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By Malorye Branca

January 15, 2003 | The U.S. government is spending billions on bio-defense, and genomics firms are getting a share. It’s no windfall because the money is spread across many fronts, but even small contracts from government agencies like the Defense Advanced Research Projects Agency (DARPA) can help little companies stay on track. The newly created Department of Homeland Security could spawn a new funding source as well, and a pending bill from Sen. Joseph Lieberman (D-Conn.) provides more financial incentives for biotechs to develop counter-bioterror products.

Integrated Genomics, a small bioinformatics company in Chicago, is one beneficiary. Even before Sept. 11, it had a $500,000 grant from DARPA to sequence Bacillus cereus and B. thuringiensis—anthrax’s closest relatives. That project is completed, and a paper about it will soon appear in a leading scientific journal. Now, the company is in line for some National Institutes of Health (NIH) contracts. “It takes a while between the time they [NIH] decide to fund something and the money starts coming out,” says Michael Fonstein, president of Integrated Genomics. “Those [bioterror] funds are starting to be spent now.”

Directing the Dollars
NIH’s as yet unapproved 2003 budget calls for almost $1.75 billion for bioterrorism-related research. That’s an increase of $1.47 billion over 2002’s budget. Most of that money goes to the National Institute of Allergy and Infectious Diseases (NIAID). Specific research areas include genetics of potential bioterror agents, and development of “next generation” vaccines, therapeutics, and diagnostic tests. The majority of NIH dollars ends up in academic labs, but companies get some of it.

DARPA’s interest in bio-IT technologies predates Sept. 11, says DARPA spokesperson Jan Walker. “We saw the linking of life sciences and information technology as a revolutionizing trend that we needed to capitalize on for national defense,” she says.

DARPA grants aren’t huge. Integrated Genomics got just half a million for its project, but microbial genomes are an integral part of the company’s business, so it proved cost-effective for everyone. Biochip-developer Nanogen has garnered almost $20 million in funding from government agencies, including DARPA, since 1997. “If you’re developing these products for clinical applications anyway, it’s a good bridge, and everyone wins,” says Gerard A. Wills, Nanogen’s vice president and chief financial officer.

DARPA is increasing its bio funding substantially. In 1999 the group allocated about $80 million to the bio-warfare budget. The 2003 budget calls for $90 million just for products combining informatics, biology, and microsystems. Another $39 million will go to therapeutics, $13.5 million to diagnostics, and more than $30 million to bio-sensors.

The Dept. of Homeland Security (DHS) may also establish a new source for bioterror grants, but the agency’s plan is not finalized yet.

Sen. Lieberman’s bill (S-3148), meanwhile, provides generous tax incentives, “guaranteed” markets for successful products, and special patent protection. “The government will specify the nature of the market, and [contract] terms for a successful product, before the research is started,” says Chuck Ludlam, counsel for Lieberman.

“The key question is whether or not the administration, and particularly the new secretary of Homeland Security, will develop a plan for involving biopharmaceutical companies in countermeasure research,” Ludlam says. That puts the onus on Tom Ridge, President Bush’s pick to head the new department. The DHS did not respond to Bio•ITWorld’s requests for comment.

Lieberman believes biopharma is the best place to develop counter-bioterror tools. “Industry’s purpose in life is to create products,” says Ludlam, while government-funded research, “does not lead directly to products.”

He led the way in proposing the creation of DHS, but Lieberman doesn’t think that’s enough. “We aren’t yet ready for the next chemical and biological arrows that may be shot at us by terrorists,” he Lieberman? Ludlam? says. “We need to encourage our biotechnology and pharmaceutical industries to build the shields that will protect us.”

From Bust to Boom
One major effect of all this is a surge of interest in microbial biology. “The basic information about an organism…is now seen as critical to the development of detection and protection technologies,” says P. Scott White, a technical staff member at Los Alamos National Laboratory, whose group has done pioneering anthrax genomics work.

Researchers want to find out which genes makes microbes virulent and where their weak spots are. They also want tools to detect deadly infectious agents quickly, and to distinguish natural epidemics from “terrorist-made” ones.

“There’s definitely more bioterror funding, and that influences where scientists direct their research,” says Steven Salzberg, senior director of bioinformatics at The Institute for Genomic Research (TIGR). TIGR pioneered microbial genome sequencing, and was involved in the investigation of the anthrax attacks.

More competition is good, as long as more top-notch people are becoming involved, but some people are simply following the money and even developing unsound “counter-terror” products, according to White. “It is always a good thing to have more money and more research in a given area, but there is a great need for critical review of research proposals [when this happens],” he says.

Salzberg is encouraged by bioterror research’s sudden popularity. “Almost no one was doing this before,” he says. “It has to help.”


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