The Biotech Boom

The same could be said for the hundreds of small companies cropping up across Scandinavia and, to a lesser degree, southern Europe. In Spain, Jose Maria Fernandez Sousa-Faro, the president of family-owned insecticide maker Zeltia, founded PharmaMar in 1986 to investigate potential anticancer agents extracted from marine plants and animals. The firm holds 620 patents, but the great hope is ET-743, a promising antitumor agent extracted from red sea squirts living in the Caribbean and Mediterranean seas. The drug has been tested on 750 patients in the United States and Europe and shows few of the typical side effects such as nausea or diarrhea. It may be licensed for use in Europe in 2002 to treat bone, skin, breast, ovarian and other cancers.

Israel sowed the seeds of its own biotech boom in the 1950s and 1960s around citrus crops, when a generation of biologists toiled to make better strains of oranges. But by the late 1970s, most farmers had gone bust. In 1980 Haim Aviv, the father of Israel's biotech industry, managed to attract American venture capitalists. His success encouraged other foreign investors, and the result was a boomlet of small start-ups. Now Israel has 135 biotech companies. "Once that watershed was crossed, it's been repeated hundreds of times," said Bernard Dichek, who runs an online biotech magazine. "Today it's taken for granted that you raise money abroad, but nobody had done it."

In India, the government took the first step in encouraging a biotech industry back in 1986, by establishing a separate government department charged with increasing the number of biotech grads coming from universities. Fifty universities now produce about 500 biotech scientists annually. In addition, the government began funding more than 50 centers around the country to collect genomic data. Because of India's caste system and isolated and in-bred tribes, Indians have a particularly well-preserved and easily traced gene lineage, which could prove to be a rich source of information for scientists seeking the mechanisms behind hereditary diseases and, ultimately, cures for them. "Biotech's an area where India can be a key player," says Kiran Muzamdar-Shaw, managing director of Biocon, a biotech firm. "We've got the skill sets and the manpower, and in genomics alone India has the richest gene pool in the world." So far, though, private industry is still in its infancy.

Brazil is also just getting biotech research off the ground. It used $250,000 of seed money from a So Paulo-based science foundation, FAPESP, to jump-start what has blossomed into a $20 million operation involving more than 200 scientists at 62 laboratories. Scientists have now completed more than 730,000 sequences of the cancer genome. Brazilian researchers lead in sequencing cancers. By year-end they expect to complete a million sequences and believe that, by 2002, they'll finish assembling a full genetic map of a breast-cancer tumor. Brazil hasn't yet translated this research into new start-ups.

Noticeably absent from the biotech boom is Japan. As early as 1981, the government was planning to build automated high-speed DNA sequencing facilities for a project led by Akiyoshi Wada, then a University of Tokyo professor. Japan, however, could not pull off this ambitious effort. The various funding agencies would not cooperate with each other, research facilities went underfunded and petty turf wars among scientists got in the way. The government may also have been overly sensitive to America's fears of Japanese industrial domination. "The Japanese government did not want Americans to feel that way, and that's why we fell behind," claims Wada. Now Japan is home to only a few dozen biotech companies.

But Japan is trying to catch up in the post-genome world. Despite continuing hard times, the government plans to increase spending on biotech research by 23 percent next year. This month it opened the Genomic Sciences Center in Yokohama, led by Wada, featuring a nuclear magnetic resonance center to study protein structures. The Kyoto-based liquor producer Takara Shuzo will start operating Dragon Genomics, a center for high-throughput genome analysis, in early 2001, which will be the largest of its kind in Asia.