Biotech Companies, Researchers Venture Into Functional Genomics

Last month in Redwood Shores, Calif., participants in the National Conference of Biotechnology Ventures decided to have some fun. Venture capitalists and biotech CEOs lined up to play a corporate version of "Family Feud," an old television game show in which competing families guessed at trivia. HIGH HOPES: Venture capitalists want functional genomics firms to partner with drug companies, says Karl Thiel. One game question: What's going to be the next hot biotech area for investment? Feud players at the conference, sponsored by Ernst & Young International of New York, began brainstorming. Immediately, the venture capitalists had a response: "Functional genomics," or unraveling how genes work. Their answer doesn't surprise investment analysts. "Every company having anything to do with genomics is now renaming itself a 'functional genomics' company," declares Stelios Papadopoulos, head of the health care investment banking group at PaineWebber Group Inc. in New York. He notes that a dozen or so companies-most small and privately owned-call themselves functional genomics specialists. Many are biotech start-ups launched by professors. The list, however, is growing, and a few bigger names have jumped into the fray, including two public companies: Millennium Pharmaceuticals Inc. in Cambridge, Mass., and La Jolla, Calif.-based Sequana Therapeutics Inc. That increased interest means more opportunities to a variety of genomics-minded scientists, including geneticists, biochemists, and molecular biologists. Researchers specializing in bioinformatics, which blends computer information and molecular biology, also are in demand. The motivation behind the push to functional genomics is simple: To create a drug based on a gene, you have to know how that gene works. What is the gene's protein product? How does the gene interact with others? And how does the gene's behavior change as disease progresses? A NEW OUTLOOK: Berkeley’s Corey Goodman coined the term "functional genomics" about two years ago. These questions represent a departure from traditional genomics, which focuses on simply sequencing genes to learn their structure, says Corey Goodman, a neurobiologist at the University of California, Berkeley, and cofounder of Exelixis Pharmaceuticals Inc., a private genomics company in Cambridge, Mass. "There are roughly 60 human disease genes that have been [sequenced and copied]," says Goodman, who coined and trademarked the term "functional genomics" about two years ago. "But simply cloning a gene doesn't get you there." Companies are using several techniques to unravel gene functions-both normally and during disease. Some firms are searching diseased tissue to find active genes. Others are building libraries of genes with a specific function. Still others are studying genes of interest in simple model organisms, such as the fruit fly and worm. "It remains to be seen who's really successful," remarks Karl Thiel, managing editor of BioVenture View, a biotech industry newsletter published in San Mateo, Calif. According to Thiel, venture capitalists assume-and hope-that functional genomics companies will snag profitable partnerships with drug firms. Enthusiasm, he notes, is running high. REVERSE ENGINEERING: Gregory Went notes some companies use diseased cells to search for expressed genes. Some companies approach functional genomics by starting with diseased cells and systematically searching for expressed genes. "The idea is to take your disease system of interest-in the form of, say, tissue or cell lines-and try to characterize that system comprehensively with respect to how genes differ during disease stages," explains Gregory Went, senior vice president at CuraGen Corp., a Branford, Conn.-based private genomics company. For example, scientists might learn which genes are active during tumor growth. These genes might themselves become diagnostic tools for physicians. Researchers also might eventually learn how to create a drug to inactivate such a disease gene or its protein product. The key to this gene expression work is DNA analysis based on a system of optical screening equipment, gel assays, and computers, Went notes. "You're asking the technology to look at 10,000 to 20,000 genes in a variety of tissues to mine results for statistically significant correlations. You want to take the differences between normal and diseased tissue to identify a subset of genes statistically associated with that condition." Each company doing this kind of gene expression work has its favorite-and patented-technology. At PharmaGenics Inc., a private genomics company in Allendale, N.J., researchers use a system called SAGE, for "serial analysis of gene expression" (V.E. Velculescu et al., Science, 270:484-487, 1995). The company is licensing the technology from collaborators at Johns Hopkins University to explore genes implicated in colon, lung, prostate, breast, and pancreatic cancer. "We're looking at approximating the genes that affect the growth of [cancer] cells or normal cells," explains Arthur Bert, senior vice president of research at PharmaGenics. The company wants to find out which genes suppress cancerous cells and support normal cell division. Naturally, companies that thrive on high-throughput gene screening need researchers with a knack for computers and crunching data. Three-year-old CuraGen employs about 100 people. Went says biochemists, in particular, have found a home within the company. "I find, in general, that molecular biologists are finding it difficult to adjust to the systematic nature of genomics," he observes, adding that these researchers often deal with organisms on an individual level. "Biochemists seem able to make the jump quicker. They're versatile. They have both the arithmetic rigors of a chemistry background and medical insight." To get a job with CuraGen's genomics group, Went advises, a researcher must understand statistics and work well with both engineers and clinical investigators. Job hunters might say the same about Genetics Institute Inc., a public biopharmaceutical firm in Cambridge, Mass. Genetics Institute is taking a slightly different tack toward functional genomics. The company is screening various tissues for genes that produce secretory proteins. Such proteins make up many of the major biotechnology drugs on the market today, including insulin and growth hormone. Genetics Institute is working to build a screenable library of secretory protein genes and, at the same time, express those genes. This way, the company can license both a gene and its protein product to researchers. "Our belief is that computing and sequence analysis will tell us a lot, but having the actual protein available for bioassay will let us get at function faster," says Steven Clark, senior vice president of discovery research at Genetics Institute. Clark notes that the company, which employs roughly 1,000 people, is looking for statistics-savvy biologists. "We need people who are really familiar with computers but also have done some kind of molecular genetics. Right now, it's very difficult to find people who do both." At a few genomics companies, at least, there's still a place for biologists who think "Mac" refers to a hamburger, not a computer. Exelixis, for example, is pursuing functional genomics via Drosophila studies. This work stems from the growing realization that flies-not to mention fish, mice, and worms-have many of the same genes and biochemical processes as humans. CuraGen Corp. http://www.curagen.com Genetics Institute, Inc. http://www.genetics.com/ Millennium Pharmaceuticals, Inc. Bio Online Member Website http://www.bio.com/companies/millennium.html PharmaGenics Inc. Page on BioSpace Online: http://www.biospace.com/g/synd/__d3816744/exhib_script/ exhibitors/PharmaGenicsInc.html Sequana Terapeutics Inc. http://www.sequana.com/ By inserting a human disease gene into a fly, Exelixis researchers can study that gene in the context of a biochemical pathway. For example, they can easily watch-and manipulate-how a given disease protein interacts with other proteins. This knowledge offers clues about parallel biochemical processes in human cells. OLD NEWS: Gerald Rubin maintains that genetisicts did protein interaction studies long before the functional genomics rage. "This is what geneticists do for a living," explains Gerald Rubin, a professor of genetics at UC-Berkeley and a cofounder of Exelixis. "They have done [protein interaction studies] for years, long before there was the term "functional genomics." Exelixis has hired a handful of postdoctoral fellows and recent graduates of university genetics labs. Goodman acknowledges that the company's focus on model organisms-rather than gene-screening technology-initially drew skepticism from the genomics crowd. "At first, the investment community raised its eyebrows," he says, chuckling. "But in the past two years, there's been a noticeable shift [in attitude]. They're calling us 'the fly guys' less often." Tim Harris, senior vice president of R&D at Sequana Therapeutics, agrees: "I think you'll find the CEOs of large pharmaceutical corporations will be more aware of Drosophila and nematodes than in the past. A few years ago, they might have asked: 'What in the hell do we want to work with worms for? I thought we were interested in humans.' The answer is that worms are closer to humans than you think." This summer, Sequana Therapeutics bought NemaPharm Inc., a small company in Cambridge, Mass., that specializes in drug discovery based on the nematode Caenharobus elegans. Harris says Sequana is continuing its work on the tub mouse gene, implicated in obesity. "We found a highly conserved [tub] gene in the worm," Harris points out. "Now we are looking to find out just what that gene does in the worm, which will give us a clue to what it does in humans." The company also has begun work with Drosophila. RECOGNITION FACTOR: The ability to identify gene patterns is an important skill, says Millennium’s Robert Tepper. Meanwhile, Millennium Pharmaceuticals is trying to get the best of both worlds by partnering with companies to pursue a model organism approach and large-scale gene screening. "I agree that model systems can be very valuable," says Robert Tepper, vice president of biology at Millennium. "But model systems can only go so far. They may not [represent] the actual disease state in humans. It may be quite different in higher organisms in the context of disease, not just genes." He adds that going from gene structure to actual function-and a disease phenotype-requires an understanding of the clinical disease at hand. That's where collaboration with drug companies and academic researchers comes into play. "You need to develop a meshing of technology with disease experience." In addition to forming partnerships, Millennium builds an eclectic blend of talent in-house. The company counts some 200 employees as scientific staff, from geneticists to animal physiologists. Beyond biochemistry, the company looks for people with an ability to recognize patterns of protein and gene expression, Tepper says. A general ability to recognize patterns-or view gene questions more globally-is beneficial. "I rarely see a merging of areas like [that in] functional genomics," adds Tepper. From model organisms to high-tech gene screens, the functional genomics field is full of optimism-and opportunity. Kathryn S. Brown is a freelance science writer based in Columbia, Mo.

Biotech Companies, Researchers Venture Into Functional Genomics

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