Subprime Melt Down Effects on Biotech

I was going through my email today when I came across some really insightful comments made by Jayson Parker, who is an associate professor of my Biotechnology program. With his expressed consent, please review some key points that highlight the effects of the US “subprime melt down” that is taking place and their relevance to the biotechnology industry.

He explains that there are two basic outcomes:

1. Core inflation is priority. If interest rates go up, it hurts biotech (as it is capital intensive and increases the cost of money for loans).

2. The housing market continues to meltdown in the US. If interest rates go down in response to a recession precipitated by the housing meltdown it will also hurt biotech (money is cheaper, but investors will assign a much higher risk to stocks and the flow of money will decrease).

Recapping some events that have take place so far:

  • The US economy has defied gravity for the past several years given the unexpected strength of consumer spending.
  • Consumer spending has been made possible by unprecedented appreciation in housing values and historically low interest rates – consumers have borrowed against this to maintain their purchases.
  • Unlike previous market bubbles, a substantial portion of consumers have leveraged themselves to be part of this current bubble – the housing market.
  • Some consumers have borrowed heavily enough against the price appreciation of their homes – that a strong market correction could leave them owing more money on their homes (negative equity).
  • In a historically low interest rate environment, some mortgage companies have offered loans to high risk clientale (e.g. NINJA – loans to folks with no income, no job and no assets) assuming far greater risk in their client base than is normally prudent.
    These risky loans have been “securitized” – meaning the debt has been repackaged – and through a series of events I don’t follow – have been included in other investment vehicles that affect more broadly the retail market.
  • The housing market in the US – which has seen more growth than in Canada – is the “canary” of US economic outlook – recent interest rate increases have seen an increase in bankruptacy rates among homeowners who cannot make their monthly payments.

Currently, the US federal reserve is meeting over the next two days to decide on whether interest rates will climb – the expectation is that it will remain status quo. Core measures of inflation (excluding indices of energy), indicate that inflation may be a concern which will eventually demand an interest rate increase. Finally, giving the “recap” above, the Federal reserve will likely will be more focused on the Housing market and in keeping bankruptacies to a miniumum by keeping interest rates as low as possible to avoid a recession. Keep your eyes on the subprime meltdown in the US over the next quarter. If we enter into a recession, there will be harder times for biotech.

Once again, I would like to thank Jayson for his insightful comments!

US Masks Global Warming Consequences

The US administration is being accused with editing out the significance from the scientific proposals made by lead scientists, notably James Hansen who is the director of the NASA Goddard Institute for Space Studies, and a pioneer who first started warning us all about the threats of climate change.

There was a great article that talks about all the hype – from NewScientist, I have highlighted some of the interesting points:

In a 10-year policy plan, Cooney and Brian Hannegan, also at CEQ, made at least 181 edits to emphasize scientific uncertainty regarding the effects of climate change and 113 changes to minimise the importance of human contributions to global warming, according to the committee’s memo.

For example, Cooney replaced “will” with “may” in the sentence: Warming temperatures will also affect Arctic land areas.” He also deleted this sentence: “Climate change has global consequences for human health and the environment.”

Hansen had previously accused political appointees of trying to silence scientists (see US agencies accused of muzzling climate experts). His case came to prominence in 2006 after he had called for cuts in greenhouse gas emissions (see Top climatologist accuses US of trying to gag him).

See full article at: US fudging of climate science – details revealed

Exercising: your Heart and Brain

Okay … this isn’t so much about genetics or biotech, but these articles are ones I came across and said “wow, I have to tell people about this” — so here it is!

These articles discuss the scientific reasons why going to the gym makes you feel more alert, and how cardiovascular exercise helps your heart.

The first study shows a correlation between exercise and better results on memory tests. The study done by the Columbia University Medical Center explains specifically what exercise does within the brain:

This finding is significant because it was accomplished via the first-ever observation of neurogenesis, the growth of neurons, within a living brain. Using an MRI imaging technique developed at Columbia, the researchers were able to identify neurogenesis within the dentate gyrus region following exercise.

“No previous research has systematically examined the different regions of the hippocampus and identified which region is most affected by exercise,” said Scott A. Small, M.D., associate professor of neurology at Columbia University Medical Center and the study’s lead author.

See more at: New Reason To Hit The Gym: Fighting Memory Loss (ScienceDaily)

The second study, also from the Columbia University Medical Center shows that aerobic exercise is good for the heart, but why? Here is what they found:

Whole blood samples were taken from 46 healthy young adults (20-45 years old) both before and after participating in moderate or high intensity aerobic exercise, over a 12-week period.

The blood samples were stimulated with the infectious agent lipopolysaccharide (LPS) – gram negative bacteria – and then analyzed for levels of tumor necrosis factor (TNF) – an initial step in the inflammatory cascade. Substantially lower levels of TNF were found after aerobic training, in both the moderate and high intensity groups.

“These findings suggest strongly that exercise reduces the systemic inflammation that can lead to heart disease,” said Dr. Sloan. “This study is especially significant because the value of exercise has never before been shown in TNF, and never in healthy adults who were not at high-risk for heart disease.”

See more at: Why Aerobic Exercise Is Good For The Heart (ScienceDaily)

Ethics in Personalized Medicine

Today, I want to highlight a great article I found on the ethical issues in personalized medicine, which is centered around pharmacogenetic information (your specific DNA genotype for a number of specific genes). Firstly, if you want to get up to speed on pharmacogenomics, check out the US government-run Human Genome Project Information site that has some quick Q&A on this topic!

There was an article recently published online by Reagan Kelly, that discusses some ethical issues of personalized medicine, please see some excerpts below:

“Protecting patient privacy is one of the most important things that must be done before ordinary people will be willing to take advantage of individualized medical care, and just about everyone agrees that patient’s have a right to keep details about their health private from most people (even if not from, say, their insurance company or in some cases state or local governments). But how far does that right extend? Does it cover a person’s genetic makeup? That is something that undeniably influences health, and a fair amount of information about what diseases a person has or is at risk for can be extracted from genotype and gene expression information like what would be collected for personalized medicine services. How do you keep that information private and what uses are OK? … Additionally, what about the privacy of other family members? Families share genetic information, and by knowing something about their risk, a person also learns about their relatives’ risks.”

“One of the issues of privacy is also directly related to patient autonomy – the right of a patient to choose what happens to them. The question of what uses of a patient’s data are permissible is not exclusively a question of privacy but also one of autonomy. Is it OK to require a person to allow their data to be used for risk profiling or diagnosis as a condition of performing the service for them?”

“Cost, just like with the policy issues last time, is a significant ethical issue as well. Something like 46 million people are without health insurance today, and many more have insurance plans that cover only the most basic things. How can we provide access to personalized medicine to everyone? Is access for everyone a reasonable goal? Is it an attainable one?”

Please see the full article for more details.

Just In: Sub-Zero Beer and Ice hotter than boiling water?!

Looking for a new venture to finance? Here are a few business ideas based on cutting-edge physics. Talk to Daniel Dolan who has turned water to ice in nanoseconds, but having a temperature hotter than the boiling point of water! Alternatively, he also says that water in a glass could be cooled below freezing and remain as water in a supercooled state – now that could be a refreshing beer!

Here’s an interesting point that the article mentions:

In the Z experiment, the volume of water shrank abruptly and discontinuously, consistent with the formation of almost every known form of ice except the ordinary kind, which expands. (One might wonder why this ice shrank instead of expanding, given the common experience of frozen water expanding to wreck garden hoses left out over winter. The answer is that only “ordinary” ice expands when water freezes. There are at least 11 other known forms of ice occurring at a variety of temperatures and pressures.) “This work,” says Dolan, “is a basic science study that helps us understand materials at extreme conditions.” [right … basic science.]

Read the full article originally adapted from a news release issued by DOE/Sandia National Laboratories.

Who knew? 11 forms of water ice. Cool. You learn something everyday… to learn more about WATER, one of Earth’s precious resources, check out this book called Water, by Marq de Villiers .

Turning Carbon Dioxide into Fuel

It’s been said that we have been polluting the air with billions of tons of carbon dioxide and that its a bad thing. Well … not if you’re Frederic Goettmann, a chemist at the Max Planck Institute for Colloids and Interfaces in Potsdam, Germany. He is designing a catalyst that could help turn CO2 into fuel!

Goettman stated “We have taken the first step towards using carbon dioxide from the atmosphere as a source for chemical synthesis. Future refinements could allow chemists to reduce their dependence on fossil fuels as sources for making chemicals. Liquid fuel could also be made from carbon monoxide split from CO2.”

Here are some highlights from the Goettmann article:

In an attempt to emulate this natural process, Goettmann and colleagues Arne Thomas and Markus Antonietti developed their own nitrogen-based catalyst that can produce carbamates. The graphite-like compound is made from flat layers of carbon and nitrogen atoms arranged in hexagons.

The catalyst’s next useful step was to enable the benzene molecules to grab the oxygen atom from the CO2 in the carbamate, producing phenol and a reactive carbon monoxide (CO) species.

The researchers are now trying to bring their method even closer to photosynthesis. “The benzene reaction currently supplies the energy that splits the CO2,” Goettmann says, “but in plants it is light.” The new catalyst absorbs ultraviolet radiation, so the team is experimenting to see if light can provide the energy instead.

The Max Planck technique has only been demonstrated on a small scale and it has a low yield of 20%, he points out. “But it looks quite promising,” he adds. “The catalyst can be made cheaply and it works at a relatively low temperature.”

Investors, investors? Where are you? This is a disruptive technology in the making. If these guys are really able to turn carbon dioxide into fuel in a way that yields a net energy gain, it is a monumental step for energy sustainability. If they can adapt the technology to breakdown carbon dioxide and convert it to other non-polluting sources such as graphite, it could even be used to fight global warming — albeit, it would have to be used quite broadly!

Banking on Global Warming

Many variables are contributing to the warmth of the world, at at the same time a whole of set of opportunities are arising as a result of the global warming bug.

Opportunities lay in:

  • Biotechnology applications for coal plants to “scrub” emissions before they are released
  • Cleaner oil refinery processing, to emit less carbon dioxide from oil sands particularly in Alberta, Canada
  • Carbon sequestration technologies to capture and store carbon dioxide deep within the Earth (still to be determined if this is a good idea)
  • Real estate and community planning of areas that are either going to become habitable and a lucrative shipping/trading centers (such as Nunavut, Canada described in this article)
  • Places will become flooded as ocean levels rise and entire cities are going to find themselves under 20 feet of water – technologies may be needed in advanced insulation from water, dam building, or something I can’t even imagine right now.
  • Cleantech: as an increasing number of emission laws come into place, there will be an escalating need for cleaner technologies to develop energy efficiently. This is not a new concept, merely a reinforcement of the need. I recently found out that Sustainable Development Technology Canada (SDTC) now has a $550 million not-for-profit foundation that bridges the gap in the innovation chain by fast-tracking groundbreaking clean technologies through development and demonstration in preparation for commercialization. There is certainly incentive for some businesses to consider developing their technologies in Canada, or perhaps, in partnership with Canadian businesses and educational institutions. Interested? Leave me your email in a comment and I’ll put you in touch with some people here in Canada!

The retreat of glaciers and arctic ice sheets are going to open up new shipping routes, key ports and new economic centers. One such gateway community is discussed an interview with a writer from The Atlantic, Gregg Easterbrook. I have to credit Paul Kedrosky for introducing me to this piece from his blog “Paul Kedrosky’s Infectious Greed“. The interview is as follows:

Early in this article you ask, “If the world warms, who will win? Who will lose?” But even the winners in this equation would seem to face grave risks. The Inuit of Canada may come to own valuable ports, for instance, but their traditional ways of feeding themselves and making a living will be decimated as the animals they hunt disappear. I suspect many people will consider the question and answer, “We will all lose.”

No, I don’t think so. In economics we don’t find many zero sum games and I don’t think this is a zero sum game. I think a lot of people and nations will come out ahead. The Inuit–the little semi-nation of Nunavut–is going to become significantly more valuable in a warming world. Right now Nunavut’s a frozen wasteland. I would love to be the guy with the Nunavut promotion account twenty years from now because I’m going to rechristen the place “the gateway to the hemispheres” and invite celebrities, and cruise ships will be stopping by, and the sign on the dock will say, “Welcome to Nunavut, Gateway to the Hemispheres!” We’ll see all kinds of wild economic activity up there. There will be change, yes. The traditional way of life will fade and be replaced with something else, maybe something zany, but change seems an inevitability of human experience. Really no society on earth, maybe the ones in the Amazon basin are the only exception, has been able to insulate itself from change. We can’t insulate ourselves from it and I doubt the Inuit will ever be able to do that, either.

On Technorati:

Genetic Goldmine Found by Global Ocean Sampling Expedition

Craig J. Venter has accomplished yet another feat in his conquest to sequence everything under the sun. Venter is best known for leading Celera in their challenge to beat the National Institute of Health (NIH) in a race to sequence the human genome. Since then he has lead numerous sequencing projects including the genetic analysis of New York City’s air [or the Nature publication], searching to discover the minimum genome at his company Synthetic Genomics, and most recently the Sorcerer II Global Ocean Sampling Expedition.

Results from the oceanic voyage that traveled from Halifax, Nova Scotia to the Eastern Tropical Pacific during the two year circumnavigation by the Sorcerer II Expedition have finally been released. The announcement from the J. Craig Venter Institute (JCVI) detailed several publications that were made in PLoS Biology. Highlights of the publication include:

Rusch et al. describe the results of metagenomic analysis of 37 samples taken aboard Sorcerer II during its voyage between Halifax, Nova Scotia and French Polynesia in 2003 to 2004, combined with seven samples collected during the pilot study in the Sargasso Sea. To capture the DNA, scientists onboard the Sorcerer II collected water every 200 nautical miles and then filtered it through progressively smaller filters to collect bacteria and then viruses. The DNA extracted for these publications were from the filter that collects mostly bacteria.

The group analyzed a massive dataset consisting of 7.7 million DNA sequences totaling 6.3 billion base pairs. Following from the Sargasso Sea pilot study, they continued to find a great degree of diversity both within and across the sampling sites. Researchers identified 60 highly abundant ribotypes (roughly equivalent to species) however, the inter-species variation and the variation of organisms within the same environment suggests that while the microbes might be similar at an rRNA level they can differ greatly at a biochemical and genomic level.

Yooseph et al. report on the 6.12 million new proteins uncovered from 7.7 million GOS sequences by using a novel sequence clustering approach. This nearly doubles the number of known proteins. The researchers found that the GOS dataset covered almost all of the known prokaryote (bacterial and archaeal) protein families and that there were 1,700 totally unique large protein families in the GOS dataset, not matching any known families. A surprising number of the new protein families discovered are in viruses. Researchers were also able to match 6,000 previously unmatched sequences in current protein databases to proteins found in the GOS dataset.

Previously, it was thought that different families of kinases were responsible for these types of cell regulation in prokaryotes (bacteria) versus eukaryotes (animals and other non-bacteria). Eukaryote protein kinases (ePK) were most common in eukaryotes, histidine kinases in bacteria. However, in their PloS Biology publication Kennan et al. show that with the scope and diversity of the GOS data that ePK-like kinases (ELKs) are indeed very prevalent in bacteria, in fact, more so than histidine kinases. This finding is even shedding some light on human kinases.

The research team has shown that the ePK is just one family in a diverse superfamily of enzymes that all share a common protein kinase-like (PKL) fold (shape). Using sensitive profile methods, the researchers discovered more than 45,000 kinase sequences from the GOS and other public data sources and grouped these into 20 diverse families, of which ePKs were just one. The GOS data doubles the size of most PKL families and triples the number of known ePK-like kinases (ELK). Many of these families exhibited eukaryote-like structure and function of their proteins and thus the researchers conclude that several of these protein families existed before the divergence of the three domains of life.

For more information, please see the press release at the J. Craig Venter Institute.

The data recovered from this mission is likely to yield a number of findings, and will be the focus of much scientific research from years to come. Kudos to you and your team Dr. Venter, and it was nice seeing you in Toronto last fall!

Pharmacogenetics Era: Cancer and Opiate Updates

Pharmacogenetics has “been around since the 1950’s” but, practically speaking, is a new player in clinical diagnosis and treatment, but it is changing the way that healthcare systems, pharmaceutical companies and even small biotechs position themselves in terms of developing new ways to combat disease. With DNA sequencing dropping in price by orders of magnitude, approaches to medicine are in the process of change. Now we are able to start at the genetic level, find out your genotype for a given gene and then recommend certain drugs to you based on your personal genetic profile.

Traditionally, most pharmacogenomic profiling existed with patients needed blood thinners, specifically warfarin, where the Cytochrome P450 gene was tested to determine its presence, mutations and copy number. These features let the physician know your relative rate of metabolism to see how you will respond to the drug and what dosage you should be taking. There are a number of other cytochrome genes that are often included in pharmacogenomic tests now, such as Cytochrome P450 2C9, which is an enzyme that metabolizes coumadin.

I found two examples recently that speak to some advances made in pharmacogenetics:

The first article discusses a new diagnostic called Oncotype DX which looks at DNA of the breast cancer cells to determine if the cells are benign, malignant, or metastatic. The test is commercially available and looks at 16 tumourigenic genes to determine how the cancer is going to behave. This is the tip of the iceberg for the cancer diagnostic market. Look out for more of these test as they are bound to pop up all over the place within the next 2 years. Mark my words.

The second advance is a Nature paper from Clinical Pharmacology & Therapeutics titled Pharmacogenetics of Opioids. They are looking at a number of genes, that, when present or absent, affect a persons dosage requirements. A selection of the article abstract is seen here that speaks to what the paper’s findings indicate:

The polymorphic CYP2D6 regulates the O-demethylation of codeine and other weak opioids to more potent metabolites with poor metabolizers having reduced antinociception in some cases. Some opioids are P-glycoprotein substrates, whereas, ABCB1 genotypes inconsistently influence opioid pharmacodynamics and dosage requirements. Single-nucleotide polymorphisms in the mu opioid receptor gene are associated with increasing morphine, but not methadone dosage requirements and altered efficacy of mu opioid agonists and antagonists. As knowledge regarding the interplay between genes affecting opioid pharmacokinetics including cerebral kinetics and pharmacodynamics increases, our understanding of the role of pharmacogenomics in mediating interpatient variability in efficacy and side effects to this important class of drugs will be better informed.

The pain market is large and vast, with 100-150 million Americans (~57%) having acute and/or chronic pain within the past year. Beyond America, over 500 million cases of pain are diagnosed worldwide each year, and most patients are unsatisfied with current treatment options. The worldwide pain management market symbolizes an escalating trend, having a value of $27 billion in 2004, with an expected increase to $35 billion by 2009. The number of people affected by pain, and have access to pain treatment is likely to escalate with the “baby boomer” generation approaching older age. Also, there is a trend indicating higher incidences of cancer, arthritis, HIV as well as surgeries[1].

There will undoubtedly be the need for advanced pharmacogenetic testing platforms that can determine the drugs that will work best for each individual’s pain need. Be sure to see these diagnostics enter hospitals and genetic labs in a few years!

[1] Frost and Sullivan. (2002) U.S. Pain Management Pharmaceuticals Markets.

All-nighters, Caffeine and Better Colons?

For all you busy finance geeks, and entrepreneurs working 80+ hour weeks buzzing on caffeine from your last quad-americano from Starbucks, there’s a little bit of good news for you!

A recent study published in the Journal of Agricultural and Food Chemistry shows that brewed coffee contains soluble fiber which aids in digestion, helps the body absorb nutrients, and fight cholesterol. An article from Scientific American gives some interesting statistics and insight:

According to the National Coffee Association, 82 percent of adults in the U.S. drink an average of 3.2 cups of java every day. A traditional eight-ounce (237-milliliter) cup of coffee could contain as much as 1.5 grams of fiber and 3.2 cups nearly five grams of fiber. But, of course, a “cup” is relative these days. A “grande” (medium size) cup at Starbucks, for instance, is 473 milliliters (or 16 ounces) and could pack as much as three grams of fiber, about the same as a raw apple and 20 percent or more of the average American’s daily intake.

But that does not mean you should drink coffee in lieu of veggies and whole grains to up your fiber intake, says ADA spokesperson Katherine Tallmadge. “There are so many other sources of fiber [that are healthier]. Should you drink tons of coffee to get those benefits? No,” she says, noting that coffee also contains caffeine—around 100 milligrams per cup. It is far better, she says, to get fiber from a variety of foods that do not contain caffeine and are also packed with other healthy compounds, such as protein and vitamins. “It’s the whole diet that’s important,” Tallmadge says, adding that she would not recommend more than two cups of coffee a day.

So there you have it. You can have your coffee and digest better too.