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BioTech History: San Diego is big part of a big gamble , Major companies bet...

by By Thomas Kupper, UNION-TRIBUNE (reposted by Thursday, Jun. 21, 2001 at 5:19 AM

San Diego is big part of a big gamble, Major companies bet millions that resistance won't kill market By Thomas Kupper  UNION-TRIBUNE STAFF WRITER

errorSan Diego is big part of a big gamble , Major companies bet millions that resistance won't kill market


November 30, 1999

LA JOLLA -- At the edge of a canyon overlooking Interstate 5 in La Jolla, bulldozers began clearing land this year for what will be one of the largest of San Diego's many biotechnology research facilities.

Sometime in the year 2001, several hundred scientists affiliated with the Swiss company Novartis will move into a campus of seven buildings, all filled with the latest DNA-analysis tools, "gene guns" and other high-tech gear.

Their job: Finding new ways to manipulate the genetic makeup of plants, and new products for dinner tables around the world.

Europeans have banished such "genetically modified" foods from their dinner tables, but the uproar does not appear to have dampened the interest of American companies and others in the industry.

The industry is in a high-stakes gamble that resistance to bioengineering won't make its products worthless -- and San Diego is at the center of that bet.

"This industry has the potential to fuel the economic growth of the United States the way telecommunications and the computer industry have," said Stephen Briggs, head of one of two research institutes that will fill the Novartis campus.

"San Diego has the potential to be one of the major centers. It can be the Silicon Valley of agricultural biotech."

Major agricultural companies are all stepping up their efforts in bioengineering. Monsanto has sold off many of its other businesses to focus on biotech, and both Dow Chemical and Novartis are investing heavily to increase their presence in agricultural biotechnology.

Briggs' Novartis Agricultural Discovery Institute plans to invest $55 million a year on the study of plant genetics. Already, 65 people are at work in a temporary building in La Jolla. That staff is expected to grow to more than 200, with another group at a separate genomics institute.

Instead of building its own capability, Dow simply bought the San Diego biotech Mycogen, which was a pioneer in the development of bioengineered corn. Now, Mycogen is pursuing new discoveries that could make plants resistant to disease or more healthful to eat.

Perhaps a half-dozen small San Diego biotechs are also working on agricultural projects. And while most of San Diego's dozens of biotech companies are focused on medical research, the agricultural side is growing fast.

Why push forward when acceptance of bioengineered products is uncertain?

Nearly everyone in the industry concedes that the backlash against bioengineered food has gained momentum because the benefits of insect-resistant corn, for example, aren't obvious to the people who actually eat the corn.

All these companies are betting that acceptance of bioengineered crops will increase, and in some cases are subtly shifting their approach to help their case. Their talk has shifted from promoting products that help farmers to finding products with consumer benefits that can't be denied.

That is a big change, because much of the earliest agricultural biotech work focused on increasing production efficiency for the highest-volume crops, corn and soybeans, offering the biotech companies the quickest financial return.

Now scientists talk more about "output traits," which means improvements that will be attractive to the consumer.

For example, instead of insect-resistant corn, the companies now promote their efforts to develop crops that will fight human disease. Instead of weedkiller-resistant soybeans, they talk about tomatoes that taste better or stay fresh longer.

"If I put out a tomato that tastes like the tomato I grew up with on the farm and sell that year-round, I could have a $1 billion-plus product, and the consumers would buy it," said Jerry Caulder, a former chief executive of Mycogen who now heads the local start-up Akkadix.

Joe Panetta, a former Mycogen executive who now heads BioCom, the local biotechnology trade group, remembers when the company was introducing its insect-resistant corn and executives thought they had a sure-thing winner. The question of whether consumers would approve was largely an afterthought, an approach that turned out to be a major miscalculation.

Vegetables for vaccines?
"These companies made products for farmers. They didn't sell products to consumers, and so the thinking from a marketing standpoint was, 'What do we need to do to make these products attractive to farmers?'" Panetta said. "When it came to corn that could control insects, that wasn't something the public could identify with."

Today, scientists at the Novartis Institute are focused on developing crops that will help consumers avoid such diseases as cancer, diabetes and osteoporosis.

Researchers think nutrition makes a difference in each of these areas and are trying to determine the genetic basis.

At Dow's San Diego facility, the former Mycogen, scientists are looking for ways to produce high-oil grains and plants that contain vaccines. The unit also works with Dow's chemical business to study methods for using plant oils to produce such things as biodegradable plastics, a spokesman said.

Likewise, the start-up San Diego biotech Epicyte is looking at ways to use plants to make drugs. The company believes, for example, that a new corn that can be processed into a gel for herpes could cut production costs and also produce an effective drug.

"Companies like ours may go a long way toward alleviating some of the 'What's in it for me?' kind of reasoning," said Robert Leach, the company's chief executive. "Many of our ideas are aimed at markets where they could affect 25 percent of the population."

One entrepreneur making a big bet on the technology is Paul Ecke, whose family has bred poinsettias in Encinitas for much of this century. Ecke plans to spend $25 million building a research park on his poinsettia farm to look at new biotech applications in agriculture.

Ecke thinks it would be prohibitively expensive simply to hire scientists to develop flowers that need less water or that exhibit other beneficial traits. But by renting space for the scientists to work on other things, Ecke believes he can gain access to some of the technology.

"It has been extraordinarily expensive to do even basic research," Ecke said. "We've had our toes dipped in the water, but we didn't want to drown."

How it's done
The process of genetically modifying a plant is straightforward.

There are two methods, one of which uses a "gene gun" to inject the genetic material into plant cells, while the other involves producing bacteria that contain the genetic material.

In either case, the success rate is not high.

With the bacteria method, for example, scientists must dunk a plant in the bacteria for half a minute or so and hope that the genetic material gets into the plant's cells. That happens less than 1 percent of the time -- producing a good number of genetically modified seeds from each plant, but also many that aren't modified.

Understanding which genes to manipulate is also not an easy task.

It can require understanding and moving several genes to get the desired result, and even a life form as seemingly simple as corn could have tens of thousands of genes, many of which have yet to be understood by anyone.

It's not a totally random process, though, because researchers can use the advances of conventional breeders to help them. For example, they might focus on finding the genetic differences that led an existing corn or soybean to develop a healthier oil profile.

Steve Goff, who leads a research group of about 30 at the Novartis Agricultural Discovery Institute, points out that thousands of years of breeding have already substantially alterered the genetic makeup of a crop such as corn, which tended to produce scraggly ears several centuries ago.

"In reality, nearly all crops are modified genetically," Goff said. "Some of them have already been modified to the point that the ancestral population is impossible to recognize."

Goff argues that breeding in the lab isn't really any more unnatural than the process of conventional breeding, in which much larger numbers of genes could be involved in changes that take place in successive generations of plants. He believes the controversy stems largely from a lack of understanding.

Tough prospect
"What's the most disturbing is that there's a lack of general scientific understanding and a lack of understanding of the entire historical development of crop plants," Goff said. "If people understood that more, the definitions of 'natural' and other things that people seem to be concerned about would take on a new meaning."

In the industry's worst nightmare, of course, Americans will start to wonder whether they, too, should think twice before eating anything with bioengineered ingredients. If that happens, it could become very difficult for companies to continue investing in the research.

Briggs believes it's possible that resistance to the technology will spread beyond Europe and possibly to the United States. That's why he said it's essential to get products with clear consumer benefits on the market, before resistance spreads.

Once products that control disease or improve nutrition emerge in the United States, he said, it's likely that European shoppers will also demand access to them. Until then, though, companies such as Novartis will face a tough battle convincing consumers the products are beneficial.

"The role the controversy plays is simply to reinforce that we have to come up with products that matter," Briggs said. "We need to come up with products that really benefit the average citizen."

Ecke believes that his poinsettias could eventually become a sort of advertisement for the benefits of genetic engineering. After all, he asked, who could be against a more beautiful or longer-lasting flower?

As with others in the field, Ecke recognizes that his investment in the research facility he wants to build faces additional risk because of the opposition to agricultural biotech overseas. If the industry fails to grow, it would be difficult to rent space in his facility.

But he is betting on the potential of today's technology to help his business grow, just as earlier innovations such as conventional breeding or better-designed greenhouses have done.

"What we've been doing is trying to improve the plants that we offer growers for 75 or 80 years," Ecke said. "This is just another way to do that. It's another tool in our tool belt."

Copyright 2001 Union-Tribune Publishing Co.
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