The biotechnology industry promises to revolutionizehealthcare through disease prevention, gene therapyand advanced diagnostics.
Some people are big believers in destiny. Dale Wahlstrom is not one of them. An engineer with 11 patents in medical device technology, Wahlstrom embodies many of the qualities common to his field: He is analytical by nature, detail-oriented and adept with numbers. And, like most of his colleagues in the medical industry, he has a “prove it” mentality—problem-solving and scientific theories are based on tangible proof. Nothing is left to chance.
Yet even the most methodical scientists and engineers might find it difficult to explain Wahlstrom’s career path without concluding that chance or destiny was at least partially at play. Consider the serendipitous set of circumstances that led Wahlstrom to his current position in the biotechnology industry: In August 2003, Wahlstrom, a vice president at Medtronic Inc., gave a speech about the experience of building Medtronic facilities in other countries and in states that were dedicated to growing their bioscience industries. At around the same time, Minnesota Gov. Timothy J. Pawlenty (then only seven months into the job) was creating the Minnesota Biosciences Council, an agency designed to serve as a catalyst for the creation, development and retention of biotechnology businesses and “supportive institutions” in the North Star State.
Concerned about lawmakers’ commitment to growing the state’s bioscience industry, Pawlenty reached out to Don Gerhardt, who at the time, was president and CEO of the St. Louis Park, Minn.-based trade group LifeScience Alley. Pawlenty asked Gerhardt to help him find someone with strong leadership skills who could jump-start growth in Minnesota’s promising biotechnology industry.
Here’s where fate steps in. Gerhardt attended Wahlstrom’s speech and considered him the perfect candidate to chair Pawlenty’s new venture. In July 2004, the governor asked Wahlstrom to lead the BioBusiness Alliance of Minnesota, a nonprofit group created to foster and cultivate the long-term viability of the state’s biotechnology sector.
Coincidentally (or not, according to firm followers of fate), Wahlstrom found himself gravitating toward the biotechnology industry around the time he was asked to chair the BioBusiness Alliance. During his final few years at Medtronic, Wahlstrom was responsible for examining different industries and technologies that would be “disruptive” to the medical device industry.
“One of the areas we were looking at extensively was the area of biotechnology,” recalled Wahlstrom, president and CEO of both LifeScience Alley and the BioBusiness Alliance of Minnesota. “When I was at Medtronic, what really got me hooked on biotechnology was the fact that the medical device industry is fundamentally all treatment. But the interesting thing about biotechnology—and what I mean by biotechnology is the ability to control outcomes with biology—is that you not only can do treatment but you can also introduce prevention and cure. You can prevent or cure as well as treat. Therefore, the implications for industries that are based on treatment are substantial.”
Those implications perhaps are most substantial for the healthcare industry, where ballooning costs are straining the system. Healthcare spending in the United States totaled $2.48 trillion in 2009, more than three times the $714 billion spent in 1990, and more than eight times the $253 billion spent in 1980, according to data from the Centers for Medicare and Medicaid Services. Spending on treatment for chronic diseases accounts for more than three-quarters of the nation’s health expenditures (in 2009, for example, treatment costs exceeded $1.86 trillion.)
With healthcare costs consuming a larger chunk of the nation’s gross domestic product, lawmakers, medical professionals, business leaders and even consumers have become more open-minded about shifting the practice of medicine in the United States from disease treatment to disease prevention. The concept took center stage during the ramp-up to healthcare reform and became a cornerstone of the Patient Protection and Affordable Care Act passed by Congress last spring. The act appropriates $1.5 billion over 10 years to the Prevention and Public Health Fund for prevention and wellness programs, and it includes $200 million in grants for fiscal years 2011 through 2015 to small businesses that set up workplace wellness programs. To be eligible for the grants, companies cannot employ more than 100 workers.
“The healthcare model is going to look much different in 10 years than it does now. I think we’re going to see more of a wellness model, where there will be many more technologies focused on wellness,” said Michael Dixon, Ph.D., president of UNeMed, the technology transfer entity of the University of Nebraska Medical Center in Omaha. “You’ll still see the technologies coming out that are treatments but I think we’re going to see more technologies that are focused on wellness. That is the model the government is beginning to look at. We’re now realizing that it costs a lot of money to treat disease. It’s a lot cheaper and more efficient to prevent the disease in the first place. It’s really the tobacco model—it costs a lot of money to treat people with lung cancer but if we can prevent people from smoking we can save a lot of money. As you start to look at technologies that can help prevent disease, you’re going to see more of those looked upon favorably by government and insurance as we move into the future.”
Biotechnology is one of the oldest forms of science on the planet, dating back thousands of years to societies that precede recorded history. Though it has taken on different meanings through the millennia, biotechnology is, in its most simplest form, technology based on biology. Based on the fundamentals of animal health and pharmaceutical research and development, the biotechnology field harnesses cellular and biomolecular processes to develop technologies and products that improve the lives and health of humanity.
Ancient civilizations practiced biotechnology more than 6,000 years ago, long before the existence of fossil fuel-burning cars or test tube DNA. The Chinese in 500 B.C. used moldy soybean curds to treat boils; 600 years later, they created the first insecticide from powdered chrysanthemums.
The rate of innovation in the biotechnology sector has rapidly accelerated over the last 250 years as scientists and researchers learned how to decode some of Mother Nature’s best-kept secrets. The lessons have resulted in a plethora of products that have helped combat debilitating and rare diseases, feed the hungry, conserve energy and improve manufacturing efficiency.
The Biotechnology Industry Organization (BIO), the world’s largest biotech trade group, estimates that more than 250 biotechnology healthcare products and vaccines currently are available to patients, many for previously untreatable diseases such as smallpox, multiple sclerosis and cystic fibrosis. In addition, more than 13.3 million farmers worldwide use agricultural biotechnology to increase yields, prevent damage from insects and pests, and reduce farming's impact on the environment, according to Bio. And more than 50 biorefineries are being built across North America to test and refine technologies to produce biofuels and chemicals from renewable biomass, which can help reduce greenhouse gas emissions.
“Biotechnology is much broader than human health,” LifeScience Alley’s Wahlstrom noted. “It’s animal health, it’s food, it’s engineered plants for energy and chemicals. If you look at the opportunities in biotechnology, there are some areas that contain profound opportunities—energy is one, food safety is another, and of course, human health.”
With breakthroughs in gene therapy and a detailed map of human DNA now available to researchers, perhaps the most promising opportunities in biotechnology are occurring in healthcare. A report issued last month by Battelle Memorial Institute about the economic impact of the Human Genome Project said the sequencing of the human genome “holds promise for revolutionizing the practice of medicine in the 21st century.” Besides estimating the return on the $3.8 billion the U.S. government invested in the project between 1988 and 2003 ($796 billion), Battelle’s report claims the human genome sequencing has helped advance biomedical research and development in areas such as gene therapy, vaccine development, regenerative medicine and stem cell therapy as well as improved matching of organs and tissue from donors to patients.
“With the first full draft of the human sequence in hand, new areas of biomedical science have opened,” Battelle’s report reads, “with pharmacogenomics and companion diagnostics, for example, being used to identify appropriate drugs based on patient genomic profiling and to refine the dosing of therapies, thereby maximizing effectiveness and reducing negative side effects.”
Technological advancements in the eight years since the human genome mapping officially was completed have brought the cost and speed of sequencing down significantly. Experts contend an entire human genome now can be sequenced in less than a day for under $3,000. This gain in efficiency has led to new uses for the technology: Agricultural companies are using genomics to help design genetically modified plants that are more resistant to parasites. Industrialists in the energy industry are splicing genes in search of cleaner fuels, and the U.S. Food and Drug Administration (FDA) has requested a $695,000 sequence to compare E.coli and other bacteria nationwide in an effort to better pinpoint the source of outbreaks.
Inspiration and Innovation
For decades, scientists have warded off infectious disease with a combination of vaccines and drugs. This strategy generally has worked well in conquering such nuisances as influenza, diptheria, anthrax, polio, pneumonia, the human papillomavirus and a host of other illnesses, but it virtually is futile against some of the more invasive demons—AIDS, malaria and cancer, among others—due to the complexity of these diseases and the way in which they infiltrate cell processes. Eradicating these malicious maladies, experts claim, will require a shift to a practice of medicine that is based on a thorough understanding of the way in which cells work and the development of new methods to manipulate their internal processes.
This shift already has begun. Many biotechnology companies have developed products based on cell structure and function. Cook Biotech Incorporated, for instance, manufactures advanced tissue repair grafts using the small intestines of a pig. Based on extracellular matrix technology, the grafts provide a scaffold-like structure around damaged tissue and communicate with the body to trigger new tissue growth. Over time, the graft is remodeled into fully vascularized tissue and it becomes as strong as the patient’s own tissue, according to the West Lafayette, Ind.-based company.
Cook’s tissue repair graft products are used throughtout the body in hernia repair, fistula repair, plastic surgery, staple line reinforcement, continence restoration, Peyronie’s disease, dural repair and pelvic floor repair. Another product, Oasis Wound Matrix, treats disease-induced skin ulcers, burns and pressure sores.
“As we begin to tackle new disease states you’re going to see biotechnology play a very large role,” predicted Andy Cron, vice president of Cook Medical’s surgical business unit. “That’s where a lot of the answers are. The standard tools that we’ve had up to this point are not going to take us any farther. The advances you’re going to see in the future are going to be on the cellular or biologic level. We’re just scratching the surface, really—all the research that’s coming out of the different laboratories around the country are helping us to better understand different biological processes. Even something as simple as wound healing—is happening very much at a biological level now. The knowledge is there but we’re learning new things every day.”
Such a steady stream of scientific data has helped companies improve their understanding of gene therapy. Lexicon Pharmaceuticals Inc. has been developing large-scale gene “knockout” therapy for use in drug discovery since its 1995 founding. But with improved technology and data from the human genome sequence at hand, the Woodlands, Texas-based firm now is zeroing in on 5,000 genes—nearly a quarter of the entire human genome—that it considers “druggable” and possibly could be used to create new medicines to fight disease. And scientists successfully have used gene therapy to treat the fatal brain disorder adrenoleukodystrophy in children.
Biotechnology’s promise, however, is not limited strictly to new frontiers in medicine. The science behind the technology is just as effective at solving nagging issues that have perplexed researchers for a number of years. For example, BioMimetic Therapeutics Inc. of Franklin, Tenn., is attempting to solve one of the most frustrating conundrums in orthopedics: Finding a bone substitute that is just as good as the original. The company has developed products based on recombinant human platelet-derived growth factor technology (rhPDGF-BB), which is a synthetic form of PDGF, one of the principal agents in the human body that stimulates and directs healing and regeneration.
BioMimetic Therapeutics received FDA approval in 2005 for its first product, GEM 21S, a grafting material for bone and periodontal regeneration. The firm is sponsoring clinical trials for its three main products, Augment Bone Graft, Augment Injectable Bone Graft and Augment Rotator Cuff Graft (for the treatment of foot and ankle fusions and rotator cuff tears, respectively).
BioMimetic received approval in November 2009 from Canadian authorities to market Augment Bone Graft and U.S. approval may follow soon. Just last month, the FDA’s Orthopedic and Rehabilitation Devices Panel of the Medical Devices Advisory Committee voted favorably on Augment Bone Graft’s safety, efficacy and benefit to risk profile for its use as an alternative to autograft in hindfoot and ankle fusions.
“When you look at the protein that is the core of our technology as opposed to what so many large drug companies are taking as an approach to therapy, most large drug companies are developing novel molecules or modifications to existing molecules. They may achieve a specific therapeutic effect—but then there’s a long list of disclaimers about potential side effects,” said Jim Monsor, senior vice president of operations at BioMimetic.
“Often, the general approach for those therapies is to replace the function in the body which I think is a misguided approach, fundamentally. We deliver a product that re-stimulates, rather than replaces, the natural function in the body. It restarts natural body mechanisms where a patients systems have been compromised for a variety of reasons. Focusing discovery research on understanding how human biology works and finding out how to restart those natural functions is a better approach to innovation than just replacing some function with a chemical compound.”
The opportunities in the biotechnology industry are plentiful and very well could revolutionize healthcare. But those opportunities do not come without challenges.
Biotechnology firms share some of the same concerns as their rivals in the medical device sector—changing regulatory requirements, a more complex FDA approval process, intellectual property protection and the ability to forge the right relationships with product development and/or manufacturing partners.
However, there are some challenges that are unique to the biotech sector due simply to the nature of the end product. Biologically-based products tend to be more complex than medical devices and thus are subject to longer clinical trials, additional testing and higher standards. As a result, time-to-market usually is longer in the biotech sector. As one industry expert told Medical Product Outsourcing, “As the products and ideas that come into the FDA become more complex, the review of those products and ideas becomes much more complex. That is just the world we live in today with these complex biological products. It’s something we’re all trying to deal with.”
Biotech firms also are trying to deal as best as they can with escalating costs. Bringing groundbreaking drug therapies from bench to bedside can be a long and arduous process, one that can cost anywhere from $800 million to $1.2 billion, and can last between eight and 12 years. Companies that lack the research and development funds to conduct such a capital-intensive process must turn to private sector investors and collaborative agreements to finance the early stages of therapeutic development.
Finding investors, though, is not so easy these days. Stubbornly high unemployment and endless debates about federal spending as well as the nation’s debt ceiling is causing capitalists to reconsider financing high-risk projects in the pharmaceutical and biotechnology sectors. As a result, venture capital has steadily declined over the last four years, according to industry data, affecting not only the ability of companies to develop products but also the ability of academic institutions to support the research for new drugs and therapeutic treatments. In 2010, biotechnology received $2 billion in venture funds, a 27 percent decrease compared with 2009. Funding rebounded slightly in the first quarter of this year, growing 5 percent in dollars but dropping 21 percent in deal volume compared with 2009.
Figures from PricewaterhouseCoopers LLP indicate $784 million went into 85 deals in Q1 of 2011; the quarterly deal count represents the lowest number in a single quarter since the first three months of 2009.
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The biotechnology sector, with its ability to manipulate cell processes and rejuvenate the body’s biological functions, will be key to the practice of medicine in the future as companies look for ways to conquer diseases that require more complex solutions. A report by Battelle Memorial Institute on the economic impact of the Human Genome Project claims the sequencing has had a profound and paradigm-shifting impact on basic biological science and medical professionals’ understanding of biomolecular life processes. Advances in human genomics has resulted in a new class of advanced diagnostic tests and is triggering growth in regenerative medicine. Though the developments and discoveries resulting from these biotechnological advances have been mind-blowing, researchers often remain challenged in seeing their discoveries through to commercialization. But it’s a challenge the academic community is confident it can overcome. As UNeMed Corporation’s Dixon noted, “What gets us up in the morning and keeps us coming to work is trying to find ways to develop the technology so that someone can pick it up and develop it into a drug or compound or diagnostic or something that is valuable. Research is fantastic, it’s one of the few pure novel areas where you can sit and think and develop to meet the application of that science. Ideas are great but I want to see ideas that actually make a difference. We all do.”
Biotechnology’s Big Sprint:Is the Pace of Innovation Accelerating?
Futurists certainly are an optimistic bunch. In 1967, nuclear strategist Herman Kahn—one of the inspirations for the fictional “Dr. Strangelove”—co-authored a book called The Year 2000: A Framework for Speculation on the Next Thirty-Three Years. His vision for the new millennium included high-speed data processing, the fax machine and quite possibly, mobile phones.
Not a bad bit of professional guesswork.
Of course, Kahn also predicted interplanetary travel, giant supersonic jets, dream control machines, artificial moons, automated supermarkets (he was close with that one) and undersea colonies, though some futurists could argue that underwater hotels technically can be considered “colonies.”
Similarly, last year, Richard Worzel, C.F.A., published a two-part narrative on his weblog about the state of healthcare in 2035. Over the next quarter century, Worzel asserts, advances in science and technology will push the average life expectancy well past 100 years and virtually wipe out diseases such as cancer and diabetes. The cost of decoding a genome will drop to $100 (from the current average of $3,000) and genetically-linked conditions such as cystic fibrosis, multiple sclerosis and celiac will be cured with only one treatment. Potential epidemics won’t be a problem, either: Worzel predicts that researchers will need only six weeks to develop a genetically suitable vaccine or antibiotic to stop the outbreaks from spreading.
Disease detection will improve dramatically by 2035, thanks to embedded computer “companions” that monitor people’s health with each heartbeat. These internal internists can detect health problems from the moment they begin by measuring heart rate, galvanic skin responses, body temperature fluctuations and subconscious muscle movements, according to Worzel’s foresight. Any change, however subtle, is sent to the patient as well as his or her health practitioner, and if necessary, the patient’s local ambulance corps.
Worzel is confident that technological advancements and robotics will help turn his visions for the future of healthcare into common practice by the mid-2030s. In the second part of his narrative, Worzel maps out a blueprint for achieving the elusive but long sought-after ideals of perfect health (or as close to perfect as possible) and longevity, contending that a mix of genetic programming (using natural selection to discover solutions), improvements in X-rays, CAT scans and imaging, increased use of robotics for both surgery and tending to patients, and additional computing power will provide the pathway to a healthcare wonderland. He bases part of his theory on data supplied by inventor and technologist Raymond Kurzweil, who claims that a $1,000 computer in the next five years will have more computing power than a human brain. Kurzweil also projects that a $1,000 computer by the year 2036 will have more computing power than the entire human race. Such rapidly accelerating intelligence, Worzel insists, will produce a “rapidly increasing flow of new discoveries and treatments.”
Whether Worzel can predict the future more accurately than his predecessors remains to be seen. But like Kahn’s predictions—and those of many futurists—Worzel’s prophecies depend almost entirely on the development of mind-blowing progress in science, information technology and medicine in order to work. Such progress though, is not always so rapid and reliable. Take for instance, the $3 billion Human Genome Project. The first draft of the human genome was completed more than a decade ago, but the discovery has yet to produce any of the promised benefits—namely, getting to the roots of common diseases such as cancer and Alzheimer’s and generating treatments. At least 350 biotechnology-based products resulting from the genome project have been developed, but all currently are in clinical trials.
Likewise, technology hasn’t caught up to other, more conventional inventions. The dominant model of air travel remains the Boeing 747, which made its maiden flight just three years after Kahn’s book was published. Fossil fuels remain the preferred source of energy in the United States, despite vows to find alternative methods. And the world is still waiting for an HIV vaccine.
Such lags are not a surprise to economist Tyler Cowen. In his book, The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick and Will (Eventually) Get Better, he argues that the United States has burned through all the relatively easy innovation, making progress in areas such as science, medicine, transportation and information technology more difficult and slow.
“Not so easy to get to. It’s like all the science we have done that we have not yet turned into useful products,” Cowen told “PBS Newshour” in a story that aired May 18.“How close is nanotech to being a reality? No one knows, but it’s not going to come tomorrow. The sequencing of the human genome. It has been done. It’s a great breakthrough. It deserves tremendous respect, but converting it into useful products has been very hard.”
Some of Cowen’s skeptics, however, believe the problem lies with the rapid pace of technological advancements. Erik Brynjolfsson, who runs the Massachusetts Institute of Technology’s Center for Digital Business, claims Cowen has the story backwards.
“The problem is not that we have had a stagnation of technology,” he said in the PBS story. “Ironically, part of the problem is that technology is rushing ahead so fast that people are having trouble keeping up. Every technology goes through an S-curve, which means that at first, it grows fairly slowly. Then there is a faster phase and then things get mature and level off. Tyler Cowen is sort of backwards-looking at the mature technologies that are at the peak of their S-curve, rather than the new technologies that are just emerging.”
And there are plenty of new technologies blooming, from artificial lymph nodes and biological pacemakers to asthma sensors and a new bacterial strain that can kill the natural decay-causing strain living on teeth. As technology accelerates, the pace of innovation will as well, making it difficult to keep up with the latest advancements, Brynjolfsson and others claim.
“We’re in this age where innovation is growing so quickly we often think that there can’t be anything new. There was a quote back in the 1800s that said ‘everything that can be invented has been invented,’ “ noted Michael Dixon, Ph.D., president of UNeMed, the technology transfer entity of the University of Nebraska Medical Center in Omaha. “Sometimes if you stop and look back you think that’s silly but we all start to think that. But that is not how I’m seeing the world right now. I’m seeing innovation going so fast that it’s hard to keep up with what the next technology is. Innovation is moving so fast on so many different fronts that it’s hard to stay on top of what the new innovations are and how we are leveraging those innovations to create better innovations.”
Worzel might end up being right after all. — M.B.