Shunned by Commercial Markets, Biotechs can Turn to Government Funds

Image: Anne MacNamara Researchers disheartened by the slowdown in private money for genomics projects should keep an eye on the Congressional budget, under debate now. US Government agencies are stepping up their spending on the search for genomic keys to disease. "It's a great time for genomics, as far as we're concerned," says Maria Giovanni, assistant director for microbial genomics and related technology development for the National Institute of Allergy and Infectious Diseases (NIAID). NIAID is asking Congress to fund $103.6 million (US) in microbial genome sequencing projects in 2003, more than double the $47.2 million in the current year's budget. The generous government requests follow a withdrawal of venture capital investment. Four deals for genomics companies in 2002 amounted to only $26 million, a 76% decline from the $110 million raised by 10 companies in 2001. FAME AND FORTUNE The popularity of genomics research accounts for the disparity between public and private investment. Years of whopping funding for genomics sequencing efforts have packed the public databases and inspired slick systems to mine them. Dozens of companies now have the ability to do what no one could do just a few years back: decode and analyze complex gene sequences. To private investors, that spells commodity, meaning a low-margin product unlikely to inspire a sparkling initial public offering of stock. But to government agencies, the commoditization of the human genome spells payday, as researchers revel in easy access to information about cell coding that was long out of their reach. "The infrastructure is there and we're expanding it," Giovanni says. A North Carolina-based genome-sequencing firm stands to take in almost as much from a single government contract as the entire genomics sector collected during the third quarter. Paradigm Genetics, based in Research Triangle Park, may collect as much as $23.8 million for work sent its way by the National Institute of Environmental Health Sciences in the coming years, the company announced Oct. 1. NIEHS is studying how environmental factors such as toxins can interact with genetic information to affect susceptibility to disease. Paradigm will conduct the toxicogenomics analysis for the agency, helping to discover what happens between the time an organism is exposed to a toxic substance and the time it falls prey to disease. GENOME GOVERNMENT The fiscal year 2003 budget has genomics written all over it, thanks to projects from NIEHS and about a half-dozen other agencies, including the Department of Defense (DOD), National Science Foundation, Department of Energy (DOE), and National Institutes of Health. The NIH's Office of Behavioral and Social Sciences Research, for example, is campaigning for an increase in funding based in part on a commitment to support research into environmental influences on gene expression. Funded at $23.7 million in 2002, the office requested $25.8 million for 2003 on a pledge to add genomics to its agenda. Most of the NIH genomics money is being channeled through NIAID. And most of the increase in NIAID genomics spending comes under the subheading of bioterrorism-related projects, a line item that has gained importance. NIAID funded $18.8 million worth of biodefense-related genome sequencing in 2002. For 2003, the agency has asked for $97 million to fund genomics projects targeted at the fight against terrorism, including studies of what makes some strains of a pathogen lethal. While genomics information has yet to produce a hit on the private side in the form of a blockbuster drug, it paid off big-time when scientists were called into the hunt for the source of last fall's anthrax assaults. NIAID had a contract in place with the Institute for Genomics Research (TIGR) in Rockville, Md., which tracked the source of the anthrax used in the attacks. "It just so happens that we were finishing up an anthrax project when all hell broke loose," recalls Claire Fraser, TIGR's president and director. The institute counts on NIAID for one-quarter to one-third of its roughly $40 million research grant portfolio. The NSF and DOE account for the rest. The DOE, which partially funded the Human Genome Project, awarded $103 million this summer to fund studies of the use of genomics to engineer microbes that fight pollution and feed energy sources. The DOE is working on anthrax, too. "There is great promise in genomics to address biothreats," says Daniel Drell, manager of the DOE's Office of Biological and Environmental Research in Germantown, Md. "We have the sequencing capability to make a big dent in that area very fast." The DOE runs a series of meetings it calls "which bug workshops" to consult with outside scientists on the most promising candidates for sequencing. DOD, similarly, is interested in some bugs and not others. Fortunately for scientists unfamiliar with the federal funding web, government agencies with genomics projects on tap meet regularly to coordinate efforts. The Central Intelligence Agency and Federal Bureau of Investigation join NIAID, NSF, DOE, and DOD in the working group of "people who have been doing genomics sequencing and people who need it," Giovanni explains. She invites researchers to bring their projects to NIAID as a first point of entry. "You need to know what bugs are of interest to which program," Giovanni says. "If it's an organism that's not part of our interest at NIAID, we can help move the proposal around to NSF or DARPA [Defense Advanced Research Projects Agency]. For researchers, it's getting that initial contact that matters." Peg Brickley(pegbrickley@hotmail.com) is a freelance writer in Philadelphia.

Shunned by Commercial Markets, Biotechs can Turn to Government Funds

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