Genomics Concerns Stage a Comeback
GENE MACHINES
DAVID P. HAMILTON
Companies Race to Build High-Speed Genome-Sequencers
August 6, 2004
Don't look now, but after powering a biotech stock mania that imploded four years ago, the largely discredited business of "genomics" is back.
A shorthand term for attempts to exploit the recently deciphered human genetic code, or genome, genomics entranced investors in the late 1990s who believed it could lead to a vast array of new medicines, therapies tailored to a patient's inherited quirks and a deep new understanding of disease.
None of those forecasts were wrong, exactly, but hype over the nearing conclusion of the Human Genome Project led many investors to believe that genomics profits were far closer than they turned out to be.
When biotech stocks crashed in 2000, genomics companies took the brunt of the blame. Survivors such as Celera Genomics and Incyte Genomics went on to reinvent themselves as more straightforward drug discoverers, largely eschewing lofty talk about harnessing a genomics-based medical revolution.
As if to prove that no biotech fad can fall too far out of favor, however, venture capital is once again pouring into genomics concerns. Like their predecessors, the companies attracting funds are promising better, faster tools and databases that can tease out and interpret genomic information from humans and other species, with the hope of ultimately speeding medical discovery and treatments.
One hot area is a race to build high-speed genome-sequencers -- gadgets capable of reading millions or billions of "letters" from the genetic code in a matter of hours. Such high-speed gene sequencing, proponents argue, might eventually allow a doctor to order up a full scan of your genome, or that of a mysterious bacterial infection such as the one that killed Muppets creator Jim Henson, as easily as she now orders cholesterol and other blood tests. The results could help pinpoint hard-to-diagnose conditions and determine which drugs are most likely to work for a given individual.
These long-term projects ultimately aim to produce a complete map of an individual human genome for less than $1,000 in just a few hours. By contrast, it took the federal effort more than a decade and roughly $300 million to sequence the first human genome.
In the future, "genomes will be sequenced like McDonald's does burgers," says Jonathan Rothberg, chief executive of CuraGen Corp., whose 454 Life Sciences unit is hard at work on a novel sequencing technology. "When you're 40, you'll have your genome sequenced; when your children are born, they'll be sequenced."
Traditional gene sequencing is a tedious and time-consuming process of analyzing the genetic "letters" encoded in DNA -- three billion of them, in the case of humans. Researchers cut up DNA from an organism into small pieces, insert them into fast-reproducing bacteria that churn out zillions of copies, then run the resulting DNA soup through robotic sequencing machines that read out code sequences like ATGGTCACG. Celera, which mounted a private sequencing effort to compete with the federal genome project, eventually required 300 huge sequencers and three years to put its first genome together.
By contrast, today's high-speed sequencers want to make sequencing small and incredibly fast. 454, for instance, is developing "massively parallel" sequencers that decode DNA in more than a million tiny wells pitted in a 2.5 square inch plate. The entire sequencing gadget fits in a box roughly the size of a microwave oven, and 454 says it has already sequenced several bacterial genomes with it.
Helicos BioSciences, a tiny company in Cambridge, Mass., is beginning an ambitious effort to sequence single molecules of DNA by running them through microscopically small channels. (Other techniques generally require billions upon billions of copies of the target DNA.) So is Solexa, a U.K. company whose technique involves attaching stretches of a single DNA molecule to the surface of a chip and analyzing them via laser light and fluorescent tags that identify particular DNA "letter" sequences.
Such high-speed sequencers aren't likely to show up in your local hospital any time soon. Some of the novel sequencing approaches may fail to live up to their promise, and it will be years before any of them can tackle all three billion letters of the human genome in a reasonable period of time. James Golden, an analyst with Life Science Insights, a market-research firm in Framingham, Mass., thinks it will be more than a decade before anyone produces such a device for less than $1,000.
That time horizon hasn't stopped venture capitalists from opening their checkbooks. Despite its tiny size, Helicos has already raised $27 million from venture capitalists eager to get in on the ground floor. Since its inception four years ago, 454 has raised $60 million from CuraGen and venture investors. Solexa, only six years old, says it has received £15 million ($27.4 million) in venture capital.
Such sums are particularly notable given the way investors fled from genomics "tools" companies after the 1999-2000 stock-market bubble. Ever since, investors have shunned most companies developing genomics technologies, preferring instead to finance the development of new biotech drugs, despite the high risk of failure.
Even Mr. Golden, a former official with 454 who is generally enthusiastic about sequencing, finds the current level of excitement about the new technologies a bit bewildering. "These companies have raised an immense amount of money," he says. "It's stunning, but also a little disturbing. It feels very 1998 to me."
Some established companies are also exploring new sequencing technologies. Agilent Technologies Inc., for instance, is researching a way to sequence single strands of DNA by drawing them through tiny pores in a membrane. Applied Biosystems, the leader in conventional sequencing technology, says that it continues to evaluate new sequencing techniques and declines to give details.
Venture capitalists who have invested in these companies insist they are taking a sober approach. Helicos investor Corey Mulloy, a partner with the venture-capital firm Highland Capital, notes that sales of traditional DNA and RNA analysis equipment -- mostly to research laboratories -- currently amount to more than $2 billion annually.
"Those are pretty darned good markets," he says. And if high-speed sequencing equipment eventually finds a use in routine medical diagnostics, those markets could be many times larger, although financiers like Mr. Mulloy are reluctant to project that far ahead.
That might be wise, since it's not entirely clear that future medical treatments will require as much full-genome sequencing as visionaries like Mr. Rothberg predict. While the developers of high-speed sequencers slog ahead, other researchers are busy cataloguing subsets of genetic differences that could explain a great deal about an individual's susceptibility to disease and the likelihood that particular drug treatments will be effective.
Such "biomarkers" are generally far cheaper and faster to analyze than entire genomes, and could conceivably render full-genome sequencing unnecessary in many cases. Identifying the right sets of biomarkers, however, is still almost as much an art as a science, and the effort is still in its infancy.
Still, sequencing proponents retort that high-speed sequencing will make it possible to quickly identify previously unknown pathogens like Severe Acute Respiratory Syndrome, or SARS, a technique that would also be valuable in defending against bioterror attacks. Fast, cheap sequencing should vastly improve understanding of genetic variations among and between species, making possible finer-grained techniques for genetic modification. The technique could even lead to aging treatments if it sheds light on ways the human genome changes as individuals age.
"The sequence is the ultimate completist view of a person's evolutionary history and prognostic future," Mr. Golden says.
Write to David P. Hamilton at david.hamilton@wsj.com |
