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The Biotech Revolution

Unbridled Apprentices?

The avalanche of advances in the current biotech revolution is both exciting and frightening. The promise of new remedies and cures in many diverse fields of medicine has given new hope to many sufferers, but is also increasingly being accompanied with forebodings by some observers. Many fear that the biotechnologists may prove to be the "Sorcerer's Apprentices" of the 21st century.1

Continuing our series of articles highlighting both the progress and the misgivings in the fields of genetics, nanotechnologies and robotics, we will review the worldwide boom in high-tech start-ups in the biotech industry and some of the remedies that are being anticipated on our near horizon. 2

Panorama of Anticipated Remedies

The spectrum of biotech research is remarkably wide and is being pursued by many new independent start-up firms all over the world, as well as by the more traditional pharmaceutical firms. Following are some examples of current research:

oHemophiliacs may be assisted by genetically engineered protein being pursued by Ernst-Ludwig Winnacker, at the Max Planck Institute in Munich, Germany.

oEndothelium is the single-cell layer that lines veins and arteries and which plays a key role in the onset of arterial pulmonary hypertension by secreting a hormone that constricts blood vessels. The focus of Swiss biotech firm Actellon is an endothelium receptor antagonist called Bosentan, (which could be available by 2001).

oBrain trauma involves ten million new cases per year worldwide. There presently is no good way to stop freshly injured brain cells from killing surrounding healthy brain cells. (That's why car crash victims often arrive at the hospital in stable condition and yet end up brain damaged or dead). Israeli scientists, working for the U.S. firm Pharmos, believe that the key lies in cannabis, the active ingredient in marijuana. They have developed a cannabis-derived drug, Dexanabinol, which appears to inhibit the action of neurotoxic chemicals, drastically limiting brain damage (provided it is administered within six hours of injury). It is still under test, however, and won't be on the U.S. market for at least two years.

oEmmanuel dias Neto, a researcher at the Ludwig Institute in San Paulo, Brazil, was investigating the genetics of achistosomiasis, a major killer in Brazil, when he developed a new method of sifting through reams of genetic data. Dias Neto's technique focuses on the center of the genes where most proteins are defined. It is hoped that this research (on a parasite that makes its home in a fresh water snail) may someday end with a cure for breast cancer.

oChasing diabetes genes: About 20 million Indians are expected to suffer from some form of diabetes by the end of the decade. Since their families tend to stay put for generations, marry not too far outside the family circles, and stick with same eating habits for generations, India is a good place to investigate the genetic basis of the disease. So far, the researchers have narrowed the culprits down to four genes. Originally called the "thrifty genes," they are thought to have been useful in times of famine by adjusting the body metabolism to cope with less food. These days, with food relatively plentiful, the gene tends to interfere with the body's ability to control the blood-sugar levels. Nicholas-Piramal, a drug firm based in Mumbai, is spending $3 million a year on genetic research and plans to triple its team of 150 biotech researchers to develop a drug that would "turn off" the thrifty gene.

oA drug for obesity? With one child in ten suffering from obesity, the researchers at the French firm Genset believe they've come up with a drug, Famoxin, which speeds up metabolism to burn off fat. (Patients would need an injection once per month.) They hope to have it in clinical trials by the end of next year. They started out developing techniques for gene sequencing and other basic research and wound up by discovering several genes for prostate cancer.

oA better grain of rice: 200 labs across Japan are busy decoding the rice genome with an eye to making a "super rice," a genetically modified rice that could withstand chilly temperatures and drought, and resist disease. In 1998 the Japanese government formed a ten-nation consortium that aims to sequence the entire rice genome by 2004. Although Japan has all the rice it needs, breakthroughs may be applicable to corn or wheat, which have similar genes. Despite current opposition to genetically manipulated foods, a patent for the rice gene could be worth many millions of dollars.

o Fishing for New Genes: Researchers at Artemis Pharmaceuticals, a start-up company in Germany, have undertaken the world's largest study of zebra fish. Scientists treat the tiny, striped fish, originally from the River Ganges in India, with a chemical that causes genetic mutations and allows them to breed. When inevitably some suffer from genetic defects, the scientists work backward to find the gene that caused the mutation. From there it's not hard to match it up with its human equivalent - ninety-five percent of human genes are found in the zebra fish. The fish are handy to work with because they breed in huge numbers and their transparent embryos are easy to monitor. Soon the scientists expect to have bred 17 million fish, mutating every gene. Among other projects, they are looking for a drug to prevent angiogenesis, the growth of new blood vessels in cancerous tumors.

Global Growth Arena

As the foregoing samples suggest, biotech is now giving birth to many international players. In a field long dominated by the United States (with more than 1,300 U.S. biotech firms, compared with about 700 in all of Europe), the global competition is increasingly intense.

Britain, of course, was first out of the gate in starting its own biotech industry back in the mid-1980s when the outbreak of brain rotting Creutzfeldt-Jakob disease, a form of bovine spongiform encephalopathies (BSE, or "mad cow disease"), first gathered public attention. 3 Britain now has 560 biotech companies. Of 70 or so publicly traded biotech concerns in Europe, half are British. This includes the grandfather of British biotech firms, Celtech, which pioneered drugs that exploit the body's own antibodies to combat disease, and who posted a profit this year for the first time. Britain has approved its first three biotech products this year: a new anesthetic and treatments for migraines and Alzheimer's disease.

The Netherlands-based firm Qiagen is the leading manufacturer of products for purifying genetic material such as proteins and nucleic acids; its products are now being used in most labs around the world.

The Swedish firm Prosequencing has become a technological leader in making systems for automated DNA sequence analysis, which is essential for mining the rich vein of data in the human genome.

In many countries, genetically modified foods are still off-limits. But otherwise, the next "super foods" could just as well come from Munich, Rio, or Stockholm as from the Silicon Valley or Cambridge.


A lot of this activity has to do with the big strides researchers have made in gene sequencing. The Human Genome Project last summer enumerated three billion letters of the human genome, a gold mine of raw data for countless medical breakthroughs. Scientists, however, must first wade through the mass of information and figure out what it all means. That's something not even the vaunted U.S. medical research establishment can do by itself. For countries that have not previously had a big biotech industry, this spells opportunity.

Moral and ethical objections to genetic manipulation, especially in Germany and Denmark, delayed scientific research for years and drove scientists to the U.S. But attitudes are quickly changing and cultural barriers to genetics research are coming down.

Genetics, of course, isn't the only factor behind the growth in biotech. Big pharmaceutical companies, facing an unusual number of expiring patents and thin product pipelines, are looking to life-sciences companies for new drugs. At the same time, new drug-discovery techniques are getting cheaper, faster, and better at targeting specific diseases. This means as drugs become more accurate, markets will become more segmented and small labs can afford to go after a potential market too puny for big pharmaceutical firms to care about.

Munich-based Wilex Biotechnology, for example, is working on ways to stop a particular protein that causes cancer to spread, even though it is active in only 30% of breast-cancer victims. "We would be happy with $100-200 million a year," says CEO and founder Olaf Wilhelm. "A small company can survive on that."

Investment Fever

The financial industry is also showing more interest in biotech ideas. In the past, financial markets outside the U.S. were simply not geared to support start-ups. Venture capitalists ultimately require an exit path, usually through public markets, which have been limited outside of the U.S. In the past three years, however, Germany, France, Italy and other countries have set up NASDAQ-like markets for small, high-tech companies, which have provided the necessary liquidity and also allowed firms to lure researchers back from the U.S. with stock options.

Venture capital has only recently made an appearance in continental Europe. Total investment in European biotech was 579 million in 1999, less than half that of the U.S., but up 53% over the year before. Europe's leading biotech entrepreneur, Chris Evans, a Welsh-born investor, has founded 17 science-based companies in Britain. In 1998 he launched Merlin Ventures and recently raised 247 million for the new Merlin Biosciences Fund.4

Germany is the next big bet. Germany has embraced biotech as the key to its long-term competitiveness. In 1993 the government passed new legislation designed to streamline decision making in biotech projects and then held a "BioTech Contest" among 17 regions in 1995 and awarded 50 million marks each to Munich, the Rhineland near Cologne, and the area including Heidelberg, to help build research centers.

The German government is proposing to spend some 1.2 billion marks over the next five years to human genome research at universities and institutes. Indeed, grant money has flowed so freely that for awhile entrepreneurs could triple their start-up cash overnight with matching regional and federal grants. A law was tweaked to give scientists at universities and institutes the rights to their intellectual property should they decide to leave for start-ups. To rally the country, the government in 1997 even declared a national goal of catching up to Britain by 2000. Although it hasn't yet, last year German researchers claimed 14% of all biotech patent applications, up from 10% five years ago. More than 400 biotech-related start-ups pepper the country.

From across the Rhine, France has been paying close attention. The French government has increased its funding of biotech research tenfold since a decade ago, up $260 million. One of the beneficiaries is the Genopole research campus at Evry, near Paris. Genopole, also known as Genetic Valley, is the home of France's most promising new biotech companies. Geneticist Pierre Tambourin, president of Genopole Evry, aims to have 50 or 60 new companies up and running on the campus within the next two years. Other Genopoles are slated for 20 French cities.

Research optimism is also reflected by the hundreds of small companies cropping up across Scandinavia and southern Europe. In Spain, Jose Maria Fernandez Sousa-Faro, the president of family-owned insecticide maker Zeltia, founded Pharma-Mar in 1986 to investigate potential anticancer agents extracted from marine plants and animals.

The firm holds 620 patents, but their great hope is ET-743, a promising anti-tumor agent extracted from red sea squirts living in the Caribbean and Mediterranean seas. The drug has been tested on 750 patients in the U.S. and Europe and shows few of the typical side effects, such as nausea or diarrhea. It may be licensed for use in Europe in 2002 to treat bone, skin, breast, ovarian and other cancers.

Israel sowed the seeds of its own biotech boom in the 1950s and 60s around citrus crops. In 1980 Haim Aviv, the father of Israel's biotech industry, managed to attract American venture capitalists. His success encouraged other foreign investors, and the result was a boomlet of small start-ups. Now Israel has 135 biotech companies.

In India, the government took the first step in encouraging a biotech industry in 1986 by establishing a separate government department charged with increasing the number of biotech grads coming from universities. Fifty universities now produce about 500 biotech scientists annually. In addition, the government began funding more than 50 centers around the country to collect genomic data.

Because of India's caste system and isolated and inbred tribes, Indians have a particularly well-preserved and easily traced gene lineage, which could prove to be a rich source of information for scientists seeking mechanisms behind hereditary diseases and, ultimately, cures for them.

Brazil is also just getting biotech research off the ground. It used $250,000 of seed money from a Sao Paulo-based science foundation, FAPESP, to jump start what has blossomed into a $20 million operation involving more than 200 scientists at 62 laboratories. Scientists have now completed more than 730,000 sequences of the cancer genome. Brazilian researchers lead in sequencing cancers. By year-end they expect to complete a million sequences and believe that by 2002 they'll finish assembling a full genetic map of a breast-cancer tumor.

Noticeably behind in the biotech boom is Japan. As early as 1981, the government was planning to build automated high-speed DNA sequencing facilities, but this ambitious effort floundered for lack of cooperation among agencies and petty turf wars among the scientists. But Japan, with only a few dozen biotech companies, is trying to catch up in the post-genome world.

Despite continuing hard times, Japan's government plans to increase spending on biotech research by 23% next year. This month it opened the Genomic Sciences Center in Yokahama, featuring a nuclear magnetic resonance center to study protein structures. The Kyoto-based liquor producer Takara Shuzo will start operating Dragon Genomics, a center for high-throughput genome analysis, in early 2001.Dragon Genomics will be the largest of its kind in Asia.

As we watch the emergence of a global industry, which will undoubtedly suffer many false starts, belly-up failures, consolidations among the giants, cross-alliances, multilingual labs, talent raids, and international funding, with all the attendant hopes and disappointments, we should also recognize that there is a cloud of gloom on the more distant horizon.

The Dark Side

In these rapidly developing fields, there are few safeguards against abuse or errors, and the cross-species implications and the potential for mutations are impossible to adequately anticipate. With most of the critical research being done by small laboratories under intense competitive pressures - and with few of the regulatory or procedural protections typical of larger governmental or corporate laboratories - the potential for major catastrophes has many knowledgeable observers very concerned.

Clearly the greatest apprehensions are in the areas of genetic research, genetically manipulated foods, and cloning - especially in cross-species experiments, which are likely to lead to unknown diseases and unanticipated complications.

As we suggested in last month's article, the attendant advances in nanotechnologies and robotics combining with developments in genetics may result in the development of self-replicating machines that can lead to new diseases, some of which may prove directable to genetically distinct groups of people, or even specific individuals! Some of these prospects, and their eschatalogical implications,5 will be the subject of subsequent articles in this series.
Next month we will explore some of the bizarre results being reported from cloning. [Many have expressed skepticism over the intrusions of the fallen angels in Genesis 6, and their attempts to contaminate the human genome in Satan's quest to thwart the plan of God to redeem the human race from its genetic defect called Sin. Are these laboratories destined to develop alternative paths to the modification (and contamination) of that which, initially, "God saw was very good"? Stay tuned.]

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There are Internet web sites too numerous to list, but here are a couple to explore.


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