By Randall Osborne

Editor

At the recent Chase H&Q Healthcare Conference in San Francisco, gene-sequencing king Craig Venter knitted his brow and assured a crowd of listeners that the intellectual property of his company, Celera Genomics which recently said it has sequenced almost all of the human genome, representing about 97 percent of the genes, and is nailing down patents as it goes is secure from challengers.

At least, as secure as it can be.

But, Celera's president and chief scientific officer Venter noted, anyone can sue anyone else. Whether the litigation has merit doesn't matter to lawyers, who get paid either way, and many in Venter's audience (not to mention all of Celera's shareholders, and those of other genomics firms) fear a legal free-for-all when the patent office catches up with its backlog, which has grown with the explosion of data.

The times are confusing in biotech. Information is outpacing chemistry in importance; firms that once succeeded by hoarding data now plan to advance by sharing it. And public enterprise is blending with private. Venter left The Institute for Genomics Research (TIGR) to lead another effort, with Perkin-Elmer Corp., to sequence the human genome, naming the company Celera, for "swiftness."

Analysts and company leaders have plenty to say about the genomics push what it means now, and what could happen later. Almost all, however, have an interest that goes beyond academic either as investors, or as the representatives of investors, or as people seeking investors to help them advance their firms.

Then, there's TIGR.

The institute got out of the business of human-genome sequencing with the formation of Celera, and now is devoted to microbial genome sequencing, plant research and a few other projects, said president Claire Fraser, who took over the job when Venter, her husband and former TIGR president, left to start Celera.

Fraser said she expects the chaotic patent battle, but TIGR will only be an "interested bystander."

Once TIGR was removed from the human-genome war zone, Fraser who has been working in molecular biology since the 1980s, and moved into genomics in 1995 found herself in a position to examine the field objectively, and form a few ideas that might be useful to those with cash they want to put into biotech.

"There seem to be a couple of different ways that I see the field collectively thinking," Fraser told BioWorld Financial Watch. One is to use the flood of sequencing information the way scientists have always used it, methodically and carefully, but slowly, a piece at a time. "That's a short-sighted view," Fraser said.

"Where the real breakthroughs will come next is in the development of techniques to look at changes in gene expression, [changes] at every single gene in the genome simultaneously," she said. In other words: microarrays.

Investing in microarray firms on the ground floor or as close as possible to the ground floor is what to do next, Fraser said.

"That's what I'd be looking for if I had a pot of money," she said.

"[Microarray technology] is already starting to have a major impact," Fraser said. "It's getting to the point where it's becoming integrated into genomics programs across the board. Companies have either contracted engineers to build the machinery, or are buying equipment from specialized makers.

"What we need," Fraser said, "is more breakthroughs analogous to microarrays, where we can get into protein interactions, rather than looking at DNA and RNA."

Fraser said proteins in the cell "do all the work, and this is where things will ultimately go, and we'll be headed that way through many avenues of investigation," as researchers seek a view of the cell as a "functioning biological entity."

TIGR, she added, is "very comfortable with where we are," and the institute's work will prove increasingly valuable along with similar work being done by biotech companies.

"There's more to genomics than human sequencing," Fraser said. "If you look at numbers of new genes discovered from microbial and plant projects, we've discovered the largest number of novel genes. Humans are obviously an important part of all genomics. It's what got it all started, and is going to have the biggest impact, but some of the microbial programs can be equally important in terms of human health."

Microbial research will become critical in beating antibiotic resistance, she predicted.

"In the large pharmaceutical companies, there have been programs in anti-microbial agents, but many are winding down or have been eliminated, because it was thought that infectious diseases had been conquered, and there was no need for new antibiotics," Fraser said.

The past five years or so has changed that.

Fraser said companies such as Microcide Pharmaceuticals Inc., of Mountain View, Calif., will move toward the front of the line, as the need for drugs against antibiotic-resistant bugs becomes even more serious.

Microcide has "set up really sophisticated assays to identify essential genes in key human pathogens," she said. "If any gene is essential for survival of a microbial species, it becomes an immediate target for drug development. They've identified not only essential genes, but small molecules that bind to them."

The approach "holds tremendous promise, in terms of coming up with entirely new classes of antibiotics," Fraser said.

Maybe so, but even Microcide has its eye on what has become the hottest realm of biotech. Early last year, the company said it had formed a spin-off enterprise, Iconix Pharmaceuticals Inc., to focus on using surrogate genetics technology to conduct genomics-based drug discovery.

Iconix's initial capital came from a $12.5 million venture capital investment that gives investors a 50 percent stake in the company. Microcide, founded in 1992, retained a 35 percent stake, with the rest reserved for the founders and employees of Iconix.

If genomics stays the leader in the industry, and processing the patent logjam leads to big skirmishes, TIGR will be out of the line of fire having filed only a handful of patents, Fraser said.

"We could have claimed all sorts of potential utility, but we decided for an organization that's existing on research grants, it was throwing money away to be chasing intellectual property we can't sort out," she said. "The problem is, there's so much new information, it's not obvious from sequence alone what these novel genes will do in the cell, and we can't even begin to sort that out in a timely way."

Industry taking over a project begun by the government and speeding it up, as happened in the case of Celera with human-genome sequencing, is a scenario that wasn't planned, but "it's not out of the question this kind of situation will come up again," Fraser said.

"The viewpoint has been discussed that this was some sort of land grab on the part of Perkin-Elmer and Craig Venter, to steal this project away from the government, and turn it into solely a money-making venture," she said. "I think that's a little simplistic. Everything was done out in the open. From the beginning, everybody at Celera has made it clear that their intention was not to put a halt to the federal program. From the beginning, they thought there could have been a great deal of synergy."

TIGR, for its part, has learned that the primary funding sources the Department of Energy, the National Institutes of Health and the National Science Foundation plan only "modest" budget increases, she said. But, "if genomics research budgets could increase four or five-fold, there would be enough good and important science to spend every one of those dollars very wisely," whether the money goes for human genome research, microbial work or plants, Fraser added.

Meanwhile, the genomics scramble goes on, in publicly funded entities and in industry, as the shift continues from gathering data to making sense of it, with new methods and new technology which, Fraser said, will hold the key for investors of the future.

Right now, she said, "out of all this information, there's no way to know what the gold nuggets are." *