Union Tribune

May 1, 2002

S.D. biotech firms compete for anti-terror contracts


ARLINGTON, Va. Before Sept. 11 and before any anthrax
attacks, executives at Xenerex Biosciences hadn't given much
thought to how their antibody technology could be used to
combat bioterrorism.

But now the San Diego biotechnology firm is trying to get
officials at the Pentagon and federal health agencies interested in
the technology as a way to protect soldiers and civilians from a
host of deadly toxins that could be used by terrorists.

Xenerex, a subsidiary of Avanir Pharmaceuticals, was just one of
dozens of biotech companies that descended on a suburban
Washington hotel yesterday to pitch their high-tech wares to
federal officials in the market for everything from anthrax
detectors to self-repairing body armor.

Several other San Diego companies also vied for attention,
including Alexion Antibody Technologies, which, like Xenerex,
boasts a technology for isolating antibodies for anthrax and
other pathogens; Nanogen Inc., which touted a system for
detecting biological agents; and Structural Bioinformatics Inc.,
which gave a presentation on anti-viral and anti-bacterial drug
development and research.

Listening to the presentations and offering advice on navigating
the Byzantine world of government procurement were officials
from an alphabet soup of federal agencies that are poised to
spend billions of dollars on defense and homeland security in
coming months.

Organized by the Biotechnology Industry Organization, a trade
group, the "procurement conference and expo" is an example of
the complex courtship that has developed between business and
government in the wake of the terrorist attacks.

"It's important for companies like us to make these presentations
to the government. They're going to be our prime purchaser or
even developer of this kind of product," said David Hansen,
president and chief operating officer of Xenerex. "This only
works if they decide that it becomes a part of the biodefense

On the other side of the table, officials from the Pentagon, the
National Institutes of Health and other federal agencies
explained some of their unique needs for "multi-agent" vaccines,
rapid detection systems for biochemical attacks and the latest
treatment technologies.

"We know there are better answers out there. We are looking to
the biotechnology sector to provide us some of those answers,"
said Col. Steve Reeves of the Army's biological chemical

While biotech companies may be familiar with civilian agencies
such as the NIH, the sheer size of the government's post-Sept. 11 procurement drive and the involvement of numerous Pentagon branches present a bureaucratic challenge even for companies that have landed previous government grants and contracts.

"We really have been struggling for the past year with who
should we be talking to and what are some of the things the
government is looking for," said James Prutow, senior director
for business development at Nanogen.

Government officials acknowledged that the procurement
process can be daunting.

"The department needs to better develop its relationship with
the biotech industry," said Col. Jerry Warner, director of the
Defense Department's Office of Net Assessment.

He called the conference "a small step in that direction."

Thirty-five companies made presentations on vaccines and
antibodies, plant-derived medicines, detection systems, drug
delivery methods, decontamination strategies and disease
treatment. More than 30 others packed a small exhibit area to
show off equipment, such as new injection devices.

Several of the government officials stressed that they were in the market for fully developed products that could be deployed in a short time frame.

"Our job is to sort out what's real from the anti-gravity boots . . .
We are vitally interested in what you have in available
technology," Reeves told the biotech executives.

But others encouraged the companies to think big.

"We are all about ideas," said Michael Goldblatt, a top official at
the Defense Advanced Research Projects Agency, whose mission
is to encourage cutting-edge research and development.
"DARPA is about high-risk, high-reward opportunities."