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U.S. investor rethinking genome project

  • 2004-01-29
  • By Justin Petrone
TALLINN - The Estonian Genome Project suffered a serious setback last week, when EGeen International, the project's U.S.-based backers, decided to delay the next round of funding for the project until it can come to an agreement with the government on what the project's priorities should be.

The original premise was to compile a complete genetic database of the Estonian population in order to develop new, holistic treatments for hereditary diseases and conditions, but this has come into question by U.S. investors, who wish to see the project switch its focus to researching particular diseases.
"EGeen has proposed to initially focus on acquiring a deeper understanding of the status of diabetes, heart diseases and rheumatoid arthritis through the database," said Kalev Kask, chief executive officer of EGeen International.
Kask stressed that the database would still be completed, but that the research into diseases would become paramount.
"We at EGeen view this as a sensible thing in the world of economic realities," he said.
In reaction to the announcement, the Estonian government reacted on Jan. 22 by allocating 4 million kroons (256,000 euros) to the project. Prior to this funding, the government had only provided the project with 1.4 million kroons - or 3 percent of total investments.
Of the 60 million kroons invested in the project over the past three years, 55 million has come from private investments and donations, mostly handled through Kask's Redwood City, a California-based company. Thanks to this finance EGeen alone reserves the rights to use or rent out the database commercially for 25 years.
However, the right to change the mission statement of the project has not been stipulated in any contract.
In light of new developments, the Estonian Genome Project was forced to reiterate its commitment to cataloguing the genes of the Estonian population.
"The idea of the Estonian Genome Project has been - and still is - to create a database that would include the health and gene data of the Estonian population," said Aire Koik, head of information at the project.
"Today investors and EGeen are more interested in collecting the data by disease groups. But this is not exactly in accordance with the idea and goals of the gene bank, as declared in the Human Genes Research Act, which was passed by the Estonian Parliament in December 2000," Koik said. While she said that the project has extensively catalogued two particular disease groups - diabetics and people suffering from hypertension - the Estonian Genome Project would rather stick to its mission statement.
Negotiations with EGeen, according to Koik, are still underway, but if EGeen sticks to its demands, new contracts will be negotiated, and EGeen Inter-national will most likely lose some of its rights to the database.
Furthermore, the Estonian Genome project is looking for other financial backers, most notably the Estonian government, as well as Wellcome Trust, an independent U.K.-based nonprofit charity whose assistance looks "promising," according to Koik.
If "the role of the public and state funding for carrying out the Estonian Genome Project increases, the contracts with EGeen will be reviewed and altered, especially the clauses regarding the exclusive rights to use the data," said Koik.
Minister of Social Affairs Marko Pomerants told the Postimees daily that the impasse had likely resulted from a "bad business plan" on behalf of EGeen's American investors. Like Koik, he predicted that the company could lose its exclusive rights to the database as a result.
A special working team headed by the Ministry of Social Affairs has been set up with representatives from four ministries to decide to what extent the government should invest in the Estonian Genome Project, according to Koik. A proposal should be submitted to Pomerants by mid-February.
So far the Estonian Genome Project has catalogued the genes of 10,000 donors. Koik said the project would begin data collection again in February and hoped to have 100,000 samples collected by 2007.