ATP FOCUSED PROGRAM:

                           Tools for DNA Diagnostics

                       FY 1994 NIST Funding: $25 million
                  Total FY 1994-98 NIST-Funding: $145 million

Potential for U.S. Economic Benefit

     Deoxyribonucleic acid (DNA) attained celebrity status among
     molecules in the 1950s when scientists first uncovered its now
     famous double helix structure. In the following decades, scientists
     began to show how the molecular basis of life flows from DNA. Since
     1990, the National Institutes of Health and the Department of
     Energy have been funding a major effort -- called the Human Genome
     Project (HGP) -- to map out the thousands of individual genes
     strung along the 46 chromosomes in human cells and to sequence each
     gene. Each gene is made of four kinds of building blocks, called
     nucleotides, that link into linear sequences hundreds or thousands
     of nucleotides long. In the end, researchers hope to have mapped
     out the entire human genome, which is about 3 billion nucleotides
     long.

     Scientists and physicians expect that the HGP will prove to be a
     fountain of insights to now poorly understood biological phenomena
     and diseases and to new treatments for genetically based ailments.
     Industry -- the biotechnology sector and users of biotechnology's
     wares -- expects that it will become both the impetus and basis of
     new multibillion dollar markets stemming from DNA-based diagnostic
     tests. According to industry projections for 1997, the DNA-based
     portion of the in-vitro (outside of the body) diagnostics industry
     is expected to reach into the vicinity of $500 million of a total
     estimated market of well over $18 billion, up from a $58 million
     portion of an estimated $5 billion market in 1992.

     By 2005, DNA probes are expected to account for $6 billion, or 15
     percent, of a $40 billion in-vitro diagnostics market. At the
     moment, the United States enjoys a lead position in this ever more
     global industry.

     That's where the ATP's focus on Tools for DNA Diagnostics comes in.
     According to representatives in the pharmaceutical, biotechnology,
     and analytical instrumentation industries, reaping the full
     potential of the HGP will require the development of new methods,
     instruments, and data-handling protocols. More specifically, DNA
     analyses and sequence interpretation will have to speed up by a
     factor of 10 and costs will have to fall to one-tenth to
     one-hundredth of the present price tag, which is in the range of
     $100 or more per test. Meeting these goals will help U.S. companies
     maintain their advantageous position in the coming years of the
     biotechnology revolution. The industries and technical arenas that
     stand to benefit from the program include healthcare, forensics,
     biomedical research, environmental monitoring and bioremediation,
     toxicology, drug design, animal husbandry, agriculture, and quality
     control in the food industry.

Technology Challenge

     The initial goal of the Tools for DNA Diagnostics program is to
     develop cost-effective methods for sequencing, interpreting, and
     storing DNA sequences for diagnostic applications ranging from
     healthcare to agriculture to environmental monitoring. Moreover,
     these methods need to be highly automated, miniaturized whenever
     possible, easy to use, and inexpensive as well as able to determine
     and analyze DNA sequences accurately and rapidly. A working system
     meeting these criteria might begin with the injection of a sample
     into a cassette, which then would be positioned automatically into
     an instrument that performs the sequencing and stores the results.
     These results then could be displayed immediately on a computer
     screen and transferred to a patient's records. By the end of the
     five-year program, industry should have the technical tools and
     know-how in hand with which they can design, engineer, and produce
     commercial products like this one.

Industry Commitment

     About 20 companies, which range in size from large established
     pharmaceutical firms to small start-up companies as well as
     non-profit research organizations, submitted the  white papers
     from which DNA diagnostics emerged as an area that the
     biotechnology industry perceives to be badly in need of
     development. These papers made it clear that the program will
     require expertise in biological sample preparation, molecular
     biology, microfabrication, surface chemistry, instrumentation
     development and engineering, molecular detection technologies,
     information and data handling, and other areas. No single company
     can claim that it has all of those strengths, but a collection of
     companies, working toward common goals, can.

Significance of ATP Funds

     A glimpse of what this focused program in Tools for DNA Diagnostics
     might mean comes from a current ATP project. The project involves
     the Genosensor Consortium, a group of companies that combines
     expertise in instrumentation, micro-electronics, chemical synthesis
     of DNA, and diagnostic test development. Without ATP funding, the
     risk would have been too high for the smaller consortium members to
     even consider pursuing the goals of the project. Larger members,
     whose stockholders may not be patient enough to wait for long-term
     payoff, also would likely have put the project on hold.

     The ATP program on DNA diagnostics can leverage existing government
     investments in DNA research to achieve the aim of low-cost DNA
     diagnostic technologies on a much larger scale. It can help U.S.
     industry to maintain its global leadership in the biotechnology
     industry. The HGP goes part of the way by supporting the research
     that produces the maps and sequences. But it does not support
     technology development for diagnostics, which ultimately must be
     more user friendly and automated than state-of-the-art instruments
     for basic research in the laboratory setting.

     At the moment, companies that are well positioned to develop DNA
     diagnostic tools are often hesitant to push forward without
     additional government support because any of a number of competing
     analytical methodologies could turn out to be the most suitable for
     DNA diagnostics. Betting on one technology, which is all that most
     companies could hope to do, is too much of a gamble. The ATP Tools
     for DNA Diagnostics program both reduces and dilutes that risk. The
     payoff could be the technology base for a new multibillion dollar
     industrial base in the United States that will keep the country on
     top in biotechnology and widen its scope of industrial
     applications.

April 1994