Associate

Biotechnology oftentimes eases into the wake of U.S. - and global - burgeoning health risks. That wake occasionally allows companies to ride the waves of newfound investor interest.

Take note of a post-Sept. 11, 2001, United States scared to open mail for fear of anthrax and nervous over the thought of bioterrorism. In the depressed financial markets following the attacks, several biotechnology companies dabbling in biodefense or vaccines against bioterrorism agents watched their stock values mushroom.

Today, severe acute respiratory syndrome is splattered all over the news, and biotechnology companies are scrambling to address the interest in diagnosing, treating and preventing the disease that has taken, at last count, the lives of 472 people worldwide. The question for investors, however, is whether SARS is a real potential revenue generator.

"That depends on the long-run issues presented by SARS," said Craig West, analyst with A.G. Edwards & Sons Inc. in St. Louis.

Not enough is known about SARS to forecast its future or longevity, West said. The path the disease takes going forward will determine how strong the focus that biotechnology companies - and investors - place on it. At this point, no one's counting on anything, including West, who covers GenVec Inc., a company that just signed an agreement with the National Institutes of Health in Bethesda, Md., to develop a vaccine for SARS.

"It's certainly not a factor in [GenVec's] model," he told BioWorld Today. "For it to be so, one would need to predict sales, and the ability to do that is not yet possible."

Firms Garner Funding, Attention Through SARS Work

But while West suggests caution, others have thrown their investing dollars behind those chasing SARS. The day GenVec announced its government deal, investors added $1.15, or 75.3 percent, to its stock. Gaithersburg, Md.-based GenVec followed that news by saying it signed a letter of intent to form a Collaborative Research and Development Agreement with the Vaccine Research Center at the National Institute of Allergy and Infectious Disease of the National Institutes of Health to pursue the development of a SARS vaccine using GenVec's adenovector technology. The company's stock (NASDAQ:GNVC) now sits at its highest point since mid-February; it closed Tuesday at $2.43. (See BioWorld Today, April 28, 2003.)

EraGen Biosciences Inc., of Madison, Wis., developed a new SARS-specific assay test, which it handed to the U.S. Army Medical Research Institute of Infectious Diseases, the World Health Organization's Central Public Health Laboratory and the British Columbia Center of Disease Control. The company also said it would offer the assay to entities willing to validate the test.

Affymetrix Inc., of Santa Clara, Calif., said Tuesday it is taking orders for its new GeneChip brand CustomSeq SARS pathogen detection resequencing array.

Ghent, Belgium-based AlgoNomics N.V. said Tuesday it published "the so-called CTL epitopes of the virus" in order "to contribute to a rapid development of a vaccine against SARS."

Earlier this week, AVI BioPharma Inc., of Portland, Ore., raised $15 million through a private placement, due to rising stock prices it attributed to news coming from its Neugene antisense drugs. It said in late April it would begin clinical trials to test a product against West Nile virus and also said it would work with the NIH against SARS. Its stock ended at $6.28 April 30, it's highest close of the year. (See BioWorld Today, May 6, 2003.)

The list goes on. Focus Technologies, of Herndon, Va., said this week it developed a first-generation real-time PCR test designed to detect the presence of the coronavirus. Cel-Sci Corp., of Vienna, Va., said it is evaluating the availability of public funds and/or other sources to pursue the testing of its immune-modulating peptide, CEL-1000, in SARS.

SciClone Brings In SARS Revenues

Since the disease is young, revenue streams from SARS products remain on the horizon. But SciClone Pharmaceuticals Inc., of San Mateo, Calif., said it is expecting sales of its immune system drug Zadaxin to reach $15 million in the second quarter, compared to $5 million in the first quarter, because of "SARS-related export sales to China." The company said it has "worked incessantly" to respond to the "sudden increase in demand."

The Michael Smith Genome Sciences Centre in Vancouver, British Columbia, was first to sequence the virus thought to be responsible for SARS, disclosing the news in the first half of April. Shortly afterward, the Centers for Disease Control and Prevention in Atlanta said its scientists had completed a sequence. The news provided a feeling that science was besting nature.

And it might. But if there is a lesson taught by the genomics revolution, it's that drugs and vaccines do not come snapping at the heels of a sequenced genome. Developing drugs takes time, trials can fail and it all costs a fistful of cash.

"We need three things," West said. "Diagnostics, treatment and prevention. We think biotech will play a role in all three of those facets, but it's most likely we'll get a diagnostic test first," followed by a therapeutic regimen "and finally, a vaccine."

Mark Witten, chief scientific officer at ImmuneRegen BioSciences, believes a path to a vaccine will be steep.

"It's a coronavirus - it's related to the [virus] that causes the common cold," he told BioWorld Today, adding that a vaccine against the common cold still eludes researchers. "Does that tell you how tough it's going to be?"

Witten said that "the way to go is to rev up the immune system." ImmuneRegen, of Scottsdale, Ariz., is developing Homspera, which has been shown in animals to protect and repair the lining of lungs damaged by smoke inhalation. The company, Witten said, is trying to receive an NIH contract to develop the product to treat SARS.

"We are advocating what we believe is an effective treatment strategy and we'll see what happens," he said.

West and A.G. Edwards, which makes a market in GenVec and rates the company a "buy," like GenVec's technology. GenVec's TNFerade platform is aimed at cancer; it uses adenovector technology to deliver the tumor necrosis factor-alpha gene into a tumor.

"If SARS is a long-running problem for the planet, there is some sort of unknowable but well-matched probability that GenVec would have a role to play there," West said. "Do we know that SARS is suited for an adenovector? No, we don't know enough about SARS. [Is GenVec] well positioned to come up with a product? Yes, they are very well positioned."

The entire landscape, West said, is pitted with uncertainties - the history of other global viruses makes forecasting difficult, vaccine development is strenuous because vaccines are meant to be given to healthy people and not enough is known about SARS. When considering developing a vaccine, "there are 50 ways it could go wrong," he said.

Perhaps the only certainty with SARS is that the future is uncertain.

"We don't know if SARS is going to be an ongoing problem," West said. "The world doesn't know.

"Could it be that SARS is contained? It's possible. My sense is that this will be a problem next winter. I just don't believe we can eradicate this thing off the planet in one season. We've got a shot, but it's a long shot."