SAN FRANCISCO - It's a grueling process from the very beginning. A start-up biotech company discovers a potential blockbuster product, then spends 12 years or more and up to $800 million to prove efficacy and clear the road to approval.

A number of new technologies have surfaced in recent years to help accelerate the process. Biotech companies are looking toward genetic engineering, combinatorial chemistry, high-throughput screening, bioinformatics and genomics, among other technologies, to circumvent some of the time-consuming roadblocks of drug discovery. But these technologies have done little so far to speed up the process. And the investors are getting impatient.

"The Future of Drug Development: Can We Develop Better Products Faster?" was the focus of the plenary session Tuesday at the Biotechnology Industry Organization's BIO VentureForum 2002 at The Palace Hotel in San Francisco. More than 500 people attended the conference, where a panel of industry executives addressed the concern that new technologies are not living up to their promise, and suggested other ways biotech companies can bring a product from mouse to man more efficiently.

"Great new technologies and a lot of money have not resulted in a lot of new drugs," said Bob Jones, the chair of business development at Cooley Godward LLP in Palo Alto, Calif., and moderator of Tuesday's panel.

"What's the problem?" he asked the panelists. Is there too much genetic data? Is it a poor selection of Phase III candidates? Is the technology being used improperly?

Allen Roses, the senior vice president of genetic research at GlaxoSmithKline plc in London, said he believed the technology hype was overrated.

"We've become so enamored with the technology, we've lost sight of single selectivity of putting together a product," Roses said.

A total of 27 biotech products were approved in 2001, compared to only nine so far this year, causing some concern that not only hasn't the process sped up, but that it is actually slowing down.

The lack of an FDA head may deserve some of the blame, but that problem may be solved with President Bush's appointment last week of Mark McClellan as FDA commissioner.

"Now with a new commissioner maybe we can look at picking up the pace of the approval process," said Brian Cunningham, president and CEO of South San Francisco-based Rigel Pharmaceuticals Inc.

James Woody, president of Roche Bioscience in Palo Alto, Calif., said biotech companies have been too optimistic about new technologies and how quickly they could create value. He believes the industry won't see an impact until 2008 or 2010. "I remain optimistic that in a five- to 10-year time frame, we will see some of the benefits of some of these things," he said.

Some technologies, however, like toxicogenomics, have greatly benefited companies that have a good compound but run into toxicology problems, he said. In the past, scientists would go back to their libraries and start all over. But toxicogenomics provides them with a way to work around the problem so the compound contains its value, Woody said.

It helps companies conduct research more efficiently, but until it results in an approved product, it means little to investors.

"Our own technologies are only useful in a way that they are integrated into a process that makes money," said Russell Howard, the CEO of Redwood City, Calif.-based Maygen Inc.

In order for a technology to be integrated into a process, it takes infrastructure, and infrastructure needs critical mass, and critical mass requires more investment. Howard stressed that biotech and pharmaceutical companies need one another for those reasons.

Part of the slowdown in drug approvals, he suggested, could be that pharmaceutical and biotech companies are looking for new targets, whereas the targets were readily available to them 20 years ago.

The industry is moving into uncharted territories, he said.

In the late 1980s and early 1990s, biotech companies were picking proteins whose functions were known, added Cunningham. "Now we don't know," he said.

"All of the technological improvements have not done anything at all to the art of drug development," Cunningham said. Some drugs that were thought to be mediocre turned out to be great and vice versa, he added.

Thomas Paterson, chief scientific officer of Entelos Inc. in Menlo Park, Calif., said the drug research and development process takes longer than other R&D industries because drug companies are limited by a trial-and-error scenario. In 2000, he said, drug companies spent 22 percent to 24 percent of their budget on research and development, whereas the aerospace industry spent 4 percent and the electronics industry spent 7 percent. "They use simulation technologies before building costly prototypes," Paterson said.

Agreeing that the new technologies have shown few effects thus far on the efficiency of drug development, the panel pointed out ways some companies are attempting to get their products to the market faster. Some have turned to contract research organizations, while others have consolidated their programs internally. Even others have conducted mergers and acquisitions. Jones suggested that there are compelling incentives for biotech companies to merge with one other, even though it rarely occurs.

But all of these examples or suggestions have problems of their own.

"It takes less time to discover something than it does to position it with someone to take it further," Howard said.

Speaking from experience, Woody said using CROs was not much cheaper and did not move the compounds along much faster than if his company had done the work internally. He also said acquiring smaller companies left Roche with several separate compound chemical libraries in which it had to completely renumber and consolidate into one library.

As for biotech companies merging with each other, management finds itself faced with understanding another company's products and technology to make sure it works.

"It's just as hard for us to figure it out as it is for the market to figure out as it is for big pharma to figure out," Cunningham said.