Reprinted in the Arizona Republic 3/6/00 from the Washington Post is the following:Behind-the-scenes negotiations to create a grand alliance of public and private researchers to unravel the human genetic code all but collapsed Sunday as the the two sides accused each other of manipulation and bad faith.Newly available documents show that representatives of the National Human Genome Research Institute, the lead aency in an international campaign to map all human genes, and of Celera Genomics Corp., the Rockville, Md., biotechnology company pursuing the same endeavor, have been talking since December.The negotiators hoped to strike a deal that would merge the international Human Genome Project with Celera's efforts, producing a top-notch, virtually comple map of human genes by late this year, far earlier than the 2003 deadline set by the Human Genome Project.Such a map, a central goal of modern science, promises to speed medical research and shed light on some profound mysteries of human biology."Humankind" will be better served if we can find a viable way to join forces to produce a better product in a more timely fashion," one negotiating document said.But the effort appears to have foundered amid sharp disagreements about commercial use of the gene database that would result from the collaboration.What could be the final blow came Sunday, when the Wellcome Trust, a large British charity heavily involved in financing gene research and long suspicious of Celera's efforts, released a copy of a letter from public negotiators to J. Craig Venter, Celera's president and chief scientific officer.The letter, dated Feb. 28 and marked "confidential" outlines difficulties in the negotiations and sets a deadline of Monday for Venter to alter his positions. In a telephone interview, Venter said he interpreted release of the letter the day before the deadline as an effort to pressure him.Francis Collins, director of the National Human Genome Research Institute and principal author of the letter, said he played no role in releasing it and learned the Wellcome Trust was about to do so over the weekend.He added, however that negotiations with Celera have been disappointing, and barring some unexpected breakthrough, a public-private collaboration to map the genetic code is unlikely.
Here is the Washington POst story:http://www.washingtonpost.com/wp-srv/WPlate/2000-03/06/049l-030600-idx.htmlChas
the conflict:[Francis Collins is director of the National Human Genome Research Institute and principal author of the letter]In the letter, Collins said a prime issue was Celera's desire for restrictions on commercial use of the genome database. Celera is spending hundreds of millions of dollars on gene research and has become a Wall Street darling because of its perceived lead over other biotech companies.Venter said his company supports the goal of completing the gene map rapidly but is concerned that research it paid for will be available for other companies to repackage and sell.According to the letter, public researchers were amenable to some restrictions for a brief period, perhaps six to 12 months. But the letter said Celera wanted the restrictions to run as late as 2005, which Collins said would hurt other biotech companies pursuing disease research.Celera has long said that, with or without the cooperation of public researchers, it would combine its private research with public databases to produce a complete, publicly available gene map this year. Venter reiterated that plan yesterday. But without a cooperative arrangement, there are certain to be continuing arguments about who gets credit for the work and about the quality of the resulting database.
Interesting. I saw this on the news for my portfolio this morning from AOL. What effect will this have on the stock's attractiveness? Does Mr. Ventner think he can get a better deal? I know I'm not supposed to get nervous on a Rule Breaker, but sometimes I can't help it! Any reassurance would be lovely.Thanks, fellow CRA followers.
I think that the fact that Venter was holding out for such a good deal shows that he knows 1) that Celera really can do it without the HGP anyway2) that there is nothing the HGP can do about it: there really is NOTHING wrong with Celera using the HGP data - ALL companies are free to do so,public or private, and, in fact, that is exactly what the data was developed for: for ALL companies to use freely.3) all the talk about Celera being "unethical" for doing so are just pure unadulterated BS.Private companies ADD VALUE to public work all the time and then sell their added value products. This is dead normal practice and in fact the US government ACTIVELY ENCOURAGES it: it has even set up programs to encourage exactly that sort of thing.
Personally, though I wished the government and Celera might come to an agreement, I didn't really think it would happen. The egos involved, on both sides, are enormous, and the number of players on the public side is just too many to come to a concensus. Celera has no choice but to reject the offer; they have to make money to cover their costs, and frankly I'm pleased that they're looking out for their shareholders, as they should be. The government has, IMHO, effectively shot itself in the foot. They have everything to lose by taking a hard line, and everything to gain by working out a deal to save face, and more importantly, ensure the future funding of public projects. Taking a hard line will, IMO, not stop the advance of the technology, nor the leadership postion of Celera, simply because getting to the finish line is perceived by the public, and myself, to be a step closer to living a better life in my old age. In the end, the hope for a cure for disease (which will be seen by the public as the true mission) will always win over government intervention. Just my .02, which is now only .01 split adjusted.
Also, as I understand it, CRA intends to give the "bare-bones" gene database to the public, which is the same end product that HGSP is going to give out.
This thread has made me reflect on an unfortunate potential political side effect of a Celera speed victory over the government. Namely, that there is always a large percentage of the population that thinks that government spending on science is a waste of tax dollars and this would create fuel for these arguments by those who are ignorant. They might point to this as an example of, "The US Government wasted millions of the tax payer dollars mapping the genome when once again private industry showed it could do it faster and cheaper...all science should be left to the private sector..." Follow this up with the usual lines like, "we can't feed our own people and we're spending billions of NASA dollars for failed Mars probes that can't even find the planet... etc."I hope that this isn't used to promote government cutbacks, like cancelling the supercollider, but I'm afraid there will be those who twist this in order to promote those arguments. --Michael
There is another perspective.By insisting on proprietary rights over its key loci, CRA limits the number of companies who can effectively research products based on a particular locus. Let's remember -- there are 10 million loci on the genome, and no single biotech company has the size and/or capability to work on more than a couple of them in a given decade [understanding that all loci are not important for disease research].I think CRA's view is incredibly shortsighted. Let's take two examples. First, Subway. They grew to the second largest fast food chain NOT by demanding large franchise fees (or expensive buildouts) but by making the franchise available to just about everybody. The founder realized that over the long term, having 14,000 outlets paying him an 8% royalty a month was a whole lot better than having 2,000 outlets coughing up $50K for a franchise fee. So, he forewent the Mercedes and the mansion for a decade, and is now reaping the benefits.CRA could have agreed to licence all loci for free, but requested a reasonable royalty for all products based on a given license. This would have expanded the potential profit base, as any qualified molecular biologist/biochem team could have gotten into the game. Play for free, pay if you win, rather than pay to play, regardless of outcome.Second, the strategy reeks of Apple Computer vs. IBM in the early 80's. Proprietary technology vs. opentechnology. You know the story.Finally, unless CRA thinks they can handle [and hire] for the kind of personnel growth they would require to actually research and produce based on the majority of their own patents (CRA has 350 employees = Merck has 57,500, for example) they can't do this alone. They need partners.Mike
Well, what do you suggest? Let everybody use the database that they spent millions obtaining, and have them pay % from all profits they make? This would be a good way to go with any discovery, but not this. Do you really think that they will be able to patent all the drugs that were made using their database? How in the world they will be able to prove that company that made the drug used THEIR database, and not Human Genome Sciences' database, for that matter? What I am saying is that it is not possible to have a share of the profits from "all the drugs that were made using known DNA sequences" - even if they sequence it first. They will make money on people accessing the database, as well as patents on genes and drugs designed from those patents. Also, the was they are sequencing genes is quite different from other companies. the Shotgun method is much more capable - once they are done doing human genome, they can sequence other genomes. Human genome is one of the most complicated (hey, we are a result of millions of years of evolution after all:) - and it will take them VERY short time to sequence it. For example, they can probably sequence base pairs for wheat, rice, watermelons - any populpar crop - in less then a year. We are talking about a machine that is capable of sequencing ANY genome VERY fast. I bet farmers will pay hundreds of millions of dollars for cow's genome. Note, that Celera is a sister company of Perkin Elmer - people who make $300,000 gene sequencing machines. They "sell" them to Celera. They are the only ones that have the technology at this time. They will assure that noone else has the same capabilities Celera does. Tony White (I think that's the name) - Perkin Elmer's CEO is a very smart man - I suggest you read an article or two about the way he reorganized PE and created Celera. VERY smart man.
" By insisting on proprietary rights over its key loci, CRA limits the number of companies who can effectively research products based on a particular locus. Let's remember -- there are 10 million loci on the genome, and no single biotech company has the size and/or capability to work on more than a couple of them in a given decade [understanding that all loci are not important for disease research]."What Celera is insisting on is proprietary rights for five years on the ability to create a commericial database for all those loci not the ability to use them. That would be dumb. Celera is a DATABASE company not a drug company, not a gene therapy company, but a database company they make their money by selling data to (currently) pharmas. How they sell access to the database is still evolving what they wanted to be surew was that another commercial gene database company couldn't also sell their data after a collaboration with the HGP. royalty fees for using their data would be great if there was way to prove that companies created a drug based on their data and if we weren't talking about 10 years from now before drugs get to market. " Finally, unless CRA thinks they can handle [and hire] for the kind of personnel growth they would require to actually research and produce based on the majority of their own patents (CRA has 350 employees = Merck has 57,500, for example) they can't do this alone. They need partners." thats why they sell access to their database.
what they wanted to be sure was that another commercial gene database company couldn't also sell their data after a collaboration with the HGPThat's my thoughts, too, but then I am still trying to wrap my mind around Celera's business model. Why would Celera want a deal with a publicly funded organization if it is so sure of itself -- except perhaps that it is just a tad worried that much of its work might be made available forfree?I stand corrected,blue
Why would Celera want a deal with a publicly funded organization if it is so sure of itself -- except perhaps that it is just a tad worried that much of its work might be made available forfree? Maybe the Celera folks are as concerned about scientific accuracy as the HGP folks. After all, the integration of both approaches makes for the best data.However, as Venter himself pointed out, Celera has access to the HGP data, but not vice versa, so the lack of an agreement should not slow down Celera much. The real concern is protecting their database searching and presentation tools from copycat competitors. the blurb below is lifted from USA: Celera Genomics hopes for public gene alliance. Reuters English News Service - 03/07/2000 By Maggie Fox, Health and Science Correspondent (C) Reuters Limited 2000.Reuters Celera published its own letter on Tuesday defending its stand. Paul Gilman, director of policy planning for the Rockville, Maryland-based company, said some of its demands had been misunderstood. "Our sole concern, the only concern we have, is that our data would be used by a competing database company," Gilman said in a telephone interview. "We want to protect the database from being pirated," he added.
Lesha1, I assume you are responding to me.You have eloquently posted the positional rationale for proprietary vs. open technologies. The problem is, that as clear and as obvious as that rationale seems, the market over the long term rewards the open position rather than the proprietary. There are dozens of examples of this, you know them as well as I.I am well aware of Perkin Elmer, which is an old-line,PROPRIETARY techology scientific computer manufacturer which either reorganized in bankruptcy or just avoided it after years of red ink. Very adept, but its hard to change years of habit.BTW, it would be of questionable legality for PE to refuse to sell to Celera's competitors.Anyway, the news reports of the last few days made me question management strategy, which would exclude CRAfrom RB status, so I am out at 235. Time will tell if I am a Fool or a fool. We can talk morality and how the government should or shouldn't get involved in business until we're blue in the face, but reality is that if CRA ticks off certain government mucketymucks, the gov't will find a way to upset the apple cart. They own the economy -- we just play in it.Mike
RE:" We can talk morality and how the government should or shouldn't get involved in business until we're blue in the face, but reality is that if CRA ticks off certain government mucketymucks, the gov't will find a way to upset the apple cart. They own the economy -- we just play in it."-----------The government does not have the authority to act *selectively* against any company, except insofar as a company violates existing laws or regulations (which is why it is acting against Microsoft).Celera has done nothing whatsoever which gives the government the slightest pretext for acting selectively against it, nor has the government given any indication that it would wish to. (The HPG is NOT the government. Their ability to do anything to Celera is NIL. They cannot even deny Celera access to their data should they wish to do so: it is PUBLIC data and such denial would be clearly illegal.IMHO, you have made a decision based on the wrong reason.
Hello fellow CRA Investors/PunditsDo any of your actually "Watch X-files"????Pickin' up on some of the story lines Huh?(LOL)Back to Lurkin' and Snickerin'Woolybooger
Re: "They own the economy, we just play in it" Wrong. This is supposed to be a capitalist country, not socialist or communist. And the secret is, for now, anyway, it is! WE own the economy, the government just tinkers around with it and politicians disingenuously take credit for it when it's good. The basic misunderstanding of the American citizenry about basic economics(and Civics, for that matter) just astounds me....and it portends the potential loss of our wonderful free-market economy and freedom itself if more and more of us choose to be ignorant and belive the lies of socialists like Bill & Hillary.Ed
>Wrong. This is supposed to be a capitalist country, >not socialist or communist.The operative word above is "supposed to be". If it were truly, there would be no Fed, and the market would control rates.>The basic misunderstanding of the American citizenry >about basic economics(and Civics, for that matter) >just astounds meI tend to be more astounded by the American citizenry's naivete.Mike
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