Bio Technology Stocks DNA 101--This is a Great Article
May 30 2000 4:45PM CST
by Margaret Medina
With the recent ascendance of genetics-oriented companies on the investment landscape, the well-informed bio-tech investor stands to gain a great deal of perspective by learning about the basics of DNA and genetics. Armed with this basic information, the savvy investor can begin to ask informed questions about bio-tech and genetics-related stocks that have been in the news lately. To that end, we at WallStreetCity.com are initiating a series that focuses on publicly traded companies that are engaged in the fast-paced, promising field of genetics research and the development of genetics-based therapies. Over the next several weeks, look for original, incisive articles from WallStreetCity.com concerning this exciting and complex field.
DNA Simplified
Think of DNA as a messenger code which carries instructions for passing traits, such as hair color, eye color, height, and disease susceptibility from one generation to the next. Visually, it resembles a ladder that has been twisted into a continuous spiral composed of two rails and several rungs. The rungs are composed of four molecules, called nucleotide bases - adenine, cytosine, guanine, and thymine. These bases are often referred to simply as A, C, G, and T. The molecules that these letters represent combine to form amino acids, which are the building blocks of proteins. Chemically, the rungs are actually composed of paired nucleotide bases - A and T always combine as do C and G. The rails are composed of an alternating pattern of two compounds - a sugar and a phosphate. This relatively simple, six-component chemical structure forms DNA. Different sequences of these letters in DNA spell out a genetic code that the human cell uses to manufacture protein, an important complex molecule that plays a major role not only in the function of a living organism, but also influences its growth, development and appearance.
Watson and Crick reached a milestone in biotechnology history when they determined the correct structure of a DNA molecule in 1953. However, this discovery brought forth new questions. How could a molecule with only four bases generate a code to make complex molecules such as proteins and ultimately, an entire living organism? The answer to that question, among many others, is likely to be revealed from a federally-funded research project launched in 1990. That research effort is the Human Genome Project.
The Human Genome Project
The desire to fully understand our genetic makeup culminated in the Human Genome Project. Two of the main goals of the Human Genome Project are to determine the exact chromosome location of each gene and to discover the specific sequence of the three billion base pairs.
Genes, which vary in length, are basically connected sections of DNA strands located on rod-like structures, called chromosomes, in a cell's nucleus. Together, all the genes of a single organism are referred to as the genome. The entire human genome is estimated to consist of about three billion base pairs (the As, Cs, Gs, and Ts) and approximately 100,000 genes.
Initiated in October 1990, the federally-funded project is a cooperative effort between scientists in the United States and 18 other countries including the United Kingdom, Canada, Germany, Japan, and Australia. The U.S. effort is divided among the National Institutes of Health, the National Human Genome Research Institute and the Department of Energy Human Genome Project. Originally estimated to cost $3 billion and last 15 years, the research process has been sped up by advancements in DNA-sequencing technology; the group expects to announce a working draft by mid-June.
A privately funded effort is also underway, organized by renowned genome researcher, Dr. J. Craig Venter, president of Celera Genomics, which specializes in gene-sequencing technology and databases. Ironically, Venter worked as a genomic researcher as the head of a lab for the National Institutes of Health, but later left in 1994. In 1998, Dr. Venter announced his intentions to map the entire human genome in three years. Although some question the thoroughness of his work, Venter and Celera Genomics are expected to announce in the next several days that they have completed a rough draft of the humane genome. (The mapping of the human genome involves three steps, and all three must be completed before the genome is considered mapped. The steps are: (1) sequencing, which Celera announced in April it had completed; (2) assembling, or putting the letters of each gene in the proper order, and (3) annotation, or identifying the gene and its function.)
Regardless of who finishes first, once the entire project is completed, scientists will have deciphered the genetic code and unlocked many previously unknown mysteries of life. These results should usher in a new chapter in medical advances that are likely to include new methods of diagnosing diseases and treatments to applications that have not yet been conceived. Experts and industry observers believe advances in biotechnology will rival those of the Industrial Age and the Information Age, and affect every aspect of our lives.
Biotechnology Applications
Increasingly rapid dissemination of the growing knowledge base in the biotechnology industry, aided by the ubiquitous computer, is increasing the industry's rate of development. The number of biotechnology medicines currently in testing attests to the fast pace at which the industry is growing. According to the Pharmaceutical Research and Manufacturers of America, as of March 2000, 369 medicines are in development, up from 284 in 1996, 143 in 1993, and 81 in 1988. Another growth indicator is the increasing amount of funds allocated to biotechnology research and development. The industry projects it will spend $26.4 billion on R&D in 2000, up 10.1 percent from 1999's total of $24 billion, and up from $11.9 billion in 1996. The number of patents granted has also increased by almost 10 percent annually, from just under 2000 in 1977 to over 8,000 in 1997.
These combined factors have led to remarkable biotech advances which had been previously dismissed as science fiction. The knowledge gained from the Human Genome Project will act as a further catalyst, greatly increasing biotechnology's scientific advancements. Biotech scientists are working on many technologies ranging from genetic engineering to environmental engineering. That which may have been scientifically impossible just a few years ago is now a reality.
Developments include a therapy called angiogenesis. Angiogenesis is simply the growth of new blood vessels. The body naturally grows new blood vessels in response to injury to supply blood flow to tissues and to heal wounds. The body controls the process of angiogenesis through a series of "on" and "off" switches. One application scientists have had success with is in the treatment of clogged coronary arteries. Using the body's own natural "on/off" mechanisms, scientists can direct the heart to grow its own blood vessels, thus improving blood flow to the heart and bypassing the clogged arteries. Eventually, this treatment may replace traditional bypass surgery and angioplasty. Angiogenesis therapy is also being explored in the treatment of cancer, diabetes, vascular disease and skin disease. Other genetic engineering advances include the development of cells which are capable of regenerating the brain and spinal cord, as well as growing muscle and bone cells. Other developments could allow parents to choose the sex of an unborn child. Genetics-oriented research could also lead to the development of vaccines against cancer and other life-threatening diseases.
Discoveries in plant engineering include vaccine-treated foods which willboost the immune system and fight various viruses, trees that can grow in a shortened time span, drought-resistant plants, and cotton that can grow in high-salinity soil. Animal engineering research efforts have produced sheep that automatically shed their wool and goats capable of manufacturing a human protein which can be used in the treatment of heart attacks and the prevention of blood clots.
Environmental engineering advances include the fabrication of bacteria which break down waste and environmental pollutants and convert them to inert matter. Bacteria that can produce biodegradable plastic from organic matter (as opposed to plastics traditionally made from petroleum distillates) could also be on the horizon. New fibers made from bacterial waste and a fiber derived from spiderweb silk that is five times stronger than steel could constitute other developments spawned by genetics research and engineering. Possible uses for this fiber include surgical sutures, and the development of artificial ligaments and building materials. Also, "smart" materials that can remember their original shapes may be developed for use in industrial and medical applications. Two examples of smart materials include a metal that can collapse itself for insertion into a blood vessel, expand to scrape the inside of clogged arteries, and then contract again upon removal, and a new construction material that can sense movement, such as in an earthquake, and dampen the vibrations. All of these developments could be on the not-too-distant horizon thanks to the benefits from genetics research and engineering.
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