GENTECH archive


Biotech Battlefield: Profits vs. Public

                                     Sunday, February 21, 1999 

            SUNDAY REPORT 
            Biotech Battlefield: Profits vs. Public 
              Private companies are refusing to share the genetic code
            of a deadly staph bacterium. They say it cost them millions
            to discover, but officials say the data are needed to avert a
            public health crisis. 
            By MARLENE CIMONS, PAUL JACOBS, LA Times Staff Writers
                      WASHINGTON--The first reported case was in
                      1996. A Japanese baby nearly died of a
                  raging infection, despite treatment with one of the
                  most powerful antibiotics in existence. Over the
                  next two years, there would be at least three more
                  cases--including the first death, that of an elderly
                  New York man struck down last year. 
                       One of public health officials' darkest
                  predictions had come to pass: A strain of
                  Staphylococcus aureus, the most common source of
                  life-threatening bacterial infections in hospitals,
                  had arrived that was resistant to every antibiotic
                  known to medicine. 
                       But scientists working to divert a potential
                  medical disaster have run into a significant
                  roadblock from the most unexpected of places:
                  their fellow scientists. 
                       Biotechnology and drug companies have spent
                  huge amounts of money decoding the genome--the
                  genetic blueprint--of staph, with the hope of
                  designing new drugs to challenge it. But they are
                  unwilling to share that crucial knowledge with
                  government and university scientists, a stance that
                  many researchers believe is critically stalling the
                  pace of scientific progress. 
                       As a result of the private sector's refusal to
                  collaborate, federal health officials have been
                  forced to strike out on their own, duplicating the
                  work at a cost of millions to taxpayers. 
                       What might have been a triumph of modern
                  science over a looming public health crisis has
                  become a clash between the needs of companies to
                  seek a return on their investments and the desires of
                  academic scientists to put basic genetic information
                  into the public domain. 
                       This is not the first such confrontation in this
                  new age of commercialization of biological
                  science, nor is it likely to be the last. Private
                  companies and federally funded labs, for example,
                  are similarly competing to complete the much
                  larger human genome over the next few years. And
                  private and public researchers have collaborated in
                  the past--most notably in the 1980s on AIDS drug
                  studies--resulting in considerable friction
                  concerning patent rights. 
                       But in the case of staph, public scientists argue
                  that profit margins should be secondary to fighting a
                  common public health enemy and that it is difficult
                  to imagine a conflict where the stakes could be
                  higher: fighting a possible outbreak of an
                  untreatable infectious disease. 
                       The delay in making the data public has "slowed
                  research by four or five years," contends Dr. Olaf
                  Schneewind of UCLA, a leading staph investigator,
                  who understands the industry's position but is
                  unsympathetic to it. "From the perspective of
                  industry, you can view this as a market," he says.
                  "At the same time, there is a humanitarian issue." 
                       "Not having this information is a big obstacle
                  for the scientific community," says John La
                  Montagne, deputy director of the National Institute
                  of Allergy and Infectious Diseases. "Without this
                  information, we don't have the insights we need. . .
                  . It's like keeping the map of the city of Washington
                       The companies argue that they've spent all this
                  money to get the data--why should they give it away
                  for free? It will only remove their incentive to do
                       The three biotechnology companies that are
                  known to have deciphered the staph genome
                  maintain that selling their data to big
                  pharmaceutical companies gets the information to
                  precisely those who are best at developing new
                  drugs to keep staph in check. 
                       "Their business is to develop new products,"
                  said Gerald F. Vovis, a senior vice president of
                  Genome Therapeutics in Waltham, Mass., which
                  has a $43.5-million deal with Schering-Plough to
                  provide genetic information from disease-causing
                  bacteria, including staph. "They feel the pressure.
                  The ultimate solution is going to come from
                  pharmaceutical companies." 

                       The Problem of Resistant Bacteria 
                       Staphylococcus aureus accounts for at least
                  500,000 cases annually of pneumonia and infected
                  incisions in the United States alone. The bacterium
                  is extremely common, and typically harmless unless
                  it enters the body through a cut or wound. It is also
                  seen outside hospitals, as a cause of meningitis and
                  infections of the skin, heart and bones. 
                       For many years, staph and other bacteria were
                  kept under control by such "first-line" antibiotics as
                  penicillin and ampicillin. But in recent years many
                  organisms have developed a resistance to these
                  drugs. Even newer-generation antibiotics are far
                  less effective against it; nearly a third of hospital
                  staph cases worldwide are now resistant to the
                  latest drugs. 
                       The potent antibiotic vancomycin is the drug of
                  last resort and "right now is the only thing standing
                  between us and unremitting Staphylococcus aureus
                  infections," La Montagne says. 
                       Microbes have an uncanny ability to adapt to
                  compounds trying to kill them: Expose them to an
                  antibiotic and a few may survive--the ones that
                  have genes that can protect them from the drug the
                  next time they encounter it. 
                       And because bacteria multiply very quickly--as
                  fast as once every 20 minutes--just a few microbes
                  with these resistance genes can become a colony of
                  millions overnight, all with the ability to resist
                  antibiotics. Worse still, scientists have shown in
                  laboratory studies that resistance genes are able to
                  transfer from one kind of bacterium to another. 
                       Government and academic scientists argue very
                  strongly that basic genetic information should be
                  publicly available. The massive,
                  government-funded human genome project--which
                  is undertaking to decipher all of the genes in the
                  human body--has a policy of publicly posting its
                       "I believe science moves forward in
                  unpredictable ways, and with something as basic as
                  the instruction book of organisms, the more people
                  who have a chance to look at it, the better the
                  likelihood that a key insight will occur," says Dr.
                  Francis Collins, director of the National Human
                  Genome Research Institute. "The question we ought
                  to be asking is, 'What is good for the public?' I'm
                  not sure that all this gold rush is going to serve the
                  public's needs very well in the long run." 
                       Responding to the frustration of academic
                  scientists, NIAID last year committed almost $3
                  million to decode the staph genome's "sequence,"
                  the bug's basic chemical configuration. 
                       "We were interested in getting these grants
                  funded precisely to be sure that the sequence
                  information on the genome of this organism would
                  be publicly available," La Montagne says. 
                       Last year, the research agency spent more than
                  $17 million for work on the genomes of more than
                  20 disease-causing microbes, including several that
                  have become resistant to standard treatments. In
                  cases of resistant organisms, scientists look at the
                  genes of both resistant and nonresistant bugs in
                  order to understand the differences. 
                       Private companies were already offering their
                  commercial customers the genetic detail of at least
                  six of these organisms, among them Mycobacterium
                  tuberculosis, which causes TB, and enterococcus
                  faecalis, second only to staph as a cause of
                  potentially life-threatening hospital infections. 
                       Under proposed federal rules endorsed this
                  month by an advisory panel, partial results of the
                  NIAID-funded work must be publicly posted on a
                  Web site of the researcher's choice at least monthly
                  for anyone to download. 
                       "We recognize that sharing this data is of vital
                  benefit to vast numbers of scientists," says Michael
                  Gottlieb, a program officer with NIAID. "We
                  consider it a unique research resource and want to
                  make it as widely distributed as possible,
                  especially since it was funded with U.S. tax
                       But why did the federal government wait so
                       "People were being optimistic" that the work
                  would be available for everyone, said Clare
                  Fraser, director of the Institute for Genomic
                  Research, a nonprofit laboratory that is now
                  completing work on one strain of staph and a
                  number of other bacteria. "Why spend $1 million or
                  $2 million to duplicate what was done in the
                  private sector?" 

                       The High Road vs. the Income Stream 
                       Publicly traded corporations' first obligation is
                  to their shareholders, says Dana Wheeler, of Incyte
                  Pharmaceuticals in Palo Alto. 
                       Incyte sells its staph genome data to some of the
                  world's biggest drug manufacturers, including Eli
                  Lilly, Abbott Laboratories and Johnson & Johnson,
                  and refuses to share it free with academic
                  researchers. Incyte's extensive database now
                  includes genetic blueprints for at least 40
                  disease-causing organisms. 
                       "We are a commercial enterprise in funding this
                  work ourselves and going after it at a very
                  high-quality pace," Wheeler says. 
                       Unlike its competitors, Human Genome
                  Sciences of Rockville, Md., is willing to share its
                  data with publicly funded scientists--but only those
                  who sign agreements protecting the company's
                       The company believes that discoveries should
                  be publicly available to "further the goal of
                  improving human health," company spokeswoman
                  Kathryn de Santis says. But if the researchers' work
                  results in a product, "the intellectual property rights
                  will reside with Human Genome Sciences," a
                  restriction that several scientists say would mean
                  giving up rights to their own discoveries. 
                       As yet, no researchers have taken the company
                  up on its offer. 
                       More than four years ago, John Iandolo, then at
                  Kansas State University, gave Human Genome
                  Sciences the staph DNA it needed to begin
                  decoding the microbe's genome. He said he did so
                  assuming the company would make the information
                  public when it was finished. 
                       "When it became clear they were not going to
                  share this, we decided to get into the genome
                  business ourselves and make it clear we would
                  share it with everybody," says Iandolo, who is now
                  at the University of Oklahoma, leading the
                  government-funded $1.4-million effort to decode
                       "I feel that industry doesn't care as much about
                  [public health] scares as they do about making a
                  buck," he says. "When it comes to public health,
                  you'd think the companies would take the high
                       The staph research involves isolating copies of
                  the bacterium's genome--circles of DNA tucked
                  away in every microbe--and randomly breaking its
                  DNA into tiny pieces to decipher the chemical
                  structure. Using computers, scientists are able to
                  produce a detailed map of the entire genome. This
                  process is called sequencing, decoding the order in
                  which four basic chemicals occur in the genome,
                  giving an organism its unique characteristics. 
                       The staph genome includes between 2,000 and
                  4,000 separate genes, each one carrying
                  instructions for a different protein important in the
                  bug's life cycle. By understanding how these
                  proteins work, researchers will have new targets
                  for potential therapies--for example, block one
                  protein, and the bacterium may be unable to attach
                  itself to the cells of its human host. Disable another,
                  and it may not be able to multiply. 

                       Merck Funds Basic Research 
                       Biotechnology firms and their pharmaceutical
                  company partners are applying for patents for some
                  of those promising protein targets as well as for the
                  genes themselves. 
                       Government officials and academic scientists
                  worry that the companies' staking claims to the
                  staph genome--and delaying the release of genetic
                  information until patents are secured--will
                  discourage independent investigators from studying
                  an organism at all. 
                       "At the end of the road is a product that will
                  benefit the public," Collins says. "All this secrecy
                  being applied is putting a lot of tollbooths on that
                       However, Collins also acknowledges that patent
                  protection can serve as an incentive to get new
                  antibiotics and vaccines to the market. 
                       "My happy medium would be to get all the
                  sequencing into the public domain, and if people
                  want to claim intellectual property rights, it has to
                  be based upon [discovering] the function or utility
                  of a sequence, instead of claiming the sequence
                  itself or hiding it," he says. "Then what we would
                  reward would be a discovery of how it works." 
                       While the law is not entirely settled, U.S. patent
                  officials say that scientists must indeed show the
                  utility or usefulness of a discovery before they will
                  be issued a patent. But some legal scholars observe
                  that patents are being given for most basic
                  discoveries, and they worry that this will hamper
                  further research, as Collins fears. 
                       Standing virtually alone in the drug industry, one
                  company--Merck Research Laboratories--has been
                  supporting efforts to share basic gene-sequencing
                  information for the human genome, as well as staph
                  and other organisms with all scientists, even those
                  working for its competitors. 
                       Through its nonprofit Merck Genome Research
                  Institute, the company has awarded grants to the
                  University of Oklahoma and the Institute for
                  Genomic Research to finish their work on two
                  separate staph strains. 
                       In fact, one of Merck's conditions for all of its
                  grants is that the results be "shared in a rapid and
                  customary fashion via publications, presentations,
                  and submission to public databases." 
                       The company insists that having the staph
                  genome publicly available will spur basic research
                  by academic researchers and result in whole new
                  classes of antibiotics being developed by drug
                       "About 95% of the fundamental discoveries that
                  point you in the right direction come out of basic
                  science funded by government and not-for-profit
                  sources," says Dr. C. Thomas Caskey, president of
                  Merck's research institute, and a senior vice
                  president of the company. "About 98% of products
                  and vaccines come out of the pharmaceutical
                       "It's a diversion of [the private sector's] money
                  to be trying to make the fundamental discoveries
                  and a diversion of [the government's] money to
                  make drug products," he says. "Our overriding
                  philosophy is to make the [genetic information]
                  available to all investigators electronically and
                       To be sure, access to the staph genomic
                  sequence and its various strains won't instantly or
                  by itself lead to new ways to attack infections. 
                       But it is seen as a critical first step--and one that
                  should be available to the best minds in science,
                  academic researchers say. 
                       "The irony of the whole thing is, you're much
                  more likely to find interesting things if you allow
                  free access," says Richard Novick, a researcher at
                  the New York University Medical School. "You'll
                  understand the organism better, and learn what to
                  go after." 
                       Cimons reported from Washington and Jacobs
                  reported from California. 
                                    * * *

                       A Dictionary of Terms 
                       Biotechnology companies have spent millions to
                  decode the genetic blueprint of the bacterium that
                  causes the most serious staph infections. But
                  because they are not sharing the information with
                  government-funded scientists, the National Institute
                  of Allergy and Infectious Diseases is spending
                  millions of taxpayer dollars to duplicate the work
                  on staph and a number of other organisms. Here are
                  some of the key terms and concepts: 
                       Staphylococcus aureus. One of several types of
                  staph bacteria, this one causes half a million
                  hospital infections a year, most often entering the
                  body through surgical incisions. 
                       Antibiotic resistance. Bacteria are able to
                  develop resistance to antibiotics because they
                  evolve so quickly. They multiply rapidly--two or
                  three times an hour. That's as many as 72
                  generations in a day, which for humans would
                  require more than 1,500 years. The bacteria with
                  genes that protect them from antibiotics survive the
                  exposure. Overnight, a few resistant microbes can
                  become millions. 
                       Genome. All the genetic material of an
                  organism. In the case of staph, the genome is a
                  circle of 2.8 million chemical structures, the basic
                  building blocks of DNA. The genome is the genetic
                  blueprint, divided into smaller units called genes,
                  which guides the microbe through its life cycle. The
                  staph genome is about one-thousandth the size of
                  the human genome. 
                       Sequencing. The reading out of the genome, in
                  order, chemical by chemical, using the four letters
                  that represent the DNA code--G for the chemical
                  guanine; T for thymine; A for adenine; and C for
                  cytosine. This was once a slow and laborious
                  process. Today, scientists break up multiple copies
                  of the entire genome into small pieces and then use
                  high-speed, automated machines to do the readouts.
                  Reassembling the information is like taking several
                  copies of a novel that have been cut up randomly
                  into sentence fragments, searching for overlapping
                  words and phrases, then piecing the book back
                  together. The job requires sophisticated computer

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