SYDNEY — Australia's smallest state, the island of Tasmania, is about to become a genetic laboratory, with listed company Amrad Corp. Ltd. investing A$2.5 million in a project to search for genetic flaws in families.

Amrad will pay A$2.5 million over five years to the Menzies Centre for Population Health Research at the University of Tasmania, in Hobart, the state capital, to search for genetic flaws in Tasmanian families.

Tasmania has a population of little more than 500,000 people and, because it is isolated — at least compared with the "mainland" states, such as Victoria, New South Wales and Queensland, it has not experienced the flood of immigrants and demographic shifts of the rest of Australia. As a result, Tasmania is a good hunting ground for genetic flaws.

Center Director Terry Dwyer said the relative population stability and the existence of historical records, which permit many Tasmanian families to be traced back through five generations, means Tasmania has similar conditions for hunting inherited, defective genes as found among the Amish in the U.S., or the populations of Iceland and Finland.

The newly formed genetic epidemiology unit of the Menzies Centre will trace and genetically test all living members of a particular family with a history of illnesses such as multiple sclerosis or osteoporosis. By comparing differences between a number of related genomes, the center should be able to identify the individual genes involved in each disease.

Amrad will patent any discoveries made by the new unit, Dwyer said.

Amrad Managing Director John Grace said his company will provide scientific assistance to the Menzies Centre in its efforts to identify genes involved in various diseases, and will pay the Menzies Centre a royalty on any pharmaceuticals resulting from its research.

Apart from new genetic research project, Amrad is developing a new compound, AM424, for the treatment of motor neuron disease and last year announced that it would join forces with Chiron Corp., of Emeryville, Calif., to search for a treatment for hepatitis C. (See BioWorld International, Oct. 1, 1997, p. 4.)

In addition, the company is also developing a new form of the injectable anesthetic Propofol, using a compound and technology licensed from the Montreal-based Pharma Inc. (See BioWorld International, Sept. 10, 1997, p. 3.)

The Menzies Centre has been operating for about 10 years, but previously has been involved in conventional epidemiological research. Apart from the Amrad work, the center has other genetic research projects totaling A$300,000 to be completed this year.