Barnyard Biotech Breeds High Hopes

How Dolly and friends could lead to fat profits

First came Dolly, the famous cloned sheep from Scotland that spawned a huge ethical debate in February, 1997. Then came Gene, a Wisconsin-born cloned calf.

Since then, science has created a herd of biotech animal wonders, including not only clones but so-called transgenic creatures whose genes have been altered. Two sheep named Polly and Molly, for example, were engineered by Dolly's creators to make a drug in their milk. And a family of seven transgenic cattle, cloned by a Worcester, Mass., company, was described in June at a scientific clone fest in Washington.

PALS FOR DOLLY. Most recently, researchers in Hawaii and Japan say in tantalizing reports that they have replicated in mice and cattle the most startling claim about Dolly--that she was cloned from an adult animal cell. Dolly, finally, "is not alone," says gene engineer Ryuzo Yanagimachi of the University of Hawaii.

The question now is: Are Dolly and her biotech barnyard kin the stuff of big profits as well as headlines? The answer won't be clear for many years, but a number of companies are betting that there is indeed money to be made. A new industry is taking shape around the twin technologies of transgenics and cloning. Companies such as Genzyme Transgenics in Framingham, Mass., PPL Therapeutics PLC in Scotland, and Pharming in the Netherlands are investing millions to develop transgenic drug-producing rabbits, goats, cows, and other animals. They are also linking up with new cloning companies, including Advanced Cell Technology Inc. (ACT) in Worcester and Infigen Inc. in DeForest, Wis., who envision such additional products as cloned herds of disease-resistant steers. "Cloning will enter the commercial market within two years," predicts James M. Robl, co-founder of ACT and a professor at the University of Massachusetts.

That may be a little too optimistic. After all, scientists working with malleable embryo cells have been able to clone livestock for more than a decade. Indeed, back in the 1980s and early 1990s, a hyped commercial industry that was based on cloning "fell flat on its face," says Charles R. Looney, a veteran of one failed company, who now heads Ultimate Genetics, a small Texas startup.

Since then, however, the science has made great strides. One breakthrough has been showing that specialized cells, such as those already on the path to becoming skin, could be reprogrammed to recreate entire animals like Dolly or the Worcester Seven. Another breakthrough is coming through the marriage of cloning to the related technology of transgenics.

To create transgenic creatures the traditional way, scientists inject DNA directly into eggs or embryo cells. But that's a notoriously inefficient process. Researchers may run through 25,000 eggs to produce fewer than a dozen transgenic animals, says Steven L. Stice, chief scientific officer at ACT. What's more, the resulting animals typically don't have the desired gene in all their cells, and must be refined through a generation or two of breeding.

Cloning could change all that. Scientists can first add the desired gene to a cell and then clone the cell that evinces the desired trait. In fact, boosting the efficiency of producing transgenic animals was the goal that first inspired Dolly creator Ian Wilmut of Scotland's Roslin Institute. And it works. Starting with fetal skin cells, ACT scientists were able to make seven transgenic calves in 876 tries--a huge gain. "We've shown it's feasible to use transgenics and cloning to produce animals," says Stice.

The advances are brightening the prospects of turning animals into living pharmaceutical factories. Already, Genzyme Transgenics, PPL, and Pharming have genetically engineered mice, rabbits, goats, sheep, and cows to make scores of different proteins. Pharming, for instance, is working with the American Red Cross to make cows that would produce fibrinogen, a protein capable of stanching blood flow from even severe wounds. It can be extracted from donated blood, but there's not nearly enough to meet the expected demand. And fibrinogen is too complex to be made by the biotech industry's so-called recombinant method of using gene-altered bacteria or yeast.

In contrast, transgenic animals can not only make fiendishly complex proteins but can often do it at a fraction of the cost. After all, scaling up production is easy. "You virtually stick the animals in a field and let them get on with it themselves," says Julian Cooper, COO of PPL Therapeutics. In fact, the biggest cost of making drugs in animal "biofactories" is purifying the desired substance from the animals' milk, not creating the animals in the first place.

The ability to make large amounts of once rare drugs cheaply could bring new uses for the drugs, says biotech analyst and Senior Vice-President Mary-Ann Gray of Raymond James & Associates. William Drohan, senior director of plasma development at the American Red Cross, for instance, expects that large amounts of fibrinogen will make possible everything from bandages and powders that rapidly stanch bleeding to an expanding foam that can plug internal holes from gunshot wounds. "It's the first major change in treating bleeding since gauze was discovered 3,000 years ago," he says.

Just making proteins in bulk, however, isn't a very sexy or lucrative business. That's why companies such as Pharming and PPL hope to become drug developers as well as transgenic experts. One of PPL's lead products, for instance, is a natural enzyme called alpha-1-antitrypsin. It can dampen the inflammatory reaction that damages the lungs of cystic fibrosis patients. Previous clinical trials were inconclusive because companies couldn't supply enough of the protein to test it properly. Now, PPL has 700 transgenic sheep making the protein in their milk. Phase II clinical trials are under way in Britain, with U.S. trials expected later this year. "If it can reduce the inflammatory response as we hope, it will add many years to people's lives," says Dr. Robert J. Beall, president of the Cystic Fibrosis Foundation.

Scientists see even bolder things ahead. They envision knocking out the gene for the proteins that turn lethal in mad cow disease, for instance, creating herds of cattle impervious to the scourge. As the cloning of adult animals becomes more efficient, companies plan to use cloning to copy valuable animals such as top semen-producing bulls. And they expect to create pigs with added human genes and deactivated pig ones, so that pig organs can be transplanted in people without being rejected.

MANY FAILURES. But all of this faces daunting scientific and regulatory hurdles. Indeed, researchers are still struggling to understand why cloning leads to far more failed pregnancies and dead or deformed animals than to successful live births. "We need to find out why 99% of attempts are failures," says cloner Tanja Dominko of the Oregon Regional Primate Research Center. "It's still one of the biggest problems in the industry."

Then comes the challenge of producing viable medical products. "Transgenics and cloning are at a crossroads," asserts Paul Rohricht, U.S. business development manager for PPL. "We have to prove ourselves by getting products in the clinic and approved." It can be difficult to purify drugs made in animals' milk. And because these are radical new methods, regulatory agencies will be looking for extra proof that the products are safe. Once those hurdles are cleared, Dolly and the whole biotech barnyard will be much more than scientific curiosities.