BioWorld International Correspondent

The second phase of the Norwegian Functional Genomics Program (FUGE) has secured NOK420 million (US$70.3 million), which will be allocated to research programs between now and 2011, but the board responsible for the initiative is seeking an additional NOK490 million. An extra NOK45 million is being made available in October to fund industry-driven projects.

Despite Norway's burgeoning wealth, driven by its oil and gas exports, the country has kept a tight rein on research spending. The previous phase of FUGE, which ran from 2002 to 2006, received about NOK150 million annually - just half of what the country's research community originally sought to put the state's biotechnology research base on an internationally competitive footing.

The current allocation to FUGE has been pegged to the same level, but its board is seeking a restoration of the originally targeted annual spending of NOK300 million when the government decides on its 2008 budget in the fall.

"In October this year, we will see what they will do next year," FUGE coordinator Steinar Bergseth told BioWorld International.

A major constraint on government spending has been its overriding aim not to overheat the economy with oil and gas revenues and thereby introducing inflationary pressures. Most of Norway's surpluses have been invested in a pension fund - the Government Pension Fund of Norway (previously the Petroleum Fund) - which is currently worth around $300 billion.

Only a small percentage of this is spent within the economy every year, and this is diverted toward education, provisions for the elderly and social benefits. International equities and other financial instruments are the fund's main investment targets. Domestic firms do not receive funding.

The government aims to grow the biotechnology sector organically, and it wants the private sector to provide most of the investment, Bergseth said. The problem is that Norwegian investors are not strongly engaged with biotechnology. "They have not woken up yet," Bergseth said.

The first phase of FUGE helped establish core research platforms in bioinformatics, integrative genetics, Arabidopsis research, microarray technology, structural biology, proteomics, molecular imaging, transgenic mice, microbial technology and two biobank initiatives.

"Our main task was to make Norway one research nation, if you can put it that way," Bergseth said. "They are all in place and have been in place for three years."

In addition, 22 biotechnology companies shared about NOK117 million in funding, mostly to support early stage product development for which there is little investment capital available in Norway. Tromsø-based Lytix Biopharma AS gained funding for its development of peptide-based cancer drugs, for example, while Avexxin AS, of Trondheim, used cash from the program for early stage drug discovery work in rheumatoid arthritis and glomerulonephritis.

The program also funded several companies in the aquaculture sector, a key industry for Norway. Those included Overhalla-based Pharmaq AS, which received funding for development of a vaccine against Piscirickettsia salmonis, an intracellular pathogen of several species of farmed salmon and trout. lesund-based PatoGene Analyse AS gained support for a project characterizing viral pathogens of farmed Atlantic salmon.

In FUGE II, support for the core research platforms will continue - on the advice of an international evaluation conducted late last year - but several will be networked nationally across several centers, following the uptake of technologies, such as proteomics and molecular imaging, that were difficult to acquire at the beginning of the decade.

Approximately half the budget will be available for research projects.

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