Gene milestone expected
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June 23, 2000: 11:31 a.m. ET
Public scientists, private venture to announce mapping of human genome
By Staff Writer Martha Slud
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NEW YORK (CNNfn) - In a scientific milestone that's been likened to man's walk on the moon, public and private researchers are set to announce Monday that they've completed a "rough draft" of the human genetic code - the operating manual to the human body.
The announcement by the publicly funded Human Genome Project and Rockville, Md.-based Celera Genomics Group (CRA: Research, Estimates) -- an upstart company that has been so fast in cracking the genetic code that government researchers were forced to quicken their efforts -- marks a watershed for the still-nascent biotechnology industry. Drug developers hope to use this genetic knowledge to one day develop a new generation of gene-based treatments for cancer, heart disease, diabetes and an array of other diseases.
The two groups plan to announce in Washington that they have made a preliminary reading of all of the chemicals contained in the approximately 80,000 or so genes in the human body.
Now that this "sequencing" phase is complete, scientists will look for specific genetic mutations - research that could help them better understand why certain patients are prone to illnesses. Then, scientists say, they can turn their attention to creating medicines to root out disease at the molecular level. One day, they say, patients could conceivably carry around their individual genetic profile on a computer chip - revolutionizing the way doctors diagnose illness.
"It's a very significant achievement that we've read the human blueprint, essentially one time through," said Mark Gessler, chief executive of Gene Logic Inc. a Gaithersburg, Md.-based genomics firm. "It's the first big step."
For investors, as well as scientists, the mapping of the genome is a development that's also been closely watched.
Biotechnology stocks went on a tear last fall - in part because of excitement over scientific advances in the genomics sector.
But fear over intellectual property issues - sparked by comments in March by President Bill Clinton and British Prime Minister Tony Blair over the importance of making genomics discoveries publicly available to all researchers - helped trigger a downturn in the sector after several heady months of gains.
Many industry analysts also say that the highly volatile sector had gotten ahead of itself, with shares in many young, unprofitable companies surging beyond reason. Shares of Celera Genomics for example have risen from a low of 7-1/16 a year ago to as high as almost 300 in intraday trading earlier this year. Shares slipped 1-1/2 to 118-1/2 early Friday.
The genomics sector still has a lot to prove - namely that it can take these genetic discoveries and translate them into profitable business models, said Frank DiLorenzo, a biotech analyst at S&P Equity Group.
Genomics companies already get revenues by licensing their databases to pharmaceutical and biotech firms hunting for new drug targets. But it likely will take years for drug companies to bring new medicines on the market based on genomics, he said.
"Long term it's going to depend on which companies can actually sustain growth," DiLorenzo said. "Most of them aren't profitable yet."
The actual announcement of the genome sequencing is sure to get a lot of media attention, but it may not have a dramatic effect on biotech stocks, because investors have been anticipating the announcement for months, analysts said.
However, the entire biotechnology sector has enjoyed a bit of a runup in the past few weeks as investors have become excited about genomics once again, said Todd Nelson, a genomics sector analyst at Merrill Lynch. The Nasdaq biotech index, which tracks the performance of about 200 U.S. and European companies, is still down about 22 percent from where it stood in early March, but the index is up about 12 percent for the year.
"People continue to be able to appreciate the magnitude of the importance of the release, and the eventual impact that it will have on the genomics companies at large," Nelson said. "In the long run, it will benefit stocks tremendously."
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Celera Genomics
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