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5-Animals: GE animals in trouble

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TITLE:  Biotechnology venture hits unexpected snags
SOURCE: The New York Times, by Andrew Pollack
DATE:   November 23, 2001

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Biotechnology venture hits unexpected snags

On a farm near Madison, Wis., are some of the world's most costly and well-
protected cows. People entering their climate-controlled steel and concrete 
barns have to shower first -- to keep the cows from becoming infected. The 
cows have been genetically engineered to produce pharmaceuticals in their 
milk. Some biotechnology executives think such animals may be the 
pharmaceutical factories of the future. But today the roughly 45 cows face 
an uncertain fate. The company that created them, the Pharming Group, which 
is based in the Netherlands, has run out of money and filed for protection 
from its creditors.

Pharming's problems suggest that the dream of producing drugs in milk has 
begun to fade. PPL Therapeutics, the Scottish company that cloned Dolly the 
sheep and is also trying to produce drugs in milk, nearly ran out of money 
before raising about $45 million recently. Genzyme Transgenics of 
Framingham, Mass., while flush with cash, changed chief executives in July, 
and its stock has dropped from above $45 last year to about $4 now. The 
problems of the drugs-from-milk business could also deal a blow to animal 
cloning companies because replicating such drug-producing animals was 
expected to be one of the biggest applications of cloning. Indeed, 
Pharming's cows were created with the help of Infigen, a Wisconsin cloning 

The troubles are occurring at a time when it would seem the use of 
genetically modified animals would be in great demand. That is because the 
biotechnology industry is suffering from a severe shortage of conventional 
manufacturing capacity, spurring the need for alternatives like drug-
producing animals. Biotechnology drugs are generally human proteins like 
insulin or growth hormone that are manufactured by putting the gene for the 
protein into bacteria or hamster cells, then multiplying those cells in 
stainless steel fermentation tanks. A big manufacturing plant requires 
several years and $100 million to $500 million to build. Putting the gene 
for the human protein into animals and then purifying the protein from milk 
is a cheaper alternative, backers say. "You're talking about investments in 
animals and barns and milking facilities rather than stainless steel 
reactors," said Tom Newberry, a spokesman for Genzyme Transgenics.

The biggest advantage of using animals may be to produce drugs that are 
needed in large quantities because they are given in high doses. PPL and 
its partner, Bayer, are now holding clinical trials of a protein produced 
in transgenic sheep called alpha-1 antitrypsin, which is used to treat 
emphysema and cystic fibrosis. Bayer already gets the protein from human 
blood but can only make enough for 3,500 patients. But 2,000 transgenic 
sheep could make enough for 20,000 to 40,000 people, said Ron James, PPL's 
chief executive. But despite the theoretical advantages, the earliest that 
drugs made in animals will be on the market is 2003. For one thing, it is 
not yet clear how readily the Food and Drug Administration will approve 
such drugs. Among other things, drug-producing animals will have to be 
certified as free of mad cow disease or other serious infectious illnesses.

Genzyme Transgenics has signed more than a dozen deals with drug companies 
to explore producing drugs in transgenic goats. Johnson & Johnson and 
Bristol-Myers Squibb have signed agreements for two drugs apiece. But none 
of the companies has actually made a commitment to begin clinical trials 
with a drug produced in milk. "You're at a point where you've got to 
execute," said William Tanner, an analyst at SG Cowen. "This is not a 
problem of getting more partners or getting more goats. It's a question of 
getting someone to pull the trigger."

Genzyme Transgenics planned to have its own drug from goat milk approved 
first. It finished clinical trials of antithrombin-III for use in certain 
patients undergoing coronary bypass surgery. But when the F.D.A. requested 
more data, Genzyme Transgenics dropped the drug, saying the potential sales 
would be too small to justify the expense.

That decision, early this year, sent the company's stock tumbling and 
Genzyme now acknowledges that it was a mistake. Geoffrey F. Cox, who took 
over as chief executive in July, said the company will pursue new clinical 
trials to get antithrombin-III approved for a different use by 2003. Sales 
might be small, Dr. Cox said, but the real goal is to demonstrate that a 
drug produced in animal milk can win approval. "We need to establish 
through our own leadership the sense of confidence in the regulation of 
transgenic products," he said. In addition to regulatory hurdles, it can 
take 18 months to begin getting a drug from an animal. To produce drugs in 
a goat or sheep, a gene must first be inserted into an embryo, which can 
take several months. Then the embryo must be implanted in the womb of a 
surrogate mother, which will give birth five months later.

It then takes six months for the goat or sheep to reach sexual maturity and 
another five months for that animal to give birth and begin producing milk. 
With cows, which have a longer gestation period, it takes even longer. If 
an animal does produce enough of a drug in its milk, it can be the founding 
animal of a herd. But if not, the whole process must start again. By 
contrast, conventional production in hamster cells can yield small amounts 
of protein in a few months, allowing clinical trials to begin more quickly. 
Even Pharming ended up switching to conventional manufacturing using 
hamster cells for its first drug -- a treatment for a rare genetic 
disorder, Pompe's disease -- after starting with genetically engineered 
rabbits. "If you are in a clinical program and need to scale up quickly, 
they duplicate every 24 hours," Rein Strijker, senior vice president at 
Pharming, said of hamster cells. "Even rabbits, though they breed like 
rabbits, don't duplicate in 24 hours."

But the shift to hamster cells added an extra financial burden for Pharming 
and undercut its claims for its own technology. Pharming's failure is 
affecting several American organizations. Most of the cows in Wisconsin 
were engineered to make either fibrinogen, a wound-sealing protein Pharming 
was developing with the American Red Cross, or human collagen 1 for tissue 
repair, which was being developed with Cohesion Technologies of Palo Alto, 
Calif. Pharming was also working with Baxter Healthcare on a protein known 
as human C1 inhibitor for the treatment of hereditary angioedema. Pharming 
executives say they hope to raise money soon and emerge from receivership. 
They say the technology will find a place given the need for alternatives 
to conventional manufacturing. Meanwhile, new start-up companies are trying 
to produce drugs in genetically modified plants, in the eggs of genetically 
altered chickens and even in the semen of genetically engineered hogs. The 
stumbles of the transgenic animals companies could allow some of these 
competitors to catch up. Or it could merely show them the pitfalls that are 


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