Report on Business Magazine, September 2000 vol 17 no 3 p117-18,120

Human resource: Newfoundland’s 300-year-old genetic legacy has triggered a gold rush.

Sarah Staples.

The way many Newfoundlanders see it, outsiders have plundered their province’s natural resources for far too long. Fish, timber, hydro power, oil, minerals–the list keeps getting longer, spurring local efforts to secure a tighter control over, and a fairer share of, future resource bonanzas.

But what could be the most lucrative and problematic item on the list is just beginning to attract the attention of political and business decision-makers. This despite the fact that the “new” resource is one of Newfoundland’s oldest and most characteristic: its unique genetic legacy.

Why is that legacy so valuable? Because so little has changed on the island since the first permanent settlers arrived from Britain and Ireland more than 300 years ago. Large families within close-knit, isolated coves created enduring pockets of virtually undiluted gene pools. Since many of those early immigrants came from isolated hamlets to start, the so-called founder effect is remarkably strong.

That combination is a boon to researchers hoping to uncover the genetic underpinnings of disease. “Newfoundland is a gold mine for the study of human genetics,” says Dr. William Davidson, a molecular evolution specialist and former acting dean of science at Memorial University in St. John’s, now dean of science at Simon Fraser University in Burnaby, B.C.

Universities certainly aren’t the only interested parties. Since the early 1980s, pharmaceutical manufacturers and biotechnology companies have invested heavily in genetic research. Now, the largest of them are closing in on big profits.

The Street is also keen–although that excitement has its ups and downs. Maryland-based giant Celera Genomics Inc. has seen its stock soar from near $10 (U.S.) per share late last year to $276 in March, dive back down to $50 in May, then rebound to $100 in June. Investors’ enthusiasm was rekindled by news that Celera and the Human Genome Project–a publicly funded effort involving 1,100 researchers from six countries–had completed the first full draft sequence of the human genome, a molecular-level blue-print of the human body.

Meanwhile, deCODE Genetics Inc., a company that is studying the highly homogeneous population of Iceland–some 270,000 descendants of ninth-century Norse and Celtic settlers–raised $172.8 million (U.S.) in July with an initial public offering on the Nasdaq Stock Market. Shares of the four-year-old firm shot up by 41% from their issue price of $18 on the first day of trading.

Back in Newfoundland, all the hype surrounding genomics research is raising concern that multi-national corporations, not local patients, will reap most of the benefits. Already, there have been clear warning signs with deCODE and its experience in Iceland.

In 1998, the Althingi, Iceland’s parliament, agreed to grant deCODE an exclusive 12-year licence to compile and enter islanders’ genetic data into a proposed $150-million (U.S.) central database. But just a few months earlier, the company had already concluded an agreement to share its research with Swiss-based pharmaceutical heavyweight E Hoffmann-La Roche for $200 million (U.S.).

None of this sits well with the Icelandic protest group, Mannvvernd. In February, it announced that it would launch a legal challenge to deCODE’s licence, charging that it gives the company a de facto commercial monopoly over Iceland’s genetic heritage. Other critics complain that the IPO will effectively make that heritage a publicly tradable commodity.

A more glaring red flag was raised in Newfoundland itself in 1998 by scientists from Texas’s Baylor College of Medicine. The group flew into St. John’s to study an extended family who suffer from ARVC, a form of congenital heart disease that renders victims prone to cardiac arrest from an early age. After a weekend of collecting DNA samples, the group left, and the customary quid pro quo–follow-up treatment and genetic counselling–was ignored. Local physicians and researchers weren’t given access to the data. Participants received only a brief written thank-you, with no indication of whether they were at risk.

Baylor eventually issued a qualified apology. But, says Davidson, “There’s been a complete loss of control over the genetic legacy that is the heritage of this family.” Newfoundlanders dubbed it “biopiracy.”

To understand exactly what makes Newfoundland, Iceland and other historically isolated areas such coveted testing grounds, it helps to review some basic genetics.

Human tissues are made of cells, in which are genes, short sequences of molecules strung together in the oft-diagrammed spiral formations called DNA. Genes dictate instructions to the cells, telling them when and how to create the proteins that will either sustain cellular life or trigger the chain of events leading to the cells’ death.

Genes are also copied into future generations of life, but the process isn’t always exact. Sometimes entire sections of DNA change or disappear, creating mutations that send their cellular hosts faulty commands. The consequence is often disease–cancer, for example, is thought to result when cells fail to receive the order to die; instead, they divide and multiply indiscriminately, becoming tumorous masses.

Newfoundland has a high incidence of several congenital illnesses, including rare forms of cancer and heart disease, plus hearing loss, psoriasis and Bardet Biedl Syndrome, which leads to obesity and blindness. To devise treatments for those and other diseases, you need to know what genes the body contains and in what sequence they’re arranged. In recent years, scientists had identified many genetic elements, but were far from nailing down the entire sequence of as many as 100,000 genes–three billion bits of DNA.

Computer models perfected by Celera Genomics and the Human Genome Project sped up the daunting task. Now, the finished draft resembles a genetic Rosetta stone: The words and letters are there and in the proper order, but geneticists don’t know what they mean. The hope is that once the meaning is uncovered, scientists can learn how genes morph into their nefarious alter egos, identify the genetic links to diseases and develop new drugs and treatments.

Unfortunately, the superfast computers are of limited use in determining what genes do. Sequencing merely deduces function by comparing unknown genes to similar ones whose function is known; the computer cannot easily tell the difference between healthy genes and their mutated counterparts, nor can it firmly establish the relationship between the gene and the malady it is suspected to have caused.

Far more accurate is a process called gene mapping. As a flawed gene filters along the branches of a family tree, it marks the passage of disease from one generation to the next. By comparing genealogical records with DNA extracted from an extended family, researchers can pinpoint the ancestral founder of a mutation, find that gene’s unadulterated equivalent and, eventually, spell out–or map–the association with a specific illness.

Under normal circumstances, this sleuthing is virtually impossible. Immigration has scattered families across continents, and marriage has made alphabet soup of our DNA, so it is hugely difficult to reconstruct the lineage of disease.

Newfoundland, Iceland and other isolated locales offer a chance to search for needles in smaller haystacks. Iceland’s population is essentially one big gene pool. Newfoundland’s population–550,000–is twice the size of Iceland’s, but it is distributed into a series of mini-haystacks.

In the case of Bardet Biedl Syndrome, Davidson and Memorial geneticist Dr. Jane Green used the island’s superb genealogical and medical records to help locate several BBS genes. The disease affects 1 in every 17,000 Newfoundlanders–nearly 10 times the general population’s average of 1 in 160,000. “Six Newfoundland family groups yielded more information than the 91 BBS families that have been studied throughout the rest of North America,” says Davidson. “That’s the power of the island’s common ancestry.”

The approach has also worked in Iceland, where researchers have mapped the approximate locations of genes involved in several conditions, including stroke and osteoarthritis. In Utah, a company called Myriad Genetics is studying the state’s Mormons, with their polygamous tradition and impeccable genealogies. Myriad’s greatest coup was the discovery of BRCA1 and BRCA2 in 1994 and 1995, two genes that collectively account for nearly 80% of the small portion of breast cancers that are inherited. The company has since concluded industry alliances worth more than $445 million (U.S.). Last January, Myriad signed an agreement with Toronto-based MDS Laboratories Inc. that will see its BRACAnalysis diagnostic kits distributed throughout Canada, starting as early as the end of this year.

But University of Montreal law professor Bartha Maria Knoppers, an adviser to the World Health Organization on bioethics and human genetics, cautions that such achievements must be weighed against any potential ethical ramifications.

The most serious charge levelled against Iceland’s deCODE is that its sample collection practices have inverted the legal tradition of informed consent: Unless individuals give formal refusal, the company has free access to health records. DeCODE has argued that the data are entered in an encrypted, and therefore anonymous, format and that citizens may opt out at any time. But the reverse onus has allowed the medical histories of generations of deceased Icelanders to be added to the database–people who aren’t likely to opt out any time soon. The legal reversal was also assailed in the June 15 issue of The New England Journal of Medicine.

Flawed though Iceland’s legislated protections may be, the potential for abuse is arguably far greater in Newfoundland, where the government has only recently begun to devise a framework for the use of patient data in medical research.

According to a study commissioned last year by then-Newfoundland Health Minister Joan Marie Aylward, several problems stem from the fact that Canada’s biotechnology industry is essentially self-policed. Under the current regime, ethics committees at hospitals and universities look at individual research proposals and scientists themselves follow administrative codes of ethical conduct, such as the new Tri-Council Policy Statements, a national ethics guideline that Knoppers helped write.

But the author of the Newfoundland study, Dr. Verna Skanes, the former assistant dean of research and graduate studies at Memorial University’s Faculty of Medicine, notes that the various guidelines only govern projects that receive public funding or are carried out under the auspices of publicly funded institutions. In the Baylor case, researchers approached Newfoundland family doctors directly to obtain the names of study candidates.

Skanes argues that a more open system of accountability is needed immediately. She proposes that the province convene a human health research board to review all medical research proposals. It would include academics, health care workers’ associations, regional health care boards, and the Newfoundland and Labrador Medical Licensing Board, the physicians’ stakeholder group. Her report was formally presented to the Newfoundland legislature in May, and it is currently working its way up the bureaucratic ladder. It could be implemented as early as this fall.

Other provinces are also struggling with the intensifying foreign interest. Quebec’s Lac-Saint-Jean region is home to a founder population known as the Quebecois de souche, who are direct descendants of original inhabitants of New France, who began to arrive in the late 17th century. In August, 1999, Utah’s Myriad Genetics bought a 15% stake in Galileo Genomics Inc., a Montreal company that conducts research in Lac-Saint-Jean.

Myriad’s equity investment totalled $750,000. It also signed a $750,000 contract for Galileo’s services, and options on two other contracts worth $750,000 apiece. But the bigger news is that Myriad can now count on Galileo’s solid relationships with Quebec hospitals and family doctors to assure it access to Canadian DNA.

A kinder, gentler form of biopiracy? Not according to Joseph Walewicz, an analyst who covered genetics companies for Lehman Brothers in New York City, and is now with Dlouhy Investments Inc. in Montreal. International collaborations are the bread and butter of any company, he argues. As long as patient records remain anonymous, why should transactions involving genetic information be perceived any differently? Besides, given their comparatively small capitalization and early stage of development, most Canadian human genomics companies find it difficult to attract the investment they need to survive from domestic sources alone.

“If you’ve got great scientists who don’t have the resources, give them what they need and help them co-ordinate their efforts better–before they move to California,” Walewicz says.

John Hooper, president and CEO of Galileo, agrees. “You might see some resistance from hospitals at Americans coming in [without a Canadian alliance],” he says. But if Galileo’s founding scientists had not accepted the deal with Myriad, they might well have ended up working there–most turned down lucrative U.S. job offers before starting their own firm in May, 1999.

Memorial University’s Davidson, Scots-born but a self-described “Newfoundlander-by-choice,” sums up the need for outside investment with characteristic passion and pragmatism. Newfoundland may not have benefited fully from past resource developments, he says, but “the reality is we couldn’t get the backers ourselves. And if no one puts up the money, the resource stays in the ground.”

That isn’t a likely option these days–not with people’s lives and billions of pharmaceutical dollars at stake. So Davidson believes that Newfoundland’s unique genetic legacy, on the verge of becoming recognized as the province’s most important resource, must also be treated as its foremost responsibility. “If we don’t take control of the way this legacy is managed,” he says, “you can bet someone else will.”