By Lisa Seachrist

Washington Editor

WASHINGTON — In rented space at the Cold Spring Harbor Laboratory, in New York, David Beach finally serves as president for Genetics Inc., a three-employee functional genomics company that aims to increase the pace and accuracy of the drug discovery process.

Incorporated in 1996, Genetica did not become a fully realized company until January, when the Cold Spring Harbor Laboratory (CSHL) approved a license-lease agreement for the fledgling firm to take its first steps into the rapidly moving world of genomics.

"With our technology, we are faster getting to the function of a novel gene," Beach said. "Our advantage over other functional genomics applications to date is that we are letting the cell tell us what is important." The approach has already resulted in two collaborations.

Beach described the impetus behind Genetica's platform technology as a yeast geneticist's attempt to create a system that would allow scientists to perform rapid genetic manipulation of mammalian cells.

"Yeast offer[s] such an elegant system for genetics," Beach said. "Tissue culture cells are, on the other hand, an asexual organism. When we started working in human cells there were a whole range of techniques that were no longer available to us."

In order to solve that problem, Beach and Greg Hannon at CSHL developed a method to use retroviruses to identify and validate novel genes. Genetica licensed the technology and certain follow-on technologies from CSHL in January, and last month announced its first collaboration, with Mitotix Inc. for the discovery of novel cancer genes. Financial details were not disclosed.

"Basically, most functional genomics techniques provide you with sequence data," said Thomas Needham, director of business development for Cambridge, Mass.-based Mitotix. "This technology gives us a novel gene with knowledge of its biological function. It will really allow us to identify new tumor-specific survival genes."

Genetica's technique utilizes a library of cDNA-containing retroviruses to "rescue" mammalian cells in culture as a means of establishing function. The retroviruses infect and multiply in the mammalian cells, allowing researchers to observe what function the cDNA encoded in the retrovirus confers to the mammalian cells, collect the retroviruses and confirm the activity in another set of cells.

For example, epithelial cells are inhibited from growing by the cytokine TGF-beta. However, epithelial cancers grow in the presence of TGF-beta. Genetica recently used its library of retroviruses to determine genes that permit normal epithelial cells to grow in the presence of TGF-beta.

"This technology allows us to treat culture cells as genetically tractable organisms," Beach said. "It allows us to recycle the library through the same type of cells to validate activity."

That platform also formed the basis for the collaboration disclosed this week with Osiris Therapeutics Inc., of Baltimore, which will use the technology to identify novel molecules that are active in the growth and differentiation of human mesenchymal stem cells (hMSCs). These are the progenitor cells responsible for the formation of bone cartilage, muscle, tendon, ligament, marrow stroma and fat. The financial details of this arrangement are also undisclosed.

"We may look for molecules that could expand the stem cell population, providing for more starting material for the production of bone or cartilage or such," said Daniel Marshak, Osiris' senior vice president for research and development and chief technology officer. "Using this technology means that we are more likely to find useful molecules in context, making it more likely that we will find pharmaceutical targets."

In the short term, Beach said, Genetica intends to use its technology to collaborate with other biotechnology companies, rather than aim first for the big pharmaceutical companies. However, he expects to move eventually to partnerships with the larger drug firms.

"Producing our own products is not an early objective," Beach said. "It is a transition which may occur later on for the company, but we have no plans for it now." *