The Gene Bubble.(bioinformatics and the pharmaceutical industry)(Brief Article)(Statistical Data Included)

You've heard of the Internet bubble, and maybe even the telecoms bubble. But have you heard of the gene bubble? It grew in the late 1990s, fueled by excitement over the decoding of the human genome, announced with great fanfare in June 2000. By then investors on both sides of the Atlantic had poured hundreds of millions of dollars into a particularly promising area of research known as bioinformatics. The idea was that the genome, an instruction manual of the human body written in a DNA code, might yield its secrets to scientists if only they could bring big enough computers to bear on the data. Scientists and investors alike hoped this convergence of computers and biology would help big pharmaceutical companies bring new drugs to market.

Like every bubble, this one had to burst. Stock prices of many bioinformatics firms have fallen sharply in recent years. LION Biosciences of Germany went public at $40 a share and now trades at about $13. Iceland's DeCode is worth a fourth of its former high. Even Celera, the U.S. firm that helped decode the human genome, is off its peak.

Falling stock prices are a symptom of a greater disappointment in bioinformatics. A few years ago the laborious and quirky process of drug discovery seemed on the verge of giving way to new streamlined, data-driven methods. Some firms organized the blizzard of genetic data into databases that researchers could mine with search engines from still other firms. Software companies built computer programs that modeled what goes on in human cells and even whole organs. Many investors came to believe that bioinformatics would open a new avenue to the discovery of drugs. But this avenue simply hasn't materialized. Says biotech analyst Earling Refsum at Nomura Bank in London: "Bioinformatics has not helped Big Pharma get more drugs into the pipeline."

Computers have succeeded in speeding up drug development, but this does nothing to address the far more vexing problem of finding drugs to treat new types of diseases. The obesity drug P57, currently under development, is a case in point. Researchers are now using molecular databases to screen new chemicals that might reproduce the appetite- suppressing effect of a natural plant. But the idea for the drug came not from computers but from tales of the San bushmen in South Africa, who for years have chewed a local plant to stave off ...