Original Antigen Panel had
recommended; after listing all of the Category IIIA products, including
SPL, the order stated that ``[l]icenses remain in effect for these
products pending conformance with the Panel's recommendations and
completion of testing'' (44 FR 1544 at 1548) (emphasis added). As
discussed above, the Original Antigen Panel was clear that all Category
IIIA products reviewed by that Panel needed further clinical
investigations to establish their effectiveness.

c. 1983 Data
    In December 1982, FDA assigned the VRBPAC to follow the
reclassification procedures in Sec.  601.26 (65 FR 31003 at 31004) to
reclassify the bacterial vaccines and antigens with ``no U.S. standards
of potency'' that had been previously classified into Category IIIA,
including SPL into either Category I or Category II. Under these
procedures, Delmont submitted to the VRBPAC additional data on SPL. The
VRBPAC held reclassification meetings in January, June, and September
1983 (65 FR 31003 at 31006).
    After reviewing all of the data, VRBPAC voted to recommend placing
SPL into Category II and to revoke Delmont's license. VRBPAC's Final
Report provides VRBPAC's detailed critique of all the data that Delmont
submitted (see Ref. 1, at pages 47 to 54). The Final Report confirmed
that the VRBPAC members voted unanimously to recommend placing SPL into
Category II because the evidence was insufficient to prove
effectiveness. (See Ref. 1, at page 55). We continue to agree with the
VRBPAC's analysis as described in that portion of the Final Report at
page 55.
d. 1994 Data
    On February 28, 1994, Delmont submitted to FDA results from a study
on hidradenitis suppurativa (HS) that had just begun in 1983, along
with the results from some other studies. (A copy of Delmont's February
28, 1994, submission is attached as Tab C to comments that Delmont
submitted to the Docket No. 2000N-1219, Item C1 on August 9, 2000). In
FDA's February 26, 2003, NOOH, FDA published a detailed critique of
Delmont's 1994 data (68 FR 8908 at 8909). Of all the study results that
Delmont submitted, only the HS study, a prospective, double-blind,
placebo controlled trial, constituted a controlled clinical
investigation (68 FR 8908 at 8909). The investigators in that study,
however, found ``[n]o significant differences between treatment groups
or between the two centers'' after performing efficacy analyses, and
concluded that ``[u]nder the conditions of the study, SPL was not
demonstrated to be effective in the treatment of HS'' (Delmont's
February 28, 1994, submission, at page 9). A third party that Delmont
contracted with to perform a reanalysis of the data reached a more
optimistic conclusion (Delmont's February 28, 1994, submission, pages 9
to 11, and 68 FR 8908 at 8909). But it reached that conclusion only
after first unblinding the patient data and performing a subset
analysis on a selected subgroup of patients based on a different method
of assessing effectiveness (68 FR 8908 at 8909). Even then, the third
party found no statistically significant difference between the
patients treated with placebo and with SPL (68 FR 8908 at 8909).
    The rest of Delmont's 1994 data fails to satisfy the controlled
clinical investigations standard, as FDA explained in its February 26,
2003, NOOH (68 FR 8908 at 8909). We continue to support the analysis
described in the Federal Register document of February 26, 2003 (68 FR
8908).
    Significantly, Delmont's April 28, 2003, hearing request does not
attempt to argue that any of the data it submitted to FDA during the
reclassification process in 1983 and 1994 satisfies the controlled
clinical investigations standard or otherwise is adequate to
demonstrate effectiveness. Instead, Delmont's hearing request argues
that the data that it submitted to FDA in 1978 sufficiently
demonstrates that SPL is effective. Delmont does not, however, discuss
the specific data that it submitted in 1978 or explain why it is
sufficient to prove that SPL is effective. Rather, Delmont argues that
in 1978, FDA stated that Delmont's data were sufficient to justify a
hearing. What FDA actually stated, however, is that the data justified
a hearing only on whether FDA should classify SPL into Category IIIA or
IIIB--not Category I. In other words, FDA did not find that the data
justified a hearing on whether SPL was effective--only on whether SPL
was safe enough to allow Delmont to keep marketing it while Delmont
conducted further effectiveness studies. Indeed, even Delmont admitted
that further effectiveness studies were necessary.
    Therefore, Delmont has not raised a genuine and substantial issue
of fact justifying a hearing as to whether SPL is effective.
3. Delmont's Procedural Objection
    Delmont also argues that FDA did not follow correct procedures
during the effectiveness reclassification process and that, therefore,
Delmont deserves a hearing on SPL's effectiveness. Delmont's specific
objection is that because FDA issued a NOOH before finally
reclassifying SPL into Category II, FDA has violated its own procedures
and has deprived Delmont of fair notice and opportunity for judicial
review.
    Delmont is incorrect that FDA violated its own procedures. The
reclassification procedures, set forth in Sec.  601.26, are silent as
to when FDA should issue an NOOH. However, the preamble to Sec.  601.26
provides that the procedures for review and reclassification of the
Category IIIA products were designed to be ``analogous to the
procedures in Sec.  601.25 for the 1972 biologics review,'' as Delmont
itself admits (Delmont's April 28, 2003, hearing request, at page 4)
(46 FR 4634, January 16, 1981). Section 601.25 required FDA to issue an
NOOH before issuing its final classification order. Specifically, Sec.
601.25(g) required FDA's final classification order to address all
matters in the proposed order, and Sec.  601.25(f)(2) required that for
products that FDA proposed to classify into Category II, FDA also
include a license revocation proposal in the proposed order. However,
before revoking a license, FDA first had to issue an NOOH (Sec.
601.5(b(1) (21 CFR 601.5(b)(1)). Therefore, under Sec.  601.25, FDA had
to issue an NOOH before issuing a final classification order because
that final classification order had to include the license revocation.
    Although Sec.  601.26 is silent on this issue, as stated in the
preamble, the agency did follow the process analogous to Sec.  601.25
for this license revocation. In the proposed order issued at 65 FR
31003, May 15, 2000, FDA stated that the proposed order contained the
agency's intent to revoke the licenses of certain products that the
agency proposed to reclassify into Category II. The agency further
stated that, after the end of the comment period on the proposed order,
if it decided to proceed with the license revocation proceeding, it
would publish a NOOH on the revocation of the license of each Category
II product. The agency also stated it would issue a final order on all
matters covered by the proposed order (65 FR at 31005). In fact, Sec.
601.26(e) provides for the final order to cover all matters in the
proposed order. As with the procedures under Sec.  601.25, FDA included
notice of its intent to revoke certain licenses in the proposed order.
In order to finalize all matters in the proposed order in the final
order, it was necessary for FDA to issue the NOOH prior to the final
order. Therefore, contrary to Delmont's arguments, FDA has not violated
its procedures.
    In addition, Delmont is mistaken that FDA has deprived Delmont of
fair notice and an opportunity for judicial review. This final order,
which contains all of FDA's reasons for denying Delmont a hearing and
for revoking Delmont's license, is final agency action that is
reviewable in the courts (Sec.  12.28(d) (21 CFR 12.28(d))). Moreover,
Delmont has had years of notice that FDA intends to reclassify SPL into
Category II and to revoke its license based on that

reclassification, and has availed itself of two opportunities to
comment on and object to FDA's proposal: (1) On August 9, 2000, in
response to FDA's May 2000 proposal, and (2) on April 28, 2003, in
response to FDA's NOOH (68 FR 8908). FDA has not deprived Delmont of
fair notice, nor has FDA precluded Delmont from seeking judicial
review.

D. Denial of Hearing Request

    For the reasons stated previously in this document, the
Commissioner of Food and Drugs (Commissioner) determines that Delmont
has failed to raise a genuine and substantial issue of fact to justify
a hearing on the proposed revocation of U.S. License No. 299 issued to
Delmont Laboratories, Inc. for Polyvalent Bacterial Antigens with ``no
U.S. Standard of Potency'' (Staphage Lysate), and, therefore, denies
Delmont's request for a hearing. The Commissioner also determines that
Delmont's procedural arguments do not provide a basis for a hearing.

IV. Categorization of Products--Final Order

    The Commissioner has considered all relevant information regarding
the four Category IIIA bacterial vaccines and bacterial antigens
subject to reclassification and concludes that FDA's proposal for the
reclassification of Category IIIA products into Category I or Category
II is adopted as set forth in this section of this document and hereby
formally classifies:

    Category I--Biological products determined to be safe, effective,
and not misbranded, and which may continue to be introduced into
interstate commerce.

Sanofi Pasteur Inc., U.S. License No. 1725:
    Tetanus Toxoid Adsorbed (primary and booster use), and
    Tetanus and Diphtheria Toxoids Adsorbed For Adult Use (DECAVAC\TM\)
(primary and booster use).

    Category II--Biological products determined to be unsafe,
ineffective, or misbranded, and which may not continue to be introduced
into interstate commerce.

Delmont Laboratories Inc., U.S. License No. 299:
    Polyvalent Bacterial Antigens with ``No U.S. Standard of Potency''
Staphage Lysate[supreg] (SPL)

V. License Revocation--Final Order

    For the reasons set forth in this document, under section 351 of
the Public Health Service Act (42 U.S.C. 262) and 21 CFR
601.5(b)(1)(vi), the Commissioner revokes the license (U.S. License No.
299) issued to Delmont Laboratories, Inc., for Polyvalent Bacterial
Antigens with ``No U.S. Standard of Potency'' Staphage Lysate[supreg]
(SPL).

VI. References

    The following references have been placed on display in the
Division of Dockets Management (HFA-305), Food and Drug Administration,
5630 Fishers Lane, rm. 1061, Rockville, MD 20852, and may be seen by
interested persons between 9 a.m. and 4 p.m., Monday through Friday.

 1. Final Report: Addendum to Previous Panel Reports for the
Reclassification of Category IIIA Biologics, VRBPAC, 1984.
 2. Fujino, Ryuichi; Yuji Sugisaki; Junko Nakagawa; Masana Komatsu;
and Hachihiko Hirayama, ``Chronic Toxicity Test of SPL in Rats,''
Fujizoki Pharmaceutical Co., Ltd., Shinjuku-ku, Tokyo.
 3. Fujino, Ryuichi; Yuji Sugisaki; Junko Nakagawa; Masana Komatsu;
``Acute and Subacute Toxicity Tests of SPL,'' Fujizoki
Pharmaceutical Co., Ltd., Shinjuku-ku, Tokyo.
 4. Hirayama, Hachihiko, ``Teratologenicity Study of SPL in Rats and
Rabbits,'' Fujizoki Pharmaceutical Co., Ltd., Nerima-ku, Tokyo.
 5. ``Effect of SPL on the Development of Skin Lesion in Mice after
Inoculation with Herpes Simplex Virus,'' Department of Microbiology,
School of Medicine, Kyushu University, Fukuoka, Japan.
 6. ``Chemotactic Accumulation of Macrophages in the Peritoneal
Cavity after Inoculation of SPL and their Antitumor Activity,''
Department of Microbiology, School of Medicine, Kyushu University,
Fukuoka, Japan.
 7. ``S-27: Summary of Results of Tests Conducted at Fuji-Zoki
Pharmaceutical Research Division,'' Fujizoki Pharmaceutical Co.,
Ltd., Tokyo.
 8. Shigeno, N.; T. Mitsuma; and K. Kojima, ``Susceptibility of
Staphylococcus aureus Clinical Isolates to Gratia Bacteriophage,''
Junior College of Medical Technology and Nursing affiliated with
Niigata University.
 9. Mitsuma, T.; N. Shigeno; K. Kojima; and M. Tanaka, ``Influence
of Staphage Lysates (SPL) on Immune Responses In Vitro,'' Junior
College of Medical Technology and Nursing affiliated with Niigata
University and Santo Hospital.
 10. Azuma, C.; Y. Tokuda; and T. Shibata, ``Immunopotiator Activity
of Staphage Lysate (Mudd),'' Department of Dermatology, Tokyo
College of Medicine, Tokyo.
 11. Tsuda, Shingo and Kikuo Minami, ``Immunochemotherapy for
Infections--With Particular Reference to Staphage Lysate,''
Department of Dermatology, Kurume University, School of Medicine,
Kurume, Fukuoka Prefecture.
 12. Salmon, G.G. and M. Symonds, ``Staphage Lysate Therapy in
Chronic Staphylococcal Infections,'' Journal of the Medical Society
of New Jersey, 60:180-193 (1963).
 13. Rank, Dale, ``Immune Stimulation Therapy for Inflammatory
Disease of the Gut,'' and ``Immune Stimulation for Aphthous
(Herpetic) Stomatitis & Rhinitis,'' (Study Nov. 1975 to Dec. 1977).
 14. Rank, Dale, ``Immune Stimulation for Aphthous (Herpetic)
Stomatitis & Rhinitis,'' (Jan. 1976 to Jan. 1978).

    Dated: November 24, 2010.
Leslie Kux,
Acting Assistant Commissioner for Policy.
[FR Doc. 2010-30441 Filed 12-3-10; 8:45 am]
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