After 20 years of scepticism, increasing sales have finally convinced industries that genetic engineering holds the key to the future.

GENETIC engineering -- the ability to manipulate the molecular blueprint of life -- is coming of age. Biotechnology is transforming medicine, agriculture and animal husbandry: In the not too distant future, cancer will no longer be a dreaded disease, crops will be able to resist pests and tomatoes will be forever fresh. Thanks to rising sales of genetically engineered products, pharmaceutical and agriculture-based industries have dumped their scepticism of biotechnology. But the new-found enthusiasm for the nascent technology is not without bounds as ethical and safety issues continue to haunt it.

Today, the biotech industry has an annual turnover of more than $8 billion. Companies realise they cannot ignore this powerful tool, which can revolutionise current medical treatment and plant-breeding technologies. Jurgen Drews, president for international research and development at the pharmaceutical multinational Hoffmann-La Roche, told the New Scientist recently, "(Earlier,) biotechnology companies were interesting and fascinating -- but outsiders."

Now, mega firms like Roche have tied up with biotechnology research companies that mushroomed in the 1980s. Four years ago, La Roche forked out $2.2 billion to acquire a 60 per cent stake in Genentech -- the first biotechnology company set up in California in the 1970s. Similarly, Sandoz has signed up with Systemix, Cynamid with Immunex and American Home Products with the Genetics Institute.

After some initial dismay, small, independent biotech companies also are seeing the benefits of these tie-ups. Over the past decade, they invested heavily in R&D, but they are yet to show profits. Genentech, for example, unveiled last year what is probably the largest biotechnology lab in the world, equipped for 400 scientists. In 1992, US-based public biotechnology companies made a loss of more than $1 billion.

Booming sales
Ironically, as losses mount so do sales figures. Sales increased some 350 times from $10 million in 1988 to almost $ 3.5 billion in 1992. In 1991, the biggest of these companies, the California-based Amgen, made $409 million from the sales of human erythropoietin, a product that stimulates the production of red blood cells.

La Roche's investment in Genentech is already paying off. In August, the US Food and Drug Administration (FDA) cleared DNAse, a drug developed by the company to treat cystic fibrosis, an inherited lung and digestive tract disorder. Analysts reckon that by 1996, the drug will generate $300 million in revenue annually.

As in other high-tech areas like supercomputers and artificial intelligence, the Japanese are giving the Americans a run for their money. In 1981, Japan's ministry of international trade and industry (MITI) designated biotechnology as a key future technology and set a goal of reaching world leadership by 2000.

Japanese investment in biotech R&D rose from about $475 million in 1988 to $720 million in 1992 and is expected to be $813 million in 1993. Informal arrangements between university, government and industry scientists have enhanced MITI's efforts.

Private enterprises have also invested heavily in biotechnology. The US consultancy firm Arthur D Little says the Japan Bioindustry Association estimates by 2000, biotechnology will account for 10 per cent of Japan's gross national product and will be worth more than a trillion dollars.

However, US investment in biotechnology is by far the highest -- last year, it was $12.5 billion. Among the small biotech companies, Genentech is the largest R&D spender at $270 million, followed by Amgen, which spent more than $180 million last year. The US governmental biotech budget for the year ending 1993 is $4 billion and the Clinton administration has already asked for a $4.3-billion investment for government-wide biotechnology programmes in the next year. Today, the industry employs 79,000 people in 1,300 companies in the US.

But a US National Academy of Science report last year warns that the US biotechnology industry "could lose its competitive edge by the end of the century" because it has exchanged too much of its technical know-how for Japanese capital. Moreover, the report warns if nothing is done, many US biotech companies will disappear by the end of the decade and a substantial and profitable proportion of the industry will be located outside the country.

Though European companies also invest in biotech research, their efforts at commercialisation have been relatively slow. In 1989, only 10 genetically engineered products were developed and only 130 patent applications were filed in Europe, whereas the US produced 147 products and 626 patent applications.

The strong, pro-environment public opinion in Europe and general suspicion of genetically engineered products have led to tough regulations and slow acceptance of the technology. The patents situation is also a "muddle" as far as companies are concerned, and as a result, Europeans are cautious about investing in biotechnology. The biggest spender is UK, with an estimated $220 million. Moreover, venture capital investments in biotechnology in Europe are going down. According to the consultancy firm KPMG, investments decreased from L101 million in 1989 to L62 million in 1991.

But the developing world is eager to cash in on the biotechnology boom. The Latin American nations of Argentina, Brazil, Chile, Costa Rica, Mexico and Venezuela are reviewing patent protection and economic policies to encourage biotechnology. Ernst & Young point out that biotechnology is perceived as a source of future economic development for Malaysia, Singapore and Thailand.

In India, efforts have been made to encourage biotechnology and a special department of biotechnology was set up under the ministry of science and technology in 1986 (See box on India: Poor expression).

An analysis by Ernst & Young shows that two-thirds of all biotechnology companies focus on therapeutic or diagnostic applications; 10 per cent on agriculture and food applications; 8 per cent on applications in the chemical industry and environment clean-ups, and the rest license out or supply services and instrumentation to other biotechnology, chemicals and pharmaceutical firms.

It's no surprise medical applications draw the most researchers. Says Steven Burrill, a specialist at Ernst and Young, "The financial markets really understand that if you make a drug against cancer or AIDS, it will have a proven market." Investors are confident that pharmaceutical products produced by genetic engineering will give returns, but they are not so sure about untried recombinant DNA (deoxyribonucleic acid) products for food processing or environmental protection.

Nonetheless, scientists the world over today are struggling to unlock the secrets of genes and manipulate them for a range of benefits -- from a cure for cystic fibrosis, which is a common genetic ailment in the West, to increasing the shelf life of tomatoes.

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