"Disillusion with genetic advances depresses biotechs"
A couple of issues preventing my purchase of biotechs selling for less than cash is 1) a lack of an advanced scientific degree, 2) the lack of biotech product advancement, and 3) concerns like the following:
"...Drugs from gene analysis probably won't reach the market for another 10 or more years, scientists now say..."
A company with a significant burn rate will simply run out of cash -- if they are not currently profitable. That is, of course, the underlying problem. Unless one has an advanced medical degree, then who can determine what drugs will receive FDA approval?
Reuters Company News
FEATURE-Disillusion with genetic advances depresses biotechs
By Toni Clarke
NEW YORK, July 5 (Reuters) - Human Genome Sciences chief executive William Haseltine predicted in March 2000 that, within two or three years, his company would be selling drugs derived from a new understanding of human genes. The world is still waiting.
The company, which raised nearly $2 billion on its promise to develop drugs by analyzing the function of genes, is still years away from bringing a product to the market. Its shares, which were trading at $103 in early 2000, are now priced at less than $15.
Human Genome Sciences (NasdaqNM:HGSI - News) is one of dozens of drug developers whose shares have plummeted in the last year amid a series of disappointing results from clinical trials and, recently, from the possible effects of an insider trading probe at ImClone Systems Inc. (NasdaqNM:IMCL - News)
The disillusion follows what many now describe as overly optimistic expectations of the speed at which medical advances would emerge from advances in molecular biology that culminated in 2000 with the mapping of the human genome.
"The financial community believed there would be these tremendous breakthroughs in a short period of time, but that belief was not based on any reality," said Adrian Hobden, president of Myriad Pharmaceuticals, the drug discovery unit of Myriad Genetics.
Drugs from gene analysis probably won't reach the market for another 10 or more years, scientists now say. Yet many pharmaceuticals companies are relying on genomics, or the analysis of gene function, to help spawn a new generation of blockbusters able to fight complex diseases such as cancer.
NO BLOCKBUSTERS ON THE HORIZON
A study by research company Datamonitor found that at least five of the world's biggest drug companies do not have any such blockbusters in their pipelines, even though in 2001 they spent record amounts on research and development.
"Drug companies are in a transitional period where they are moving from traditional chemistry to biotechnology, and they are on a learning curve," said Jeffrey Trewhitt, a spokesman for the Pharmaceutical Research and Manufacturers of America, a drug industry group.
"It is literally a matter of learning to use this technology," he said.
Last year, the number of new drug applications filed with the U.S. Food and Drug Administration fell 20 percent to 111 compared with the previous year's 138, while the number of new drugs approved fell 30 percent to 66 from 94.
It is far from a given, however, that genomics is the panacea for the drug industry's doldrums that many had hoped it would be.
Millennium Pharmaceuticals Inc. (NasdaqNM:MLNM - News), which like Human Genome Sciences was founded on the belief drugs could be developed from genes, has yet to produce a drug of its own. It conceded earlier this year that the process is taking longer than it expected.
"Whether genomics can provide new targets quickly and cost-effectively enough remains a major question," Joseph Dooley, Accenture consulting firm analyst, said in a report.
Genomics companies believe that if they can discover the function of a particular gene, they can use mass screening techniques to find a chemical compound that might interfere with the gene and perhaps halt progress of a disease.
The problem, skeptics say, is that it is difficult to pinpoint whether a gene or protein that appears to have interesting biological characteristics is in fact the cause of a disease.
"Biological function or significance of a drug target does absolutely not equal medical or clinical significance," said Toni Schuh, chief executive of Sequenom Inc., a company that claims it is able to help scientists isolate clinically relevant genes.
"The finding that a protein is involved in the control of blood pressure does not mean that manipulating this target with a drug enables you to control blood pressure in a human being," Schuh said.
Most drugs over the last 50 years have been developed against a limited number of molecular targets that were already known to be clinically relevant.
"Penicillin was developed by the observation that fungi inhibited bacterial growth," said Steven Delco, an analyst at Fortis Securities Inc. "Many drugs were discovered that way; somebody noticed something in nature that had an effect in humans."
These targets, however, seem to have been mined to exhaustion. Finding new ones is the challenge.
"Genomics can solve the problem," said Jonathan Rothberg, chief executive of CuraGen Corp., a company that's betting gene analysis will help lead to drugs for hitherto intractable diseases.
"Just as Ford industrialized cars, I'm industrializing molecular biology," he added.
But an increasing number of companies now feel that throwing compounds at targets is only useful in combination with techniques and technologies that can identify which of the discovered targets definitely lead to disease.
"High throughput screening is useful but does not absolve you from using your brain," said Paul Herrling, head of research at Novartis AG, which is pouring millions of dollars into genomics and other genetic research.
Some big drug companies are beginning to recognize the limitations of functional genomics, a process that has been likened to reading 50,000 books in order to discover information contained in just five books. The question now is, how to figure out which five books are the relevant ones.
The answer may be in genetics, but genetics with a new twist. The mapping of the human genome has made it possible for the first time for companies to compare the genes of healthy populations with those of populations in generally poor health, then flag those points in the genome where risk factors for a particular diseases are more prevalent.
One of the first big drug companies to invest substantially in genetics is GlaxoSmithKline Plc (London:GSK.L - News), which over the last five years has accumulated 80,000 samples of human DNA. The company now can go into this database and begin to compare the genetic makeup of, say, asthma patients, with those of healthy individuals and, using information gleaned from the genome, pinpoint the variations that may be associated with the disease.
"Genetics and genomics will play a major role in the future of the healthcare industry," said Alen Roses, head of genetics research at GlaxoSmithKline.
Over the next two to five years, the biggest use of genetic information will likely be to create genetic profiles to establish who is most likely to benefit from existing drugs and who is most liable to suffer a potentially serious side effect, he said.
"Creating safer products is becoming even more necessary if they are to compete in this highly regulated market," Roses said.
With all genetic research, however, the promise of new drugs is still just a promise.
"At this point," said Herrling, "there is an element of belief, and an element of vision," |
