8 Dec 2008

Tortilla chips going biotech as limits change on seeds

White corn, the variety that's milled into chips, taco shells and tortillas, has for years been free of genetic engineering. Millers and companies such as snack-food giant Frito-Lay bought only conventional, biotech-free varieties of the specialty corn from farmers.

But that's changing. Farmers in Iowa, Nebraska and other states started growing a small amount of genetically modified white corn this year after word came down from processors they would start accepting it.

"Our domestic millers have always been in favor of it," said Todd Gerdes, specialty grains manager for Aurora Cooperative, which buys white corn at three of its locations in Nebraska. The corn is sold to domestic mills and for export. "What they've always wanted to do is to make sure that they didn't accept (biotech versions) and drive away their customers."

"They've come to a comfort level where they can convince their customers it's OK."

That change of heart has opened a new business for Pioneer Hi-Bred, which offered three white varieties of its Herculex corn for the first time this year and plans to bring out three more in 2009. About 2 percent of Pioneer's white corn seed this year was genetically modified.

Virtually all of the corn grown in Iowa and nationwide is of yellow varieties and used for livestock feed, ethanol and for sweeteners and other food uses. Some 80 percent of the yellow corn seed planted this year was genetically engineered to make the plants toxic to insect pests or immune to a popular weed killer, or both.

Biotech varieties have been in the market for more than a decade, and there were even some versions in white corn in the 1990s. But industry officials said millers got spooked by the controversies that initially surrounded biotech crops, including the StarLink episode in 2000.

StarLink, a variety of biotech corn produced by a Pioneer rival, was found in taco shells and other food products without having been approved for food use.

Morry Bryant, Pioneer's key account manager for corn processing, said millers have changed their minds about biotech corn in part because of concerns about grain quality. Corn that has insect damage is susceptible to diseases that can make the grain toxic.

"When you have a healthier plant you typically have better grain quality," Bryant said. "They also like it because their growers like it."

Foreign corn buyers also are playing a role in the acceptance of biotech corn, Gerdes said. They already pay farmers a premium for white corn and feared that would go up unless they allowed farmers to grow genetically engineered versions, he said.

Darrel McAlexander, who farms near Sidney, Ia., and sells white corn to the Grupo Minsa mill in Red Oak, grew 50 acres of the biotech version this year. It turned in a sizable increase in yield of about 25 bushels per acre over the production he got on the other 1,400 acres of conventional white corn, he said.

"Now that Frito-Lay has approved it and some of the other food processors, I think we're going to see more" biotech white corn, said McAlexander, who is chairman of the Iowa Corn Promotion Board.

But as prices for yellow corn have risen to historically high levels during the past two years, premiums for white corn also have gone up, and are now running at about 60 to 70 cents a bushel, Gerdes said.

A spokeswoman for Frito-Lay said the company's individual business units can decide whether to buy genetically engineered ingredients. Officials with Mexico-based Minsa and Azteca Milling, a Texas-based unit of another Mexican company, GRUMA, did not respond to requests for comment on their buying decisions.

The fact that another food market has fallen to agricultural biotechnology isn't evidence that consumers are accepting genetically engineered crops, said Bill Freese of the Center for Food Safety, an advocacy group long critical of the industry.

The continued growth in sales of organic foods shows consumers don't want biotech foods, he said. Organic farming rules prohibit use of genetically engineered seeds.

Domestic use of white corn has been growing about 4 percent to 7 percent a year as the Latino population has grown, although white corn still represents a fraction of overall corn production, according to the Agricultural Marketing Resource Center at Iowa State University. About 700,000 acres were planted to white corn in 2005, up from 430,000 acres in 1990.

Texas and Nebraska are the leading producers, although white corn is also grown in southwest Iowa, Illinois, Indiana, Kentucky and Tennessee.

Source

7 Dec 2008

Obama's Team Includes Dangerous Biotech "Yes Men"

Biotech "Yes Men" on Obama's team threaten to expand the use of dangerous genetically modified (GM) foods in our diets. Instead of giving us change and hope, they may prolong the hypnotic "group think" that has been institutionalized over three previous administrations--where critical analysis was abandoned in favor of irrational devotion to this risky new technology.

Clinton's agriculture secretary Dan Glickman saw it first hand:

"It was almost immoral to say that [biotechnology] wasn't good, because it was going to solve the problems of the human race and feed the hungry and clothe the naked. . . . If you're against it, you're Luddites, you're stupid. That, frankly, was the side our government was on. . . . You felt like you were almost an alien, disloyal, by trying to present an open-minded view"

When Glickman dared to question the lax regulations on GM food, he said he "got slapped around a little bit by not only the industry, but also some of the people even in the administration."

By shutting open-minds and slapping dissent, deceptive myths about genetically modified organisms (GMOs) persist.

• The industry boasts that GMOs reduce herbicide use; USDA data show that the opposite is true.
• We hear that GMOs increase yield and farmer profit; but USDA and independent studies show an average reduction in yield and no improved bottom line for farmers.
• George H. W. Bush fast-tracked GMOs to increase US exports; now the government spends an additional $3-$5 billion per year to prop up prices of the GM crops no one wants.
• Advocates continue to repeat that GMOs are needed to feed the world; now the prestigious International Assessment of Agricultural Knowledge, Science and Technology for Development has joined a long list of experts who flatly reject GMOs as the answer to hunger.

Food Safety Lies

Of all the myths about GMOs, the most dangerous is that they are safe. This formed the hollow basis of the FDA's 1992 GMO policy, which stated:

"The agency is not aware of any information showing that foods derived by these new methods differ from other foods in any meaningful or uniform way."

The sentence is complete fiction. At the time it was written, there was overwhelming consensus among the FDA's own scientists that GM foods were substantially different, and could create unpredictable, unsafe, and hard-to-detect allergens, toxins, diseases, and nutritional problems. They had urged the political appointees in charge to require long-term safety studies, including human studies, to protect the public.

Their concerns stayed hidden until 1999, when 44,000 pages of internal FDA memos and reports were made public due to a lawsuit. According to public interest attorney Steven Druker, the documents showed how their warnings and "references to the unintended negative effects" of genetic engineering "were progressively deleted from drafts of the policy statement," in spite of scientists' protests.

"What has happened to the scientific elements of this document?" wrote FDA microbiologist Louis Pribyl, after reviewing the latest rewrite of the policy. "It will look like and probably be just a political document. . . . It reads very pro-industry, especially in the area of unintended effects."

Who flooded the market with dangerous GMOs

Thanks to the FDA's "promote biotech" policy, perilously few safety studies and investigations have been conducted on GMOs. Those that have, including two government studies from Austria and Italy published just last month, demonstrate that the concerns by FDA scientists should have been heeded. GMOs have been linked to toxic and allergic reactions in humans, sick, sterile, and dead livestock, and damage to virtually every organ studied in lab animals. GMOs are unsafe.

At the highest level, the responsibility for this disregard of science and consumer safety lies with the first Bush White House, which had ordered the FDA to promote the biotechnology industry and get GM foods on the market quickly. To accomplish this White House directive, the FDA created a position for Michael Taylor. As the FDA's new Deputy Commissioner of Policy, he oversaw the creation of GMO policy.

Taylor was formerly the outside attorney for the biotech giant Monsanto, and later became their vice president. He had also been the counsel for the International Food Biotechnology Council (IFBC), for whom he drafted a model of government policy designed to rush GMOs onto the market with no significant regulations. The final FDA policy that he oversaw, which did not require any safety tests or labeling, closely resembled the model he had drafted for the IFBC.

Michael Taylor is on the Obama transition team.

Genetically engineered bovine growth hormone and unhealthy milk

Taylor was also in charge when the FDA approved Monsanto's genetically engineered bovine growth hormone (rbGH or rbST). Dairy products from treated cows contain more pus, more antibiotics, more growth hormone, and more IGF-1--a powerful hormone linked to cancer and increased incidence of fraternal twins (see www.YourMilkonDrugs.com.) The growth hormone is banned in most industrialized nations, including Canada, the EU, Japan, Australia, and New Zealand. But under Michael Taylor, it was approved in the US, without labeling.

As more and more consumers here learn about the health risks of the drug, they shift their purchases to brands that voluntarily label their products as not using rbGH. Consumer rejection of rbGH hit a tipping point a couple of years ago, and since then it has been kicked out of milk from Wal-Mart, Starbucks, Kroger, Subway, and at least 40 of the top 100 dairies. In 2007, Monsanto desperately tried to reverse the trend by asking the FDA and FTC to make it illegal for dairies to label their products as free from rbGH. Both agencies flatly refused the company's request.

But Monsanto turned to an ally, Dennis Wolff, the Pennsylvania Secretary of Agriculture. Wolff used his position to single-handedly declare rbGH-free labels illegal in his state. Such a policy would make it impossible for national dairy brands to declare their products rbGH-free, since they couldn't change packaging just for Pennsylvania. Wolff's audacious move so infuriated citizens around the nation, the outpouring caused the governor to step in and stop the prohibition before it took effect.

Dennis Wolff, according to unbossed.com, is being considered for Obama's USDA Secretary.

Although Pennsylvania did not ultimately ban rbGH-free labels, they did decide to require companies who use the labels to also include a disclaimer sentence on the package, stating that the according to the FDA there is no difference between milk from cows treated with rbGH and those not treated. In reality, this sentence contradicts the FDA's own scientists. (Is this sounding all too familiar?) Even according to Monsanto's own studies, milk from treated cows has more pus, antibiotics, bovine growth hormone, and IGF-1. Blatantly ignoring the data, a top FDA bureaucrat wrote a "white paper" urging companies that labeled products as rbGH-free to also use that disclaimer on their packaging. The bureaucrat was Michael Taylor.

Betting on biotech is "Bad-idea virus"

For several years, politicians around the US were offering money and tax-breaks to bring biotech companies into their city or state. But according to Joseph Cortright, an Oregon economist who co-wrote a 2004 report on this trend, "This notion that you lure biotech to your community to save its economy is laughable. This is a bad-idea virus that has swept through governors, mayors and economic development officials." He said it "remains a money-losing, niche industry."

One politician who caught a bad case of the bad-idea virus was Tom Vilsack, Iowa's governor from 1998-2006. He was co-creator and chair of the Governors' Biotechnology Partnership in 2000 and in 2001 the Biotech Industry Organization named him BIO Governor of the Year.

Tom Vilsack was considered a front runner for Obama's USDA secretary. Perhaps the outcry prompted by Vilsack's biotech connections was the reason for his name being withdrawn.

Change, Truth, Hope

I don't know Barack Obama's position on GMOs. According to a November 23rd Des Moines Register article, "Obama, like Bush, may be Ag biotech ally", there are clues that he has not been able to see past the biotech lobbyist's full court spin.

- His top scientific advisers during the campaign included Sharon Long, a former board member of the biotech giant Monsanto Co., and Harold Varmus, a Nobel laureate who co-chaired a key study of genetically engineered crops by the National Academy of Sciences back in 2000. - [Obama] said biotech crops "have provided enormous benefits" to farmers and expressed confidence "that we can continue to modify plants safely."

On the other hand, Obama may have a sense how pathetic US GMO regulations are, since he indicated that he wants "stringent tests for environmental and health effects" and "stronger regulatory oversight guided by the best available scientific advice."

There is, however, one unambiguous and clear promise that separates Obama from his Bush and Clinton predecessors.

President Obama will require mandatory labeling of GMOs.

Favored by 9 out of 10 Americans, labeling is long overdue and is certainly cause for celebration.

(I am told that now Michael Taylor also favors both mandatory labeling and testing of GMOs. Good going Michael; but your timing is a bit off.)

Source

Genetically Modified Peanuts Could Save Lives

Image: Hypoallergenic peanuts (left) and wild peanuts



Genetically engineered peanuts may help fight the most common cause of fatal allergic reactions to food in the United States. While the research is unlikely to result in the creation of completely allergen-free peanuts, it could result in fewer outbreaks and even fewer deaths.

For years now, government scientists have been testing ordinary peanuts in the hope of finding one that cannot cause the deadly allergic reactions which kill more than 50 Americans every year. But nature may not be able to provide an answer.

Horticulture expert Peggy Ozias-Akins at the University of Georgia in Tifton is taking a different tack by using genetic engineering to grow hypoallergenic peanuts.

Most allergic reactions to peanuts are triggered by the same eleven molecules. In theory, peanuts without the genes responsible for those molecules would be far less likely to trigger allergic reactions.

"Some proteins cause more severe allergic reactions than others," said Ozias-Akins.

Tackling the worst offenders first, her team has made and tested peanuts that do not produce two proteins that are among the most intense allergens. The research appears in The Journal of Agricultural and Food Chemistry.

The biologists shot a customized DNA sequence into the plants with a gene gun, causing the legumes to produce hairpin-shaped RNA molecules, which halt the production of the two proteins.

Messing with the genetic code of a plant could potentially cause the seeds to develop improperly, change the taste of the crop, or render it more susceptible to fungal infections. But Ozias-Akins' team found that they grow normally and can resist a common mold without any problems.

Still, getting rid of every allergy-causing substance in peanuts would not be easy, Ozias-Akins said. "Given the number of allergenic proteins in peanuts, I doubt that developing an allergen-free peanut is realistic."

Although it may be impossible to make a perfectly safe peanut, clipping the right genes out could make food accidents far less common.


6 Dec 2008

Healthy bacteria Sale in Supermarkets

A company in Mayfield Heights is marketing a probiotic that might help the health trend already accepted in Europe and Asia catch on in America.

It's selling its healthy bacteria as a food ingredient -- one that unlike most other probiotics remains effective even when it's baked, boiled, frozen or squeezed.

The company, Ganeden Biotech, has teamed with two dozen food companies since January to incorporate its probiotic in everything from muffins to health bars to energy drinks -- even ice cream.

Main Street Gourmet in Akron recently began adding GanedenBC30 to the raisin bran muffins in its Isabella's Healthy Bakery line under the label Activate: Probiotic Enriched Muffins.

You can't buy these muffins in Ohio yet. But foods with the GanedenBC30 logo could start hitting the shelves of local grocery and drug stores by early next year.

Probiotics are live microorganisms containing bacteria or yeasts that can make people who take them healthier. Foods like yogurt naturally contain probiotics. Some believers say probiotics improve their digestion, boost their immunity and even enable them to digest dairy foods.

The number of new products containing probiotics has doubled since 2003, according to a database kept by NutraIngredients-USA.com.

The top categories for probiotics are yogurt, yogurt drinks, milk, baby food, supplement tablets and cheese, according to Nielsen LabelTrends, which keeps track of manufacturer labeling practices.

The trouble is, probiotics must be delivered to the gut alive to have a positive effect. Including probiotics in moist, refrigerated foods like yogurt is easy.

But processing the healthy bacteria for use in vitamin tablets, or baking or boiling it in food, often kills it. So do digestive acids in the stomach.

That's where Ganeden may have a leg up on many of its competitors. The company's patented strain of Bacillus Coagulans -- GanedenBC30 -- generally survives processing and digestion, and is stable in items on store shelves for up to two years.

So instead of drinking a few ounces of probiotic-rich Yakult dairy beverage every morning like Japanese people do, Americans soon may be able to get their daily dose of probiotics in breakfast cereal.

Ganeden has made dietary supplements with its probiotic -- discovered by Sean Farmer, a California microbiologist -- under the Digestive Advantage brand for nearly a decade. Farmer is Ganeden's founder and chief science officer.

These supplements come in the form of capsules aimed at helping people who have digestive ailments such as Crohn's disease or lactose intolerance, said Andrew Lefkowitz, the company's chief executive and president.

The Ganeden supplements "work wonderfully well with balancing the gut," said Dr. Terence Isakov, a family practice doctor in Lyndhurst.

Isakov, who has a financial interest in Ganeden, said probiotics have been found to help other inflammatory diseases such as arthritis.

"I think people are starting to look at probiotics in an entirely new light," Isakov said.

Ganeden, which means "Garden of Eden" in Hebrew, has spent millions of dollars testing its probiotic for safety and efficacy, said Michael Bush, who runs his company's food ingredient business as vice president of business development.

Figuring out when in the recipe to add the tasteless probiotic was the biggest challenge for Main Street Gourmet, said Harvey Nelson, co-chief executive.

It's too soon to say whether adding the Ganeden probiotic to its muffins will boost sales. However, food distributors "are calling us instead of us calling them," which is an indication of unusual demand, said Steve Marks, co-CEO.

Jack Kelly, president of PC Brands in Solana Beach, Calif., is adding Ganeden's probiotic to its Pop Culture health bars. GanedenBC30's proven survivability through the manufacturing process and stable shelf life made it an attractive addition.

"We believe in the use of probiotics in a more convenient form for most consumers," Kelly said. "Refrigerating is limiting for an energy bar."

Source

5 Dec 2008

Support for biotech strongest in RP - survey

Philippine consumers are aware of biotechnology benefits and do not have safety concerns with GMO, a recent survey by the Asian Food Information Centre (www.afic.org) shows.

The AFIC survey covered five Asian countries, namely China, India, Japan, the Philippines and South Korea. It aimed to provide insights on how consumers in Asia perceive the use of biotechnology to produce foods and how likely it is consumers are accepting the various benefits biotechnology derived foods may bring.

The survey findings for the Philippines indicate that consumers are knowledgeable and positive about food biotechnology. Consumers largely believe that biotechnology crops have the potential to deliver high quality, nutritional foods. A large majority of Philippine consumers also indicated that they accept biotechnology as a way to increase the production of food staples and to supply sustainable food. Compared to the other countries surveyed, support for biotechnology appears stronger in the Philippines.

Dr. George Fuller, executive director of AFIC, says: “Acceptance from Philippine consumers of crop biotechnology to produce nutritionally enhanced foods is an important outcome of this research. For instance, Golden Rice (enhanced in B-carotene to prevent vitamin A deficiency) is close to commercialization in the Philippines and the AFIC research shows that consumers in the country will accept this nutritionally superior rice.”

“The survey also indicates that food security is on the consumers’ mind and consumers support biotechnology’s potential for improving agricultural productivity”, added Dr. Fuller.

Key findings from the different areas included in the survey:

Plant biotechnology and food

Awareness about plant biotechnology is high in the Philippines and positively correlates with favorability and acceptance of biotechnology to produce foods.

Almost one in three Philippine consumers report that they are very knowledgeable about biotechnology and in total two thirds say they have at least some knowledge.

The majority of consumers (59 percent) have favorable impressions of plant biotechnology while 19 percent are neutral. A large majority (73 percent) of Philippine consumers believes that they would personally benefit from food biotechnology in the next five years. Key expected benefits are improved food quality and making food more affordable.

A vast majority of the surveyed consumers would be ready to purchase foods produced through biotechnology for specific benefits. More than 90 percent of the consumers would be likely to buy cheaper rice or rice with an increased nutritional value (like a higher vitamin A content) produced through biotechnology. Consumers expressed an equally high (greater than 90 percent) likelihood of buying biotechnology-derived foods such as cooking oil with reduced levels of saturated or trans fats or fresher and better tasting tomatoes.

Plant biotechnology and sustainability

Consumers in the Philippines are also very positive towards plant biotechnology if the technology is related to sustainable food production.

Although most of the consumers are not familiar with the concept of sustainable food production, once the concept is explained, 84 percent of the respondents believed sustainable food production is important. When asked to rank seven factors related to sustainable food production, Philippine consumers picked ‘increasing the production of food staples in the world, thereby reducing world hunger’ as the most important factor, and ‘increasing the productivity in the field and thus reducing production cost, thereby reducing the cost of food’ second.

Ninety-two percent of those surveyed said they support food production using plant biotechnology if the technology delivers sustainable benefits.

Confidence in safety of food supply

The survey was conducted in July and August of 2008 and 71 percent of the respondents indicated to be neutral to confident with the food safety level in the country. When asked to rank specific food safety concerns, Philippine consumers indicated a rather high level of concern for many of the issues, with food poisoning, pesticides residue, and improper handling of food topping the list. Food biotechnology is much less of a concern compared to other food safety issues with none of the respondents citing this as a top of mind concern.

Food labeling

Almost three out of four respondents said they read food labels regularly. The kind of information that Philippine consumers normally look for on food labels include expiry date (most important information for 59 percent of the consumers), vitamin content (mentioned by 13 percent of the consumers as the most important info) and food additives (seven percent).

A majority of consumers (74 percent) state that there is no information they would like to see added to food labels. Those who are not satisfied with the current information on food labels said they would like to have additional information about the content (presence of vitamins, minerals and other basic ingredients) and expiration/production dates.

GM labeling is not a spontaneous labeling demand, none of the respondents suggested presence of GM ingredients as an additional item to be included on food labels.

Compared to the other surveyed countries, consumers in the Philippines appear to be most knowledgeable about food biotechnology and the increased awareness positively correlates with acceptance.

The survey also shows that crops produced through biotechnology do not generate a high level of concern. In addition, although most Asian consumers are not familiar with the concept of “sustainable food production,” once the concept is explained, a majority believe sustainable food production is important and accept plant biotechnology if the technology contributes to a more sustainable way of producing foods. Asian consumers are also ready to accept nutritional benefits from biotechnology-derived foods. However, specific benefits are linked to the dietary habits in each country. Consumers from the food producing countries, China, India and the Philippines, tend to be more positive about food biotechnology and the benefits it can bring compared to consumers from Korea and Japan, where local agricultural production is less important.

Methodology

AFIC commissioned The Nielsen Company Research to conduct a quantitative assessment of adult consumer attitudes toward food biotechnology from July 15 to Aug. 15, 2008. The research was conducted via an on-line survey of 1007 adults, aged 18 to 64 years, and living in five major cities in five different countries. The number of respondents for each city was: Beijing - 200; New Delhi - 204; Manila - 200; Seoul - 202 and Tokyo - 201.

Quotas were set to best reflect the demographic population in the cities.

About Asian Food Information Centre (AFIC) Singapore registered not-for-profit organization, its mission is to effectively communicate science-base information on food safety, nutrition and health information to media, regulators, food/health professionals, and consumers in the Asia region.

For more information, please contact infor@afic.org or visit the Asian Food Information Centre website www.afic.org

Source

4 Dec 2008

A Better Way to Invest in Biotech?

With the market down so much, even losing funds look good if they haven't lost very much. The Biotech HOLDR (NYSE: BBH) fund, for instance, has managed to eke out relatively good returns, drawing investor interest. Still, this is not your typical portfolio and should be looked at very carefully before dipping your toe in.

Fund specifics
HOLDRs enable investors to purchase a slice of the market in a number of specific sectors, from broadband companies to regional banks. Structured as a trust, the Biotech HOLDR holds common stock of companies in the biotechnology industry.

Unlike some sector exchange-traded funds (ETFs) that are well-diversified with dozens of securities, Biotech HOLDR has nearly 95% of its assets in just five stocks: Genentech (NYSE: DNA), Amgen (Nasdaq: AMGN), Gilead Sciences (Nasdaq: GILD), Biogen Idec (Nasdaq: BIIB), and Genzyme (Nasdaq: GENZ). Investors also have direct ownership of the underlying stocks. That means dividends are paid directly, resulting in numerous tax reporting obligations. There are no management fees, but there are transaction costs and an annual custody fee of $0.08 per HOLDR share.

Fund facts

* Year-to-Date Return: 2.5%
* Expense Ratio: none; $0.08/share custody fee
* Assets: $1.2 billion

Fund prospects and risks
A HOLDR is a basket of stocks just like an ETF. But there the similarity ends, as each HOLDR is a static portfolio that doesn't change over time. The HOLDR is unmanaged and its component stocks do not vary. This is very different from most ETFs, which track indexes that adjust periodically due to rebalancing. If a stock is acquired, the index will often replace it, but the HOLDR will remove it and not replace it.

That means that over time, the HOLDR's portfolio can become more and more concentrated. Investors look to ETFs for their diversification benefits, yet with Biotech HOLDR, you are really not getting that benefit.

Portfolio fit?
With a new president, there's potential for changes to the American health-care system. So investors should monitor the mood in Washington and make sure their portfolios are optimally positioned for any changes.

But remember that HOLDRs may not be the best tool for biotech investors. Don't get fooled into thinking this is just another sector ETF, as its unique structure makes it more like a concentrated five-stock fund. That level of concentration brings an unusually high degree of stock-specific risk, which most investors don't want. Although the strong performance of those five biotech stocks has led to good returns for Biotech HOLDR, it requires you to put your eggs into a pretty small basket.

Source

3 Dec 2008

Biotech blues : 1.2bn over decade to develop a medically useful molecule

It takes an average of $1.2bn over 10-12 years to develop a medically useful molecule. This huge expense of time and money means that almost all biotechnology start-ups require top-ups of funding or other outside sources of revenue in order to survive. In normal times, companies with promising technologies are able to attract the funds needed to soldier on through clinical trials while those whose products fail to clear various scientific and regulatory hurdles are left by the wayside. But now, the financial crisis has left even healthy companies wondering where the cash is going to come from next.

Traditionally, struggling businesses have sought shelter in the arms of big drug companies or stronger rivals willing to buy their intellectual property and hire their scientific talent. Others can elect to go into "hibernation" if their technologies fail to bear fruit, shutting down research while holding on to their intellectual property in the hope it may one day prove useful.

This year looks different. Venture capitalists have begun to shun high-risk bets such as biotech. Meanwhile, the public funding market has all but dried up. So far this year, there has been just one initial public offering of a biotechnology company - for a minuscule $5.8m - compared with more than two dozen last year. At least five biotechnology companies have gone bankrupt in recent weeks for lack of funds, according to Bloomberg. Others have begun to shutter research projects in an effort to preserve cash.

Like many problems sparked by the financial crisis, this, too, will pass. Several big drug companies are set to lose patent protection on lucrative medicines over the next few years. Demand for medically promising molecules will eventually pick up as pharmaceuticals companies search for the next big thing. Unfortunately, these long-term dynamics are likely to come as cold comfort to medical patients who might have benefited from research projects now set for the chopping block.

Source

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