Drug Giant Creates Genomics Institute

Most drug companies seeking to apply the wealth of data on the human genome to the hunt for new drugs have turned to specialized start-up companies for help (Science, 7 February 1997, p. 767). But one drug giant is bucking this trend. Today, Novartis Pharma of Basel, Switzerland, announced that it is committing $250 million to create its own research institute dedicated to tracking down the functions of the many genes being discovered.

The Novartis Institute for Functional Genomics, to be based in La Jolla, California, should be up and running in 2 years and will be home to some 100 researchers, says neurobiologist Paul Herrling, head of research for Novartis. The company decided to set up the institute, he adds, because it expects to get "a large competitive advantage" if it can efficiently translate genetic information into drug targets. Other biotech experts question whether Novartis's approach is better than linking up with smaller companies, however.

The institute will combine under one roof the various kinds of expertise needed to perform studies of gene function on a large scale. This functional genomics, as it's called, incorporates bioinformatics, DNA chip technology, animal models, and other approaches to pin down the genes that cause human diseases and are therefore prime targets for drug development. "What we want to create is an institute that integrates these technologies," says Herrling. In addition, its scientists "will help develop high-capacity methods" that will speed up and streamline the determination not only of the functions of individual genes but also of how those genes and their protein products interact.

Few companies have tried to build such extensive expertise in-house, because "that model has not been successful by and large," says G. Steven Burrill, who runs Burrill and Associates, a private merchant bank in San Francisco that specializes in life sciences companies. In his experience, the best minds in functional genomics are much more likely to start their own companies, where they can be owners and entrepreneurs, not just employees.