INTERVIEW: Applied Biosystems Eying European Proteomics
By SUSANNAH RODGERS
Of DOW JONES NEWSWIRES
LONDON -- For biotech followers, Applied Biosystems Group (ABI) is an all-American company, but President Mike Hunkapiller is keen to drive home the message that the U.S. group isn't new to Europe or proteomics.
Applied Biosystems, part of Applera Corp., has been here for some 20 years, has around 20 offices across Europe and has cornered many of its markets. It sells machines that can search for the gene and protein makeup of substances.
AB's 3700 machines were instrumental in the work of the U.K.-based Sanger Centre as it helped in the combined international effort to decode the genes of the human body, which culminated last summer in the production of a gene map.
The gene map confirmed that there wasn't a simple one gene-one disease link. As the drug industry's focus increasingly turns now to the study of the proteins involved in disease, AB is hoping to lead the way in selling protein-deciphering systems.
But the road is going to be a long one, Hunkapiller told Dow Jones Newswires in an interview, and the demand will come from many companies, not just the big players.
"Proteins are much more complicated chemically than DNA. There's not one tool that can do all that you want," he said.
"Because the protein world is a lot more complicated than the gene world, I don't think we're going to have any one company sequencing the proteins in the human body in the same way that Celera sequenced the genome," said Hunkapiller.
The work of Celera Genomics Group (CRA), also owned by Applera Corp., was key to the U.S. side of the international human genome project.
The gene map also revealed that, contrary to earlier higher estimates, there are probably only around 30,000 genes in the human body. In contrast, there are far more proteins, and scientists think every disease can be linked to a different protein.
And it's not just the pharmaceutical sphere that interests Applied Biosystems. AB is one of the world's largest suppliers of forensic science kits used by the police.
Forensic sales probably count for around 7-8% of AB's total sales of genetic analysis tools, a poignant statistic as the world's largest ever forensic investigation gets underway at the site of the World Trade Center attacks in New York.
And AB has seen increasing demand for its technologies from the developing economies of central and South America and Asia.
The principal demand from these countries has been not for drugs or forensic research tools, but for systems for use in agricultural research and development, where agriculture is a major source of foreign exchange earnings, said Hunkapiller.
Still, the biggest product growth rate at the moment is in AB's proteomics systems, says Karl-Heinz Franzen, vice president of Applied Biosystems Europe. Gene-sequencing systems, in contrast, although still strong sellers, saw their sales growth peak with the deciphering of the gene map.
And as protein-based research increases, so does the appetite of AB's biggest customer segment worldwide, the publicly-funded sector, from universities to hospital research laboratories.
"There's more protein-based research, and also public funding has increased," said Franzen. "It's much easier to get funding as a university if you're looking at protein research. The increase in pure (gene) sequencing is not so dramatic anymore."
Revenue comes not just from sales of systems, but also from the reagents used in the systems. These chemicals, which have to be replaced every so often, account for up to 50% of sales.
In all, close to one third of AB's business is in Europe, says Franzen, who joined the company in 1991. The first European office opened in 1983, joined by four more by the early nineties, rising to the current 20.
"What we're doing from a business point of view is running the business in Europe as a European business," he said. Although the European side sells the same products as its U.S. headquarters, there has had to be some tailoring to customers' needs.
This has meant centralizing European manufacturing and distribution in the Netherlands to satisfy demand for swift delivery. Research and development remains almost exclusively in the U.S.
Also taking off in Europe are early-access schemes, involving among others the U.K. proteomics specialist Oxford GlycoSciences PLC (OGSI). Under the scheme, a client such as Oxford can buy AB's systems before they go on the market, in return for feedback on how to perfect the systems.
The early-access scheme is proving successful, said Hunkapiller, generating useful feedback that is ploughed back into the research and development process before full launch.
Hunkapiller is keen to spread the message that AB was in the field of protein research alongside the early biotechnology companies, before it became a hot field in mainstream scientific writing and among venture capitalists. AB itself started as a venture capital startup in 1981 and within two years had a foothold in Europe.
Around 15-20% of AB's customer base is biotechnology companies, and the current shaky financing environment for biotechs has impacted the purchasing decisions of some clients, said Hunkapiller.
But the upside of the biotech sector is that it's the cash position, rather than share price, which tends to influence purchasing decisions. So, often demand for gene sequencers and protein mapping systems continues irrespective of stock market turbulence.
Hunkapiller should know his stuff. He's published over 100 scientific papers on the type of systems that AB sells, and has been at the company since 1983. AB estimates its systems are now used in over 100,000 laboratories around the world.
"What I want to emphasize is that we're not new to proteomics and we're not moving from genomics into proteomics," says Hunkapiller.
He borrows a DNA metaphor used by Craig Venter, founder of Celera, to illustrate the future potential for protein study.
"If you take a caterpillar, a chrysalis, and an adult man, the DNA is almost the same - but the proteome is quite different."
Now he's hoping to spread more of that news as the proteomics race heats up. |
