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BIOSECURITY AND BIOTERRORISM: BIODEFENSE STRATEGY, PRACTICE, AND SCIENCE Volume 3, Number 4, 2005© Mary Ann Liebert, Inc.

Eight Strategies to Engage Industry in Biosecurity

JAMES GILMORE and JANET LYNCH LAMBERT

A significant portion of the domestic bioresearch base—and the one most likely to provide transla-tional research—is not engaged in biodefense. Despite the fact that more than one-third of all life sci-ence researchers are employed in commercial bioresearch, fewer than 3% of the 1,500 U.S. biotech-nology companies are involved in biosecurity initiatives. The biotech industry has largely not aligneditself to play an integral role in biosecurity, but there are a few policy changes that could dramati-cally alter this balance. These include engaging and motivating the biotechnology middle class, seed-ing secondary markets, focusing on system solutions, providing reagents and standards, aligningcommunications, and prioritizing translational research. By reaching out, policymakers can span thecurrent chasm between the bioindustry and government, build a stable biodefense industrial base,establish solid working relationships, and secure better services and products. The rewards would besignificant for government and industry alike.

RECENT EVENTS have greatly increased our awarenessof current and future biowarfare threats. The 2002

anthrax attacks and the 2003 Senate ricin incident in theUnited States demonstrated that attacks involving evensmall amounts of biological agents cause significant hu-man and economic harm. Developing an effective systemof surveillance, detection, and countermeasures for bio-logical warfare requires the active, ongoing involvementof the biotechnology industry, yet the industry is largelyunengaged in the problem. This is unfortunate, becausebiotechs tend to be more flexible than pharmaceutical gi-ants; they are willing to take risks, and, most important,they are able to both develop and deploy novel platformsand technologies. As just one example, biotechnologycompanies have developed two of the most revolutionarytools in biology: the Polymerase Chain Reaction at Chi-ron, and the Gene Chip by Affymetrix.

The engagement of biotechs also can stimulate fasterresults. Consider the entry of Celera into the process ofsequencing the human genome. In 1990, the NationalInstitutes of Health (NIH) and the Department of En-ergy (DoE) kicked off a 15-year program to sequence

the human genome at a cost of approximately $3 bil-lion. But in 1998, Celera announced that they would se-quence the human genome within 3 years at no cost tothe government. The entry of Celera precipitated a race,as academics feared that one company could lock upsignificant intellectual property. Strong and dynamicpersonalities propelled their respective groups forwardto an interesting climax, in which the two groups simul-taneously published their results in 2001—4 yearsahead of schedule for Francis Collins’s Human GenomeProject.1 The real winners of a biotech entry were two:the research community, which gained unprecedentedclarity on the makeup of the human genome, and pa-tients, who may receive newly developed genomics-based drugs and diagnostics 4 years sooner than antici-pated.

The biotechnology industry includes drug and diagnos-tic developers, service providers, and technology/toolproviders. The U.S. biotechnology industry currently em-ploys nearly 200,000 people,2 spends $18 billion annu-ally on R&D, and has annual revenues of $39 billion andmarket capitalization of $311 billion. The pharmaceutical

James Gilmore is Director, Business Segments, and Janet Lynch Lambert is Director, Government Relations, both at InvitrogenCorporation, Carlsbad, California.

industry spends nearly $40 billion on R&D globally andemploys more than 75,000 researchers, 30,555 of whomare engaged in preclinical research.3,4

The overall number of researchers entering the life sci-ence industry continues to grow, with 34.6% of doctorateholders in the life sciences now in commercial firms(Table 1). Yet according to Burrill & Company,5 fewerthan 3% of the 1,500 U.S. biotechnology companies areengaged in biodefense contracts. Perhaps in correlation,overall U.S. government research awards to industryhave actually declined between 2000 and 2003, whilethere has been considerable growth in government andacademic research (Table 2). Of the top 100 recipients of$2.2 billion in NIH National Institute of Allergy and In-fectious Disease (NIAID) grants and awards, industry re-ceived only $283 million—approximately 12.7% anddisproportionate to the distribution of researchers.

In short, very little of the intellectual and commercialhorsepower of the industry is being devoted to our coun-try’s key bioterrorism challenges. BioShield I legislationis a good step in the right direction for vaccines, but itstill suffers from some important weaknesses,6 and itdoes not adequately address biodetection and surveil-lance.

Similarly, the Safety Act has what is perceived to be ahigh barrier to entry to receive the protections it offers,and few companies have stepped through the thresholdsof designation. There is also concern that Safety Act pro-tections are available only once a terrorist act has beendeclared (the anthrax incidents have never been declareda terrorist attack). Drafts of BioShield II address somebut not all of the problems that limit the biotech indus-try’s involvement in solving biodefense problems.

While some progress has been made in improving ourbiosecurity—from development and testing of next gen-eration anthrax vaccines to deployment of the USPS Bio-hazard Detection System—there are still many ways tofurther involve the biotech industry in the search forbiodefense solutions. Biotechnology trade organizations

and larger companies can and need to expand their lead-ership role; however, this article focuses primarily on thelevers government wields: How can policymakers en-hance the engagement of the biotechnology communityin homeland security? We offer eight strategies that to-gether could make a big difference in accelerating bothbiodefense and deterrence technologies.

ENGAGE THE BIOTECH “MIDDLE CLASS”

Government agencies directing biodefense today areworking mainly with small biotechnology companies(few employees, small market capitalization, relativelylittle if any commercialization experience) or with LeadSystem Integrators ((LSIs), which are frequently verylarge companies accustomed to obtaining substantialgovernment contracts but with little experience inbiotechnology (and few scientists trained in molecularand cellular biology, virology, and bacteriology). Largelymissing in current industry engagement are the biotechcompanies engaged in tool development, bioinformatics,and therapeutic research. This is the “sweet spot” of in-dustry: stable companies with proven track records inproduct development, firm understanding of intellectualproperty, and the ability to deliver rapid and focused re-search results.

This biotech “middle class” for the most part lacks anytradition of contracting with national and homeland secu-rity agencies. Their lack of familiarity with contractingrules is combined with a perception that compliance withthe rules is both complex and expensive. Government de-cision makers can take four steps to help overcome thisperception:

1. Rationalize the biodefense program (or create a bet-ter guide to the current program). There are currentlylarge funding opportunities in the Department of Health

TABLE 1. DISTRIBUTION OF DOCTORATE

HOLDERS IN LIFE SCIENCES

1995 2001

Government 11.50% 10.20%Academic 56.80% 55.20%Industry 31.70% 34.60%

Industry holds more than one–third of available doc-torates in the life sciences.

Source: U.S. Census Bureau, Statistical Abstract of theUnited States 2003.

TABLE 2. TOTAL FEDERAL GOVERNMENT R&DEXPENDITURES BY RECIPIENT ($M)

Delta 2000 2001 2002 (00–02)

Government 17,917 21,048 23,788 5871Academic 17,681 19,332 21,066 3385Industry 17,183 16,899 17,085 –98

Decreasing R&D awards to industry despite massiveincreases in federal biodefense spending.

Source: U.S. Census Bureau, Statistical Abstract of theUnited States 2003.

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and Human Services (HHS) for basic biodefense re-search (at NIAID) and for already-developed biodefensevaccines and countermeasures (through Project Bio-Shield). But there are also myriad other smaller efforts inbioterror detection, surveillance, response, agriculturesafety, and the like scattered throughout the federal agen-cies. Unearthing research and grant programs and pursu-ing them is a daunting task for the uninitiated; yet thegovernment needs are precisely where the biotech middleclass has the ability to quickly develop and field solu-tions. Many of these programs also are surprisingly un-derfunded, given the huge investment in basic researchand countermeasures procurement.

2. Communicate high-priority requests for proposals(RFPs) and their specifications, while clarifying the RFPprocess to the biotechnology industry. Increase the ef-forts that have already begun to take biodefense needsand opportunities to the industry’s watering holes—sci-entific conferences, journals, and national, regional, andlocal trade associations.

3. Employ the more flexible contracting rules availablefor working with commercial firms. Congress wiselygranted Other Transactions Authority to several agenciesinvolved in antiterrorism, but recent reports and experi-ence in the field suggest that agencies have been slow toemploy these tools.

4. Attend to the problem of liability. Because the con-sequences of a bioterror attack are so potentially devas-tating, and because the treatment may involve the admin-istration of drugs or vaccines to a largely healthypopulation, the liability risk of companies involved in de-tection or countermeasures is extraordinary. This shouldbe the first order of business in BioShield II. Likewise,Safety Act regulations should be reviewed to enhancetheir effectiveness and timeliness.

MOTIVATE THE BIOTECH MIDDLECLASS AND VENTURE CAPITAL

The biotech market (i.e., the market for tools/technolo-gies or the market for biotech drugs or biotech companiesthemselves) is relatively new—unlike aerospace andother defense industries—having developed only sincethe early 1990s. The industry is still undergoing rapidtransformation as a result of emerging areas (e.g., pro-teomics), completely new fields (e.g., RNAi), and chang-ing system and hardware requirements. Researchers inbiotechnology are used to scanning and analyzing newtools and creating prototypes within an accelerated timeframe. As a result, biotechs are highly risk tolerant andoften use leading-edge technology, but they have limitedfamiliarity with the relatively slow and stable federalgovernment contracting and accounting systems. What

knowledge they do have primarily concerns the FDA, thePatent Office, and, in the case of researchers, NIH R01grants.

The biotechnology industry is young, and it is not yetprofitable (with recent estimates that profitability will oc-cur in 20087). Because of the long development cycle andrelatively high risk involved in biotech product develop-ment, most biotechnology companies are highly depen-dent on external sources of capital. Both the companyand its funders must therefore be convinced that pursuitof a biodefense opportunity makes sense. Governmentcontracts that are cost reimbursement or cost-plus, how-ever, offer a lower return than alternative biotech pur-suits—on average operating margins in defense are one-quarter those of biopharma.5

Therefore, engaging in biodefense for governmentcontracts alone (alternative markets will be consideredlater) is perceived as an opportunity cost and presents anunattractive prospect for most biotechs and biotech in-vestors. Additionally, many biotechs assume that tech-nologies developed under contract or NIH Research ToolGuidelines may be taken by the government, licensed toa competitor, or even made freely available to the public.

Policymakers can undertake a number of efforts to mo-tivate these companies to address biodefense specificneeds:

• Increase the contract margins allowed for biotechnol-ogy biodefense solutions that have no secondary mar-kets.

• Alternatively, change the tax structure to allow compa-nies engaged in these activities to retain higher profit,or create a patent benefit to biodefense solutionproviders.

• Encourage competition among firms to develop biode-fense technologies by structuring “moon-shot” chal-lenges with a high reward and visibility for the first toachieve the challenge.

• Stress the benefits of having a balanced revenue port-folio. An 8–10% return, while low by biotech stan-dards, also carries lower risk, is a solid return that canbe gained immediately, and may encourage invest-ment.

SEED SECONDARY MARKETS

While the overall amount spent on biodefense is sub-stantial, many of our colleagues have questioned thelongevity, profitability, and the genuine availability ofthe market. Market reports and conferences frequentlyrecommend that biotechs should pursue the government-funded biodefense market only where a private marketfor the products and services also exists.

The government can and should develop and supportR&D programs with civilian and biodefense applica-tions. For example, programs in host response can spurthe development of sophisticated new tools for detectingpathogen exposure (vs. pathogen presence), but thosetools also may have important applicability to infectiousdisease detection. A new program in vaccine develop-ment could fund the development of tools and techniquesto shorten the time it takes to develop any biodefensecountermeasure, but it would also be applicable to de-velop protection against naturally developing threats(such as SARS).

It is difficult to see a private market, however, formany current requirements, such as smallpox vaccine (avirus that was declared eliminated) or tularemia detection(averaging only 124 U.S. cases annually between 1990and 20008). In these situations, program directors shouldfocus on developing horizontal markets where biode-fense products and technologies are useful:

• For instance, the government can help seed and de-velop secondary markets such as mold detection andremediation, food and water testing for natural patho-gens and toxins, as well as pathogen testing in emer-gency waiting rooms, daycare or assisted care facili-ties, hospitals, and schools.

• When drafting RFPs, program managers should focuson whether and how the requirements may resolve anongovernment need. Where a secondary need is iden-tified, it should be spelled out explicitly in the pro-posal. If technologies are successfully adapted to sec-ondary markets, government grants and CooperativeResearch and Development Agreements (CRADAs)will become less important as private industry willfund the research. Rates of return allowed should re-flect the existence of secondary markets (lower rates)or lack thereof (higher rates).

• Supplement private venture funds with matching gov-ernment money (analogous to the Defense AdvancedResearch Project Agency [DARPA] or the CIA’s In-Q-Tel) to help seed market technologies.

FOCUS ON SYSTEMS SOLUTIONS

Scientists and engineers often have a curious malady,which when fueled by territorial agencies and departmentantagonism, leads to a disease that affects innovation andultimately public safety: the Not Invented Here syn-drome (NINH). Solutions invented by outside teams areoften viewed as being weaker than those that are inter-nally developed. The result is often a series of highly spe-cialized technologies that are dead-ends for further de-velopment or are difficult to integrate.

At NIH, home to more than $1.5 billion in biodefenseresearch funding, moving beyond the long tradition of in-dividual researcher R01 grants to more integrated re-search teams has been challenging. Biodetectors offer aninteresting example. Researchers have developed a seriesof stove-piped technologies with little integration: eachstovepipe has a series of controls, but there are no con-trols that test the entire system; a variety of reportingmechanisms exist, and some include sample preparation,while others do not. In summary, individual technologiesare being developed to highly specialized states, whichare then bandaged together to form a system. A top-downapproach will sometimes be better: start with the systemin mind, then develop the individual components. Policy-makers and program managers can encourage wide-spread collaborations and build teams to help preventNINH. More important, decision makers can establish apolicy and programmatic framework that aims to developintegrated systems rather than individual technologies.Lead system integrators can play an important role butmay be best focused on project management rather thantechnology development unless they have a broad rangeof biotechnology research, development, and commer-cialization experience.

DISTRIBUTE KEY MATERIALS ANDDEVELOP STANDARDS

While a system can be designed and built without agreat deal of government influence, it is very difficult totest or optimize a biodefense system without access tokey materials. Taking the previous example of detectors,key materials include antibodies and inert pathogens.Currently, these are tightly held by government agenciesand are difficult to gain access to. Alternatives are avail-able—for example, the bacteria Bacillus globigii may besubstituted for the pathogen Bacillus anthracis. But atsome point in the development cycle, real reagents mustreplace simulants in order to determine real-world sys-tem parameters. Government officials should develop astockpile of these materials that have been inactivatedand that registered users in industry can obtain.

In addition, a stockpile would help solve the secondproblem industry faces in testing and optimizing sys-tems: the lack of standards. Without standards, there arefew means for quantitative, much less qualitative, testing.What is needed is a set similar to the standard clinicallaboratory reference material provided by the NationalInstitute of Standards and Technologies (NIST). Alsocommendable are efforts by government agencies suchas the EPA’s Environmental Technology VerificationProgram, which tests various technologies and publishesresults. While they do not compare technologies, they are

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EIGHT STRATEGIES TO ENGAGE INDUSTRY IN BIOSECURITY 361

one of the few agencies that has used, evaluated, andmade public detector performance.9

CROSS-POLLINATE END-USERS WITH RESEARCHERS

The biotechnology industry is comfortable dealingwith its standard customer base—primarily physicians,fellow technologists, and other researchers. By contrast,it has little familiarity with first responders, the military,or special operations, and it does not understand theneeds, concerns, and issues of this special base. The end-users of developing technology need to interact directlywith researchers, particularly during the translational re-search phase. There is also no replacement for putting aface on a problem—and understanding that solving thisproblem correlates directly to the safety of an individual.Cross-pollination also can result in more efficient use ofresearch funds. Grants can seep into well-intentioned butrather marginal arenas of research when the technologistdoes not fully understand the problem that is to besolved. Consider involving biotech stakeholders inbioterror simulation exercises. Holding general seminarson milspecs and ruggedization would also be useful, asthe biotech industry does not generally build equipmentthat is designed to work in harsh conditions.

EDUCATE PROGRAM MANAGERS ONTHE BIOTECHNOLOGY INDUSTRY

Just as government contracting is a foreign concept tomany biotechnology companies, government programmanagers may be equally uncomfortable in dealing withbiotechs. This may be due to hesitancy in dealing withcompanies unfamiliar with contracting rules, the obviouschallenge in working outside their normal customer baseof LSIs, and the need to quickly develop and deploy tech-nology that is not easily understood. In confidential con-versations, many biotech industry executives acknowl-edge that they are not even vaguely familiar with eventhe largest or most outstanding biodefense RFPs. On theother side, we have witnessed program managers whostate they put the RFP on FedBizOpps and cannot under-stand how anyone could miss it.

Ideally, program managers will sell their RFPs to theindustry and educate them on the RFA process. On theface of it, this sounds rather ludicrous: after all, the pro-gram managers view themselves as the customer and theone who is holding the money. Why should they be theones soliciting a seller? The easy answer is that govern-ment agencies will get better solutions for their problems.Industry organizations need to do their part by providing

a forum that facilitates interaction between programmanagers and their private industry counterparts.

FOCUS ON COMMERCIALIZINGTRANSLATIONAL RESEARCH FROM THEREGIONAL CENTERS OF EXCELLENECE

NIAID set up new Regional Centers of Excellence(RCEs) in 2003 to provide a research and developmentinfrastructure for bioterrorism and emerging infectiousdisease. Much is expected from these new RCEs, fromnovel detectors to vaccines to therapeutics. However, theprogram is at risk of drifting into “research as usual,” asill-defined timelines begin to sag, more time is spent onadjacent projects, and researchers gravitate toward arenaswhere they will generate publications rather than prod-ucts or solutions. In addition, commercialization efforts,experience, and success vary widely, both by universityand out-licensing groups. So even if a technology hascommercial potential, it may never be realized.

The RCEs should consider a translational researchgroup, composed of people from both academia and in-dustry, to periodically review and report project status, toassist in product development, and to be in “pull-mode,”where they can actively promote technologies to indus-try. Additionally, intellectual property issues need to beclarified. The RCEs are a broad series of collaborationswhere each university or site may have a piece of a li-censing pie. Commercialization efforts will be hamperedor even stopped if industry has to negotiate with a bevyof conflicting out-licensing groups.

SUMMARY

In summary, a significant portion of the domestic biore-search base—and the one most likely to provide transla-tional research—is simply not engaged in biodefense. De-cision makers should take steps to change this by engagingand motivating the biotechnology middle class, seedingsecondary markets, focusing on system solutions, provid-ing reagents and standards, enhancing communications,and prioritizing translational research. While smaller com-panies are an integral part of the country’s biodefense pro-gram, a solid biodefense industrial base must be created byattracting the talents of the biotech middle class. If success-ful, government agencies will find themselves with bettertools and solutions to assist in their missions.

ACKNOWLEDGMENTS

We would like to thank Andrew Michaels of DFI Cor-porate Services for his market analysis and insight.

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www.ey.com/global/Content.nsf/US/Health_Sciences_-_Library_-_Resurgence%3A_ _ Americas_Biotechnology_Report_2004. Accessed November 17, 2005.

8. Centers for Disease Control and Prevention. EmergencyPreparedness and Response: Tularemia. Atlanta, Ga: CDC;2005. Available at: http://www.bt.cdc.gov/agent/tularemia/.Accessed March 30, 2005.

9. Environmental Protection Agency. Environmental Technol-ogy Verification Program: Rapid Polymerase Chain Reac-tion (PCR) Technologies. Washington, DC: EPA; 2005.Available at: http://www.epa.gov/etv/verifications/vcenter1-32.html. 2005. Accessed March 30, 2005.

Address reprint requests to:James Gilmore

Director, Business SegmentsInvitrogen Corporation

1600 Faraday AveCarlsbad, CA 92008

E-mail: James.Gilmore@invitrogen.com

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