Bioinformatics firm Genomatix Software GmbH reached an important scientific milestone Thursday. The company completed its first predictive analysis of promoter sequences in the 3.12 billion base pairs sequenced by the Human Genome Project, using software technology based on its proprietary algorithms.

According to Thomas Werner, founder and CEO of Munich, Germany-based Genomatix, the genome contains between 58,000 and 59,000 promoters. "That's our estimate," he told BioWorld International. "We can't find all promoters."

The information, he said, "is obviously of extremely high value for pharmaceutical companies." It will be able to aid in rational drug design efforts, as it can help companies to accelerate screening programs for molecules that act via transcriptional control and speed efforts to eliminate unwanted side effects. In the meantime, it is of use in functional genomics, as it can be used to locate genes and understand their regulation.

Werner established Genomatix in late 1997, taking with him a small team from his research group at the Neuherberg, Germany-based GSF-National Research Center for Environment and Health GmbH, which is backed by the Federal Ministry of Education and Research and the state of Bavaria.

The company is concentrating its analytical efforts on the 30 percent of the human genome that encodes the regulatory signals - promoters, enhancers and terminators - that control gene expression, rather than the proteome, which actually encodes protein sequences. "The coding region doesn't tell you why and when things are happening," Werner said.

Genomatix has developed a library of nearly 100 experimentally verified promoter "modules," which comprise data on promoter sequences and a complex combination of other parameters that influence gene expression, such as transcription factor binding sites. These take into account the context-sensitive nature of gene expression. For example, Werner said, binding sites for interferon responsive factor are present in many promoters, even those that govern the transcription of genes that are not interferon targets.

He said he believes that several hundred more such promoter modules exist. The company is actively engaged in identifying and compiling them. These will enable researchers to perform comparative analyses of sequences that are known to be functionally similar, but which are not fully understood at the molecular level. "Regulatory networks will be the key word for the next five years, I would say. That's where all the bucks and the hype will go," he said.

Genomatix recently raised "several million marks" from Frankfurt-based Future Capital AG, a joint venture between the Hessen state government and Aventis Pharma AG, also of Frankfurt. This follows an initial seed funding round from BioMAG, of Martinsried, and the founders. The new injection of cash "might enable us to come up to the level of an IPO," Werner said.

The company's baseline revenues, which consist of sales of software licenses and contract research services, will reach around DM1 million (US$480,000) this year, Werner said. However, the final turnover could be a multiple of this figure if it successfully concludes negotiations for one or more strategic alliances in the genomics area this year.

The company plans to establish a U.S. office soon, either in the Boston-Cambridge area or in California, to pursue its partnering and sales strategies. Unusually for a German company, Werner said, the U.S. is already its biggest market. "Americans don't go shopping in Europe unless they can't find it in the U.S.," he said.

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