Biotechnology News Bulletin Volume 2, Number 1 June 2, 1993 ----------------------------------------------------- News Summaries ----------------------------------------------------- FEAR OF PRICE CONTROLS HURTING SMALL BIOTECH COMPANIES Threats by President Clinton to include price control measures in his health care reform plan are hurting small biotechnology firms. Wall Street analysts say stocks prices are falling, financing is drying up and expansion plans are being put on hold. "There's no doubt in my mind that the Hillary effect has put a nail in the coffin on our ability to raise money," said Robert Abbott of Viagene Inc. The opportunity to form strategic alliances with larger companies has also been affected. "The large companies are hunkering down because of the uncertainty. They want to know what's going to happen to the overall environment before they do more outside collaborations," said Ron Henricksen of Khepri Pharmaceuticals, Inc. Many companies blamed the Food and Drug Administration (FDA) for adding to their problems. Steve Burrill of Ernst & Young blamed the FDA's confusing and expensive regulatory process. The possibility of price controls remains the biggest barrier, according to John Kaweske of Global Health Sciences Fund and Financial Strategic Health Sciences Portfolio. "The biggest concern is price controls for new products. If price controls are put in place, you will not see any further financing of these biotech companies," Kaweske said. One small biotech firm seems to be avoiding the problems facing some of the other small companies. The Houston-based Genemedicine, Inc. announced last week that it had raised $8.5 million in venture capital P the most ever raised by a start-up company. The company is working on technology that will deliver genes through an injection to the muscle cells of people who are losing muscular capability due to AIDS, cancer and other diseases. It is still in laboratory animal trials, however. "Gene therapy is a really hot area right now, and the company has people who are world-renowned in that area," said William Mullaney of the venture capital firm Ventures Medical Associates. Mullaney said the fact that the company has sought fewer sources of money has worked in its favor. Consequently, the deals that have been made have been for larger amounts of money. "It's the biggest deal in Houston," said Mullaney. Source: Udayan Gupta, "Clinton Health Plan Hurts Biotech Firms," WALL STREET JOURNAL, May 25, 1993; Debra Beachy, "Investors Pump Capital Into Biotech Newcomer," JOURNAL OF COMMERCE, May 25, 1993. DRUG COMPANIES EXPECT GENOME PROJECT TO AID IN DRUG DEVELOPMENT Drug companies are hoping the map of the human genome will assist them in developing drugs to combat inherited diseases. The human genome project, which expects to decode approximately 100,000 pairs of genes common to humans, could provide pharmaceutical companies with the information they need to invent drugs that will combat genetic diseases. The new drugs and diagnostic products could be worth tens of billions of dollars a year in the next century, sources say. "Over the coming decade the use of these new molecular diagnostic tests will create a major change in health care delivery by shifting the emphasis to disease prediction and prevention rather than reliance on treatment alone," said Dr. George Poste of SmithKline Beecham. The ultimate goal, scientists say, will still be to cure the gene by replacing it with gene therapy or blocking it using anti-sense technology. The first diseases to be focused on will be single-gene diseases like muscular dystrophy, cystic fibrosis and severe combine immuno-deficiency (SCID). Eventually, cures for more common ailments like asthma, diabetes and heart disease will be taken on. "There's a huge amount of interest from pharmaceutical companies because it's a vast potential market," said John Bell of Oxford University. Source: Ben Hirschler, "Drug Firms Hunt for Treasure With Human Gene Map," REUTER, May 28, 1993. USDA DEVELOPING PATHOGEN RESISTANCE IN PLANTS Consumer concern for food safety has prompted USDA scientists to begin exploring ways to resist post-harvest diseases into plants. Charles Wilson of the USDA's Kearneysville, WV laboratory said his research has discovered yeasts that attach themselves to the cell wall of pathogens on fruits. The yeasts produce enzymes that eventually break down the cell walls and kill the pathogen. The yeasts also stimulate production of the enzyme chitnase which is part of a plant's natural defense system. Wilson said he and his colleagues are looking for ways to breed this pathogen resistance into plants. Source: "Scientist Promotes New Non-Chemical Ways to Protect Produce," USDA AG NEWS FAX, May 10, 1993. EC REFUSES TO RELEASE DETAILS ON HORMONE VIOLATORS Despite pressure from Members of the European Parliament (MEPs), the European Commission refused to release details about member states who are violating the ban on hormone use to boost livestock production. "As we see it, it would be counterproductive to disseminate this information," said Information Commissioner Joao de Deus Pinheiro. Deus Pinheiro said the Commission was withholding the information as it was considered out of date, was compiled by member states themselves and preempted a community-wide agreement for dealing with the problem of hormone use. Opponents of hormone use were angered by the decision. "They have that information ... the consumers have the right to know .... What we are talking about is consumer confidence," said British MEP Ken Collins. Source: "Commission Holds on to Information on Hormone Infringements," REUTER, May 25, 1993. GERMANY VOTES TO EASE RESTRICTIONS ON GENETIC ENGINEERING RESEARCH Germany approved a proposal last week that could lead to the relaxation of tight restrictions on genetic engineering research. The proposed amendment will remove lengthy and costly research and testing procedures which had caused many German biotech firms to conduct their experiments outside of the country. "At the moment, every single genetic experiment requires a series of detailed documents in order to receive permission. This is greatly handicapping the competitiveness of German research laboratories," said Gehrad Stopa of Bayer. Gunter Rexrodt, the German Economics Minister, called the amendment a necessary step in ensuring the competitiveness of German pharmaceutical companies. The amendment will go before the German parliament sometime this year. Source: Ariane Genillard, "Genetic Research Curbs to Be Eased," FINANCIAL TIMES, May 28, 1993. BUSINESS WEEK COMMENTARY WARNS OF PR DISASTER IN JURASSIC PARK According to a commentary in BUSINESS WEEK, Joan Hamilton warns that the movie Jurassic Park, based on the novel by Michael Crichton, could be a public relations disaster for biotechnology firms. One biotech executive said at a recent conference that he did not care what the public was saying about biotechnology P as long as they were talking about it. Lisa Burns, a public relations consultant said that this attitude could be dangerous as Jurassic Park will be "the most massive exposure to genetic engineering the country has ever had." Hamilton said that much of the movie, such as extracting DNA from ancient insects for the purpose of cloning, has its basis in fact and the "Trust us, we're scientists" approach may not work this time. "It's Star Wars technology [with] the immediacy of Jaws. People will worry," said Burns. Instead of ignoring the implications of biotechnology, Hamilton recommends that the industry seize the opportunity and use it for promoting the positive aspects of the technology. "That could increase the odds that in a few years, consumers will rent Jurassic Park videos, munch gene-spliced popcorn and marvel at how fast progress was made," Hamilton said. Source: Joan O'C. Hamilton, "Who's Afraid of Jurassic Park? Biotech Ought to Be," BUSINESS WEEK, June 7, 1993. ----------------------------------------------------- Resources ----------------------------------------------------- PLANT BIOTECHNOLOGY INCLUDING TISSUE CULTURE AND CELL CULTURE is a July 1989 publication of the United Nations Development Programme (UNDP). While dated, the booklet is intended to familiarize UNDP staff with the basics of plant biotechnology. For a copy, contact UNDP, One U.N. Plaza, New York, NY 10017. ----------------------------------------------------- Calendar ----------------------------------------------------- FIFTH ANNUAL MEETING OF THE NATIONAL AGRICULTURAL BIOTECHNOLOGY COUNCIL, June 2-4, 1993 at Purdue University. FFI, contact: Peter Dunn or Marshall Martin at (317) 494- 4268/4596. A NEW PARADIGM FOR FOOD, THE FARM AND THE PUBLIC: THE IMPACT OF FOOD BIOTECHNOLOGY, June 10-11, 1993, Washington D.C. FFI, contact: Michael Gildenberg, (202) 331-0613. RISK ASSESSMENT FOR ENVIRONMENTAL RELEASES OF BIOTECHNOLOGY PRODUCTS, June 14-16, 1993, Duluth, MN. FFI, contact: James Harvey, (904) 934-9237. AMERICAN SEED TRADE ASSOCIATION ANNUAL CONVENTION, June 26-July 1, 1993, Kansas City, MO. FFI, contact: ASTA, 601 13th Street NW, Suite 570 South, Washington D.C. 20005, (202) 638-3128, fax: (202) 638-3171. SYMBOL, SUBSTANCE AND SCIENCE: THE SOCIETAL ISSUES OF FOOD BIOTECHNOLOGY, June 28-29, 1993, Research Triangle Park, NC. FFI, contact: Jill Nystrom, (919) 541-9366. LAW AND SCIENCE AT THE CROSSROADS - BIOMEDICAL TECHNOLOGY, ETHICS, PUBLIC POLICY AND THE LAW, October 21-22, 1993, Boston, MA. FFI, contact: Suffolk University Law School, Advanced Legal Studies, 41 Temple Street, Boston, MA 02114, (617) 573-8627, fax: (617) 248-0648. ------------------------------------------------------ Produced by: Michelle Thom, Information Coordinator, Institute for Agriculture and Trade Policy, 1313 5th Street SE, Suite 303, Minneapolis, MN 55414 Telephone: (612) 379-5980 Fax: (612) 379-5982 EMail: mthom@igc.org or mmthom@alex.stkate.edu. In addition to this weekly news summary bulletin, the Institute facilitates a variety of other conferences on EcoNet for farmers, educators, researchers and policymakers. These include: Susag.news: Weekly news summary bulletins on sustainable agriculture; Susag.library: Electronic "library" of documents pertaining to sustainable agriculture; Susag.calendar: Calendar of events relating to sustainable agriculture; Trade.news: Daily news summary bulletins on international trade issues; Agri.farmbill: Participatory conference on farm policy debates, including issues related to the 1995 Farm Bill .