From Sept. ’00 Ind. Invs. 60seconds with Dr. William Haseltime, CEO Human Genome Sciences
Q: On June 26th, scientists announced that they had completed the first phase in mapping the human genome, the collection of genes that defines the human species. Should the biotech industry cheer?
Ans: I don’t think biotech companies stand to gain at all. Basically, total genome sequencing is largely irrelevant for medicine and mostly irrelevant for scientists. What is important is not the genome but the specific genes, and genes have been in the hands of pharmaceutical and biotech companies for more than five years now. So, while the systematic use of human genes for medicine is very important, this particular event has no other relevance than public relations value.
Q: It won’t lead to any breakthrough treatments?
Ans: The rough draft of the Human Genome Project will not. But, the systematic understanding of human genes and their functions has already revolutionized medicine. The pharmaceutical industry has been in the post-genomic era for five years. It’s peculiar that the world at large seems to believe it has just begun with a press release.
Q: So investors have no play for this story?
Ans: None at all. Companies have already used knowledge of genes to produce new drugs, mostly antibodies and other proteins. It will be the large pharmaceutical companies that 10 years from now will benefit from having a stronger pipeline. But genomic companies will not particularly benefit. Service businesses, with their generally low margins, are typically rewarded with low multiples. Many investors have made a mistake. They have confused service companies with pharmaceutical companies.
Jim |
