The Biotech Boom

When Ernst-Ludwig Winnacker started out as a biochemist at the Max Planck Institute in Munich, Germany, he could assume that if he worked hard, he would eventually win recognition from his peers and perhaps a science prize or two. But by the late 1980s, things weren't quite that simple. Protesters were calling him a murderer and harassing his kids on their way to school. The police found his name on a terrorist hit list. He had to install a security system in his home and travel with bodyguards.

One of the protest leaders who helped demonize Winnacker was Joschka Fischer, a Green-party minister from the state of Hesse. Like many radical groups at the time, the Greens were fervently against anything that smacked of Nazi-style eugenics--just about anything with the word "gene" in it. That also included a new plant for manufacturing a genetically engineered protein for hemophiliacs, which Winnacker strongly supported. In the end, the protesters got their way. Pharmaceuti- cal giant Bayer decided to build its plant in the United States, taking 1,300 new jobs abroad.

That was 12 years ago. These days the prevailing attitude toward biotechnology couldn't be more different. Fischer is still a Green, but he also happens to be Germany's foreign minister and a cabinet member in the government. The Greens, now part of the political mainstream, are no longer against genetics. On the contrary, they are presiding over a dizzyingly rapid expansion in Germany's biotechnology industry.

Germany isn't the only country undergoing a biotech rebirth. For a field long dominated by the United States, it is now getting awfully crowded with global players. Britain, where the biotech boom has spawned hundreds of new firms in recent years, has approved its first three biotech products this year, a new anesthetic and treatments for migraine and Alzheimer's disease. A leading manufacturer of products for purifying genetic material such as proteins and nucleic acids is the Netherlands-based firm Qiagen; its products are now being used in most labs around the world. The Swedish firm Pyrosequencing has become a technological leader in making systems for automated DNA sequence analysis, which is essential for mining the rich vein of data in the human genome. French researchers may be on the verge of unlocking the secrets of obesity. German scientists are doing leading-edge research on heart disease and Indian researchers may soon offer a breakthrough for diabetes. In many countries genetically modified foods are still off-limits. But otherwise, the next Genentech could just as well come from Munich or Rio or Stockholm as from San Francisco or Cambridge.

A lot of this activity has to do with the big strides researchers have made in gene sequencing. The Human Genome Project last summer enumerated 3 billion letters of the human genome, a gold mine of raw data for countless medical breakthroughs. Scientists, however, must first wade through it and figure out what it all means. That's something that not even the vaunted U.S. medical- research establishment can do by itself. For scientists in countries that have not previously had a big biotech industry, this spells opportunity. "The genome gives us all a new start," says Winnacker, who is now president of the German Research Society in Bonn. Says Les Clifford, biotech partner with Ernst & Young in Cambridge, genome research "will speed everything up and bring on a whole swath of new competitors."

Genomics, of course, isn't the only factor behind the growth in biotech. Big pharmaceutical companies, facing an unusual number of expiring patents and thin product pipelines, are looking to life-sciences companies for new drugs. At the same time, new drug-discovery techniques are getting cheaper, faster and better at targeting specific diseases. This means drugs are more accurate, markets will be more segmented and small labs can afford to go after a potential market too puny for big pharmaceutical firms to care about. Munich-based Wilex Biotechnology, for example, is working on ways to stop a particular protein that causes cancer to spread, even though it is active in only 30 percent of breast-cancer victims. "We would be happy with $100 million to $200 million a year," says CEO and founder Olaf Wilhem. "A small company can survive on that."