Australasian Biotechnology (backfiles) AusBiotech ISSN: 1036-7128 Vol. 8, Num. 2, 1998

FROM THE PRESIDENT

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A lot is happening at the ABA. In the last 6 months we have lost two Presidents, Graeme Woodrow and Ian Nisbet, to fresh fields overseas. Both Graeme and Ian were not only skilled scientists in our currently too sparse biotechnology industry, but also tireless workers for the good of this industry. In their `spare' time they invested a great deal of effort in building and maintaining the networks which are essential if we are to increase our profile and promote our perspectives, and their skills and commitment are sorely missed.

Most of the ABA members are probably quite unaware of the extent of this work, which goes on thanks to the efforts of the present Board of Directors. Elane Zelcer and Lyndal Thorburn, both of whom received your support when the members last voted, have replaced Graeme and Ian. I would like to take this opportunity to welcome them officially. Lyndal has only just joined the Board, but Elane is already making a great contribution to the ABA.

Most recently, the Board is involved in advising the Department of Foreign Affairs and Trade on the Biosafety Protocol. This Protocol, which will have international legal standing under the Convention on Biodiversity, is about to enter the negotiating stage. It will not only be arguing its position against other OECD countries - notably the US, which takes a radically different view - but also against the G77 nations. Many of these would prefer decisions to be driven by socio-economic considerations such as threats to traditional forms of agriculture, rather than scientific assessment of safety.

It is essential that our government should have access to informed comment from the stakeholders. And make no mistake - YOU ARE THE STAKEHOLDERS. This is a particularly clear example of how the ABA can represent both its commercial and academic members, for the Biosafety Protocol basically addresses the movement of living genetically modified organisms (LMOs) across boundaries.

Are you a Lecturer in Biotechnology who has a thriving collaboration with an overseas colleague? Is exchange of recombinant strains of E. coli vital to the rapid progress of your research (and a paper in a good journal, and the next ARC grant)? Such exchange may to be covered under the Protocol.

Are you, like so many biotechnologists, at the academic/industrial interface, perhaps trying to commercialise a cell line which will benefit the industry internationally, generate significant income for Australia (and perhaps support you and your work for years)? That too may be covered.

Are you involved in an Australian biotechnology company, with a living recombinant product (a blue carnation, a disease-resistant fish) ready for export, an enthusiastic market overseas, and the prospect of better times ahead? They will certainly be covered.

Unless the Protocol is appropriately drafted and its subsequent administration is streamlined, effective, and supported by government, you may find yourself:

• forbidden to export (or import)
• subjected to mounds of new paperwork and delays which could threaten your whole project
• liable for the cost of the exercise.

The Directors of the ABA are working on your behalf, but we need to be able to do more. We can only achieve this by appointing an Executive Director who will be devoted full-time to your needs. By the time this issue of the journal is in circulation we will have asked the membership to approve this route of action, and next time I write I hope that I will be able to report that, with your support, this crucial appointment has been made.

Joan Dawes
ABA President
Professor Joan Dawes

NEWS

Florey Centenary

South Australian-born Howard Florey was born 100 years ago. He joined the team that took Alexander Fleming's discovery of penicillin on to commercialisation as the world's first antibiotic. Along with Fleming and Ernst Chain, Florey won the Nobel Prize for Medicine.

The Centenary of his birth will be honoured in many ways by the scientific community in 1998. Applications are now open for the inaugural Faulding Florey Medal for Biomedical Research. The medal and a $30,000 prize will go to Australians whose biomedical discoveries have benefited human health.

Additionally the Australian mint will produce a new coin honouring Florey; the National Science Centre will honour Florey; and a Florey internet site will be launched.

The Florey Centenary Committee and its officers have organised an extensive year of celebration. Details of activities will be released to the press as the year progresses.

Pam Owen is the Executive Officer of the Committee and can be contacted for information - Tel: (02) 9810 5642; Fax: (02) 9555 1383; Email: aipssec@eisa.net.au

Symposia of interest to many of us are planned in Melbourne, Canberra and Adelaide for various dates in September 1998. We will advise you later of details.

Science Policy Geared to Election "Decks Cleared for Action": FASTS

The new science policy document released recently by Australia's peak council for scientists and technologists is geared to an election in 1998.

Professor Peter Cullen, President of the Federation of Australian Scientific and Technological Societies (FASTS), said in launching the policy that scientists and technologists were "less than impressed" by the Government's performance in this area.

"FASTS is sharply critical of the Government over its treatment of science and technology in the universities. University science needs support as it works through a period of change," he said. "We are yet to be convinced of the merits of Government policies on encouraging industry to undertake R&D. We expect industry support for R&D to slump. Look for a disappointing reduction in the BERD figures (Business Expenditure on R&D) when they are released in April.

"On the other hand, the Prime Minister has demonstrated a strong personal commitment to workings of his Science, Engineering and Innovation Council, and that could be the beginning of a sensible statement of policy priorities for S&T."

Professor Cullen said that FASTS' policy had been thoroughly overhauled since the second edition was launched in June 1996, and that 31 of the 105 policies and actions are new. He described the new policy as an outward looking document.

"Science is an investment, and helps generate new industries and solve environmental and health problems. Our policies aim at a constructive engagement with the working world - FASTS seeks a knowledge based economy with high paying and satisfying jobs."

Alzheimer Collaboration

Biotechnology firm Biota Holdings Limited today announced it will work with the Howard Florey Institute of Experimental Physiology and Medicine on the development and commercialisation of a treatment for memory-related disorders, including Alzheimer's Disease.

Biota Chief Executive, Dr Hugh Niall, said that Biota has signed an agreement with the Institute to license a neuroactive compound discovered by the Director of the Institute, Professor Frederick Mendelsohn, and his colleagues.

Under the Agreement, Biota will assist the Institute in its efforts to further characterise the memory enhancement effects of the compound and will be responsible for commercialising the research.

An early goal of Biota will be to identify potential pharmaceutical partners with expertise in the area of Alzheimer's Disease and to assist in the development and commercialisation of the project.

Markets and Market Forecasts

There are an estimated 10 million people with Alzheimer's in the western world and this number is increasing by about 1 million per year.

The cost to American society of diagnosing and managing Alzheimer's Disease is currently estimated at more than $110 billion annually. The potential for a drug that is effective in limiting the progress of the disease has been estimated to be in excess of $1 billion annually.

Alzheimer's Disease

Alzheimer's Disease is a mental disorder mainly afflicting the elderly, although it can also occur in middle age. It results in loss of memory and judgement; and emotional instability. The disease occurs gradually, usually leading to a severely debilitated, immobile state between four and 13 years after onset and ultimately, death.

Many people who do not have Alzheimer's Disease develop what is described as "benign forgetfulness", increasing in incidence with age. The only approved therapies for Alzheimer's Disease are the cholin- esterase inhibitors, Cognex and Aricept. Neither is effective for all patients and both have side-effects.

Deposition of beta-amyloid plaques in brain cells has been suggested to be a key factor in the disease. The loss of forebrain function resulting from reduced production of the neurotransmitter, acetylcholine, is also implicated in the disease.

Money for Health Partnerships to Boost Exports

Multinational health care companies will be encouraged to work with Australian manufacturers in a $500,000 project to develop, adapt and export locally-made medical products.

Australian Business Health manager Ene Juurma said the $500,000 grant from the Department of Industry, Science and Tourism would encourage multinational health care companies to join with smaller Australian healthcare manufacturers and users to develop Australian invented and made medical equipment. She said the grant would be used to set up a series of pilot projects to breakdown some of the barriers faced by Australian health care producers. The results of the project, called the Medical Product Strategic Alliance Project, would be widely publicised as part of the agreement with DIST.

Health industry marketing consultant George Weber & Associates Pty Ltd is conducting the project's first stage. Project director George Weber said: "Multinational health care companies dominate the Australian market, making it difficult for Australian small-to-medium health care companies to compete. The purpose of this project is to seek a closer working relationship between the multinational companies and the local firms by developing strategic alliances to benefit both parties."

The potential benefits of the project are:

• Development of new products or improvement of existing ones through closer association between MNCs, SMEs and Australian medical institutions, such as hospitals.
• Opportunities for import replacement of medical components.
• Increased exports of medical products.
• Retention of intellectual property in Australia.

Australian Business Health, a unit of Australian Business, is the project sponsor and manager. Ms Juurma said the DIST grant would also be used to raise the awareness of Australian health care producers in overseas markets, using Australian Health Online - the specialist internet-based health business intelligence service.

All companies involved in medical product research and development and distribution are encouraged to participate in the project.

Genetic Screen Success

Finalist for Australian Technology Award

PreScreen, an innovative and non-invasive screen for detecting serious fetal genetic diseases as early as six weeks into a pregnancy, should be ready for testing in selected medical centres later this year.

This follows the success of a development and marketing alliance between Flinders Technologies Pty Ltd, the commercial development arm of the Flinders University of South Australia, and the US based multi-national Boehringer Mannheim Corporation (BMC).

The PreScreen technology featured in the Australian Technology Awards, which were announced in February. As Flinders Technologies was one of three finalists selected from some 140 contenders for `Excellence in the Development of a Technology from a University'.

"The award nomination reflects the quality of the work which Flinders teams have put into PreScreen over nearly a decade," said Flinders Technologies' Managing Director, Dr John Turner.

BMC, which will soon become part of the giant Roche Holdings AG group (which has net sales exceeding $16 billion a year) is an international leader in such fields as pharmaceuticals, biochemicals, and diagnostics. The Director of Medical Genetics and leader of the BMC team is Dr Walt Mahoney.

"The Flinders' work was complementary to our own R&D and, most importantly, the strategic direction Flinders was taking with its technology was consistent with BMC's goals, so combining our respective expertise and resources made good sense," Dr Mahoney said.

The project began at Flinders University in 1988 with Professor Warren Jones and his team identifying anti-bodies specific for a class of fetal cells. Over the past five years the focus has switched to molecular biology and research to identify and analyse isolated cells, and the Flinders research team is now headed by molecular biologist Dr Bill Kalionis.

PreScreen provides a way of detecting serious fetal genetic diseases without risk to the mother or a healthy fetus. Potentially it can be used to identify such disorders as Down's syndrome, cystic fibrosis, thalessemia, hemophilia, diabetes and Huntington's disease. "This diagnostic test is the first step towards therapeutic modalities that can correct genetic defects while the fetus is in utero," Dr Mahoney said.

Current methods of fetal genetic analysis involve removing cells from the fluid surrounding the fetus (amniocentesis) or the placenta (Chorionic villus sampling). These are relatively expensive and invasive procedures and carry a 1-2% risk that the fetus will spontaneously abort, and cannot be carried out until about 10 weeks into pregnancy.

The PreScreen test can be carried out at about six weeks and involves taking blood from a vein in the mother's arm, concentration of fetal cells using special magnetic particles then their analysis using modern molecular biology.

Delft Study Tour

In July 1998 a delegation of the Kluyver Institute for Biotechnology will visit Australia. The Kluyver Institute for Biotechnology is an education and research institute of the faculty of Applied Sciences of the Delft University of Technology in The Netherlands. The Kluyver Institute houses two departments, "Biochemical Engineering" (Professors Luyben, Heijnen and Van der Wielen) and "Microbiology and Enzymology" (Professors Kuenen and Duine). The biotechnological research programmes of these groups provide a unique integration of the Delft expertise's in (bio-) chemical engineering, microbiology, enzymology and bio-organic chemistry.

The delegation of the Kluyver Institute for Biotechnology
consists of professors, assistant professors, postdocs and Ph.D students, about 20 people in total. During their stay they will visit universities, research institutes and (bio-)chemical companies. The tour is being organised as a follow up of three earlier, successful study tours to the USA (1988), India (1991) and South-Africa (1995).

The objectives of their tour are the following:

• To intensify and accomplish new contacts with universities, companies and institutes in the field of biotechnology in Australia
• To initiate an intensive exchange of experience and knowledge in the field of biotechnology between the scientific board of the Kluyver Institute for Biotechnology and the institutes and companies to be visited
• To obtain insight in the application of scientific knowledge in biotechnological industry in Australia.

The first ten days of their stay (5-15 July) their visit will be orientated in and around Melbourne, the second period (15-24 July) Sydney and surroundings will be the place of interest. During their stay lectures and presentations will be given about biotechnological research in The Netherlands. Furthermore scientific discussions with leaders in certain fields in biotechnology in Australia will take place.

Further information: Stichting Biotechnologische Studiereizen, Kluyver Institute for Biotechnology, Julianalaan 67, 2628 BC

Delft, The Netherlands (Tel: +31 15 278 1006; Fax: +31 15 278 2355; Email: J.Beun@stm.tudelft.nl; http://www.kluyver.stm.tudelft.nl

Brewing Research International's new Director General's "down-under" tour

"I was impressed by the level of technological expertise I met and the advice I was given which has helped define and focus our research programmes. There was an air of excitement and openness to technological exploration and change (dare I say it!) untrammelled by the sometimes over-cautious traditions of much of Europe.

Australia and New Zealand are wonderful countries to be healthy in, and one cannot but notice people's passion for a healthy life. This has led to a keen interest in the effects of drinks on health and well-being that seems to me stronger and more educated than in most other parts of the world. The role that beers may have in promoting good health is eloquently presented by Tim Cooper of Coopers Brewery in Adelaide. At BRI the topic of health benefits has become a small, but important, part of the research programme to enhance consumer confidence in beers and ciders; during my tour I was able to present our initial results on antioxidants."

Comments by Renton Righelato, Director General, Brewing Research International

More Meat, Less Gas from Cattle

A team of Australian and Japanese scientists are investigating ways to cut global greenhouse gas emissions from cattle, while increasing the amount of meat and milk they produce.

Researchers estimate that the world cattle herd yields around 15-20 per cent all methane (CH₄) generated by human activity - up to 100 million tonnes per year. Methane is 25 times more potent than CO₂ in causing global warming. The methane is generated by bacteria in the cow's stomach, breaking down the fodder which the animal has consumed. On average, 6-7 per cent of the animal's total food intake is turned into gas and each beast puts out between 60 and 113 kilos of CH₄ a year.

New research by a joint team led by Dr Graeme McCrabb of CSIRO Tropical Agriculture and Dr Mitsunori Kurihara of Japan's National Institute of Animal Industry has identified a way both to cut gas emissions, and to lift production of meat and milk - especially in the tropics, where at least half the world's cattle herd resides.

Over the past year the team has carried out measurements of methane produced by Brahman cattle fed on diets typical of Northern Australia and other tropical regions of the world. This work is ongoing, and is providing more accurate estimates for international greenhouse inventories.

They have observed that the amount of methane produced by the cow varies dramatically according to the quality of the diet it is fed on - animals on poor quality feed, which is common in warm climates, generate a lot more gas and produce less meat or milk. They also found that better quality diets led to improved production from the animals - faster growth rates and a greater overall yield of milk and meat.

"It's perfectly logical - the energy that is being wasted as gas emissions from animals on a poor diet is instead converted to production in a balanced, high quality diet," Dr McCrabb says. "We found cattle on a forage diet produced four and a half times as much methane for every kilo gain in liveweight as cattle on a high-quality grain-based diet."

The research offers the prospect of substantial gains in efficiency for the Australian northern beef cattle herd - while at the same time lowering the national level of greenhouse emissions in a meaningful way, he says.

"This research indicates it is possible not only to reduce methane emissions from ruminant animals such as cattle and goats in the tropics, but at the same time to increase total food protein output, and so improve the diets of millions of people." Dr McCrabb said that most of the research into cattle methane production to date had taken place in temperate breeds of cattle, under temperate climatic conditions. This is the first research to look specifically at the gas output of warm-climate cattle, which make up about half the world herd.

The world currently has 1.33 billion cattle and 1.1 billion sheep and goats, predominantly in the tropical and subtropical regions, and subsisting on poor diets. India has the largest cattle herd, followed by Brazil and China.

The project is one of several under way at CSIRO investigating techniques for lowering methane emissions from livestock.

Dr Kurihara's laboratory in Japan is investigating greenhouse gas production from dairy cattle and reporting on total Japanese emissions from the country's livestock industries. So similar is the work being carried out by Australian and Japanese scientists, they are pooling their expertise and resources.

Further information: Dr Graeme McCrabb, CSIRO Tropical Agriculture (Tel: (07) 4923 8193); Dr Mitsunori Kurihara (Tel: +81 298 388 655); Grant McDuling, CSIRO Tropical Agriculture (Tel: (07) 3377 0361).

Irish Biotech News

An Irish Bio-Industries Association is in the process of being formed. The organisation, BioResearch Ireland (BRI) recently celebrated its 10th year of operation (presumably with the imbibing of a little Guiness!). The BRI was formed as a technology transfer organisation by the Irish government in conjunction with the University sector. On a negative note, genetically-modified sugar beet being grown for Monsanto was destroyed by members of the Gaelic Earth Liberation Front at the Teagasc Research Centre at Oakpark.

Fighting Tooth Decay with Eucalyptus

Japanese researchers have found that eight compounds from eucalyptus fight off the bacteria that cause tooth decay and gum diseases. Extracts of the plant might well become dental drugs for humans.

The bacteria Streptococcus mutans and Streptococcus sobrinus are thought to cause tooth decay in humans. They form insoluble substances, called plaque, from sugars using an enzyme called glucosyltransferase (GTase). The plaque sticks to the surface of teeth and obstructs the diffusion of organic acids from oral bacteria; the resulting acid build-up leads to tooth decay. Other bacteria, including Porphyromonas gingivalis, are thought to cause gum disease.

The researchers from Tokyo University of Pharmacy and Life Sciences and a company called Lotte Central Laboratory made a solution of dried eucalyptus leaves in ethanol. They found that this extract showed "appreciable" anti-bacterial activity against S. mutans and P. gingivalis, and inhibited the effects of Gtase. The team is now carrying out in vivo tests.

(Source: Chemistry & Industry, 7 October 1996)

Bioethics Group Finds "No Objection" to Human Gene Patents

A group of ethics advisers to the European Commission in Brussels says that it has found no ethical reason why a human gene should not be patented by its "discoverer" if it can be shown that it has a function with a specific industrial application.

But, in a statement in late September 1996, the group added that it should not be possible to patent the simple knowledge of the structure of a complete or partial gene sequence without identifying its function. Such a patent would not meet the primary requirements of novelty, inventive step and industrial application.

The group was asked by the Commission in April 1996 to consider the ethical implications of patenting material of human origin, as part of a wide consultation process intended to help smooth the passage of a European directive on the patenting of biotechnological inventions. An earlier directive failed to win the vote of the European Parliament in 1995, partly because of ethical concerns.

(Extracted from Nature, Vol. 383, 3 October 1996)

Non-Regulated Status Gains Ground in the U.S.

Non-regulated status of many agricultural plants which have been modified genetically is rapidly gaining ground in the USA. The USDA is granting this status for crops such as Roundup® - ready corn, as it considers that the glyphosate-resistant corn did not pose a plant pest risk. Once passed by the FDA and that there no issues raised, the companies involved will market the seed to farmers in the US.

There are currently 29 modified plants on the list approved as no longer regulated by the USDA. Companies such as Monsanto and Calgene, hold many of these approvals. Crops include tomato, squash, cotton, soybean, rapeseed, potato, maize corn and pawpaw. Claims range from glyphosate herbicide tolerance through to virus-resistant to a range of viruses. The approvals date back to 19 October 1992 (in the case of the Flavr Savr Tomato).

Probiotic E. Coli

Food Regulation Weekly www.foodregulation.com

Probiotic E. coli bacteria that kill E. coli 0157:H7 in cattle's rumen and colon is being developed by Michael Doyle, director of the University of Georgia's Center for Food Safety and Quality Enhancement. The mixture of bacteria works in a process known as "competitive exclusion," in which "good" bacteria replace "bad". Doyle's team, which worked with 1,200 strains of E. coli to find the four strains that inhibit E. coli O157:H7, has found that the "good" bacterial mixture works after the pathogenic E. coli strain has been present in the animal, This differs from Preempt, the recently approved competitive- exclusion bacterial product that kills Salmonella in chicks, in that Preempt only works if the young chickens have not been contaminated with Salmonella previously (See Food Regulation Weekly, March 23, Page 4). Doyle said FDA approval for the anti-O157 bacteria mix may be possible within three years, because the agency has given his mixture high priority, the AMI Newsletter noted.

IP and the Bt Gene

Ag Biotech Reporter summarised in its March 1998 issue the legal battle that has been going on since October 1997 between Mycogen Corporation and Monsanto and others. The agreement concerns the intellectual property ownership on process and composition relating to methods for modification of Bt genes for improved expression of pesticidal proteins in plants (see US patents 5,567,600 and 5,567,862 held by Mycogen Corp.). A number of legal actions took place following the granting of these patents. The result is still not clear, and both sides appear to have won some points. Cases are still being trialled or appealed. The full summary in Ag Biotech Reporter makes fascinating reading. The newsletter is available from Freiberg Publishing Company at $US185 p.a. (fax: +1 319 277 3783)

News from Bowditch Group AgBiotech Newsletter 136

• Pioneer Hi-Bred International has sold its 2 million shares of Mycogen Corporation to Dow AgroSciences at US$20.06 per share. Pioneer said that its ongoing research and development collaboration with Mycogen, at the inception of which in 1995 the investment in Mycogen was made by Pioneer, was successful and would continue. Dow AgroSciences' ownership in Mycogen increases to 69 percent.
• The European Commission of the European Union has approved the importation and use of four new genetically altered crops. The newly approved crops are oilseed rape resistant to AgrEvo's Liberty herbicide, Liberty-resistant corn (maize), and two corn lines using the Bt gene to provide insect resistance, one from Monsanto and one from Novartis.
• Dow AgroSciences has entered into an 18-month research agreement with Oxford Asymmetry International (UK) involving the discovery, synthesis and screening of new agrochemical compounds. Oxford works in chiral chemistry and in the high-speed synthesis of chemical libraries.
  

COMPANY NEWS

Biota - Half Yearly Financial Statements

Biota Holdings Limited has lodged its results for the half year ended 31 December 1997.

The consolidated net loss for the economic entity for the period was $3,760,000. This compares with a loss of $1,578,000 the same period in the previous year. Revenue for the period totalled $681,000, principally from interest. There were no access fees or milestone payments received or due during the period.

The major expense for the period related to research and development and totalled $3,136,000. Other expenses included underwriting fees in relation to the recent rights issue of $763,000.

The company has issued share capital of $18,208,000 representing 72,834,823 ordinary 25 cent fully paid shares. Reserves total $73,148,000 and accumulated losses $48,167,000. Biota's net assets at the end of the half year were $43,189,000 compared to $21,129,000 at the end of the same period in the previous year.

Recent highlights for Biota have included:

• Commencement of North American trials of its influenza diagnostic. Biota expects its innovative diagnostic to be submitted for regulatory clearance in the United States in the second quarter of 1998.
• Phase III clinical trials in the Northern Hemisphere of RelenzaTM, the first effective treatment for all strains of influenza. RelenzaTM is being
  developed by Biota in partnership with Glaxo Wellcome and filing for regulatory clearance worldwide is expected in the second half of 1998.
• The decision to proceed with the next stage in the development of a potent new series of anti-cancer compounds licensed from LaTrobe University in April 1997. The goals for the next 12 months will be to select the most active and promising drug candidate to take forward into clinical development, to strengthen the patent position and to identify a backup to the lead compound.
• Signing of an agreement with the Howard Florey Institute of Experimental Physiology and Medicine on the development and commercialisation of a treatment for memory-related disorders, including Alzheimer's Disease.

Biota has licensed a neuroactive compound discovered by the Director of the Institute, Professor Frederick Mendelsohn, and his colleagues.

Biota's Chief Executive, Dr Hugh Niall, said that the next 12 months promised to be exciting for the company, with the potential for realisation of its goals in the development and commercialisation of an anti-flu drug and flu diagnostic.

"The decision to proceed with the next stage of the LaTrobe University anti-cancer project is also satisfying", Dr Niall said. "We are excited that as an Australian pharmaceutical company we are able to take this Australian research to the next level."

Industry R&D Board Announces Successful Innovation Investment Fund Managers

The Industry Research and Development (IR&D) Board today announced five successful applicants who will be offered the opportunity to negotiate a licence to operate a fund under the Government's early-stage venture capital initiative, the Innovation Investment Fund (IIF) program.

The successful applicants (in alphabetical order) are:

• A&B Investment
  Management Pty Ltd
• AMWIN Management Pty Ltd
• Coates Myer & Co Ltd
• Momentum Funds
  Management Pty Ltd
• Rothschild Bioscience
  Managers Ltd

The Board has also selected a reserve group of applicants, should one or more of the successful applicants not take up the Board's offer.

Dr Terry Cutler, Acting Chairman of the Board, said, "The IIF has been established to provide venture capital to assist small, technology-based companies to commercialise their research and development." The Government will provide $130 million into the IIF on a 2:1 basis to match private sector capital. Dr Cutler said, "The offers are conditional on the successful applicants raising their funds from the private equity market."

Dr Cutler said that the IR&D Board and the Fund Management Committee (FMC) of the Board, charged with administer-
ing the Program, had found the task of selecting five fund managers from a field of 35 quality applicants, extremely difficult.

"The Board and the FMC assessed applicants' claims against the selection criteria. The selection process was competitive and involved a comparative and competitive assessment of applicants' claims."

It should be noted that the Board ensured that Board and Committee members with direct or indirect potential conflicts of interest excluded themselves from the selection process. "In order to maintain the integrity of the selection process due diligence was undertaken by two specialist investment managers, Total Risk Management in Australia and Wilshire in the United States," he said. "Moreover, to ensure that the process was carried out in a fair and equitable manner, the Board appointed experienced Probity Auditor, Stephen G Marks & Co Pty Ltd, to oversight the final selection process. The Probity Auditor also provided advice to the Board to ensure that the selection process was in accordance with the guidelines."

Dr Cutler stated that the Board was confident that the decisions taken today will be a major step toward the development of a vibrant early-stage venture capital industry in Australia.

Hyal Pharmaceutical Issues Action Plan

Hyal Pharmaceutical Corp's Board of Directors have approved an action plan for the corporation following in the wake of their decision to discontinue the development of Hyanalgese-D and the resultant subsequent sharp decline in the company's share price. The primary intention of a five-point plan is to preserve their cash position while working to maximise the value of the company for shareholders.

Hyal is taking steps to reduce its operating budget for 1998 by 60 percent. Reductions will occur in administration, contracted services, and preclinical research. At December 31, 1997, Hyal's consolidated cash position was about $14.0 million (unaudited). This excludes any proceeds from the debenture offering, which have been escrowed under the terms of the November offering (about $6.9 million). About $9.5 million of the consolidated amount was held by Hyal with the remainder controlled by the company's 60 percent-owned Australian subsidiary. Cash in the Australian subsidiary cannot be utilized directly by Hyal. Under Hyal's current budget, the company can operate for about 12 months without new revenue or cash infusions.

Research and clinical development will focus on product candidates closest to market and those most likely to be licensed over the next 12 months. Applications of Hyal's technologies to topical drug delivery problems for skin and mucosa will receive particular attention. Solarase is Hyal's diclofenac-based gel to treat sun-spots (actinic keratosis). Building on the successful approval in the United Kingdom in mid-1997, Hyal has made applications for marketing approval in four major European countries. Applications have also been made in Canada and Australia. Recent negotiations with the US FDA have paved the way for a submission in mid 1998. The company has been informed by FH Faulding, Hyal's licensee for Australia, that it expects Solarase could be approved for sale in Australia during 1998. Additional market approvals will bolser Hyal's licensing negotiations. Hyacne, a combination of an antibiotic and hyaluronan, is being tested for the treatment of acne. Hyal has licensed its technology to Shire Pharmaceuticals of the United Kingdom, and has assisted Shire in preparation of the formulation for clinical trials. Shire expects results from its multicentre Phase III clinical trial during the second quarter of 1998. Oralease is a diclofenac gel to relieve oral pain.

Cyclops is a cyclosporin-based topical formulation for the treatment of psoriasis, using Hyal's second platform technology HILT (Hyaluronan Improved Liposome Technology). In preparation for future clinical trials, Hyal is testing the stability of the formulation and how it delivers this large insoluble molecule to the skin.

Extract from Canadian Biotech News, Vol 7, No. 4, 1998.

Agen Sought by Biotech International

The WA-based company, Biotech International, launched a $15.7 million takeover bid to Agen recently. Brisbane-based Agen is a manufacturer of diagnostics for human and veterinary diseases. Biotech International offered 22 cents per share on 2 March. The bid was increased to 25 cents a share until 16 April. Directors of Agen considered the offer inadequate. Agen shares are currently trading at 24 cents, and Agen claims it was recently valued at $20.0 - 27.8 million, which priced the shares at 28-39 cents each. Biotech International holds around 20% of the shareholding of Agen.

GroPep Expands for the Future

Biotechnology company, GroPep Pty Ltd, is expanding its operations, and announces the appointment of Richard England as Independent Chairman.

Richard is a Chartered Accountant and Company Director who was previously an Adelaide Partner in Ernst and Young. He has had 25 years experience in management advisory services where he has placed particular emphasis on the introduction of profit improvement initiatives into Companies.

Richard is currently Chairman of Austrust Limited, Deputy Chairman of Healthscope Ltd and a Director of Adelaide Brighton Ltd and Seeley International Pty Ltd. As Chairman of GroPep, he will work closely with the Managing Director, Dr John Ballard, and senior staff in pursuing key strategies during the Company's growth phase in its operations.

GroPep has recently commenced clinical trials of two products developed from research on milk-derived growth factor preparations in the Cooperative Research Centre for Tissue Growth and Repair. These initiatives, together with projected increases in the sales of recombinant growth factors for industrial cell culture, are the main impetus for the Company's expansion over the next two years.

"1997/98 looks set to be the Company's most successful year in the nine years since its formation", said John Ballard. "We look forward to Richard England adding his experience to help us make future years even better."

Faulding's Half Yearly Announcement

The directors of F. H. Faulding and Co Limited announced on 2 March a consolidated net operating profit before abnormal items of $28.412 million for the 6 months to 31 December 1997, an increase of 76.2% above the $16.128 million recorded for the previous corresponding period.

The group operating profit after tax and abnormals for the half year increased 31.4% from $16.212 million to $21.297 million. Earnings per share increased to 22.1 cents before abnormals (13.2 cents last year) and 16.6 cents after abnormals (13.3 cents last year).

Directors have declared an increased fully franked dividend of 10 cents per share payable on 24 April 1998.

BIO SHARES

Covering Australian Biotechnology Stocks - compiled by M.J. Playne

Warning - This table is a guide only to stock movements. Persons should not use this information as the sole basis for business and financial decisions. Advice from financial advisors should be sought.

ASIAN NEWS

A Better Method to Control Dengue

Dengue and dengue haemorrhagic fever (DF/DHF) are viral syndrome caused by the dengue viruses and transmitted by mosquitoes of the Aedes species. DF/DHF remains as important public health problems in many parts of Asia and in northern Australia; Malaysia recorded nearly 12,000 cases in the first seven months of 1997. In the absence of effective vaccination, the only means currently available for controlling this disease is through control of the mosquito vector. In relation to this, researchers at the Institute for Medical Research in Kuala Lumpur, Malaysia recently announced an improved method for more effective control of the dengue vectors. The method is based on the use of Bacillus thuringiensis H-14 toxins to kill mosquito larvae. A local strain of Bacillus thuringiensis was used in the development of the product, which has been commercialised recently under the trade name Mosbac. The local strain used has resulted in lower cost of the product and is also believed to be more suited for the tropical climate. In addition, the toxin is harmless to humans and other animals and development of resistance is considered a remote possibility. It is envisaged that Mosbac will be used together with insecticide fogging in vector control measures in endemic areas.

Further information: Mr Lee Han Lim, Entomology Division, Institute for Medical Research, Kuala Lumpur, Malaysia (Tel: 603 298 6033; Email: leeh@imr.gov.my).

(Excerpted from the New Straits Times, January 1998.)

Private Sector in Malaysia Spending More on R&D

The recently announced results of the 1996 National Survey of Research and Development in Malaysia indicated that the amount invested by the private sector in R&D activities has increased significantly by 62% since 1992. However, the same could not be said of government research agencies and institutions of higher learning. Interestingly, it was the smaller companies in the private sector, which spent significant sums of up to 30% of their total expenditure on R&D activities. Most of the R&D activities in the private sector were in the engineering sciences whereas biotechnology research was performed mainly in the universities.

(Excerpted from the Star, February 1998.)

Malaysia Needs to Boost the Number of Scientists

A recent survey by the Malaysian Science and Technology Information Centre (MASTIC) revealed that presently the country only had a ratio of five researchers for every 100,000 workers. Although this figure is an improvement on the 1994 figure (3 researchers/100,000 workers), it does not compare favourably with the USA (74/100,000), Japan (82/100,000) or even neighbouring Singapore (48/100,000). In addition, Malaysia spent only 0.22% of its Gross Domestic Product (GDP) on R&D activities in 1996. MASTIC suggests that a specific plan be implemented to set a target of achieving a ratio of 30 researchers/100,000 workers and allocate 2% of total GDP for R&D over the next five years. The plan should also aim to increase the participation of the private sector by as much as 80% in terms of funding of R&D activities.

(Excerpted from the Star, February 1998.)

Malaysian Biodiversity Policy in the Works

Malaysia's national policy on biological diversity was recently approved by the cabinet and will become the cornerstone of all future socio-economic development projects in the country. The policy outlines the country's environment and conservation strategies and was drawn up by the National Biodiversity Committee. It includes strategies to conserve biological diversity and promote the sustainable use of resources as well as outlining actions aimed at protection of the country's resources. A study will also be made to determine if amendments to existing legal provisions are required in order to implement the policy. Malaysia was required to develop such a policy as one of the members of the global Biodiversity Convention (adopted at the 1992 Earth Summit in Rio de Janeiro), aimed at conserving and promoting the sustainable use and benefit-sharing of the world's flora and fauna.

(Excerpted from the Sun, February 1998.)

Tikki Pang
Malaysia

ABA NEWS

14th Conference Major Success

The 14th Australasian Biotechnology Conference held at Glenelg, Adelaide during the week of 19th - 24th April has been a triumph for the organisers. The Organising Committee chaired by Dr John Smeaton, and ably led by Dr Chris Franco, has set standards previously not met in Australian conferences.

They obtained an unsurpassed suite of plenary lectures starring local and overseas senior biotechnologists. These included Prof. Adrienne Clarke, Prof. Sir Gustav Nossal, Prof. Peter Colman, Mr Steve Burrill, Dr Ian Wilmut, Prof. Ko Shimamoto, Dr Amanda Walmsley, Prof. Pam Russell, Dr Robert Devlin and Prof. Gary Sayler and Prof. Grant Sutherland.

These major lectures were supported by three concurrent sessions each day covering major areas of biotechnology. One concurrent stream was devoted to business issues. The business stream was extremely well attended and of a high standard. The organisers can be proud of having a well organised conference in congenial surroundings, attended by 360 people. It was ably supported by a pleasant and enjoyable social programme. There were many opportunities to mix. Congratulations to all those involved.

Editor's note: We are planning publication of a number of papers from the conference in subsequent issues of the journal. The papers include: Dr Robert Devlin (Canada) "Production and evaluation of transgenic fish for aquaculture"; Mr Steve Burrill (USA) "Biotech 98 - an update"; Prof. Gary Sayler (USA) "Innovations and broad horizons for environmental biotechnology"; Ms Sue Muggleston (NZ) "Talking about Gene Technology: a New Zealand perspective."

Two are included in this issue - one by Pam Russell and co-authors and one by Mitzi Gilligan.

ABA Extraordinary General Meeting

A special meeting of the Association was held on Wednesday, 22nd April 1998 at Glenelg. The ABA Council called the meeting to discuss proposals to raise the level of ABA activities and services to members to higher levels. A special push is being made to markedly enhance levels of service to Corporate members. A key aim is the appointment of Executive staff to achieve this.

The meeting resolved to increase membership fees immediately by the imposition of a special levy for this financial year. The new fee structure will apply immediately and will be applicable to membership fees due on 1st May 1998.

The fees will be :

Council plans to further develop plans to finance this new venture, and as part of this process will be placing resolutions before the membership at the Annual General Meeting due to be held in Melbourne on Tuesday, 22nd September, 1998. The resolutions will include the formation of a new category of Associate Membership and a further consideration of appropriate fee structures for the 1999 financial year.

A view was expressed by many members at the meeting that the ordinary membership fee was too conservative and could be raised further without a decline in membership, provided members felt that they were getting enhanced services, good conferences and more opportunities to network.

Funding of these new initiatives still remains the biggest management problem for the ABA and seed money support is being sought. Any readers with ideas on innovative ways to fund ABA's proposed new developments should contact the Secretariat (Barbara Arnold - Tel: 03 9596 8879; Fax: 03 9596 8874; email: aba@netspace.net.au)

New Office Bearers

Craig Smith, current Treasurer of the ABA is handing over this role to Dr Ross Crittenden. Craig Smith is finding it difficult to devote enough time to custodianship of the ABA's money. Craig works in Brewtech, a Fosters Subsidiary, and changed work requirements there have brought about this change.

Dr Ross Crittenden, recently appointed by the ABA Council as Treasurer is a research microbiologist with Food Science Australia and is located in Melbourne. Ross' research interests include probiotic bacteria, oligosaccharides, and Zymomonas ethanol production.

Dr Elane Zelcer (Thrombogenix Pty Ltd Melbourne) and Lyndal Thorburn (Canberra) have been appointed by the ABA Council as Directors to replace Directors retiring before completion of their two year terms.

REGULATORY NEWS

New Standard Proposed for Food Produced using Gene Technology

ANZFA - Australia New Zealand Food Authority released on 25 February 1998 a "Statement of Reasons - proposal P97 for recommending Standard A18-Foods produced using Gene Technology".

We reproduce these reasons in full from the ANZFA press release. The press release also listed the draft variation to the Food Standards Code. This is not reproduced here but may be obtained from ANZFA (Tel: (02) 6271 2258; Email: slo@anzfa.gov.au).

The Australia New Zealand Food Authority has before it a proposal to vary the Food Standards Code by addition of Standard A18 - Food Produced using Gene Technology.

The proposed standard, as prepared after Full Assessment, is amended for the following reasons:

• To incorporate an additional provision in the standard specifically for the labelling of food produced using gene technology. This labelling provision relates to food that contains new or altered genetic material and which is not substantially equivalent in any characteristics or property of the food;
• To clarify and simplify the definitions of `gene technology' and `food produced using gene technology' used in the standard; and
• To reword clauses to reflect changes in the definitions.

The Authority has recommended to the Australia New Zealand Food Standards Council that it adopt the draft standard to the Food Standards Code, as amended, for the reasons below:

• the proposed standard will establish a mechanism whereby consumers can be confident that the safety for human consumption of foods rproduced using gene technology will be fully assessed before these products are made available for sale'
• industry will be provided with a clear regulatory pathway for the assessment of food produced using gene technology;
• consumers will have access to accurate information, including labelling, on foods produced using gene technology;
• the proposed standard does not regulate food additives and processing aids that are derived from genetically modified organisms (GMO). This is because other standards in the Food Standards Code require pre-market approval for these substances;
• the proposed standard will have the effect of prohibiting foods produced using gene technology unless they have been assessed by the Authority as safe for human consumption;
• the Authority has developed guidelines for the risk-based, case-by-case assessment of foods to be included in the standard. These guidelines are contained in the information paper Safety Assessment guidelines for foods to be included in Standard A18 _ Food Produced Using Gene Technology;
• it would not be appropriate for the Authority to include in the proposed standard foods produced using gene technology that may currently be available for sale eg. Soybean products from Roundup Ready® soybeans or cotton seed oil from INGARD® cotton. The assessment of these products will be progressed via the usual Authority application process if the proposed standard is adopted;
• the standard prescribes mandatory labelling for foods that contain new and altered genetic material and which are not substantially equivalent to their conventional counterparts in a characteristic or property of the food;
• where the standard specifies that a food produced using gene technology must be labelled, that label must indicate the biological origin and nature of the characteristic or property modified;
• a mandatory requirement to label foods that are substantially equivalent to their conventional counterparts is not prescribed as:
• it cannot be justified on the basis of sound scientific principles;
• it is not necessary for the protection of public health and safety as food that is deemed by the Authority as unsafe for human consumption will not be permitted for sale; and
• it is more restrictive than necessary to achieve a legitimate outcome;

For these reasons, the mandatory labelling of food that is substantially equivalent to existing conventional foods is also unlikely to be consistent with Australia's and New Zealand's obligations as signatories to World Trade Organisation (WTO) Agreements and therefore difficult to sustain in the likely event of a challenge in that forum and it is also unlikely to be consistent with the regulatory policies of both Australia and New Zealand. In addition, in countries where labelling of substantially equivalent foods has been required, this is not delivering useful information to consumers.

• mandatory labelling for substantially equivalent foods is not regarded as practicable given:
• the complexities associated with tracking individual food components through the food chain (eg, Roundup Ready® soybeans) and the reluctance of major producing countries to segregate commodities;
• that it is unlikely that enforcement agencies will be able to enforce mandatory labelling requirements for substantially equivalent foods; and
• that it is unlikely that mandatory labelling requirements for substantially equivalent foods could be enforced equally between imported and domestic products;
• negative claims (eg, that foods are not, or do not contain, products of a GMO) will not be prohibited.
• Industry has a primary responsibility to develop and implement a communication strategy for the provision of information to consumers about such foods. To this end:
• the Authority will cooperate with industry in the provision of information about gene technology;
• the Authority will commit to working with industry bodies, relevant government agencies and consumers in the development and provision of information to consumers; and
• the Authority draws attention to its public processes and the fact that information relating to any food produced using gene technology approved by the Authority will be available in the public domain.

The Australia New Zealand Food Standards Council consists of the Commonwealth of Australia, Australian State and Territory, and New Zealand Health Ministers who will now decide whether to accept, reject or amend ANZFA's recommendation to adopt the standard, as amended.

It has been recommended that the commencement date of the amended draft standard will be nine (9) months from the date of gazettal.

Regulatory Impact

The Authority has satisfied the Australian Commonwealth Government's regulatory impact assessment requirements. That process concluded that the amendment to the Food Standards Code is necessary, cost effective and of benefit to both producers and consumers.

World Trade Organization (WTO) Notification

Australia and New Zealand are members of the WTO and are bound as parties to WTO agreements. In Australia, an agreement developed by the Council of Australian Governments (COAG) requires States and Territories to be bound as parties to those WTO agreements to which the Commonwealth is a signatory. Under the agreement between the Governments of Australia and New Zealand on Uniform Food Standards, ANZFA is required to ensure that food standards are consistent with the obligations of both countries as members of the WTO.

In certain circumstances Australia and New Zealand have an obligation to notify the WTO of changes to food standards to enable other member countries of the WTO to make comment. Notification is required in the case of any new or changed standards which may have a significant trade effect and which depart from the relevant international standard (or where no international standard exists).

This matter was notified to the WTO because it was considered that the proposal raised matters relating to public health and safety and may be seen to constitute a technical barrier to trade.

Federal Government-Funded Research Schemes

Large Grants

Research Fellowships

The Research Fellowships Programme aims to foster opportunities for the pursuit of independent research and thereby ensure the supply of trained, innovative personnel, who are able to maintain and expand the national research capacity and move into other areas of education and industry.

International Research Fellowships

The programme funds up to five reciprocal fellowships per annum for each of Germany, South Korea and the United Kingdom. Researchers work in Australian Universities for periods between 4 and 12 months.

Strategic Partnerships with Industry-Research and Training (SPIRT) Scheme

The SPIRT Scheme is designed to encourage research collaboration between higher education institutions and industry by supporting high quality research. Matching grants on a dollar for dollar basis are available to universities for research projects developed to meet industry needs.

Applicants can seek funding for one or all of the following three SPIRT elements: a collaborative research project, the salary of a Postdoctoral Research Fellow (APDI) who will be a Chief Investigator, and/or the stipend of a Postgraduate Award (Industry) (APAI) who will undertake a research project under appropriate supervision.

Australian Postgraduate Awards (with stipend)

The Australian Postgraduate Awards (with stipend) Programme has provided 1,605 new awards in 1997 for students undertaking higher degree studies at Australian higher education institutions. These awards are allocated to institutions by formula.

Australian Postgraduate Awards (without stipend)

Around 21,500 HECS-exempt scholarships for higher degree students have been made available in 1997 under the Australian Postgraduate Awards Scheme.

Overseas Postgraduate Research Scholarships

International research linkages are enhanced through the Overseas Postgraduate Research Scholarships (OPRS) Scheme. There are 300 new OPRS awarded annually, recipients being selected on merit by higher education institutions in line with a quota allocation of OPRS. The scholarships meet tuition fees and health insurance costs of overseas postgraduate research students.

Small Grants

The Small Grants Scheme provides block grants to higher education institutions which then use them to fund research projects of less than $20,000 in the social sciences, humanities, mathematics and theoretical physics, and less than $30,000 in other disciplines. This enables institutions to determine how best to fund research of high quality but modest cost. In 1997 all institutions participating received a base grant of $50,000, with the remaining funds distributed according to a formula which takes account of the success each institution has had in the previous two years in obtaining Large Grants in each of the main discipline groupings, and the distribution of Small Grants across those groupings in the previous year.

Research Infrastructure

The programme was established to provide direct support to higher education institutions to maintain and develop their research infrastructure such as equipment, special facilities, support staff, outfitting and maintenance. The program consists of two categories:

• Research Infrastructure Block Grants
• Research Infrastructure (Equipment and Facilities)

Research Infrastructure Block Grants are allocated to members of the UNS on the basis of their performance in obtaining competitively awarded research funding ie on the basis of the National Competitive Grants Index (NCGI).

Research Infrastructure (Equipment and Facilities) (RIEF) grants are provided to support large scale initiatives, usually across two or more institutions, but under certain conditions may be awarded to single institutions.

Research Centres

Special Research Centres are established on the basis of research excellence and their potential to contribute to the economic, social and cultural development of Australia.

Key Centres of Teaching and Research are based on existing departments in higher education institutions and are aimed at assisting the higher education sector to respond to demands for expertise in particular fields, especially through teaching and research activities in areas relevant to national economic technological and social objectives. They also promote cooperation between higher education and industry. Selection rounds for both types of centres are undertaken every three years.

Aboriginal and Torres Strait Islander Researchers Development

The Aboriginal and Torres Strait Islander Researchers Development Programme is an ARC/DEETYA programme to encourage participation in, and to improve the standard of, research conducted by Aboriginal and Torres Strait Islander researchers. The key objective is to develop performance and expertise to a level at which such personnel could compete in open competition for mainstream research funding.

Special Research Initiatives

The Special Research Initiatives programme supports activities which encourages greater collaboration among researchers and cooperative development of research in innovative areas.

International Research Projects

Funds are provided to support collaboration between Australian researchers who are engaged in research supported by the Australian Research Council (ARC) and researchers from countries with which the ARC has a memorandum of understanding or traditional research links.

Biocomputing

New Internet Site Honours Howard Florey, Australian Creator of Penicillin

http://www.tallpoppies.net.au

A new Internet site detailing the life and achievements of Howard Florey, was launched on 26 Feb in Adelaide by the Federal Minister for Health and Family Services, Hon Dr Michael Wooldridge.

The site was developed by the Adelaide Florey Consortium (comprising Ngapartji Cooperative Multimedia Centre and United Focus Pty Ltd) and sponsored by pharmaceutical manufacturer SmithKline Beecham International and the Australia Foundation for Culture and the Humanities. It was conceived as part of national celebrations marking the centenary of Florey's birth in Adelaide in 1898 which were also launched by Dr Wooldridge.

The internet site describes the discovery and development of the first antibiotic against the background of contemporary methods of combating bacterial infections and the difficulties Florey had in gaining research and development funding during the War. It also gives an insight into the character of the man who relentlessly pursued the breakthrough in medical science that led to him becoming the Australian who has had the greatest impact on mankind.

The project manager for development of the site, Steven Smith of United Focus, said: "The value of this site is that it is pitched at two levels - primary students and research students - simultaneously. Either group can access the site and then choose paths which have the right level of ease or difficulty, depending on their preference!"

Biotechnology Education Web Sites Aimed at Schools and Colleges

Cold Spring Harbor Laboratory DNA Learning Center http://darwin.schl.org/

European Initiative for Biotechnology Education http://www.eibe.reading.ac.uk:8001