BioWorld International Correspondent
HELSINKI, Finland - "Welcome to the No. 1 country in the world in terms of - you name it," said Finland's former prime minister and the speaker of parliament, Paavo Lipponen, addressing the opening session Tuesday of BioFinland 05 at the Helsinki Fair Center.
Finland has an enviable track record in terms of education, environmental protection and a political system untainted by corruption. But its fledgling biotechnology sector will not be laying claim to a similar ranking any time soon.
The Finnish state has invested heavily in funding university research since the 1990s. There is evident Finnish pride for the country's national system of innovation, which has spawned more than 100 biotechnology companies. However, an immature capital market has severely restricted its development and the sector faces an additional challenge this year with the withdrawal from the market of Sitra, the Finnish national endowment, which has been one of the principal sources of seed financing for biotechnology start-ups.
Helsinki-based Sitra is selecting 17 life sciences companies from its existing portfolio of 36 firms, and it plans to create a new fund to support those, drawing on its own resources, as well as finances it hopes to raise from international institutions.
Skandinaviska Enskilda Banken AB, of Stockholm, Sweden, has been engaged to prepare a fund-raising prospectus, and a team from Sitra will be spun out to manage the new entity. The whole process will be completed by year-end, said Pauli Martilla, director of corporate funding, life sciences, at Sitra. "This is not a secondary play. We are not clearing the companies. We are still growing the companies in a positive mode. It is not a fire sale," he told BioWorld International.
However, its withdrawal from further biotech investing could hamper the flow of start-up activity. For existing companies, moreover, the funding environment remains tight.
"The capital market in Finland remains under-developed. The market is thin. There is an aversion to risk," Lipponen said. "At times, even the belief that the sector can be developed at all in Finland has been called into question."
Yet Finland has, in addition to its strong science base, several other resources that could be assets in the development of biotechnology. Its homogenous population and its state-run health care system, which has, over several decades, built up a rich store of epidemiological information, make it fertile ground for conducting population genetics studies.
"Finland is one of the best-characterized populations in the world for disease mutations," said Leena Peltonen-Palotie, professor of medical genetics at the University of Helsinki.
GeneOs Oy, of Helsinki, is one company betting on that advantage. It disclosed "several million euros" in new investment Tuesday to fund its construction of a biobank that will link lifestyle and clinical information on 6,000 patients with asthma or chronic obstructive pulmonary disease to variations in associated genetic markers. The company last year reported the discovery of two novel genes that are linked to asthma, one of which it characterized as an orphan G protein-coupled receptor. It has identified eight different variations, six of which appear to have varying degrees of disease risk. "It looks like it's associated strongly to atopic disease," said Tarja Laitinen, chief scientific officer at GeneOs.
Lending weight to that overall theme, keynote speaker Steven Burrill, CEO of San Francisco-based Burrill & Co., said the era of personalized medicine and theranostics is closer than many think. Increasingly, companies seeking approval for a new drug will need an accompanying predictive diagnostic test to convince regulators of its efficacy in defined patient populations.
"Don't bet against it," he said, adding that payers will "grab onto this technology and use it, because it will eliminate cost." With access to greater predictability obtained through genomic information, health care systems will shift from caring for the needs of 5 percent of the population who are sick to maintaining the health of the majority of the population who are healthy.
"That's an extreme challenge and opportunity for us in this business," Burrill said.
As the personalized era unfolds, the U.S. might not be the country best equipped to incorporate the underlying technologies, said David Cox, chief scientific officer at Perlegen Sciences Inc., of Mountain View, Calif., as it lacks the socialized health care system and the long-standing tradition of building national patient registers practiced in Finland and the other Nordic countries.
"I think [Nordic countries are] best adapted to demonstrate its utility in the shortest amount of time," Cox told BioWorld International.
The meeting closes today.