Gene Hunters Go For The Big Score

In a gleaming Gaithersburg (Md.) laboratory, scientists, robots, and 30 machines called automated sequencers work around the clock to read the biological book of life. Starting with a soup of human DNA, they lift out sections of individual genes and partly identify 600 genes a day. This process, called gene sequencing, is making big strides toward the goal of identifying each of the estimated 100,000 human genes. That will help researchers unlock the deepest mysteries of biology--from the delicate dance of an embryo's development to the marvel of memory.

The scientists at the nonprofit Institute for Genomic Research (TIGR) and Human Genome Sciences Inc., which funds TIGR's work, have in mind something far more practical and lucrative, however. They believe their prowess at finding genes will revolutionize medicine and drug development--perhaps even replace the discovery strategies of today's biotech industry. Declares TIGR Director J. Craig Venter: "We are moving from the era of biotech into the genome era," where the search for new drugs starts differently. Conventional biotech companies tend to study a disease first, then engineer DNA to produce drugs or find ways to short-circuit the malady. The new gene sleuths first identify genes, then figure out what they do in hopes that this knowledge will lead to better ways to treat disease.

GOLD RUSH. The approach is years from producing a marketable product, but it is fast winning advocates. The search for genes has become "a gold rush," says John T.W. Hawkins, managing director of Russell Reynolds Associates Inc., a Washington-based biotech personnel recruiter. More than a half dozen startups have recently sprung up to join a handful of others in mining human genes (chart). "All the top-level scientists have probably been locked up [by companies]," says Stanford University Nobel Laureate biochemist Paul Berg.

Biotech powerhouses Genentech Inc. and Amgen Inc. have also leaped into the fray. "Sequencing will help us find more products--and find them more quickly," explains Amgen CEO Gordon M. Binder. And even the mammoth drugmakers are bitten with the gene-prospecting bug. Glaxo Holdings PLC is advertising in scientific journals for researchers with "a burning desire to go gene hunting." Rh ne-Poulenc Rorer executives say they're scouting for a gene-sleuthing partner. On May 20, SmithKline Beecham PLC helped put a value on such a company: Sources say the drugmaker inked a deal worth up to $120 million with Human Genome Sciences for exclusive rights to TIGR's growing trove of gene discoveries.

This heavyweight interest comes despite enormous risks. "The notion that gene discovery can drive the biotech enterprise is gaining acceptance but has yet to be proven," cautions Baylor University molecular geneticist Richard A. Gibbs. Decades after figuring out the genetic defect in sickle cell anemia, critics point out, no drugs that directly correct the flaws are on the market. Legal uncertainty also shadows the endeavor. Companies are racing to sequence genes so they can stake out claims to any chunk of DNA that offers even a remote chance of patentability--reasoning that if they own the rights, they will profit if their discoveries are used. But the Patent Office and the courts have yet to decide which discoveries are patentable.

In the long run, though, experts believe that reading the genetic code will transform medicine if only because DNA is biological destiny. Each person's genetic code, written with 3 billion molecular "letters," governs everything from eye color to some risk of heart disease. What's more, genetic mutations that occur in life can lead to scourges such as cancer and diseases related to aging. Finding the responsible bits of DNA, figuring out what they do, then devising a way to correct the flaw would seem a surefire way to beat disease. It isn't that simple, of course. The search for the gene that causes cystic fibrosis, for example, cost $150 million and took three years.

Since that 1989 discovery, however, "a lot of things have come together," says venture capitalist Mark Levin of the Mayfield Fund, founder of Millennium Inc., an $8.45 million gene-sleuthing venture in Cambridge, Mass. Initially, many thought the government-funded Human Genome Project, a 15-year effort to produce "maps" and sequences of human and animal DNA, would take decades to pay off. No more. "We have all been flabbergasted at how much faster everything is going than we thought," says Dennis T. Drayna, a founder of gene prospector Mercator Genetics Inc. More than just mapping genes, scientists have begun to uncover those linked to such killers as atherosclerosis, cancer, and Alzheimer's disease--genes with the potential to create blockbuster drugs.

FIXIT GENE. That has lured big drugmakers and venture capitalists. It also has created a "paradigm earthquake" for drug development, says Kevin L. Kinsella, founder of La Jolla (Calif.)-based Avalon Ventures and CEO of Sequana Therapeutics, a $10 million startup that opened its doors on Aug. 1. With today's techniques, researchers probe the body's metabolic pathways--complex sequences of biochemical reactions--searching for ways to intervene in disease. Some biotech drugs come from turning the body's own proteins into treatments, as in the case of Amgen's Epogen, which stimulates the production of blood cells. Other approaches entail finding chemicals that somehow change a metabolic pathway--by blocking an enzyme or turning off a gene, for instance.

The results often fall short of expectations, says Kinsella, because "these metabolic pathways are far more complex than anyone thought." There may be dozens of proteins involved in a disease--and a drug that mimics or targets just one is unlikely to work precisely, without side effects. "If you don't understand the pathway, you may target the wrong part of it," says David J. Galas, who is leaving the government genome effort to become vice-president for research and development at Darwin Molecular Technologies. The way to improve the odds, says Kinsella, "is to go back to the underlying genes."

Consider cancer. Scientists have already found several types of genes that contribute to malignancies. Some, called tumor suppressors, work like brakes, checking cell growth.

If a tumor-suppressor gene is damaged, the brake pedal is released, allowing cells to grow and divide into deadly tumors. Another newly discovered gene, one of several in a chain that leads to colon cancer, is more like Mr. Fixit. When the gene is flawed, cells become less capable of repairing damage to other sections of DNA.

These findings have stimulated "great hope and excitement," says geneticist Raymond L. White of the Howard Hughes Medical Institute at the University of Utah. BUSINESS WEEK has learned that in new, unpublished experiments at one major university, scientists stopped a tumor in a test tube by adding a correct copy of a tumor-suppressor gene into the cells--in essence, putting the brakes back on. Once researchers figure out how the Mr. Fixit gene works, there's the seductive prospect of a drug capable of preventing cancer and other diseases caused by DNA damage. More likely, though, the new genetic knowledge will lead to a variety of drugs or therapies that are aimed at correcting a flaw caused by one of the many genes involved in cancer.

In the race to mine these genetic nuggets, companies bet on two competing approaches. TIGR's strategy is brute-force sequencing--reading part of the codes of thousands of genes a week. That fragment is enough to tell Venter and his team if the gene is new or potentially interesting. If it's both, they decode the entire gene and try to figure out what it does, a prerequisite to determining its therapeutic potential. Venter has filed patent applications on just the original gene fragments, but legal experts say that the full gene's structure and function will be needed to get a patent.

ZEROING IN. Other companies, including startups such as Sequana, Millennium, and Darwin Molecular Technologies in Kirkland, Wash., begin with particular diseases in mind. Sequana, for example, is targeting hypertension, diabetes, and obesity. Since some percentage of the people with these diseases inherit them, companies such as Mercator Genetics find families who are unusually susceptible or resistant. Then, using the "maps" created by the Human Genome Project, they zero in on the responsible genes--a strategy known as "positional cloning."

It's too early to tell whether one approach will prove superior. The genome business "is where the original biotech industry was 15 years ago," says venture capitalist Robert Johnston. Nor is it clear how fast the companies can transform their genetic knowledge into new drugs. Some biotech executives remain skeptical. "We have a refrigerator full of sequences, but we don't know what they do," says Kathleen Mullinix, CEO of Synaptic Pharmaceutical Corp. Still, the startups are betting that tales told by twisting strands of DNA will form a new chapter in medicine and drug development. Says biochemist Radomir Crkvenjakov of Argonne National Laboratory: "This is the future of biotechnology."

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