Industry Maintaining Its Growth but Economic Slowdown May Prevent Tech Transfer From Reaching Full Potential.

Two new biotech institutes are getting ready to open their doors, while another is set to kick into high gear. Meanwhile, third-phase trials for a promising melanoma vaccine is due to begin, and the first product from a Caltech spinoff that hopes to revolutionize much of medical testing will hit the market.

That's just a sampling of some of the movement expected this year in the region's growing biotech sector. But industry observers caution not to expect 2001 to be the year that tech transfer programs at Los Angeles universities and research institutes hit pay dirt.

While the region's biotech programs show great promise, they are still in a nascent stage compared to other regions in the state, and it doesn't help that all signs are pointing to an economic downturn.

"A (new) biotech company is going to take perhaps 10 years before it is ready to sell a product, and we have been launching companies for only four years," notes Larry Gilbert, director of Caltech's Office of Technology Transfer, which has one of the most aggressive tech transfer programs in the region.

"I think biotech will be very strong over the next decade, but I don't know about next year. We will continue to have spinoffs, but the marketplace dictates how quickly those companies go public or are acquired and it's clear the economy is slowing down."

Still, 2001 may be the year the seeds are sown for a future biotech boom, with many observers pointing to UCLA's recent $100 million bonanza from Gov. Davis to establish a California Nanosystems Institute.

The institute, with $200 million in matching outside funds, will be split with UC Santa Barbara, with separate facilities to be built on each campus.

Construction is expected to get under way in a year, but the institute will open its doors in temporary facilities in 2001, focusing on the science of molecular manufacturing and construction, which has applications in the fields of both biotech and computer science.

"We will have a working institute in a couple of months, and tech transfer is a big part of this," said UCLA chemistry Professor James Heath, the institute's scientific director. "We are on a fast track."

The state grant was a big coup for UCLA, which has suffered withering criticism because of its inability to establish a biotech institute with $100 million that entrepreneur Alfred E. Mann intended to donate to the university. That donation is still in negotiation.

Cedars-Sinai Medical Center, meanwhile, is jumping deeper into the biotech game, establishing a $10 million Gene Therapeutics Institute at its new research tower and importing a husband-and-wife team from England to run it.

The Center for Biomedicine and Genetics at the City of Hope in Duarte already opened this past year, but center officials say they plan to get down to business in 2001, doing nothing less than changing the tech transfer "paradigm."

The center hopes to become a regional and even national base where researchers can bring promising "biologic" therapies to be tested in early stage clinical trials, rather than waiting for private companies to take that step. Still, the institute is seeking to collaborate with the private sector.

"There are projects all over the country that are languishing in laboratories," said Dr. Larry Couture, the institute's director. "We need to do (the testing) on our own before you see drugs start popping out left and right."

The 20,000-square-foot institute includes 12 rooms designed specifically for producing products in quantities for such trials.

Gordon Binder, the retiring chairman and former CEO of Amgen Inc., the Thousand Oak company that is the country's largest biotech firm, said he was very excited about the prospects for the biotech industry, noting UCLA's and other research efforts.

"The promise has never been greater," said Binder, who is forming a venture capital firm and looking for ideas to back commercially. "There are a number of new things in the pipeline. The FDA has something like 75 (biotech therapies) in phase three trials. That exceeds all the (therapies) they have ever approved."

One of those therapies is a promising melanoma vaccine that was developed by the John Wayne Cancer Institute at St. John's Health Center in Santa Monica. The .vaccine, which may complete its final testing this year, has shown the potential for doubling the average survival rate.

"John Wayne has a treasure trove of technology that needs to be transferred into a commercial setting," said Dr. Donald Morton, medical director of the cancer institute. "But as you know it's a long way from the research application to commercial approval."

The institute will average about one commercial biotech transfer a year. In 2001, work will concentrate on a diagnostic test effective for multiple cancers, Morton said.

Caltech expects to spin off four to six biotech companies next year, while Clinical Micro Sensors, which spun off in 1995, prior to establishment of the tech transfer program, hopes to sell its first product.

The company, which was bought by Motorola Inc. for $280 million in cash this past year, plans to develop a hand-held bin-chip device that can instantly test for a broad array of diseases and conditions, such as hepatitis, in doctors' offices.

A table top device for use by laboratories is scheduled to hit the market in the second quarter.