A British mission finds much to learn from the United States bioindustry. Kam Patel reports.

Functional genomics is the new buzzword in the biotechnology industry in the United States. But if it is to become big business in Britain, new approaches are required, according to the findings of the Bio Industry Association and the Department of Trade and Industry.

On the basis of a look at the US bioindustry, they have concluded that more "incubators" to exploit biotechnology research in universities, better technology transfer offices and more training for students in entrepreneurship are among the measures needed for the United Kingdom to create the same level of dynamism.

The study involved a team of academics and industrialists last year visiting firms and institutions in Seattle, San Diego and the San Francisco Bay area where the biotechnology industry is particularly vibrant. Chiroscience's Simon Gunning, Mick Hunter of British Biotechnology, Andy Brass of Manchester University, Mick Browne of SmithKline Beecham and Mark Edwards of Oxagen were among mission members.

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Their report says that the emerging functional genomic industry promises to aid drug discovery programmes, create employment, strengthen the science base, attract inward investment and provide export revenue for nations able to develop the sector effectively. Both the UK and US have demonstrated considerable innovation and strength in functional genomic research.

But the report says: "It became clear during the mission that the US has been somewhat more successful in translating academic research into the small and medium enterprise sector."

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One "striking" observation made by the mission team was that "the 'academia-industry-continuum' is a constant backdrop to 'science'.". The team believes more could be done in the UK to reward and encourage exploitation of academic research but feels it is "unlikely that a top-down mechanism of committee structures would be desirable or fully workable in developing commercial academic inventions in the UK. In the US, the understanding of the value of the research and drive to exploit it seems to come from academic researchers themselves".

For the UK, the team suggests PhD courses could educate researchers in the commercialisation of research breakthroughs. Such training would alert students to the need to exploit research effectively, provide understanding of the patent process and engender a solid appreciation of the challenges involved in commercialising work.

Alongside the creation of more "incubators", the team would like to see better funded and more accessible university technology-transfer offices. Academics should also be properly rewarded for intellectual property rights, says the study, pointing out that at Stanford academics retain a third of the income generated by licensing.

The report also calls for more "technology clusters" of the type existing in Cambridge. The DTI is already collaborating with the BIA to examine the potential for biotechnology clusters under its "genome valley" initiative, which is due to report shortly.

The US has been highly effective in creating biotechnology clusters in various regional centres. They allow firms to network and encourage close formal and informal alliances among them. Cluster development has been of "great benefit" to the growth of the US genomic industry, says the report. The density of companies in clusters in turn encourages the development of a specialised skills base, easy mobility of staff between firms and the presence of venture capital firms, and legal and accountancy firms with in-depth knowledge of the sector.

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In Seattle, the mission identified Washington University as a major catalyst for the development of the industry in the region. "It is clear that the mechanisms for entrepreneurial-minded academics to hold on to their academic posts while gaining finance and resources to manage external private ventures are far more developed in the US," says the report.

The mission cited the experience of Leroy Hood of Washington University as a typical example of the enlightened support for academics. A senior academic, Dr Hood has been involved in the start-up of several successful biotech companies, including Amgen, Rosetta, Darwin and Systemix.

The report says: "Dr Hood continues this theme (of commercialising research) while still thinking very creatively of his academic interests. His vision of an Institute of Complexity to investigate systems biology and ultra high throughput biology is already attracting funding and is clearly going to produce the next wave of functional genomics companies."

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Dr Hood is looking for $150 million of investment in his institute and is inviting companies to buy in for $5 million per year. He uses commercial ventures to fund academic projects and further appears to "adapt well to the commercialisation and academic roles as if they were part of a continuum rather than as mutually exclusive activities, which is the impression that some UK academic institutes give". The biotechnology industry in Seattle employs about 13,000 people, almost as many as the whole British bioindustry.

Functional genomics, the discovery of the function of genes, is the real key to securing intellectual property rights on gene discoveries. But another issue is whether the UK can mobilise its resources to secure a major share of the functional genomics industry as it develops.

Other features identified by the mission as being responsible for the vibrant and dynamic US environment for the sector include targeted government support for start-up companies and more centres of academic excellence (such as the Fred Hutchinson Cancer Center in Seattle, Stanford University, and Stanford Research Institute) spawning companies.

"Overall, we gained an impression of a richly diverse and thriving ecosystem, where new technologies and business strategies evolve and recombine to generate robust new companies. Company failure is viewed as an inevitable and healthy byproduct of the process. Senior executives speak openly and positively of their earlier failures as equipping them for future success."

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