Great new article in Florida newspaper. Today was agood day for DNAP: vol. up, price up, good bid-ask pattern.
Good trading
dejavu
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Medical frontier
posted 03/25/01
By Margaret Ann Miille
STAFF WRITER
Brightly colored rows
containing alphabet letters fill
a computer screen at
DNAPrint Genomics Inc.'s
lab.
Different colors are assigned
to letters representing
nucleotides, or chemicals,
which form sequences
corresponding to genes.
It takes many genes to
compose the human
genome, the chemical recipe
that determines a person's
physical traits and
predisposition to certain
diseases.
Tony Frudakis, molecular
scientist, chief executive
officer and chief science
officer of the fledgling
Sarasota company, notes
that one row differs from the
rest, containing more red, or
A's, than blue, or C's.
"It has a slightly different
flavor from the rest," he said.
"We're making a sort of
treasure map for these
genes, showing where
people are different."
DNAPrint hopes to parlay
these sequential variations
into personalized medicine
as the mystery of human genetics continues to unfold.
The recent deciphering of the genetic code has ignited
worldwide expectations that miracle drugs -- and
perhaps genetic engineering -- are coming. But it will be
years, even decades, before scientists can extract the
full meaning of the deluge of data being assembled.
The genome's raw information, more than 3 billion
chemical bits denoted by the letters A, C, T and G, is
only a starting point. Researchers have concluded that
what makes a human being is not those letters of code,
in fact, but the rich variety of proteins made by genes.
The sprint to the finish line began in 1990 with the
Human Genome Project, an effort coordinated by the
U.S. Department of Energy and the National Institutes of
Health. It seeks to identify all of the approximately 30,000
genes in human DNA and put those sequences into the
correct order within the 23 pairs of chromosomes.
A rough sketch of the human genome was mapped last
June, years ahead of schedule. Another major milestone
was achieved last month when twin reports of the newly
decoded genome -- one by a flamboyant scientist
working in the private sector -- were published in
scientific journals. A final draft is expected within two
years.
The potential for blockbuster cures and resulting
spectacular profits seems endless. Established
companies are scrambling to retool, and many new
ventures are seeking a role in the DNA information
revolution.
Such heavy-hitters as IBM, Compaq, DuPont and major
pharmaceutical companies are among those exploring
markets.
Not to be left in the dust is DNAPrint, which has staked
out its territory in this new frontier.
While others rush to pioneer new drugs for everything
from cancer to heart disease, DNAPrint is focusing
mostly on existing prescription drugs, whose adverse
effects on people can be traced to chemical reactions
based on their genetic code.
Shortcut to profits
Unlike its competitors, DNAPrint Genomics devotes itself
exclusively to research and development, leaving the
matter of distributing its data and diagnostic tests to its
partners.
That much is evident in the software it has developed
in-house: It isn't particularly easy to use.
"We're not a software company, so there is no real
motivation to make it simple," Frudakis said.
The company is busy setting
up shop in its new expanded
quarters, a remodeled
church meeting hall at 900
Cocoanut Ave. It is still
organizing operations, but
Frudakis said he soon
expects to be able to
generate "genetic readouts"
of up to 1,500 people daily.
His strategy for targeting
individuals predisposed to drug reactions is a kind of a
shortcut through the vast terrain being laid by the human
genome project.
Prescription drugs are now tested on general population
groups, making drug reactions on individuals trial and
error.
By contrast, Frudakis wants to tailor drugs to a person's
genetic map, using "fuzzy logic" or artificial intelligence to
search for genes that are different in people who have
negative reactions to certain drugs. Once those genes
are located, the company can screen out people who
might have adverse reactions.
As the theory goes, focusing on these several hundred
important human genes as opposed to the entire human
genome will allow DNAPrint to execute targeted scanning
searches and conduct detailed studies.
The company, whose logo is two stylized DNA strands,
plans to make money by patenting genetic patterns
associated with each drug reaction. Physicians would be
charged a fee for running their patients' profiles through
its database.
DNAPrint is in the process of securing arrangements
with clinics and hospitals to obtain patient specimens
needed for a database.
In December, it announced it was collaborating with the
University of Miami to produce personalized medicine for
patients with ovarian cancer, the No. 1 cause of death
from gynecological cancer in the United States.
That partnership, which involves some of the world's
leading oncologists, seeks to match ovarian cancer
patients with chemotherapy drugs that will give them the
best results. The same research might be useful for
breast-cancer patients.
The company also has formed a partnership with a
group of independent Jacksonville physicians to develop
new products for people who have an increased risk for
heart disease. Those patients are prescribed
medications called "statins" that decrease cholesterol
levels by inhibiting a key enzyme in cholesterol
pathways.
DNAPrint plans to gain even more blood samples at
kiosks it will install in blood donation centers and
diagnostic laboratories.
In October, the company received an infusion of cash
from New Jersey-based Orchid BioSciences Inc., which
bought the first option to develop DNAPrint findings into
commercial medical products. The Sarasota company
will keep patents on its findings while Orchid has the
option to license products developed from them.
Frudakis estimates 30 or so biotech businesses are
working on personalized medicine, but he says only a
few have DNAPrint Genomics' ability to combine
mathematics, biology and computer science.
A tight U.S. labor market compounds the problem of
finding the workers he needs. Frudakis expects the
combined total of his hired and contracted employees to
soon grow from eight to 15, once work visa applications
clear for statisticians and programmers from India.
Frudakis, with a doctorate degree in molecular and cell
biology from the University of California at Berkeley,
founded DNAPrint Genomics last year with three other
scientists. It seems he'd been preparing for it for years.
With an early bent toward science and an aim at
becoming an astronaut, he left Annapolis Naval Academy
during his second year in 1986.
"It wasn't a place to go if you like reading about
chemistry more than ship specifications or chain of
command," he said.
Frudakis headed next to Seattle to work for the Corixa
Corp., a company that did work similar to that of
DNAPrint. Frudakis was instrumental in Corixa's early
success in attracting such research partners as
Smith-Kline Beecham.
Five years later he cashed in his stock options and
headed to Florida, which he chose for its high population
of seniors, who take an average of five prescription
drugs daily.
"It's the pharmaceutical capital of the world … in terms
of consumers," Frudakis said.
In 1988 he founded GAFF Biologic with his father,
George. That Sarasota company, which performed
molecular biology research for academic scientists, was
a means to attract investors.
They came in the form of Tampa Bay Financial Inc.,
whose Catalyst Communications Inc., a publicly traded
prepaid phone company, went bankrupt in the late
1990s.
DNAPrint Genomics became an amalgam of GAFF
Biologic and the "clean shell" of Catalyst, which acquired
DNAPrint through a reverse merger.
Tampa Bay Financial initially supplied DNAPrint with $1
million and a guarantee of up to $10 million after set
milestones.
The reverse merger also afforded the start-up a Nasdaq
listing on the Nasdaq's over-the-counter Bulletin Board
under the ticker "DNAP.OB."
The company also is launching a private placement of
shares. Executives hope for $5 million to $17 million.
Richard Craig Hall, a spokesman for Tampa Bay
Financial, said his group saw tremendous potential when
it was approached by Frudakis in January 2000.
"We liken it to where the Internet market was 10 years
ago," Hall said.
As with many entrepreneurial companies, DNAPrint has
yet to turn a profit. For the nine months ended Sept. 30,
it had $30,000 in revenue and $336,583 in expenses.
The 'pharmacogenomics' strata
Because humans differ by only 0.1 percent of the bases
that make up the genetic code, individual genetic
differences have long been suspected of playing a role in
variable drug response.
Dennis Harp, an industry analyst for Deutsche Banc Alex
Brown in New York, said the Human Genome Project has
created defined layers within the biotech industry.
DNAPrint inhabits "pharmacogenomics," one of the
smallest fields. Fewer than a dozen such companies
exist worldwide.
Major pharmaceutical makers, such as Johnson &
Johnson, already are pairing up with these niche players
to develop drugs.
"Pharmacogenomics holds the promise that the right
drug would be prescribed the first time around," Harp
said, adding that it is conceivable that people will carry
their genetic information on magnetic cards.
But who would have access
to that information and for
what means raises serious
ethical concerns. Could it
cost a person a job or
insurance coverage?
No federal legislation has
been passed relating to
genetic discrimination in
insurance coverage or in the
workplace.
But last year, former President Clinton signed an
executive order prohibiting U.S. departments and
agencies from using genetic information in hiring and
promotion practices, a move endorsed by the American
Medical Association, the American College of Medical
Genetics and the National Society of Genetic
Counselors.
Frudakis advocates responsible use of genetic data.
That eliminates discriminating for health reasons and
performing genetic feats, such as designing purple cows.
"I don't like the idea because we don't know what we are
doing. We have come so far, but we still don't know what
the genome is all about," he said.
"I feel a social responsibility to do this kind of work. We
are anticipating a market that doesn't yet exist, but we
are doing it because we feel the market will exist, that
people will want to protect themselves against the drugs
they take. Pharmaceutical companies promote the
opposite; they want you to take all the drugs all the time,
indiscriminately."
Frudakis said the financial payoff could be huge for
DNAPrint Genomics.
"If the market forms the way we think it will, we could
definitely become a Fortune 500 company within a
decade."
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