WOW...CHECK THIS OUT.....
dbusiness.com
dbusiness.com
Seeking riches in the secret life of genes
Jul 28, 2000 07:35 AM ET
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By Karen J. Cohen, dbusiness.com
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FORT LAUDERDALE and SARASOTA, Fla., July 28 (dbusiness.com) -- Earlier this month, Riviera Beach-based AmeriPath, which runs pathology practices and laboratory diagnostics, cinched a deal with Genomics Collaborative Inc. to provide researchers with blood and tissue samples for DNA analysis.
"To develop the information, to know what genes are important and what are not, and to develop therapeutic procedures or drugs, one has to have access to the raw material," said AmeriPath vice president and medical director Dr. Dennis Smith. "No one has access to the material now, that's the biggest hold-up in the whole advance of the Human Genome Project."
It wasn't the magic words "open sesame" but billions of government and private dollars that pried open the DNA treasure trove. Now scientists, doctors, investors and gold diggers of all stripes stand before a heaping pile of biological gems, intoxicated by the riches that await those able to cut and polish them.
Last month, the government-funded Human Genome Project and the Celera Genomics Group (NYSE: CRA) announced the all-but-completed decoding of the double helix that spells out human genetic language. Even before the announcement, companies were vying to isolate a facet for themselves, believing real wealth lies in creating commodities out of the secret life of genes.
Opportunities abound
While a gene itself can't be patented, a genetic treatment method or diagnostic process can be. A number of firms hope to do just that, then sell or lease the patent to pharmaceutical giants with the resources to turn them into drugs.
AmeriPath (Nasdaq: PATH) and Genomics plan to establish a kind of genetic library.
"Researchers can come to us and say 'I need 100 colon cancers from the state of Florida,' and we will be able to get them DNA from those types of cases," AmeriPath's Smith said.
"We are developing a database of information and it's the size and diversity of the database of information together with the way the information is collected and the way that information is presented that will make a database valuable to researchers," added Dr. Michael J. Pellini, president and COO of Genomics Collaborative. Drug companies seeking to develop specially targeted potions would find such information of great value, he said.
Others, however, see the opportunity in the reverse order: discovering gene function by analyzing drugs already on the market.
DNA Print Genomics Inc. of Sarasota is going the Sherlock Holmes route of deductive reasoning. Founded by molecular biologist Tony Frudakis and mathematician Myung Ho Kim, the first step is developing a set of algorithms to isolate genetic patterns by examining the DNA of people with adverse liver reactions to a commonly prescribed anti-cholesterol medicine.
In that fashion, the company believes it will find both the complex of genes and environmental factors that can predict whether a person's liver will be at risk from the medication.
With this information in hand, drugs can be tailored to a person's genetic map. The company plans to make money by patenting the genetic pattern associated with each drug reaction. While these may be licensed to pharmaceutical firms, the company also will charge doctors a fee for running their patients' profiles through its database.
"A good analogy is that the human genome project is like a dictionary. It is up to each company to learn how to make sentences, paragraphs and books that make sense," Frudakis said. "The worldwide government made sure that no one can own the dictionary. But you can write a book, and it's your book."
Funding the question
Dr. Lloyd Mitchell of North Carolina-based Intronn, said companies are hurrying to position themselves as information providers. Intronn has developed an experimental technology for rewriting a targeted gene at the RNA level - the structures that carry out the DNA programming.
Still, firms may have to do a lot of explaining and parsing to acquire the capital they need for development.
"One venture capitalist we approached recently in Boston said I shouldn't bother describing what we do in info tech terms because they were not going to fund a biotechnology anyway," Mitchell said. Other venture capitalists, however, said they would prefer to invest in just the information technology part of his company, and not fund its research.
"We might have to split Intronn into two companies and make one a straight information technology play," he said.
"The data coming from Celera and the Human Genome Project is creating demand for companies to develop the information into usable form," said John Buchanan of San Francisco-based Burrill & Co., which just raised a $110 million biotechnology venture capital fund. "You are going to see a lot more companies jumping on the genomics information technology bandwagon and going public. It's a very hot thing."
But as the gold rush intensifies, the field is becoming crowded and confused, said Robert Burrows of Gene Logic (Nasdaq: GLGC), a Gaithersburg, Md., genomics information and development firm. "It's difficult to determine which companies have the long-term legs, which ones have the stronger business models," he said.
Biotech companies are working feverishly to stay on the winning side. Burrows said the industry is shaking out along four main lines: information providers like Celera and Gene Logic; drug makers that develop products; toolmakers like software developers; and finally, fee-for-contract researchers.
A report by the investment and merchant bank Oscar Gruss & Son Inc. said by some estimates, the total market just for bioinformatics - the computer tools and databases genomic research depend on - could exceed $2 billion within five years.
A company's challenge, then, is finding a reasonable niche, staking a claim and figuring out how to exploit it.
Staff writers Ray Bolger, Donna Balancia, Allan Maurer and Jeff Shuttleworth contributed to this story.
Karen J. Cohen is a staff writer for dbusiness.com. E-mail her with story ideas and comments. |
