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Genomics

Science and business

Alellyx hires a twenty five more doctors and promises a product in two years

EDUARDO CESARThe company’s greenhouse houses various varieties of plants for graftingEDUARDO CESAR

In the a period of two years at the most, Brazil will have its first genomic product applicable to agriculture. The investigations are advancing at an accelerated rhythm, driven by twenty five researchers at Alellyx , the biotechnology research and development company founded some eight months ago and inaugurated on the 7th of November. “We’re hiring twenty five more employees, and all with doctorate degrees”, says Fernando Reinach, the company’s temporary president and the executive director of Votorantim Ventures, the venture capital fund of the Votorantim group, which set aside R$ 30 million for the setting up of laboratories and for the project’s ongoing costs.

Well versed in genomics, this group of researchers is looking for solutions to problems that imperil the production of oranges – such as the yellowing disease or citric canker- and are investigating ways of increasing productivity in the alcohol/sugarcane, paper and cellulose sectors, through improvements in the quality of the sugarcane and the eucalyptus tree. During 2003, they will begin research into soy and grapes. As well as the projects carried out by the team, Alellyx has already had contact with a company for the co-development of a product, explains Reinach, without at the moment revealing the identity of their partner. Other proposals, for the future, are already being negotiated. “We’re going to have products before the return of capital” he forecasts, conjecturing that the investments will be completely recovered in a period of six to seven years.

It is a risky bet since some of the lines of research, as is typical in this type of investigation, are not going to produce results, says Paulo Henrique de Oliveira Santos, the president of Votorantim Ventures. Nevertheless, the prospects are very optimistic, both from the point of view of the development of new products and from a business angle: in the case of success, Alellyx will share the competitive advantage with its client.

This is without speaking of the results to be obtained through the generation and commercialization of patents. The solution to the problem of the bacteriumXylella fastidiosa , for example, which devastates the orange groves, would amount to a saving for the fruit and juice sectors of something around US$ 100 million annually. Part of this sum would belong to Alellyx. “The contracts are complex, similar to those signed for the development of new drugs in biotech. companies”, emphasizes company president Oliveira Santos.

Science and business
Alellyx intends to be the perfect example that carrying out science on the frontier of knowledge and looking for solutions to problems of economic relevance, can be good business. “The private sector needs to discover that investments in biotechnology are a good source of income”, recommended the minister of Agriculture, Marcus Vinicius Pratini de Moraes, present at the ceremony of the company’s inauguration. He calculates that annual investments in biotechnology, in Brazil, add up to US$ 60 million, a large part of which comes from public coffers. “We need to quintuple these resources over the next three years, in a combined effort between the public and private sectors, so that we might come close to other countries and recover an improvement in our productivity”, the minister affirmed.

From this point of view, he added, Votorantim sets an excellent example. By way of Votorantim Ventures, founded some two and a half years ago, the group is going to invest up to R$ 300 million in risk capital projects, wagering on the development of new technologies and products. Until now, eight projects have been selected, two of them in the area of biotechnology: Alellyx and Scyla, a bio-information technology company, also made up of researchers who were integrated into the Genome Program, financed through FAPESP. According to Antonio Ermírio de Moraes, president of the Votorantim group, wagering on Alellyx is only the beginning. “We’re a very privileged country: we have 20% of the planet’s water resources, without taking into consideration aquifers, and everything indicates that we’ll shortly be the grain storehouse of the world. What are we waiting for?” questioned Ermírio de Moraes. “We need to have quality, science and technology.”

The establishing of companies such as Alellyx, according to Reinach, is the result of the convergence of three axes: a national competitive farming industry, the availability of venture capital and the competence of Brazilian researchers, formed over a twenty year period of investments at universities, and particularly during the Genome Program. The competency and experience of the group of partners within the new company is the main reason for the co-signed agreements of the projects being developed by Alellyx.

Paulo Arruda, Jesus Ferro Neto, João Carlos Setúbal, João Paulo Katajima and Ana Claudia Rasera da Silva, from the universities of São Paulo (USP), State University of Campinas (Unicamp) and São Paulo State University (Unesp), participated in the sequencing and analysis of the genomes of bacteria that cause illnesses in plants, sponsored through FAPESP, among them those of theXylella fastidiosa of the orange and of the grape,Xanthomonas citrii andAgrobacterium tumefaciens ; as well as the genomes of the sugarcane and the eucalyptus.

“By financing projects of genetic sequencing, FAPESP was determined to demonstrate a theorem”, explains José Fernando Perez, the Foundation’s scientific director. The first hypothesis, he explained, was that these pieces of research would be strategic for the country. The second was that there was the urgent need to form professionals qualified to carry out the creation of research and development companies in genomics. “The idea was that, with projects in genomics, it would be possible to form a large number of young scientists, capable of creating alternatives for investors who would believe in biotechnology and in projects centered around problems of the utmost scientific relevance and with socioeconomic importance”, he underlined. “The founding of Alellyx is the plain demonstration of this proposition”, he concluded.

These researchers, now in the role of entrepreneurs, have in front of them the challenge of transforming genomic information into products, within a different environment from the academic one. “The nature of the research in the two environments is similar, but here it’s faster and more precise”, compared Arruda, who still dedicates part of his time to lectures and research at the Molecular Biology and Genetic Engineering Center of Unicamp.

“At the university one works with the academic vision of research, which has as its focal point the formation of human resources. Here the focus is on investigation, and the researchers dedicate themselves all of the time to this”, he said. “In the academic world all problems encountered are relevant. In the company it’s different, and required much more of a focus”, adds Jesus Ferro, who also dedicates part of his time to the Agrarian Sciences and Veterinary School of Unesp, in Jaboticabal.

It is not by chance that Alellyx is installed in a building with an area of 2,300 m2, close to the Unicamp campus, in Campinas. In this case technology is the main responsible reason for making the transition between science and the market place.

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