By Randall Osborne

Editor

A few years ago, analysts couldn't stop talking about the biotech industry "maturing." As companies went under or merged, market sages often remarked that the tightening and refining went ahead by known and at least somewhat predictable laws of commerce: The strong survived, and the weak did not, and the in-betweens found other companies to take them over.

The picture is more complicated now. With the advent of genomics and the creation of a database world, with biotech and the Internet showing ever more overlap, the old ways of delineating the marketplace and competing in it just don't work.

"It's almost as if people were saying genomics is biotech, and all of a sudden there are all these sub-sectors of genomics," said Mark Vincent, spokesman for CuraGen Corp., which a year ago launched its GeneScape portal on the Internet.

The portal provides what the company calls CuraTools a suite of data analysis software along with databases for data mining, managing workflow, and conducting genomics experiments, to be used in conjunction with publicly available information from such sources as the Human Genome Project and the SNP Consortium database.

"We're not a dot-com play or an 'eyeball' play," Vincent said. (The latter refers to a site that recruits advertisers on the basis of how many "eyeballs," or hits, it can boast.)

"You can try [the tools and databases on a limited basis], and if you like it, we have more expanded versions for you to use," he said. "It's almost like a shareware program. That's been our strategy, but everybody has their own point."

CuraGen's Internet approach came more out of necessity than anything else. The company's first collaborator, Genentech Inc., made its deal in 1997.

"We had to work over the Internet," Vincent said. "That's what has separated us from day one. When we signed our agreement with Genentech, we had 60 scientists and they had hundreds," and the companies are located on opposite coasts.

Another collaborator, Glaxo Wellcome plc, has referred to CuraGen's site as a "cyber-laboratory," he said.

The Internet site's success still is dependent on other, less ethereal factors, Vincent said. When the journal Nature published on Feb. 10 that CuraGen had identified all the protein interactions in the yeast genome, the web site recorded 16,000 hits from all over the world.

"Everybody wanted to try the technology themselves," Vincent said.

With many firms offering genomics capabilities on their web sites, he said, keeping track of who gets information from where, in order to collect royalties from developed products, could be difficult but CuraGen's program for collaborators is broad enough that no confusion is likely.

"We work on projects with them," he said, and both companies in the deal keep track of what's being researched and how far the work has gone. "It's one full package."

Some have snickered over the emphasis on data manipulation as opposed to solid laboratory efforts that could lead to actual drugs on the marketplace, Vincent said, but CuraGen offers its Internet technology as one aspect of the company's business.

"There's an Incyte [Pharmaceuticals Inc.] model, and a Celera [Genomics] model, and then you've got Human Genome Sciences Inc., with three products in the clinic," Vincent said. The last is the model followed by CuraGen.

"We'd love to [work faster], but it takes six to 12 years to get a drug to market," he added.

"You've got some tech investors who were most comfortable with [companies] that were collecting and distributing data, but they get a little antsy, because there's a lack of understanding" of how genomics is used to make drugs, Vincent said.

Still, he said, "traditional" biotech companies have been scrambling not to appear that way.

"Back in December, you could count the number of genomics companies on one hand," he said. "As of February, I think every biotech company became a genomics company. Everybody put the word 'gene' after their name."

Yet another genomics category, also on the Internet, is occupied by DoubleTwist Inc., formerly Pangea Systems Inc., which may occupy that category exclusively at least for now.

"Our approach is quite a different one," said John Couch, chairman and CEO. DoubleTwist raised $37 million in March to change what had been the focus of Pangea, and turn the company into "simply an aggregator, supplying a genomics research environment," Couch said. "We're [otherwise] neutral. We do not have a laboratory, and we do not sequence any tissues."

Pangea "leveraged the investment we made in our high-throughput processing system," he said. "It's point and click research similar to cut and paste [composition]." PageMaker, the desktop publishing software, was pioneered by a person working in publishing who needed to find a better, faster way of working, Couch noted.

DoubleTwist users can do specific types of complex analysis and database monitoring by inputting a DNA or protein sequence and appropriate research agent. The company deploys traditional data warehousing, processing and mining software power. Scientists can enter a question, and DoubleTwist will run its databases and present a report back. Also included in DoubleTwist's repertoire are clustering and alignment tools.

"We've removed from the biotech community the need to write all the software that integrates all the data" from such sources as the Human Genome Project, Couch said.

DoubleTwist, an "application service provider," sells subscriptions, although "we have a certain amount of functionality on the site for free," Couch said. Users can run 10 sequences without charge.

"We didn't just take our enterprise software and use the Internet as a distribution channel," Couch said. "We've dropped the complexity of bioinformatics and empowered scientists directly," by creating a system which he compares to the personal computer itself that emulates the way people think, with nightly updating and monitoring.

"It doesn't matter whether you're a scientist at a small biotech company or at a large pharmaceutical company the subscription is the same price," Couch said. "People are going to do their 'research' on DoubleTwist, come up with targets and results, and either start their own company or license those results to corporations. We have high school kids doing genetic research."

What does it all mean? Vincent and Couch acknowledge that the need for basic drug development will never go away, but making it as fast and as easy as possible is the key supplementary job of those facilitators working with genomics tools which can be licensed by labs, to the benefit of smart investors at both ends.

Said Couch: "The society and the industry are going to be the winners." *

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