Change to Gene Theory Raises New Challenges for Biotech

By Denise Caruso
International Herald Tribune
July 4, 2007

The $73.5 billion global biotech business may soon have to grapple with a discovery that calls into question the scientific principles on which it was founded.

Last month, a consortium of scientists published findings that challenge the traditional view of the way genes function. The exhaustive, four-year effort was organized by the United States National Human Genome Research Institute and carried out by 35 groups from 80 organizations around the world. To their surprise, researchers found that the human genome might not be a "tidy collection of independent genes" after all, with each sequence of DNA linked to a single function, like a predisposition to diabetes or heart disease.

Instead, genes appear to operate in a complex network, and interact and overlap with one another and with other components in ways not yet fully understood. According to the institute, these findings will challenge scientists "to rethink some long-held views about what genes are and what they do."

Biologists have recorded these network effects for many years in other organisms. But in the world of science, discoveries often do not become part of mainstream thought until they are linked to humans.

With that link now in place, the report is likely to have repercussions far beyond the laboratory. The presumption that genes operate independently has been institutionalized since 1976, when the first biotech company was founded. In fact, it is the economic and regulatory foundation on which the entire biotechnology industry is built.

Innovation begets risk, almost by definition. When something is truly new, only so much can be predicted about how it will play out. Proponents of a discovery often see and believe only in the benefits that it will deliver. But when it comes to innovations in food and medicine, belief can be a dangerous thing. Often, new information is discovered that invalidates the principles - thus the claims of benefit and, sometimes, safety - on which proponents have built their products.

For example, antibiotics were once considered miracle drugs that, for the first time in history, greatly reduced the probability that people would die from common bacterial infections. But doctors did not yet know that the genetic material responsible for conferring antibiotic resistance moves easily between different species of bacteria. Overprescribing antibiotics for virtually every ailment has given rise to "superbugs" that are now virtually unkillable.

The principle that gave rise to the biotech industry promised benefits that were equally compelling. Known as the Central Dogma of molecular biology, it stated that each gene in living organisms, from humans to bacteria, carries the information needed to construct one protein.

The scientists who invented recombinant DNA in 1973 built their innovation on this mechanistic, "one gene, one protein" principle.

Because donor genes could be associated with specific functions, with discrete properties and clear boundaries, scientists then believed that a gene from any organism could fit neatly and predictably into a larger design - one that products and companies could be built around, and that could be protected by intellectual-property laws.

This presumption, now disputed, is what one molecular biologist calls "the industrial gene."

"The industrial gene is one that can be defined, owned, tracked, proven acceptably safe, proven to have uniform effect, sold and recalled," said Jack Heinemann, a professor of molecular biology in the School of Biological Sciences at the University of Canterbury in New Zealand and director of its Center for Integrated Research in Biosafety.

In the United States, the Patent and Trademark Office allows genes to be patented on the basis of this uniform effect or function. In fact, it defines a gene in these terms, as an ordered sequence of DNA "that encodes a specific functional product."

In 2005, a study showed that more than 4,000 human genes had already been patented in the United States alone. And this is but a small fraction of the total number of patented plant, animal and microbial genes.

In the context of the consortium's findings, this definition now raises some fundamental questions about the defensibility of those patents.

If genes are only one component of how a genome functions, for example, will infringement claims be subject to dispute when another crucial component of the network is claimed by someone else?

Might owners of gene patents also find themselves liable for unintended collateral damage caused by the network effects of the genes they own?

And, just as important, will these not-yet-understood components of gene function tarnish the appeal of the market for biotech investors, who prefer their intellectual property claims to be unambiguous and indisputable?

While no one has yet challenged the legal basis for gene patents, the biotech industry itself has long since acknowledged the science behind the question.

"The genome is enormously complex, and the only thing we can say about it with certainty is how much more we have left to learn," wrote Barbara Caulfield, executive vice president and general counsel at the biotech pioneer Affymetrix, in a 2002 article on Law.com called "Why We Hate Gene Patents."

"We're learning that many diseases are caused not by the action of single genes, but by the interplay among multiple genes," Caulfield said. She noted that just before she wrote her article, "scientists announced that they had decoded the genetic structures of one of the most virulent forms of malaria and that it may involve interactions among as many as 500 genes."

Even more important than patent laws are safety issues raised by the consortium's findings. Evidence of a networked genome shatters the scientific basis for virtually every official risk assessment of today's commercial biotech products, from genetically engineered crops to pharmaceuticals.

"The real worry for us has always been that the commercial agenda for biotech may be premature, based on what we have long known was an incomplete understanding of genetics," said Heinemann, who writes and teaches extensively on biosafety issues.

"Because gene patents and the genetic engineering process itself are both defined in terms of genes acting independently," he said, "regulators may be unaware of the potential impacts arising from these network effects."

Yet to date, every attempt to challenge safety claims for biotech products has been categorically dismissed, or derided as unscientific.

A 2004 round table on the safety of biotech food, sponsored by the Pew Initiative on Food and Biotechnology, provided a typical example:

"Both theory and experience confirm the extraordinary predictability and safety of gene-splicing technology and its products," said Dr. Henry Miller, a fellow at the Hoover Institution who represented the pro-biotech position.

Miller was the founding director of the Office of Biotechnology at the Food and Drug Administration, and presided over the approval of the first biotech food in 1992.

Now that the consortium's findings have cast the validity of that theory into question, it may be time for the biotech industry to re-examine the more subtle effects of its products, and to share what it knows about them with regulators and other scientists.

This is not the first time it has been asked to do so. A 2004 editorial in the journal Nature Genetics beseeched academic and corporate researchers to start releasing their proprietary data to reviewers, so it might receive the kind of scrutiny required of credible science.

According to Heinemann, many biotech companies already conduct detailed genetic studies of their products that profile the expression of proteins and other elements. But they are not required to report most of this data to regulators, so they do not. That means that vast stores of important research information sit idle.

"Something that is front and center in the biosafety community in New Zealand now is whether companies should be required to submit their gene-profiling data for hazard identification," Heinemann said. With no such reporting requirements, companies and regulators alike will continue to "blind themselves to network effects," he said.

The Nature Genetics editorial, titled "Good Citizenship, or Good Business?," presented its argument as a choice for the industry to make. Given the significance of these new findings, it is a distinction without a difference.

Monsanto Warns It May Withdraw from Wheat-seed Market

By Neels Blom
Business Day, South Africa
July 06, 2007

When the world's largest seed company and leading producer of genetically engineered seed asks everyone involved in the wheat value chain to help pay for its plant breeding programme in SA, one has to ask why. Is the business not profitable without an industry subsidy? If that is the case, why should it be the concern of farmers, millers and distributors?

At a presentation to the media last week, Monsanto's product manager for wheat and oil seed, Patrick Graham, said the company was sounding a warning to the wheat industry that it could not be expected to continue paying the research and development costs involved in producing new and improved cultivars.

The warning comes at the start of the winter wheat planting season and follows a market survey of farmers by Monsanto. The survey sample was taken from farmers mostly in the north of the country, with the majority from the Free State. To them, maize and wheat rank as equally important crops.

"This is not a red light but it is not a green light either," says Graham.

However, Monsanto is clear that if conditions do not change it might have to withdraw from the wheat-seed market. The company has already decided to discontinue producing soya seed in SA because the relatively small domestic market affects profitability. If farmers want the benefit of continuously improved varieties, they will have to import it at a premium.

Wheat farmers already contribute a statutory fee of R9 a ton to the Winter Cereals Trust, which finances research into the development of cultivars. At last year's production of 2,7-million tons of wheat, plus levies on imports, this amounted to about R24m.

Graham dismisses the trust's contribution as inadequate, saying Monsanto does the bulk of the development. Monsanto, among other seed companies, is a beneficiary of the trust.

When asked whether continued research into cultivar development was necessary, 99% of the farmers surveyed said yes. When they were asked who should pay for this, 54% of the farmers said the government should pay, 23% said seed companies should pay and 16% said farmers should pay. "This is pure hypocrisy," says Graham.

On the face of it, the decision of whether to stay or go should be Monsanto's alone, but the matter is not simple. As Monsanto's survey shows, the same farmers who plant winter wheat also plant maize seed in summer, for which Monsanto is the main supplier via its brands Sensako and Carnia, and agencies Pannar and Afgri, among others.

With maize being the most important crop in SA , Monsanto can ill-afford to alienate these farmers. This means it is possible to argue that the costs of one product could be offset against the profits from another. But for Monsanto there is a fundamental difference in the handling of these two products.

Maize seed, genetically modified or otherwise, sold to SA farmers consists of hybrid seeds, which means the high yields bred into them are delivered at a single planting only. This means that farm-saved seed -- the seed held back from a harvest and stored on farms for later planting -- does not produce the same yield as the first generation, ensuring a repeat market for Monsanto's product. It also results in a built-in protection for Monsanto's intellectual property rights to the seed it has developed.

Wheat seeds sold to SA farmers are not hybrids and they are not genetically modified, which means that, because of the nature of open pollination, seed saved from one year's crop and sowed again will deliver the same benefits.

Monsanto says this practice, which enjoys statutory protection in SA, erodes its revenue.

To recover these sales losses, the company wants two things: farmers and others in the value chain to pay it for the benefit of improved cultivars; and farmers who sow farm-saved seeds to be subjected to the same seed certification process imposed on commercial seed companies, even if the seed is for use by individual farmers only.

Even if its own research shows farmers reject these options, this is the message Monsanto wants the agricultural media to communicate to the industry, Graham says.

The company has other options, though, including joining the majority of the wheat industry in lobbying the government to pay for research and development. This would be based on the argument that improved cultivars are in the interests of everyone, including consumers. Monsanto will have nothing to do with this option, however, because the resultant intellectual property rights will become common property, or at least be shared with other researchers.

Another option put to Graham was to include the costs of developing cultivars in the price of seed, but this was rejected too, because it would price Monsanto out of the wheat-seed market.

Such is the nature of competition, even if your competitor is your own customer.

Attack of the Mutant Rice

By Marc Gunther
Fortune
July 9, 2007

BACK IN THE SPRING OF 2001, a 64-year-old Texas rice farmer named Jacko Garrett watched a fleet of 18-wheelers haul away truckloads of rice that he had grown with great care. "It just bothers me so bad," Garrett said. "I'm sitting here trying to find food to feed people, and I've got to bury five million pounds of rice." No one likes to waste food, but for Garrett, who runs a charity that collects rice for the needy, the pain was especially acute.

Garrett's rice was genetically modified, part of an experiment that was brought to an abrupt halt by its sponsor, a North Carolina--based biotechnology company called Aventis Crop Science. The company had contracted with a handful of farmers to grow the rice, which was known as Liberty Link because its genes had been altered to resist a weed killer called Liberty, also made by Aventis.

But by 2001, Aventis Crop Science was living a biotech nightmare. Another one of its creations, a variety of genetically modified corn known as StarLink, had been discovered in taco shells made by Kraft. Because the StarLink corn had been approved as animal feed and not for human consumption all hell broke loose. Hundreds of corn products were recalled. Consumers and farmers sued. Greenpeace dumped bags of corn in front of federal regulatory agencies, and an Environmental Protection Agency official accused Aventis Crop Science of breaking the law. So shell-shocked was Aventis SA, the French pharmaceutical giant that owned Aventis Crop Science, that it decided to sell the U.S. biotech unit and abandon the very emotional business of reengineering the foods we eat.

So dumping the Texas rice was a no-brainer. "We didn't want to take any chances," says a former Aventis executive. "We burned and buried enough rice to feed 20 million people."

Eventually Aventis paid about $120 million to settle the StarLink lawsuits. It sold its crop science unit to Bayer, the German drug giant that makes aspirin, Aleve, and Alka-Seltzer. Bayer Crop Science dropped plans to bring Liberty Link rice to market, largely because rice grown in the U.S. is exported to Europe and other places that don't want genetically modified foods. And everyone forgot about Jacko Garrett's rice.

CAN YOU GUESS WHERE THIS IS GOING? Yep. In January 2006, small amounts of genetically engineered rice turned up in a shipment that was tested we don't know why by a French customer of Riceland Foods, a big rice mill based in Stuttgart, Ark.? Because no transgenic rice is grown commercially in the U.S., the people at Riceland were stunned. At first they figured that the test was a mistake or that tiny bits of genetically modified corn or soybeans had somehow gotten mixed up with rice during shipping. They said nothing.

Then came another shock. Testing revealed that the genetically modified rice contained a strain of Liberty Link that had not been approved for human consumption. What's more, trace amounts of the Liberty Link had mysteriously made their way into the commercial rice supply in all five of the Southern states where long-grain rice is grown: Arkansas, Texas, Louisiana, Mississippi, and Missouri. Bayer and Riceland then informed the U.S. Department of Agriculture, which announced the contamination last August.

By then the tainted rice was everywhere. If in the past year or so you or your family ate Uncle Ben's, Rice Krispies, Gerber's, or sushi, or drank a Budweiser Anheuser-Busch is America's biggest buyer of rice you probably ingested a little bit of Liberty Link, with the unapproved gene. (A very little bit perhaps ten to 15 grains of transgenic rice in a one-pound bag of rice, which contains about 29,000 grains.) Last November, over the howls of anti-GMO (that's genetically modified organisms) activists, the USDA retroactively approved the Liberty Link rice, known as LL601. The department said the genes that it approved are similar to those inserted for years into canola and corn, with no apparent ill effects. The experts at the USDA, the EPA, and the Food and Drug Administration, all of which bear some responsibility for regulating transgenic food, say the contamination is nothing to worry about.

Then again, the experts also have dismissed repeated warnings that genetically modified crops can't be managed or controlled. When organic farmers worried that their fields could be invaded by genetically modified plants grown nearby, regulators told them there was nothing to fear. The biotech industry promised that experimental, gene-altered plants could be grown in open fields and never, ever end up in the neighborhood Safeway.

Oops.

In any event, after last year's contamination became public, and after rice prices took a tumble, and after Europe said it no longer wanted any American rice, and after several other countries, including Japan and Iraq (!), demanded rigorous testing of U.S. rice, the industry moved to contain the damage. Rice growers were told not to plant Cheniere, a popular seed variety that had been tainted by Liberty Link genes. Regulators set up a comprehensive testing program to keep future harvests clean. Last December, Bruce Knight, a USDA official, assured worried rice farmers, "The good news is that the only foundation seed to test positive for Liberty Link was of a single variety 2003 Cheniere."

And then ... the tests that had been put in place uncovered a second contamination, and then a third, involving new, unapproved strains of Liberty Link, which turned up in another popular variety of rice seed, called Clearfield 131 (CL131). This seed variety is made by the German chemical giant BASF Corp. So the CL131 seed had to be banned as well.

Yes, it's the attack of the mutant rice, and it's spreading.

"This is a new kind of pollution," says Andrew Kimbrell, director of a Washington advocacy group called the Center for Food Safety, which opposes transgenic food. "You don't see it. It disseminates. It reproduces. It mutates. It's living pollution."

And here's the thing that really bugs many of America's 8,000 rice farmers: They didn't want to grow transgenic rice. It's not that they object to genetic engineering per se; many of them grow transgenic corn or soybeans alongside their conventional rice. Over the past decade, in fact, biotech crops have become staples of the American diet; about 60% to 70% of the processed foods in U.S. grocery stores contains oils or ingredients derived from biotech corn and soybeans, according to BIO, an industry group. Nevertheless, an acrimonious debate about whether biotech food is safe for the environment and human health rages on amid considerable scientific uncertainty. Absent firm proof of danger, regulators in the U.S. have chosen to permit widespread bioengineering. But rice farmers know their market. About half of the U.S. rice crop, which was worth about $1.9 billion last year, is exported, and Europeans and Asian consumers simply don't want genetically engineered food.

"If I can't sell it, I don't want to grow it," says Jennifer James, who grows rice, wheat, and soybeans, some of them transgenic, on a 7,500-acre farm near Newport, Ark.

And so the farmers are hiring lawyers and calling their Congressmen and trying to decide whom to blame: Bayer Crop Science, which owns Liberty Link and is the target of dozens of lawsuits, or the U.S. government, which regulates agricultural biotechnology, or the Europeans, for their opposition to genetically modified crops, which many farmers suspect is a form of protectionism. (Funny, isn't it European consumers won't buy genetically modified food, but French, Swiss, and German drug companies sell biotechnology to U.S. farmers.) Some farmers point the finger at environmental groups like Greenpeace for scaring people with their talk of Frankenfoods. Says James, who has decided not to sue: "Somebody screwed up somewhere."

Collectively, farmers and seed companies have lost hundreds of millions of dollars as a result of the contamination. Its origins remain a mystery. "This is the most traumatic thing I've seen in the rice industry in 30 years," says Darryl Little, the widely respected director of the Arkansas State Plant Board, who has tried to clean up the mess. "It's been devastating."

And not just to the farmers. Consider the plight of Scott Deeter, the chief executive of a Sacramento biotech firm called Ventria Bioscience. Ventria wants to grow rice that has been genetically engineered to produce proteins that can then be extracted and turned into low-cost treatments for diarrhea. Making the drugs by growing transgenic rice is cheaper than producing them in a lab. "The rice plant is just the factory," Deeter says.

Ventria's medicine would save lives, Deeter says. About 1.8 million children in poor countries die annually from diarrhea. The disease raises national security issues as well, Deeter told a congressional subcommittee. "During Operation Iraqi Freedom, 70% of deployed troops suffered a diarrheal attack," he testified. "This is a silent enemy attacking American troops."

Even before the Liberty Link brouhaha, Ventria struggled to find a home for its "pharma rice." California told the company not to grow it in the state after farmers objected. So did Missouri, after Anheuser-Busch threatened to stop buying Missouri rice if Ventria was allowed to grow there. (AB did not want diarrhea-fighting proteins to turn up in a Bud.) Last year Deeter took his plans for rice fields and a production plant to Junction City, a small Kansas town more than 200 miles away from the nearest rice farm.

That's not far enough to satisfy critics. The USA Rice Federation, an industry group, opposed Ventria's plans. Citing Liberty Link, the group said it does not believe that the USDA can protect "the environment and the public's food and feed supply from unwanted intrusions of genetically engineered materials."

"We're not anti-biotech, and we're not anti-Ventria," says Bob Cummings, the federation's senior vice president. "Our job is to protect our industry."

"HAVE A RICE DAY." So says the USA Rice Federation, which wants people to eat more rice. Check out the recipes on its website for Senegalese peanut soup with spicy rice timbales; walnut rice with cream cheese, mushrooms, and spinach; and chocolate-chip banana nut rice pudding. Yum.

Alas, these items are not on the menu at the Little Chef restaurant in Stuttgart, Ark., where FORTUNE and a group of rice growers recently discussed the industry's woes over a lunch of chicken-fried steak, vegetables, and you-know-what. Arkansas grows about 45% of the nation's rice crop, and America's two biggest rice mills, Riceland Foods and Producer's Rice Mill, are headquartered in Stuttgart, a town of 10,000 people that bills itself as the Rice and Duck Capital of the World. Rice plants and ducks both like water.

Although they can't prove it, the farmers believe that rice prices are lower than they would be because of the Liberty Link problems. After the contamination was made public by the USDA on Aug. 18, 2006, the price of rice futures fell by about 10%. Prices have recovered since then, but farmers say they should be higher given the rising prices for other farm commodities. Currently, rough (meaning unrefined) rice sells for about $10.70 per hundredweight, or 100 pounds. "Rice could have been $1 a hundredweight more, and every farmer needs that," says Ray Vester, who farms about 1,300 acres in Stuttgart and sits on the state plant board. Rice farmers have been hard hit by rising energy and fertilizer costs, so they are feeling squeezed.

Farmers who planned to use either Cheniere or CL131 seed had an additional problem. They had to scramble to find alternatives or plant other crops. About 40% of the rice acreage in Arkansas would have been planted with either Cheniere or CL131 until both were banned, according to Chuck Wilson, a rice specialist with the University of Arkansas cooperative extension service in Stuttgart. Wilson expects Arkansas growers to plant 1.2 million acres of rice this year, 13% less than last year and the lowest acreage since 1996.

Hardest hit was a small group of farmers who specialize in growing rice for seed and were unable to sell their stocks of Cheniere or CL131 to other farmers. "We had to put seals on the bins. We couldn't ship it. We couldn't plant it," said Troy Hornbeck, an owner of HBK Seed in Dewitt, Ark. He was eventually permitted to sell the transgenic rice for consumption, not for planting, at a loss. Ten seed dealers from Arkansas, Missouri, and Louisiana recently sued Bayer, saying the company's carelessness ruined their seed. Rival BASF, which lost an estimated $15 million because it owns the banned Clearfield 131 variety, hasn't said whether it will sue, but its executives are unhappy. "We can't have an unwanted GM event floating around the seed supply," said one.

Many other lawsuits have been filed. Tilda, a British importer of rice, has sued Bayer Crop Science, Riceland Foods, and Producer's Rice Mill, saying it had to destroy or send back Arkansas rice. A Chicago tort lawyer named Adam Levitt has been named a lead counsel in a federal lawsuit brought on behalf of more than 400 rice growers. Not by coincidence, Levitt represented corn farmers who successfully sued Aventis Crop Science, Bayer's predecessor, over StarLink. Says Levitt: "Bayer knew Liberty Link rice could easily contaminate the rice supply, because Bayer contaminated the U.S. corn supply only a few years ago."

Bayer says the company complied fully with the law. In a legal filing, its lawyers speculated that the alleged damages were caused by an "act of God."

SO IT'S GOD'S FAULT? That's about as good an answer as we've got right now to the question of what went wrong.

The USDA's Animal Plant and Health Inspection Service (APHIS) has been investigating since last summer, but the agency won't say what it has learned. In a sense, APHIS is investigating itself. Its track record, frankly, is a little scary. In 2005 the USDA's inspector general said that APHIS, which regulates field tests of biotech foods, didn't know the location of some field trials, did no independent testing of nearby crops, and did not even require submission of written protocols by some biotech firms, leaving the industry to, in effect, monitor itself. The audit concluded: "APHIS' current regulations, policies, and procedures do not go far enough to ensure the safe introduction of agricultural biotechnology." APHIS says it has fixed the problems. "We regulate technology that's constantly changing, and our policies continue to evolve," John Turner, an agency official, told FORTUNE.

As it turns out, it's unlikely that Jacko Garrett's Texas rice escaped from the landfill to live another day. He grew a different variety of Liberty Link from the one that got into the Cheniere seed. Instead, the source of the contamination is probably a rice research station in Crowley, La., operated by Louisiana State University. The LSU fields appear to be among the very few places if not the only one where the Liberty Link rice was grown in proximity to fields where Cheniere and CL131 seeds were also being developed. The LSU rice-breeding station is run by a man named Steve Linscombe, one of the most admired men in the U.S. rice industry. Linscombe, who is 52, has devoted his entire career to developing rice-seed varieties that improve yields and resist pests or herbicides. "He has put millions of dollars into the pockets of rice farmers," says Darryl Little, the Arkansas regulator. "He's a premier breeder."

Because Linscombe understood the risks of mixing transgenic rice seed with conventional varieties, he took extra precautions when working with Liberty Link. To prevent pollen or stray kernels of rice from migrating, USDA rules recommend at least a ten-foot buffer zone around transgenic field tests. LSU's contract with Bayer called for a 30-foot isolation zone. Linscombe created buffer zones of at least 120 feet. Until now, no one thought rice pollen could travel that far. "I did as much isolation as I possibly could," Linscombe said. So what happened? "I have been dealing with this for nine months, and I still can't give you a definitive answer," he said. Wilson, the University of Arkansas rice specialist, says, "I think we've learned some things about rice, biologically, that we didn't know before."

Whether the USDA has learned is another question. In May the agency granted Ventria's application to grow its pharma rice on up to 3,200 acres in Kansas. The agency had received 20,000 comments (most by e-mail clicks) opposing the plan from citizens, activists, farmers, and rice industry groups.

Deeter, Ventria's CEO, says there's no chance that the pharma rice will find its way into the food supply, as Liberty Link did: "We're more strictly regulated, by a factor of ten not for any good reason, by the way."

In the USDA ruling, Rebecca Bech, an APHIS administrator, wrote, "The combination of isolation distance, production practices, and rice biology make it extremely unlikely that this rice would impact the U.S. commercial rice supply."

In other words, there's nothing nothing at all to fear.

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