BUSINESSWEEK ONLINE : JANUARY 8, 2001 ISSUE
INDUSTRY OUTLOOK 2001 -- LIFE SCIENCE Delving into a Genetic Gold Mine Nothing is changing drug development more than genomics--discovering and understanding genes. By uncovering the biological pathways of disease, this field should lead to smarter treatments. Within three years, predicts Gruntal & Co. analyst Darren Mac, all drug discovery efforts will be genomics-based. The field got a huge boost in 2000, when scientists at Celera Genomics (CRA) and at the publicly funded Human Genome Project separately completed the monumental task of reading the entire human genetic code. Now comes the hard part. ''Having the sequence is great, but moving beyond that to the biology is key,'' says Dr. Mihael Polymeropoulos, vice-president for pharmacogenetics at Novartis (NVS). That means big opportunities for today's 60-odd genomics companies. Prudential Securities Inc. analyst Charles C. Duncan figures that the current genomics market of about $1.1 billion will grow steadily to $10.6 billion by 2010. One strategy for capturing slices of that market is selling information. For instance, analysts expect that Celera's revenues from selling access to the company's databases and biological analyses of the genome will double, to some $90 million, in 2001. By comparing which genes are turned on or off in diseased vs. normal organs, scientists will gain a window on disease pathways. Similar gene data will also help drugmakers spot potential side effects early on. To do these so-called gene expression studies, companies use gene chips like those made by Affymetrix Inc. (AFFX) But analysts warn that, with giants such as Motorola Inc. (MOT) getting into the business, gene chips will become a low-margin commodity. Some investors are more optimistic about toolmakers such as Caliper Technologies Corp. (CALP), or research firms like Lexicon Genetics Inc. (LEXG) and Exelisis Inc., which use animals to understand genes. But ultimately, ''the real value of genomics will be in actual drugs,'' explains Mac. A few companies may stick to selling information. But many others, like Human Genome Sciences (HGSI), will strive to become drugmakers. By the end of 2001, we'll know how well HGS's first drug, a wound healer, works. And by 2004, analysts say, we'll know if genomics itself is living up to its immense promise. By John Carey in Washington _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					CONTENTS RELATED ITEMS Drugs CHART: Spotlight: Worldwide Pharmaceutical Sales Delving into a Genetic Gold Mine INTERACT E-Mail to Business Week Online

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