Mass-produced life goes to market

Mark Czarnecki June 16 1980


Mass-produced life goes to market

Mark Czarnecki June 16 1980



Mass-produced life goes to market

Mark Czarnecki

It looks like a stereo deck taking refuge in a freezer chest. Like any self-respecting piece of high technology it comes complete with colored push buttons, gauges and digital switches and, like many significant advances in modern biotechnology, its innards and chemical processes are closely guarded company secrets. The company is BIO LOGICALS, a fledgling Canadian concern, and “it” is a futuristic “gene machine” which BIO LOGICALS’ president, Robert Bender, says will synthesize genes more quickly and efficiently than any process currently available. Although the gene machine hasn’t yet gone into production, it has shown enough potential that BIO LOGICALS is negotiating development contracts worth up to $2 million with a number of major U.S. and Japanese chemical and pharmaceutical firms.

The development of the gene machine has been BIO LOGICALS’ major project since its founding in 1978, and if successful it will greatly reduce the time and labor involved in gene-splicing procedures (see box, page 42). The company is typical of several small biotech firms in North America and Europe thatgrasping the stunning potential of engineering new life forms, breeding them by the billions and then selling the products they create—have taken the initial risks in a commercially unproven field and now find themselves transformed into blue-chip investments.

While most of them also do research in other areas of biochemistry, the glamor technology that promises the most profitable return is recombinant DNA, commonly called gene-splicing. In its most basic form it involves adding foreign genes to the natural genetic makeup of an organism so that it will accept the new gene as one of its own and function accordingly. What it amounts to is the creation of new life forms which will produce useful substances more cheaply and in much greater quantities than traditional methods. One of the first genes to be spliced for practical applications was the gene for human insulin because its chemical structure is well known and because there has always been a need in the treatment of diabetes for purer insulin than the animal-derived product now in use. Yet only a few years ago the possible benefits of gene-splicing were being passed over by apocalypseminded scientists and observers who worried about the accidental unleashing of deadly bacteria on a helpless world.

Those fears have passed, however, and now, reassured by voluntary guidelines that leave private industry’s hands untied, enterprising businessmen such as Bender have found the opportunities to advance human knowledge while turning a handsome profit too tantalizing to ignore. In fact, there’s general agreement in the relatively closed world of Canadian biotech that if any one company is going to make a splash internationally it is Bender’s BIO LOGICALS. “He’s got the brains, the determination and the scientific knowhow—I wish to hell we had more like him,” says Francis Rolleston, director of special programs for the Medical Research Council, the body that initially formulated Canada’s gene-splicing guidelines.

At the tender age of 32, Bender’s enterprises already include another biotech operation working on the conversion of cellulose (trees, for example) into animal feed and a production company that develops educational concepts for children. His practical business experience is complemented by extensive studies in biochemistry and molecular biology, though he didn’t complete his doctorate. “I never finished university—it finished me,” Bender declares, tickled by the fact that his lack of academic qualifications (he didn’t get his B.Sc. either) has made no difference to his comprehension of, and standing in, an incredibly rarefied scientific milieu.

Bender has assembled a highly qualified and experienced management and research team at BIO LOGICALS. The chemistry inside the gene synthesizer is largely the work of Kelvin Ogilvie, a McGill University professor specializing in nucleotide chemistry and a member of BIO LOGICALS’ advisory board. The machine was designed and built by Bender and Peter Duck, BIO LOGICALS’ technical vice-president. Top management at the company presents a study in styles: Bender sports a bushy beard and an Afro haircut, always dresses in black and huddles over a tiny white Formica desk in a white room furnished with a “whiteboard” (magic markers for chalk), white tables and white chairs; his co-directors, more traditionally attired in suits and ties, occupy plusher quarters down the hall. Common to all BIO LOGICALS money managers is some knowledge of the technology involved in the company’s operations, knowledge Bender believes they must have if a high-tech enterprise is to succeed.

Lowly bacteria are the real key to the multiplier effect necessary for profitable gene-splicing. They’re easy to work with, their genetic makeup is relatively straightforward and, most important, they reproduce very quickly, in some cases every 30 minutes. Even though a bacterium with recombined genes may only create a minute quantity of a precious substance such as insulin, billions upon billions of them in large vats will eventually, it is hoped, produce enough insulin to make some people healthy and others rich at the same time.

The bigger the stakes the bigger the names, and insulin, with its $150-million U.S. market, is just a warm-up for the biotech Olympics. Although nobody except stock market speculators has yet made a cent out of any gene-spliced product, it’s the potential industrial applications that are being most extensively explored. Here the big multinationals like Du Pont and Monsanto are making up for lost time by either buying into the young biotech firms or establishing their own research facilities. Standard Oil of Indiana was one of the first to take the plunge when it decided to risk venture capital on Cetus Corporation of Berkeley, the biggest of the U.S. companies and worth an estimated $300 million: Cetus counts among its 18 projects the development of a “superbug” that by itself will transform cellulose into alcohol.

Almost every week sees the announcement of another “major breakthrough” in gene-splicing technology. The results of these projects won’t affect the consumer for years, but just those gene-splicing advances announced in the past year alone will ensure profound future changes in everyday life:

Interferon. The most spectacular example of potential profit-making in the field has been human interferon, a highly touted anti-viral agent that could provide cures for diseases ranging from the common cold to cancer. Interferon occurs naturally, but in such small quantities that the cost of isolating it from white blood cells has been estimated at $10-to-$20 billion a pound. Clearly a process that significantly reduces these costs is a major breakthrough and, in fact, the Europeanbased biotech firm Biogen announced in January that it had successfully spliced the gene for human interferon into bacteria. The implications of that advance weren’t lost on Wall Street. The day after the announcement, 128 million shares of Schering-Plough, the pharmaceutical giant that owns a major share of Biogen, were traded and its stock went up 3% points to 371/2; Inco Ltd. of Toronto, a 24-per-cent owner in Biogen, climbed 1 Vz points to 38.

Insulin. The huge pharmaceutical firm Eli Lilly already controls over 80 per cent of U.S. animal-derived insulin production. Lilly has assured itself of a dominant position in the human insulin market by acquiring the rights to mass-produce the substance under licence from the U.S. firm, Genentech, using its synthetic insulin gene. But, undaunted by Lilly’s virtual stranglehold, Connaught Laboratories Ltd. of Toronto is now negotiating with Canada’s National Research Council for licencing rights to a different process for synthesizing the human insulin gene developed by the NRC’s Saran Narang (see box, page 46). Although Genentech’s process was announced two years ago (the head of its insulin research team, Keiichi Itakura, formerly worked under Narang at the NRC), Narang’s gene appears to be a superior product, both in terms of purity and efficiency of production.

Anti-viral agents. Research is also under way at Connaught and at Quebec City’s Institut Armand Frappier into the use of gene-splicing in the manufacture of vaccines against viral diseases like influenza and hepatitis. The traditional method of vaccination is to weaken the disease-causing virus and inject it into the body, where the coating of protein on the virus triggers the manufacture of antibodies that will guard against future attack—the weakened virus itself is presumed to be not powerful enough to cause infection. The procedure isn’t foolproof, however, and sometimes produces unforeseeable side effects, so scientists are now attempting to splice the genes for the protein coat alone into the DNA of a common bacteria. It is hoped that the resulting pure protein coat will then be used as a completely safe vaccine which will stimulate the production of antibodies.

Agribusiness. Genetic manipulation has been practised for millennia by plant and animal breeders, but with gene-splicing they won’t have to wait for each new generation to see the results of their experiments. There’s a major push on to modify important cereal crops so that they can “fix” or replenish their own nitrogen and thereby eliminate the need for most fertilizers.

Normally, only legumes like peas and beans replenish the soil with valuable nitrogen with the help of certain bacteria which, in their natural state, only live on the roots of these legumes. Some biologists are now trying to manipulate the bacteria’s genes so that they will be attracted to plant species such as cereals, while others would like to splice the bacteria’s nitrogen-fixing genes into the cereals themselves.

Pesticides. One of the more bizarre products of modern biotechnology is the biological pesticide methoprene, a synthetic hormone that regulates growth and prevents insects which are most harmful in their adult state from maturing. The idea is to splice the gene for the hormone into members of an insect population and let natural reproduction do the rest until a substantial percentage of the population no longer matures. Methoprene has been receiving a lot of attention from, among others, the Chinese: Zoecon Corporation, a U.S. leader in this field, was one of the first firms Chinese scientists requested to visit under the Kissinger exchange program. BIO LOGICALS has also been at work on B.t., a biological pesticide that has been suggested as a safe alternative to the controversial spruce budworm spray.

Mining. Although mining might appear to be the last area in which bacteria could be useful, research is being done at the University of Western Ontario on bacteria that live on metal ores, oxidizing and dissolving them so that extraction can be accelerated. Western also has filed a patent application for bacteria that speed up the extraction of

011 from bitumen deposits like the Alberta tar sands.

This recent flood of breakthrough announcements followed closely upon last fall’s decision by the U.S. National Institutes of Health (NIH) to relax some of the guidelines set down in 1976 for recombinant-DNA research on the grounds that initial fears had been overplayed. Profitable new technology or not, molecular biologists recognized early on possible hazards in their experiments—doomsday scenarios included micro-organisms implanted with tumor virus genes escaping from the lab and decimating the population—and for the past four years, while guidelines have been in effect in several countries, including Canada, the debate roared on as to how safe gene-splicing really was, and indeed, whether it should be permitted at all.

Now that gene-splicing has been pronounced safe, at least for the moment, researchers are particularly pleased that U.S. restrictions stipulating strict containment procedures were relaxed on experiments using the weakened K-

12 laboratory strain of Escherichia coli (E. coli), a bacteria found in the intestines of many animals, including man. Since the makeup and behavior of E. coli are known in great detail, it has been the favored host for spliced genes; however, it was the fear that a recombined batch of E. coli might somehow infect a human population that prompted the scientists to sound the alarm in the first place.

Canada is now considering bringing its guidelines into line with the U.S. and other countries, though they probably won’t be as all-encompassing as those in the U.S. Essentially, Canadian guidelines have been based on the principle that since it is virtually impossible in practice to regulate what an individual scientist does in his own lab, restrictions should focus on a centralized code of behavior which a responsible researcher can follow. Bender agrees with this approach. “You either behave ethically or you don’t,” he says, adding that he’s in favor of submitting all research and production procedures to a government review board for “biohazard safety” approval.

Both the old and the new guidelines in Canada and the U.S. legally only apply to government-funded research and not to private industry, but commercial firms have so far agreed to abide by them. Nevertheless, concern has already been voiced in the U.S. Senate about the lack of legal sanctions on private companies that do not voluntarily comply (several attempts at making compliance mandatory have failed). As a result, a controversial bill, strongly opposed by the major pharmaceutical manufacturers, has now been introduced that would force all companies to register their recombinant-DNA research with the NIH.

However, with the NIH now approving large-scale production of gene-spliced substances on an individual basis, another question still remains unanswered. Will workers employed in this area be adequately safeguarded? Critics of the relaxed guidelines have pointed out that, although the possible hazards in the vast majority of lab research have now been judged negligible, the potential dangers in scaled-up industrial production using the same processes have yet to be determined in all cases. Optimists claim that the risk involved in producing a certain substance is the same whether the yield is 1,000 litres or one litre, given adequate physical containment and process controLThe opposing view, tentatively formulated in a recent U.K. government report on biohazards, suggests that the continuous cultivation of recombinant organisms in large quantities over thousands of generations might lead to the growth within the culture of a new species over which there would be no adequate control.

Some scientists are more concerned at the moment with the possible harm being done to pure research by the encroachment of private industry. Biotech research at Canadian universities is often carried out in collaboration with industry—BIO LOGICALS rents lab space at York, Ottawa and McGill universities to facilitate the kind of interchange of ideas that has become commonplace in the United States. But this increasing tendency on the part of molecular biologists to maintain both institutional and commercial ties may be undermining the foundations upon which objective scientific research is built. Members of the U.S. Recombinant-DNA Advisory Committee who objected to the easing of guidelines claimed that some scientists had failed to report possibly hazardous experiments during the recent moratorium because potential commercial applications might have been endangered. Many believe, too, that the traditionally free flow of information at the cutting edge of research is being impeded for fear of giving away secrets to the competition.

The issue of secrecy has also become more volatile because patenting, the usual method of safeguarding commercial innovations, may not be applicable to gene-spliced organisms or may be too costly and lengthy a procedure to be worthwhile. In the highly competitive world of semiconductors, for example, often used as a model for the emerging biotech industry, companies have largely abandoned patenting for “process secrecy,” which involves elaborate security precautions on new research. After compliance with government regulatory agencies is obtained in confidence, the product is mass-marketed on an enormous scale as quickly as possible to gain a maximum return before a rival firm can duplicate it, and the same could happen in biotechnology.

However, biotech entrepreneurs like Bender think the chances of “bug rustling,” as one industry executive puts it, are remote. Says Bender, “With a lot of trade secrets you can tell people everything you’re doing and it’s still not quite the same as being able to do it. If Nureyev tells you exactly how he does one of his routines, your chances of pulling it off are small.” A more traditional view is expressed by Louis Siminovitch, chief geneticist at Toronto’s Hospital for Sick Children and a former member of the Medical Research Council’s Biohazards Committee: “I believe there’s a lot of secrecy in the industry about new breakthroughs. Personally, I find the trend toward biologists becoming entrepreneurs disturbing. Traditionally scientists have been given a lot of money to do what they want, but the way things are going now society may change its mind.”

Though the NRC’s Narang isn’t concerned with the commercial applications of his discoveries, he’s eminently qualified to speak on the subjectas a member of Cetus’ advisory board, he takes part in brainstorming sessions with Francis Crick, the co-discoverer of DNA’s chemical structure, and several other Nobel laureates. “Our job is to create knowledge,” says Narang, lab coat flying as he strides through his plant-filled office wagging a test tube, occasionally pausing to answer the phone and give employment advice to a former research associate. Narang obtained his PhD in India and helped Nobel Prize winner Har Gobind Khorana decipher the genetic code before accepting a research post at the NRC in 1966. His life is devoted to molecular biology, and fortunately both his wife and teenage daughter share his passion—their family vacations tend to consist of lecture tours and visits to foreign think tanks.

Despite job offers from major pharmaceutical firms around the world, Narang is happy with the NRC’s pure research environment, and he doesn’t believe the free interchange of ideas inherent in academic research will be stifled by the growing ties between industry and institutions. “The fundamental breakthroughs and generation of ideas will still come from the institutions,” he claims. “The pioneers will always be pioneers because they’ve had 10 or 15 years’ head start on the rest. At the highest level we all know what we’re doing, and it’s important to me to know what might be happening in other places.”

Individual scientists may or may not be concerned about trade secrecy but most biotech companies certainly are, and the NIH has suggested that all processes submitted for registration be protected by patent application first. But it hasn’t been established yet that gene-spliced life forms can be patented at all, and the U.S. Supreme Court is currently considering a test case since many such organisms are waiting for patent (the particular bug on trial has been engineered by General Electricdo eat oil spills).

Traditionally, patents are granted on the uses to which a particular “invention” is put, so the question of patenting “life” per se may not arise at all. The U.S. Appeals Court has said,“We do not see any sound reason for making the distinction between the living and the dead.” This extraordinary statement may be justified in terms of present U.S. patent law but its consequences are horrifying to contemplate. Taken to its most sinister extreme, such a view would allow private ownership and control of the evolutionary process and the cloning of human beings whose lives would be in the hands of their creators. Most observers feel that the court will not risk a decision and will refer the question back to Congress.

Although most commercial genesplicing research has so far focused on introducing foreign genes into bacteria, ethical problems surrounding recombinant research on higher organisms are already being raised by this controversy over patenting. Some gene-splicing has been done in this area, but despite testtube babies in England and sperm banks in California, Aldous Huxley’s Brave New World remains a shocking figment of the imagination. The problems involved here are immense. The higher the life form the more complex the gene structure: a virus may have as few as three genes while man has 50,000 to 100,000 active genes, and each inherited trait is invariably the product of not one but possibly hundreds or thousands of genes working in combination. How the initial human cell created at conception selects and combines genes from the male and female gene “pools” at its disposal is largely a mystery, and manipulating them for our own uses an impossibility. Given these natural obstacles and biology’s present technological limitations, it’s easy to understand why most scientists relegate human genetic engineering to the realm of science fiction.

Twenty years ago, of course, most people would have looked upon the now mundane technique of gene-splicing as an escaped idea from the Twilight Zone and gene machines as incredible, if not downright evil. But pragmatic visionaries like Robert Bender sense infinite possibilities where others sense only nonsense. They have the ability to see the future in the present—and possibly make money from both.