Bonnie may be cute, but biotech firms aim to breed genetically engineered flocks that yield medicines

By PATRICK REYNOLDS /LONDON

he gamboled onto the world stage a year ago and shook our sense of identity. Last week, Dolly the celebrity sheep returned and this time shared the limelight; Dolly has a little lamb--Bonnie. The proud mum and cute daughter may charm a public uncertain about the cloning of animals, but business was unfazed by the new arrival. Neither did the commercial cloners hold their breath for the first practical product derived from Dolly, unveiled in March--a sweater knitted from her wool. It was hardly what is expected from the awesome science that opened the door to human cloning, and has scientists fighting bans on their research. For business, the real money is in health-care drugs.

But questions are now buzzing about Dolly's genetic credentials. Is she genuinely the first clone created from an adult--not fetal--cell? The new biotech ventures say the debate is a side-issue. The biggest profit in medicine will come from cloning fetal cells, not adult ones. But any doubts about the science or ethics of cloning need to be resolved before business can market its planned products--pharmaceuticals and, later, organ transplants from pigs.

New health-care products will be created from a combination of genetic engineering and cloning science. First, scientists alter the DNA of animal cells and embryos by adding human codes, then they duplicate the newly-created DNA to breed genetically-identical flocks. Altered genes should mean that "engineered" animals produce milk containing specific proteins for medicines, or have particular organs that will not be rejected after transplants.

But one transgenic animal is not a commercial revolution--you need a herd. That fact is forcing business to abandon the lucky draw approach of micro-injection and embrace nuclear transfer as the tool of choice for cloning. With this technique, cells grown in the lab subdivide and offer researchers many identical nuclei to extract and transfer into unfertilized eggs whose nuclei have been removed. The new cells are cultured further and the best embryos implanted in surrogate mothers.

Increasing numbers of sheep, cows and rabbits are being born as either transgenic or cloned animals, but as yet only a few, such as Dolly's playmate, Polly, are both. With DNA engineered by Dolly's co-creators--the Roslin Institute and PPL Therapeutics--Polly's milk produces human Factor IX, a blood clotting protein to help treat hemophilia B. A cloned herd is being bred to supply the world market, estimated at $160 million, which is currently served using human plasma. Many companies have plans to breed transgenic herds for other therapeutic proteins, such as the $1.5 billion market for human serum albumin, used to treat burns. "Proteins that can be provided transgenically could have a significant impact in the market," said broker Panmure Gordon's biotech analyst, Dr. Stephen Ewing, who estimates the market for recombinant proteins at $8 billion.

Dr. Harry Griffin, assistant director of the Roslin Institute, believes that purifying transgenic milk into medicine will be faster and cheaper if there is not such a strong mix of human and animal proteins. Rather than add human genes, he said: "The next step is gene targeting--the ability to knock out and substitute genes. It is the ultimate goal of more sophisticated genetic modifications." To that end, Roslin Bio-Med was launched last month with $10 million from venture capitalist 3i Group to, among other things, develop transgenic pig organs for transplant within three years. Roslin and 3i each hold 42% of the shares and employees the rest. But quantity as well as quality is a commercial issue; business wants more milk, which is leading companies like PPL and others to shift from sheep to cloned cows.

Transgenic work may be difficult but cloning--especially nuclear transfer--faces bigger hurdles, many stemming from public concern over its potential uses. In February, for example, the Dutch company Pharming unveiled a double-freezing method of nuclear transfer that needs fewer embryos, but the Dutch government banned the technique. Pharming's corporate affairs officer, Edwin van de Haar, said: "There was no indication it would happen." Pharming plans to appeal, but may continue its research in the U.S., working with strategic partners Infigen and parent ABS Global. However, this setback could affect its plans to go public in a few months to fund clinical trials.

Dolly's cloning has cast another spotlight on nuclear transfer. Scientists, such as Rockefeller University's Professor Norton D. Zinder, claim that fetal cells could have been present in the adult cellular soup used to supply her DNA. Roslin's Griffin said the idea is a "long shot" but admitted the possibility "probably didn't occur to anyone in the experiment." Independent checks will start soon. But while question marks hang over cloning science and political resistance increases--fed by fears of human cloning and possible new viruses produced from inter-species tampering--the commercial cloners still face an uphill battle to win funds for research and clinical trials. Wee Bonnie may beguile the public and Dolly's sweater may look attractive, but until the real products are brought to market the cloning ventures can only trade in perception.