Humanity has experienced a number of production revolutions-agriculture, industrial/steam, industrial/electricity, information and now the biotechnology production revolution. Biotechnology uses living organisms and their component molecules to make products, including novel medicines, crops and energy. Biotechnology will personalize therapies and aim to prevent, diagnose and treat diseases rather than just cure diseases once they occur. Biotechnology is providing breakthroughs in agriculture, food safety and energy production. And, as with all previous production revolutions, vested interests are fiercely resisting the biotechnology revolution.
Modern biotechnology can be dated to the discovery by Boyer and Cohen in 1973 of how to splice DNA (genes) from one organism to another. The first biotech company, Genentech, was founded in
To follow is a look at three major segments of the biotech industry: biomedicines, biocrops and biofuels. By the end of this brief report, it will be apparent that biotech products will be pervasive in how we live our daily lives by 2030.
As of 2006, there were 1,452 biotechnology companies, according to the accounting firm Ernst & Young. Of these, 336 are publicly traded and have a total market capitalization of $392 billion. Biotech revenues in 2006 topped $58 billion. By comparison, IMS Health, a health care intelligence firm, projects that 2007 annual pharmaceutical industry revenues exceeded $665 billion, a little under half coming from the
In 2006, the Pharmaceutical Research and Manufacturers Association reported that biotech and pharmaceutical companies already produce 125 biotech medicines to treat a wide variety of diseases, from heart attacks and strokes to multiple sclerosis and cystic fibrosis. In addition, 418 new biotech medicines are in various stages of development. Most biotechnology companies remain focused on medical treatments and diagnostics. Since its founding 31 years ago, the biotechnology industry has never been profitable in the aggregate, though Ernst & Young projects that will change soon.
Some biotech companies have been able to grow themselves into integrated companies, but the more usual path is for a start-up biotech company to prove the feasibility of a promising new therapy. The company then seeks to license, partner with or be acquired by a larger pharmaceutical company that can see the treatment through clinical trials and the regulatory maze.
Switching Off Genes: One of the most exciting new biotechnologies to emerge in recent years is RNA interference (RNAi). Without going deeply into details, RNAi can entirely silence the activity of any specific gene. Basically, genes are made of DNA, which makes messenger RNA (mRNA). mRNA is translated into proteins. Aberrant proteins-either made by the body or by infectious agents-are the causes of most human diseases. Most current drugs act by blocking the activity of disease-causing proteins. RNAi goes further back in the chain of disease by preventing the translation of messenger RNA, which means that the disease-causing proteins never get made. Many researchers and biotech investors believe that RNAi will prove broadly applicable in the treatment of a wide variety of diseases, including cancer, Alzheimer’s disease, cardiovascular disease, Parkinson’s diseases, hepatitis C and even pandemic influenza.
Pharmaceutical giant Merck endorsed the value of this approach when it acquired RNAi startup Sirna Therapeutics for $1.1 billion in October 2006. Sirna focuses on treatments for age-related macular degeneration (AMD), chronic hepatitis, dermatology, asthma, Huntington’s disease (HD), cancer and diabetes.
The current leading stand-alone RNAi company is Massachusettsbased Alnylam Pharmaceuticals. Alnylam is developing RNAi treatments for respiratory syncytial virus, which causes cold-like symptoms that can be especially dangerous for young babies, people with compromised immune systems, and the elderly. In March 2006, Alnylam published research in the prestigious scientific journal Nature, detailing how one of its RNAi treatments lowered LDL (“bad”) cholesterol by 80 percent in primates. High levels of LDL cholesterol are associated with development of atherosclerosis and coronary artery disease.
In July 2007, Swiss drug company Roche Pharmaceuticals and Alnylam announced a $1 billion deal in which Roche obtains a nonexclusive license to Alnylam’s technology platform for developing RNAi therapeutics. The alliance will initially cover four therapeutic areas: oncology, respiratory diseases, metabolic diseases and certain liver diseases. Roche also gets a 5 percent stake in Alnylam. Roche CEO-in-waiting Severin Schwan said that he hopes Alnylam will be Roche’s “second Genentech.” Genentech, which has a market capitalization of $77 billion, is majority own ed by Roche.
An Anti-aging Pill: Cutting-edge biotech is also aiming to slow the aging process. Sirtris Pharmaceuticals, based in
Researchers discovered that resveratrol, a compound found in red wine, also triggers SIRT1. Sirtris has created molecules that are 1,700 percent more active than natural resveratrol. In July 2007, Sirtris announced that its proprietary novel chemical SIRT1 activators (structurally unrelated to resveratrol)
reduce glucose, improve insulin sensitivity, boost glucose tolerance, and increase the number and function of mitochondria in multiple pre-clinical models of Type 2 diabetes. The company is targeting Type 2 diabetes with its first drug.
Why not attack aging itself? Because the FDA does not recognize aging as a disease and will not approve therapies that are not aimed at treating specific diseases. Of course, once the FDA approves a drug as a treatment for one disease, physicians may prescribe it “off-label” for other conditions.
Personalized Medicine: In May, the Freedonia Group, a Cleveland-based market research firm, projected that demand for in vitro diagnostic products would grow at 5 percent per year, reaching almost $20 billion by 2011. The universe of testing is dramatically expanding. The National Institutes of Health’s GeneTests website currently lists genetic tests for 1,508 diseases.
Pharmacogenomics is the enabling technology for personalized medicine, that is, treatments tailored to individual patients. The old blockbuster drug business model in which giant pharmaceutical companies pursued drugs that can be used by essentially everyone is fading. In the next 10 years, genetic testing as part of patient diagnosis will be as common as blood pressure cuffs are today. Since a drug that works for your aunt’s heart disease will not work for your cousin, physicians will give them different treatments.
In addition, pharmacogenomic testing will speed up the drug discovery process. Historically, clinical trials have been plagued by the fact that some portion of people enrolled as research subjects do not respond to the drug being tested while others benefit enormously. Biotechnology and pharmaceutical companies will be able to use genetic tests to screen for test subjects who do respond. This could dramatically shorten the 10- to 12-year period traditional clinical trials take to validate a new drug to years.
The pharmacogenomics pathway has already been blazed by Genentech’s Herceptin (trastuzumab) and ImClone Systems’ Erbitux (cetuximab), two monoclonal antibody cancer therapies. These drugs are administered only to patients whose protein receptor tests show that they will respond favorably to them. The FDA notes that 10 percent of all approved drugs now come with pharmacogenomic information.
For example, Salt Lake City-based Myriad Genetics has developed a genetic test that identifies patients who do not respond well to the chemotherapeutic drug Fluorouracil (5-FU). This drug is widely used to treat breast, head and neck, stomach and colon
cancers; however, one in four people have a genetic variation that makes standard dosages of Fluorouracil highly toxic to them. Myriad’s TheraGuide 5-FU gene test helps physicians identify patients with that genetic variation and so minimizes toxicity.
Another strong contender in the pharmacogenomics arena is Santa Clara, Calif.-based Affymetrix. Affymetrix’s GeneChip technology has long been a research lab standby. The company is now moving more forcefully into the global molecular diagnostics market, in which annual sales are already $2.5 billion and are growing at 17 percent per year. In 2006, Affymetrix opened its Clinical Services Laboratory to analyze the genes in blood and saliva samples for pharmaceutical companies, diagnostic laboratory businesses and hospitals. Someday, Affymetrix GeneChips could be standard diagnostic equipment in physicians’ offices.
In 2007, 23andMe, a start-up genetic testing company backed by the founders of Google, began blazing the trail to whole genome testing. The company confidentially tests about 600,000 single nucleotide polymorphisms (SNPs), which identify many of the genetic variations that contribute to the risk of various diseases. The cost is $1,000. The idea is that such information empowers people to take action to prevent future disease.
Curing Cancer by 2015: Cancers occur when some cells in the body begin to grow uncontrollably. Due to decades of medical progress, the rate of cancer deaths-the number of deaths per 100,000 people-has been dropping for more than a decade. In fact, for two years running, fewer people have died of cancer than did the year before. In 2003, the then-head of the National Cancer Institute (and now FDA administrator) Andrew von Eschenbach, called upon the entire cancer research community to set the goal of “eliminating the suffering and death from cancer, and to do so by 2015.”
Researchers know that cancer cells produce different receptors on their surfaces, and their gene activity is distinctive. These differences can be specifically targeted by cancer-killing medications. Therapies, such as Genentech’s Herceptin for treating some breast cancers, ImClone’s anti-colon cancer drug Erbitux, and Novartis’s chronic myelogenous leukemia remedy Gleevec, work by latching onto cancer cell receptors, forcing the cancers to stop growing. Genentech’s Avastin works by inhibiting tumor growth by blocking the formation of the new blood vessels.
Other companies are working to develop anti-cancer vaccines that stimulate the body’s own immune system to attack tumors. The most promising candidate, the anti-prostate cancer vaccine Provenge, produced by Seattlebased Dendreon, failed to get FDA approval in May 2007. Dendreon is using a vaccine strategy in which immune cells called dendrites are sieved from a patient’s bloodstream. The dendrites are then exposed to com ponents of the patient’s own pros tate cancer. The primed dendrites are reinfused into the patient where they incite the patient’s immune system to kill the cancer. That, at least, is the theory.
Dendreon reported promising initial results, and some analysts predicted a $1 billion per year market for the vaccine. But in May, the FDA declined to approve Provenge and asked for more clinical data. In January of this year, Dendreon was granted a broad European patent on Provenge.
In 2006, the Pharmaceutical Research and Manufacturers Association reported that biopharmaceutical researchers are working on 646 medicines for cancer. With all that effort and the investment that represents, perhaps von Eschenbach’s challenge to eliminate the suffering and death from cancer by 2015 will become a reality.
Commercial crop biotechnology is now in its second decade. In comparison to biomedicine, the biocrop market is in the tens of billions of dollars, not hundreds of billions. But in the larger scheme of things, agricultural biotechnology may well prove to be far more consequential for the future of humanity and the health of the planet as farmers around the world struggle to boost production to feed an additional 2 billion people by 2050.
Genetically improved crops have experienced the fastest adoption rate by farmers around the world of any previous crop technology, including hybrid corn. In February, the International Service for the Acquisition of Agri-Biotech Applications reported that global 2007 biotech crop area rose by 12.3 million hectares (more than 30 million acres), or 12 percent, to reach 114 million hectares (more than 282 million acres). The ISAAA also noted that 12 million farmers from 23 countries planted biotech crops in 2007, up from 10.3 million in 2006. Notably, 9 out of 10, or 11 million of the benefiting farmers, were small resource-poor farmers in developing countries whose increased income from biotech crops contributed to their poverty alleviation.
The most popular first-generation traits engineered into biotech crops are insect and herbicide resistance. Insect resistance is generally conferred by inserting a gene from a naturally occurring soil bacterium that kills only caterpillars. Herbicide resistance allows crop plants to withstand the application of very eco friendly herbicides and thus enables weed control without plowing or hoeing.
Hundreds of millions of people have been eating foods made from ingredients derived from these biotech crops for more than a decade. During that time, not a single person has ever gotten so much as a cough, sniffle or bellyache from eating foods made with ingredients from genetically enhanced crops. All biotech crops are scrutinized by the U.S. Department of Agriculture and the Environmental Protection Agency before they go onto the market. The U.S. Food and Drug Administration, the American Medical Association, the World Health Organization and the National Academy of Sciences all have concluded that biotech foods are as safe as, if not safer than, conventional or organic foods.
In the late 1980s and early 1990s, the number of start-up and well-established seed companies that aimed to develop agricultural biotech exploded. But this promising new technology oddly ran into a buzz saw of environmentalist opposition, especially in
For example, by planting insectresistant crops, farmers reduced the amount of pesticides used by 15 percent, or more than 247,000 tons, between 1996 and 2005. In addition, herbicide-resistant crops enable farmers to switch to no-till farming, which dramatically reduces soil erosion. In fact, an August 2007 study in the journal Proceedings of the National Academy of Sciences found that “no-till farming can build soil fertility even with intensive farming methods.”
Consequently, since biotech seeds are relatively low in value compared to biomedical treatments for heart disease and cancer, small crop biotech companies withered and the industry has been consolidated into fairly large companies, chiefly Monsanto, DuPont, Syngenta and Bayer. St. Louis, Mo.-based Monsanto dominates the market for biotech seed. Some 60 percent of all biotech improved seeds contain traits developed by Monsanto.
One focus of the next generation of biotech crops is improved nutrition. For example, Monsanto and other companies are engineering soybeans with heart-healthy omega-3 fatty acids. In addition, Monsanto is field-testing corn and cotton varieties that are drought-resistant. According to Monsanto, field tests show its drought-tolerant corn yields 12 bushels more than its earlier biotech versions of corn. This is on top of a yield advantage of six bushels that biotech corn has over the same variety that has not been genetically enhanced.
A Biofuel Boost
In December, Congress passed and President Bush happily signed energy legislation mandating that about 36 billion gallons of ethanol be produced for transport fuel by 2022. This is on top of the 2005 requirement that 7.5 billion gallons of ethanol be produced by 2012, which would use up almost one-third of the
This is where cellulosic ethanol comes in. Cellulosic ethanol is produced from the stalks and stems of plants, rather than from their seeds; however, cellulose is too tough to ferment. Agrivida, a Cambridge, Mass.- based biotech start-up, is pursuing one solution by genetically modifying corn plants to contain enzymes that break down cellulose after they are harvested.
LS9, a privately held start-up based in
In any case, if LS9 succeeds, there would be no need to change our current transportation infrastructure. The company has modified bacterial metabolic pathways so that their de signed microbes can eat cellulose and excrete hydrocarbons that can be re fined into gasoline and other petroleum products. In 2008, LS9 plans to build a pilot plant to test and perfect the process, and hopes to be selling biocrude to refineries within three to five years.
It’s worth noting that the biotech fuel industry can move from successful pilot to commercial production in two to five years, unlike the biopharmaceutical industry whose planning horizons are 12 to 15 years due to stringent regulatory requirements.
Policy Challenges: The
This will change as the era of personalized medicine advances and as increasingly predictive biomedicine enables drug companies and regulators to identity patients who will benefit from new treatments much sooner and at lower cost.
Biotech’s worst nightmare is that a new Democratic president and Congress could impose drug price controls after the 2008 elections. In 1993, the Clinton Administration proposed price controls causing the growth in drug R&D investment to fall from 10 percent per year to 2 percent. The Amex Biotech index fell 32 percent that year. Lower R&D investment means fewer new drugs and worse health care.
Roadblocks to biocrop technology should drop in the coming decade. The European Union’s de facto ban of current commercial varieties of biotech crops has been the main barrier to their even faster adoption globally.
The good news is that the European Union is increasingly isolated in its resistance to biotech crops and will eventually have to come to its senses on this issue in the next decade.
One worry is that while crops developed by Western companies are scrutinized for safety, many future biotech crops will be developed in
Finally, 77 percent of the world’s known oil reserves are owned by national oil companies. Even if the world is not running out of oil (and it’s not), our energy security is in the hands of governments that produce oil with all of the efficiency associated with Soviet shoe manufacturing. In addition, rising concern about manmade global warming is encouraging the search for alternatives to fossil fuels. Consequently, on grounds of energy security and averting global warming, the
However, the sunny prediction that boosted biotech crop productivity will restore millions of acres to nature might be derailed if more land is plowed up to grow biofuel stocks. Expanding the production of biofuels could spark an interesting fight between the naturalist and climate change wings of the environmentalist movement.
Ronald Bailey is Reason magazine’s science correspondent. (Disclosure: Bailey owns several hundred shares in various biotech and pharmaceutical companies, some of which are discussed in this article.)