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June 12, 2002 | He may not be the biggest biotech investor, but G. Steven Burrill's health science
 Investor G. Steven Burrill, CEO of Burrill & Company, helps biotech companies fulfill their potential. 
conferences and annual report have made him one of the authorities on biotech investing. (During our interview, Alejandro Zaffaroni, who worked with Carl Djerassi to invent the Pill, called Burrill to set up a meeting.) His namesake company, Burrill & Company, manages two biotech funds and is raising four more, primarily focused on investing in ag/bio, diagnostics, and biomaterials. Despite the biotech focus of the funds, Burrill, who draws on corporations as funding sources, considers himself primarily a general technology investor. Writer Mike Fitzgerald spoke to Burrill recently about his view of the bio-IT field.

Q: Where does bioinformatics fit into your fund plans?
A: If you look at biotechnology, there's a whole set of tools, bioinformatics being one of them. That technology toolbox has largely been paid for by the human health-care sector because that's where most of it's applied. Most of the guys in the venture space are in the human health-care space. But they don't know how to take that same toolbox and apply it to maybe finding genes in plants.

For instance, we invested in Aclara with our ag/bio fund. Aclara couldn't even spell "ag," but we could help them understand how to use their technology in the biotech world of agriculture.

Q: What role do information technology companies play in the continued development of biotech?
A: As the industry moves from wet biology (where the work is done with wet labs) to digital biology, it changes the nature of the players. We're now going into biotechnology companies and where they used to have lab environments, now they're largely on computers because it's all bioinformatics. The problems [the industry] has are things like moving large data sets and extracting data and data mining. So where are the skill sets in data mining and so forth? In IBM, in Microsoft, in Oracle, etc.

Q: Do the IT companies lead the way in biotech?
A: It's still biology. You're using informatics to drive it, but the biology world is way ahead [in understanding how to apply technology]. Five to 10 years from now, that will be different.

Q: How much of a problem is it that biotech companies basically need to build systems from scratch?
A: I liken where we are to the early days of computing. Once standards developed around Intel and Windows, computing became ubiquitous. Right now in biology, there are [few] common systems or formats. As the industry begins to integrate around standard record formats and operating systems, those will ultimately lead to more efficient drug discovery and development. They'll also lead us to personalized medicine.

Q: Let's talk about the high cost of drug development. How does IT help fix that?
A: In the last 40 years, drug development time has doubled and costs have quadrupled. These costs are still going up. We've got all this new technology, so why has this happened? The big costs come in Phase III trials where you have to run several trials with large populations of patients. If drug makers can pre-select [through gene markers] the test populations, they'll know that if the drug's going to work, it'll work on those patients. That will cut costs way down.

Q: When do you think that kind of improved patient screening will happen?
A: It's beginning to happen right now. Gleevec got approved in record time, 21/2 months, because Novartis had a very good correlation [between the trial patient population and the drug's potential effectiveness].

Q: So how long will it be before costs start dropping across the industry?
A: Five years from now [costs will] have gone down fairly dramatically. The [pharmaceutical industry] has invested very heavily in this technology over the last 20 years, and particularly over the last five. That will translate into more rapid drug discovery and development.

Q: What effect will lower costs and faster drug discovery have on the pharmaceutical industry?
A: It means the world of blockbuster [drugs] may be over. Look at Lipitor, the $7-billion drug for Pfizer. It's a fantastic drug for cholesterol. I'm on it! A lot of people are on it. But there are probably a lot of people on it who can't benefit from it. If you can move those people to a drug that is more effective for them, you will reduce costs.

That kind of technology will get us to a much more personalized world [of medical treatment]. Think about AIDS treatment today. We use a lot of diagnostics to understand what type of pathogens you have. We use cocktails of protease inhibitors to basically bring that viral load down. Then as the virus fights back and its levels start to go back up, we reassess, and then we re-cocktail. That's personalized medicine.

Herceptin and Gleevec are also examples, both in the cancer field, of understanding what works for one person and not another, to give people a drug we know is going to work for them.

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