Banking on biotech: Utah hopes this niche industry booms. (Tech Knowledge).

GOV. MIKE LEAVITT'S ANNOUNCEMENT in January that the state was teaming up with the University of Utah and the Huntsman Cancer Institute to form a nonprofit enterprise in the field of biotechnology and human generics was the latest in at least a yearlong string of promising developments for Utah's burgeoning biotech industry.

Leavitt hailed the formation of GenData Research Corp. as the "springboard for thousands of high-paying jobs ... and the means by which Utah secures a reputation as a world leader in biotechnology."

The announcement gave weight to the growing importance of the biotech industry to the state's overall economy. At last count, there were approximately 120 Utah companies in the life sciences field employing roughly 11,000 people--most of them with salaries significantly above the state's average--according to the Utah Life Sciences Association (ULSA). "What we do, we do very well," says ULSA president Brian Moss. 'And for our population, we are a force to be reckoned with."

But Leavitt's announcement also came at a time when stock prices of Utah's biotech companies, like the industry as a whole, have taken a beating. From March 2002 to March 2003, Myriad Genetics stock, for example, ranged from a high of over $35 to a low of $8.43.

Industry officials argue, however, that if you put stock prices aside and look at the potential for GenData, along with the potential product lineup from a heavy-hitter like Myriad, which has a promising Alzheimer's disease drug in the pipeline and is beginning to heavily market tests for genetic predisposition for certain forms of cancer, the future of Utah's biotech industry remains strong.

Gen Data

GenData's focus will be capitalizing on perhaps Utah's most unique offering to the life sciences industry--the Utah Population Database.

Started 20 years ago by U. of U. researchers who tapped Utah families, with the help of The Church of Jesus Christ of Latter-day Saints' extensive genealogical records, the database offers a unique wealth of health data dating back to the early 1900s. Over the years, the database has evolved to include vital statistics and clinical and genetic information that allows researchers to trace inherited traits along with the likely impact of environment. It now comprises more than 7 million linked records, vital statistics and cancer registry information, and is credited with important genetic discoveries in breast and colon cancer. Similar databases exist in Iceland and other European countries, says Moss, "but they are nowhere near as robust."

GenData will market this database to for profit pharmaceutical and biotech companies for research purposes in an attempt to "attract venture capital and pharmaceutical and medical research organizations from all over the world," according to Leavitt.

The governor's mention of GenData was an integral nugget in his 2003 Stare of the State address, but it seems to have caught the people heading up the enterprise off-guard. GenData officials, including Huntsman Cancer Institute's executive director Stephen Prescott, declined interviews with Utah Business in March. At the time, company officials had just held their first board meeting, and the business plan had yet to be finalized.

But the excitement over GenData's potential is clearly there. In January, Prescott told The Salt Lake Tribune, "Knowing the genetic cause of disease is important, but also knowing the interaction of environment and other population factors could play a huge role in improved science. This could change how future medicine is practiced."

Myriad Genetics

Meanwhile, the news coming out of Myriad Genetics for the last year typifies that of Utah's more established biotech companies: Myriad faced potentially incredibly important discoveries laced with sagging stock prices and battles over genetic patenting.

In fairly rapid succession over the last year, Myriad announced it would begin testing a new drug that could slow or even prevent the onslaught of Alzheimer's disease, as well as its discovery of genes related to obesity and depression, and Scientific American magazine named Myriad's president and CEO Peter Meldrum to its list of the top 50 scientific visionaries in the country.

The potential ramifications of the drug and gene announcements are huge. The Alzheimer's busting drug, called R-flurbiprofen, reportedly reduces the buildup of proteins (known as Ab42) that contribute to the memory-robbing degenerative disorder. The drug is still at least two to three years from market, but if it proves safe it will be Myriad's first drug on the market. And if it lives up to its potential, R-flurbiprofen could be extremely lucrative.

The obesity gene, dubbed HOB1, was uncovered in families with a history of extreme obesity. But the discovery, and the potential drugs and other therapies that it could lead to, may impact treatment of people with more moderate weight problems, says Myriad spokesperson Bill Hockett.

The depression gene has a similar potential. The gene acts in a "novel pathway" that was not previously known and is independent of the pathways used by current anti-depression drugs. "The first product that could potentially come from this discovery is a diagnostic test [for people at risk for the disease]," says Hockett. Then Myriad hopes to capitalize on the discovery with new drugs that are more effective than current therapeutics like Prozac, Zoloft and Paxil.

But Myriad's good news has not drowned out the bad. The company has made national headlines as it attempts to fend off a number of gene patent disputes. In particular, the Canadian health minister has said his government would ignore Myriad's patented genetic test for inherited forms of breast and ovarian cancer. European laboratories and patient groups have also challenged the company's patents.

Myriad has worked especially hard to resolve the disputes with Canada in particular. "We've had a number of talks with the [Canadian] government, but so far we have not had a lot of success in those talks," says Hockett. "We'd like to find a way to resolve this without a lawsuit." But the disputes, while complex, aren't a life-and-death matter, he says, because, in the end, both Canada and Europe represent relatively small markets for Myriad.

Hockett also downplays the company's falling stock price and the fact that the company has yet to turn a profit in its 10-year existence. "We don't take the price of the stock as an indication of the company's progress. We think it's more an effect of the biomedical field in general."

So what does the future of Utah's biotech industry look like? Michael Keene, science advisor with the Utah Department of Community and Economic Development, says the state will focus on recruiting biotech's "thought leaders" by increasing the number of endowed chairs at Utah's universities. He has little doubt Utah's biotech industry will grow, however, if for no other reason than the nation's aging population means discoveries and treatments coming out of the biotech industry will continue to be important. "As a country we can't afford not to invest in this stuff."

Tim Westby is a Salt Lake City-based freelance writer.