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From Xylella to Alellyx

Five researchers create a biotechnological company in partnership with Votorantim Ventures

eduardo cesarThe partners: Ana Claudia Rasera da Silva, João Paulo Kitajima, Jesus Ferro, Paulo Arruda and João Paulo Setúbaleduardo cesar

Five scientists from the São Paulo University (USP), the State University of Campinas (Unicamp) and the São Paulo State University (Unesp) have just finished creating, with the support of Votorantim Ventures, Alellyx, a research and development company for biotechnology products that will have as its goal the generation and commercialization of patents in the area of applied genomics. All of them took part of the research teams responsible for the sequencing of the genes of the bacteria Xylella fastidiosa and Xanthomonas citrii and of sugarcane, which begun in 1997.

The projects were sponsored by FAPESP. Now in the role of entrepreneurs, they will face the challenge of transforming genetic information into products. They will able to draw on resources in the order of R$ 30 million over the next four to six years, to invest in the construction of molecular biology laboratories, which will be ready in four months. However, the bioinformation technology laboratory, implanted in partnership with the company Sun Microsystems, already has working conditions.

The capital investment by Votorantim Ventures will also make it possible to hire fifty people, among them forty researchers who will take part in the task of looking for new technologies for agriculture and the agro-industry, with focus on the growing of oranges, sugarcane, eucalyptus trees, grapes and the soybeans. In the same way that American high technology companies spurred by venture capital had their origin and development close to the universities, the headquarters of Alellyx will be in Campinas, close to the Unicamp campus.

The new company will be chaired by Fernando Reinach for the moment, in the position of executive director of Votorantim Ventures. He participated in the conception and execution of the projects for the sequencing of Xylella andXanthomonas . The conclusion of the sequencing of theXylella genome had international repercussions without precedence in the scientific history of the country. The name of the company, not by chance, goes to the origin of this group: Alellyx is the wordXylella inverted – changing only the position of the letters “l” – and a reference to the term allele, one of the alternative forms of a gene.

In the evaluation of José Fernando Perez, FAPESP’s scientific director, the creation of Alellyx “is the beginning of the end” of a story that begun with the financing of the first genome project. “Our first objective was to form highly qualified human resources and on a large scale in order to be able to spur industrial molecular biotechnology in the country”, explains Perez. “We have managed to do that and also carried out science on the frontier of knowledge and now we are on the pathway to solving problems of economic relevance”, he goes on. This effort set off a new era that allows venture capital to wage on the competence of Brazilian science. “I’m convinced that Alellyx will be the first of a series of companies that will pop up in the state of São Paulo over the next few years, in order to work with research and development in genomics”, he concludes.

Daring and competent
The new company adds the audacity of private initiative and the competence accumulated in the research institutes of the São Paulo universities. “Brazil has university talent with clear competitive advantage available, but without a history of entrepreneurship”, recognizes Paulo Henrique de Oliveira Santos, the president of Votorantim Ventures. “Our role as a venture capital fund is to identify these talents and to stimulate the creation of companies in promising areas such as biotechnology”, he says. Votorantim Ventures, the venture capital fund of the Votorantim Group, established some two years ago, is investing US$ 300 million in high technology businesses. It is already participating in companies in the area of telecommunications and electronic commerce, and Alellyx is the first incursion of the fund in the area of biotechnology.

The Alellyx’s partners line-up is Ana Cláudia Rasera da Silva, of the Chemical Institute of USP; Jesus Aparecido Ferro, of the Agrarian Sciences and Veterinary School of Unesp in Jaboticabal, and Paulo Arruda, of the Molecular Biology and Genetic Engineering Center of Unicamp. Also part of team are João Paulo Kitajima and João Paulo Setúbal, both from the Computing Institute of Unicamp. These two were responsible for the development of the technologies for the treatment of results and analysis of the data generated in the genomic projects financed by FAPESP, which did away with the necessity of looking for international cooperation in the area of bio-information technology. The researchers/entrepreneurs don’t intend to quit academic life.

Partnership with clients
“At the university we have developed competence in cultivating pathogens of great economic interest”, says Paulo Arruda. For example, the Xylella bacterium is responsible for citric variegated Chlorosis (CVC), also known as the yellowing disease, a sickness that affects 34% of the São Paulo orchards, jeopardizing production. The solution to this problem, nonetheless, cannot be simply left up to the university.

The Alellyx company is going to attempt to solve a series of problems that affect diverse sectors of the economy”, says Reinach. A research project will be associated with each one of these problems, which explains the size of the team. The idea is to work in partnership with companies, without losing the business focus that is the commercial exploration of genetic information. “There are expectations of very high returns. The value of the company will be, in a large part, determined by intellectual property. However, without doubt, one is dealing with a risky undertaking, similar to the one faced by companies that develop new drugs”. Nonetheless, he believes that the undertaking has in its favor the fact that Brazil is the leader in genomic research of plant pathogens and is betting it will also have success in the development of solutions to problems of the selected crops.

Data bank
The Alellyx Company is going to investigate problems that affect the growing of oranges, such as CVC, sugarcane, eucalyptus, grape and soybean, by exploring the genomic information available in data banks throughout the world, including those generated by the projects sponsored by FAPESP. “We’re going to work with public and non-public data, through partnerships, besides also generating data in our laboratories”, advances Reinach.

For example, the project on the sequencing of Xylella placed at the scientists’ disposal, information about 2.7 million pairs of bases of the chromosomes of the bacterium that attacks orchards. In the case of Xanthomonas , the bacterium that causes citric canker, 4,500 genes were noted, associated with metabolic processes for the production of energy, amino acids synthesis, macromolecules formation, pathogens, among others. The Alellyx researchers will also have at their disposal public information on about 80,000 genes of the sugarcane identified during the Sugarcane Genome Project. Their analysis, in parallel, should give them new and precise clues about how the plant lives, reproduces and dies, allowing for the redesigning of seedlings resistant to the pests, bacteria and fungi.

The Alellyx researchers will also be able to make use of for research reference, when they are published, the information on the sequencing of the grapevine Xylella , a project that FAPESP has been developing in cooperation agreement with the United States Department of Agriculture (USDA). ThisXylella is responsible for Pierce’s disease, which attacks the Californian grapevines. “Very little exists in this area in which we are working. There are no products on the market with genic improvement”, evaluates Ana Claudia. “There’s a large amount of information being generated and it’s time to transform this information into products.”

The new company does not have competitors structured in the market, assures Oliveira Santos. Not even in the research into the eucalyptus tree. The two projects on the sequencing of the plant – one of them sponsored by FAPESP in partnership with four companies in the paper and cellulose industry and the other through the Ministry of Science and Technology (MCT), also with private support, are basic research. “The large competitors associated themselves in order to take the first step. With the information generated in the gene sequencing of the gene, each one of them will take their own path. We’re going to work onwards from this starting point.”, underlines Reinach. “We’ll have a technological platform from which to launch genomic information and to solve problems”, he observed.