Opportunities and Limitations For Biotechnology Innovation In Brazil [1 ed.] 9781608056965, 9781608057535

Citation preview

Opportunities And Limitations For Biotechnology Innovation in Brazil Authored By

Luiz A.B. de Castro ABCP –Agriculture Biotechnology Consultoria and Projects SHIS QI 28 Conjunto 16, Chacara Dom BoscoLagoSul, Brazilia DF, Brazil Co-Authors

Carlos A.L. Neri Technology and Innovation Agency of the Ministry of Science and Technology in Brazil, Brazil

Carlos Bloch Junior Mass Spectrometry Laboratory at CENARGEN - EMBRAPA Empresa Brazileira de Pesquisa Agropecuária, Centro Nacional de Pesquisa de Recursos Genéticos e Biotecnologia,Parque Estação BiológicaAsa Norte70910-900 - Brazilia, DF – Brazil

Manoel O.de Moraes Filho Universidade Federal do Ceará, Faculdade de Medicina, Unidade de Farmacologia Clínica Departamento de Fisiologia e Farmacologia. Rua Coronel Nunes de Melo, 1127, Rodolfo Teófilo 60430-270 Fortaleza, CE, Brazil

Bentham Science Publishers

Bentham Science Publishers

Bentham Science Publishers

Executive Suite Y - 2 PO Box 7917, Saif Zone Sharjah, U.A.E. [email protected]

P.O. Box 446 Oak Park, IL 60301-0446 USA [email protected]

P.O. Box 294 1400 AG Bussum THE NETHERLANDS [email protected]

Please read this license agreement carefully before using this eBook. Your use of this eBook/chapter constitutes your agreement to the terms and conditions set forth in this License Agreement. This work is protected under copyright by Bentham Science Publishers to grant the user of this eBook/chapter, a non-exclusive, nontransferable license to download and use this eBook/chapter under the following terms and conditions: 1. This eBook/chapter may be downloaded and used by one user on one computer. The user may make one back-up copy of this publication to avoid losing it. The user may not give copies of this publication to others, or make it available for others to copy or download. For a multi-user license contact [email protected] 2. All rights reserved: All content in this publication is copyrighted and Bentham Science Publishers own the copyright. You may not copy, reproduce, modify, remove, delete, augment, add to, publish, transmit, sell, resell, create derivative works from, or in any way exploit any of this publication’s content, in any form by any means, in whole or in part, without the prior written permission from Bentham Science Publishers. 3. The user may print one or more copies/pages of this eBook/chapter for their personal use. The user may not print pages from this eBook/chapter or the entire printed eBook/chapter for general distribution, for promotion, for creating new works, or for resale. Specific permission must be obtained from the publisher for such requirements. Requests must be sent to the permissions department at E-mail: [email protected] 4. The unauthorized use or distribution of copyrighted or other proprietary content is illegal and could subject the purchaser to substantial money damages. The purchaser will be liable for any damage resulting from misuse of this publication or any violation of this License Agreement, including any infringement of copyrights or proprietary rights. Warranty Disclaimer: The publisher does not guarantee that the information in this publication is error-free, or warrants that it will meet the users’ requirements or that the operation of the publication will be uninterrupted or error-free. This publication is provided "as is" without warranty of any kind, either express or implied or statutory, including, without limitation, implied warranties of merchantability and fitness for a particular purpose. The entire risk as to the results and performance of this publication is assumed by the user. In no event will the publisher be liable for any damages, including, without limitation, incidental and consequential damages and damages for lost data or profits arising out of the use or inability to use the publication. The entire liability of the publisher shall be limited to the amount actually paid by the user for the eBook or eBook license agreement. Limitation of Liability: Under no circumstances shall Bentham Science Publishers, its staff, editors and authors, be liable for any special or consequential damages that result from the use of, or the inability to use, the materials in this site. eBook Product Disclaimer: No responsibility is assumed by Bentham Science Publishers, its staff or members of the editorial board for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products instruction, advertisements or ideas contained in the publication purchased or read by the user(s). Any dispute will be governed exclusively by the laws of the U.A.E. and will be settled exclusively by the competent Court at the city of Dubai, U.A.E. You (the user) acknowledge that you have read this Agreement, and agree to be bound by its terms and conditions. Permission for Use of Material and Reproduction Photocopying Information for Users Outside the USA: Bentham Science Publishers grants authorization for individuals to photocopy copyright material for private research use, on the sole basis that requests for such use are referred directly to the requestor's local Reproduction Rights Organization (RRO). The copyright fee is US $25.00 per copy per article exclusive of any charge or fee levied. In order to contact your local RRO, please contact the International Federation of Reproduction Rights Organisations (IFRRO), Rue Joseph II, 9-13 I000 Brussels, Belgium; Tel: +32 2 234 62 60; Fax: +32 2 234 62 69; E-mail: [email protected]; url: www.ifrro.org This authorization does not extend to any other kind of copying by any means, in any form, and for any purpose other than private research use. Photocopying Information for Users in the USA: Authorization to photocopy items for internal or personal use, or the internal or personal use of specific clients, is granted by Bentham Science Publishers for libraries and other users registered with the Copyright Clearance Center (CCC) Transactional Reporting Services, provided that the appropriate fee of US $25.00 per copy per chapter is paid directly to Copyright Clearance Center, 222 Rosewood Drive, Danvers MA 01923, USA. Refer also to www.copyright.com

CONTENTS Biography Preface Foreword Introduction

i iii v vii

CHAPTERS 1.

Biotechnology and its Applications in Brazil

3

2.

Biopharmaceuticals from Brazil

29

3.

Partnerships to Build Biotechnology

67

Concluding Remarks

109

Index

111

i

BIOGRAPHY Luiz Antonio Barreto de Castro, is an Agronomist with a hybrid background. He worked many years in plant breeding before moving to plant physiology and plant molecular biology. He is PhD from UCDavis in Plant Physiology and has a Pos Doc in Plant Molecular Biology from Goldberg`s lab in UCLA. For sixteen years he worked as a professor in Agronomy at the Federal Rural University of Rio de Janeiro. He established Plant Biotechnology in Brazil at CENARGEN in EMBRAPA early in the eighties where he worked for twenty five years as a scientist. His laboratory cloned and expressed the first plant gene in Brazil in 1991. He was the president of the Biosafety Commission in Brazil for three years from 1996 to 1998 and came back to be the Chief General of CENARGEN/ EMBRAPA during the years of 2000 to 2003 to establish the Genomic/Proteomic Program of EMBRAPA now in operation. He became a member of the Brazilian Academy of Science in 2003. He published extensively in the areas of Plant Breeding, Seed and Plant Physiology and Plant Molecular Biology and was responsible for the first Brazilian patents in plant genetic engineering. In addition to his academic back ground he is an expert in the areas of plant patents, plant breeding rights, biodiversity and biosafety having contributed directly for the design and approval of all related laws in Brazil in these subjects He has served the best institutions nationally and internationally as a consultant in these areas. For eight years he served the Ministry of Science and Technology as Science National Secretary. During this period representing the Brazilian Government he successfully negotiated with the World Bank important Multidisciplinary Programs such as The Pilot Program for the Conservation of the Amazonian Rain Forest and The Brazilian Science & Technology Reform Program known in Brazil as PADCT - Science and Technology Development Support Program the largest Science and Technology Multidisciplinary Funding Program ever executed by the Brazilian Federal Government. He was from 1991 to 1999 the Executive Secretary for this Program, worked for the Getulio Vargas Foundation. Back to the Ministry of Science and Technology as a Research and Development Secretary in 2005 he established the Northeastern Biotechnology Network – RENORBIO, Bioamazonia and Centro Oeste, Graduate and R&D Networks. He became the National Secretary for the Ministry of Science and Technology again

ii

in August of 2005 in the area of Policies in Scientific Research and Development position he occupied till January of 2011. He served as the Technical Director of the IBA –Brazilian Cotton Institute until June of 2011 and since July as the Director of R&D and Innovation of União Quimica – Farmaceutica Nacional S/A till August of 2012. He served since 2006 untill 2011 in the Technical Committee of the World Bank for the Uganda Scientific Millenium Program and completed this task in September of 2012. He was honored during the 4th Brazilian Biotechnology Congress and he is now the President of the SBBIOTEC – Brazilian Biotechnology Society.

iii

PREFACE Efforts to develop Biotechnology in Brazil exceed three decades. Almost coincident with the advent of the recombinant DNA technology which became publically known early in the seventies when Herbert Boyer expressed the insulin gene in E. coli. A couple of scientists in Brazil repeated this experience almost at the same time and the interest for the area came to the agenda of a public company called EMBRAPA founded in the seventies to work with agricultural research in Brazil. The author built in EMBRAPA since 1980 a platform to develop plant genetic engineering training young scientists in areas such as plant cell and molecular biology to be able to incorporate this nascent technology to the plant breeding efforts of EMBRAPA. This work took place at CENARGEN –The National Center for Genetic Resources and Biotechnology the most prominent institution working in this area for the last four decades. The public perception in Brazil and many other countries was turned against this new technology for political reasons and when the first engineered soybean resistant to glyphosate was released commercially a campaign against transgenic plants prevented the application of this technology in agriculture for almost a decade in Brazil. The world however adopted recombinant DNA technology in the pharmaceutical area and most products utilized internationally by the public in this industry including Brazil are genetically engineered. Brazil tried to follow the growth of Biology commercially and introduced in consonance to TRIPS legislations to protect intellectually the applications of biology in genetics since the mid nineties. That was necessary but not sufficient. We had to deal with a rampant inflation for decades and had to train a number of scientists for the same time as well as investing institutionally in the area of Biotechnology. This eBook tells this story and is written now because apparently after Brazil became an emerging power financially it seems there are more opportunities now than before. So, this eBook is intended for those who want to know some of the history of Biotechnology in Brazil, since its inception, hopefully to conclude positively about the power of this technology and the opportunities we have in our hands now, that were not in the context of this now called life science innovation area when we started these efforts at CENARGEN in 1980. Brazil may become a relevant actor in this area internationally taking advantage of some circumstances here that are not available

iv

in other countries, particularly our biodiversity. We make explicit indicators to support this thesis but the eBook describes adjustments that must be made to assure the success of our investments particularly to the laws – the regulatory framework, that are at the base of this crescent international market. Finally, I would like to acknowledge the Nature Biotechnology blog, Trade Secrets, which initially published several discussions found in this eBook. The collection of those original blog posts can be found here: http://blogs.nature.com/tradesecrets/ author/lbarreto. CONFLICT OF INTEREST The author(s) confirm that this eBook content has no conflict of interest. ACKNOWLEDGEMENTS Declared none. Luiz A.B. de Castro ABCP –Agriculture Biotechnology Consultoria and Projects SHIS QI 28 Conjunto 16 Chacara Dom BoscoLagoSul Brasilia DF Brazil E-mail: [email protected]

v

FOREWORD For implementing the Millennium Development Goals and Rio + 20 Sustainable Development Goals, our world will need more than better governance and political goodwill. We need a more sustainable and high yielding agriculture, a more sustainable industry based not only on petroleum as raw material, but on agriculture and city waste and specialized "industrial" crops. We also need an affordable pharmaceutical industry, that can react efficiently and rapidly against the different emerging infectious agents. The ongoing population increase, under nourishment and urbanization result in extreme poverty and inequalities, enhancing social unrest and leading occasionally to instability and political uncertainty. All this raises the risk that evolving pathogens represent distinct epidemiological threats. How to cope with these challenges? What is needed for that? Our present world can no longer function without an accelerated contribution of science and technology. In the life science sector, tremendous progress was made in the last 40 years: Successively gene cloning, manual and later automatized high performance sequencing of DNA and RNA, novel mass spectroscopy approaches for sequencing proteins and their modifications, identification of secondary metabolites and precursors of the biological macromolecules have generated a mind boggling amount of data, and through parallel advances in information technology and fast computing have helped to build a solid amount of novel fundamental knowledge. To apply this knowledge and convince the financial and economic world to help develop the appropriate start-ups is the challenge of today’s biotechnology sector. Europe and now also the US have made solid political declarations that the future of our quality of life, including the environment, depends on the development of a performing "Bio-economy". But to be successful one will need a dynamic and innovative interaction between the established Bio-industries, active in the whole value chain of agriculture, forestry, fermentation, the pharmaceutical industry and the emerging pollution remediation industries with the research institutes and universities contributing to the fundamental life Sciences research. At present few

vi

governments have the capacity to stimulate the right interactions. An important exception is Brazil, and in particular for the agriculture and forestry related activities. EMBRAPA, established also nearly 40 years ago, is an example of how creative fundamental research can be well linked with field work in all aspects of agronomy, agriculture and husbandry. The close cooperation between breeders and molecular biologists, soil scientists and plant pathologists makes it a model for scale up and replication around the world. A more international presence of EMBRAPA can stimulate many countries to join the race for developing the necessary life sciences industries. The career of Luiz Antonio Barreto de Castro also spans exactly these 40 years. During his studies and postdoc periods in California, he realized the power of gene cloning. He was able to convince EMBRAPA to join this research and he actively did so by becoming the first director of CENARGEN. Through his vision and initiatives, opportunities were created for new generation researchers who contributed to the development of Brazil’s biotechnology capacity. It is therefore a great pleasure to congratulate him on the initiative to communicate his thoughts on the priorities for further biotechnology actions. Professor Marc van Montagu President European Federation of Biotechnology (EFB) President Public Research Regulation Initiative Institute for Plant Biotechnology Outreach – Flemish Inter University Institute Biotechnology (IPBO/VIB) Gent University Belgium

vii

INTRODUCTION This eBook has three chapters. In chapter 1, the context of Biotechnology in Brazil is analyzed as it concerns with two major areas of application of the technology: Agriculture and the Pharmaceutical industry. The eBook deals mostly with Genetic Engineering a major technology that was developed and applied in Brazil in the last three decades, both by public as well as by private large corporations. The eBook does not deal with genomic derived technologies and products (perhaps few examples) since they were not yet developed in Brazil, although in literature there are plenty of examples about the applications of this area particularly in the United States. In each area opportunities and limitations are described emphasizing mainly the regulatory system in Brazil particularly as they apply to GM crops, and its restrictive aspects as a limitation element in said context but also the opportunities related to each area particularly as Brazil is growing to become a relevant power in the global economy, the sixth economy today. The Chapter 2 deals with opportunities for Innovation related to the area of Biopharmaceuticals where Brazil may have important opportunities due to its biodiversity still far from being developed to products, to add value to these products and return dividends that can be used to assure the sustainability of the biomes where the products are derived from. In the Second Section, some of the aspects analyzed in the first Section may be brought back in an effort to demonstrate particularly how the legal aspects that will circumvent the growth of products as Biopharmaceuticals will be in the agenda of those that decide to invest in the area to promote the growth of the Pharmaceutical industry in Brazil. In Chapter 3, strategies are described to build Biotechnology particularly partnerships as a mechanism to bring the best actors and institutions together. So, this eBook is intended mostly for investors, to present an initial, sometimes crude and real view, of an area that has acquired important space financially in the world and still reserves possibilities to grow in Brazil.

Send Orders of Reprints at [email protected] Opportunities and Limitations for Biotechnology Innovation in Brazil, 2013, 3-28

3

CHAPTER 1 Biotechnology and its Applications in Brazil Abstract: The Biotechnology Industry in Brazil is of the size of some State sectors in the US. The one that is closest to the size of the Biotechnology in Brazil is Georgia. Eighty five% of the Biotechnology companies in Brazil have up to fifty employees and revenues of slightly above 1 million US $ /annually. Eighty% of these companies are located in three states: São Paulo, Minas Gerais and Rio de Janeiro (Br Biotech 2011). The academic Biotechnology sector in Brazil is however relevant. Forty eighty Graduate Courses are recognized by the Agency specialized to deal with Education in Brazil: CAPESCoordenação de Aperfeiçoamento de Pessoal de Nivel Superior (CAPES 2013).

Keywords: Biotechnology, Agriculture, Pharmaceutical Industry, Regulatory System, Biopharmaceuticals, Biological Diversity Convention, Public Perception of GM plants, The Patent system in Brazil, Plant Variety Protection Law, Partnering of biotech, SELIC rate. BIOTECHNOLOGY – THE BACKGROUND Biotechnology started early in the Seventies when Herbert Boyer transferred a gene found in the human genome and coding for insulin to E. coli, a bacteria that expressed the gene producing insulin. In order to succeed with this experiment the area of molecular biology had experienced previous advances that allowed genes to be cloned in so called vectors, at that time mostly circular DNA molecules called plasmids, using restriction enzymes that could tailor these vectors putting side by side promoter sequences and the genes themselves to be expressed in a given organism. The advances of the so called recombinant DNA technology came to a halt when a Conference in San Diego – The Asilomar Conference (Berg et al. 1975) required biosafety rules to make sure that the nascent technology would not cause any hazard to humans particularly considering the possibility of using virus as vectors to express genes in humans: gene therapy. This possibility was extremely distant in the seventies but Asilomar stimulated NIH to propose Biosafety rules that were gradually adopted globally and one can verify today that the recombinant DNA was developed without causing any harm except in very Luiz A.B. de Castro All rights reserved-© 2013 Bentham Science Publishers

4 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

few events related precisely to the issue that preoccupied the scientists in Asilomar more than three decades ago. The term Biotechnology came later and the area demonstrated the potential to affect particularly Health and Agriculture. Advancements in health had been made fast and today most of the pharmaceutical industry is based on genetic engineering and recombinant molecules. Agriculture took longer and started in the mid eighties. The first genetically modified plant was produced by Luis Herrera Estrella in Brussels in 1982 (Estrella et al. 1983) in the laboratory of Marc Montagu. Today, however most plants utilized in the industrial agriculture are genetically modified. Brazil had almost no Biotechnology development early in the 80’s and even today the area faces difficulties to grow, less in agriculture than in the pharmaceutical industry for reasons we will try to demonstrate. It is possible to define opportunities for the area of pharmaceuticals, considering particularly the possibility to internalize the best technologies available in the world, private internal investments that result from the fact that Brazil is today the sixth economic power globally and, very important, if restrictive regulatory laws that apply to the field can be adjusted. In this document, we will not face all the regulatory issues but select a few in particular: the patent law and the access to the Brazilian biodiversity. OPPORTUNITIES AGRICULTURE

OF

BIOTECHNOLOGY

AS

IT

APPLIES

TO

Agrosciences When Herbert Boyer expressed an insulin gene in bacteria mentioned previously, I was a freshman PhD student studying plant physiology at UC-Davis, with a fellowship provided by EMBRAPA, that had been created a couple of years earlier. That achievement alerted us that the world was going to change. Genetic engineering was the most important science discovery, after the genetic code itself. Brazil produces today over 180 million tons of grain in 50 million hectares and yields are moving up. The Country multiplied grain production by four in the last four decades. It can again double that figure without destroying the Amazon or the Cerrado and is building policies to assure that a sustainable agriculture will

Biotechnology and its Applications

Opportunities and Limitations for Biotechnology Innovation in Brazil

5

be the strategy, after adopting a Forest Code. The Code does not satisfy the expectations of most actors involved but it will be an advance to prevent further forest destruction and particularly protect water reservoirs and rivers. Agriculture in Brazil made a significant move forward when in 1965, Brazil established its first law to regulate the commercialization of seeds. The law exercised a very simple concept: what is inside the bag should be in the label EMBRAPA. The Brazilian Enterprise for Agricultural Research mentioned before was created in the mid seventies. Biotechnology started at EMBRAPA early in the 80’s at a research Center called CENARGEN in Brasilia and I was given the task to build Agricultural Biotechnology at EMBRAPA from the very beginning. No plants had been genetically engineered in 1980 as previously mentioned. Cenargen became later the National Research Center for Genetic Resources and Biotechnology. Brazil started training plant cell, molecular, and developmental biologists at that Center. Without those developments, coupled to work of plant breeders to be mentioned later the seed industry would not have flourished in Brazil, and this industry was essential for biotech crops developed later. In 1985, the best Brazilian scientists visited Europe to discuss biotech, we had nothing to offer. Twenty-five years later, when we came back to the same institutions, everything had been modified. Now we can express any gene of any organism in bacteria, yeast, human cells, plants and animals, and plant molecular biologists team up with plant breeders to create plants for the tropics. When the necessary genes are not available, we settle partnerships with gene companies. Also, EMBRAPA established a Foundation Seed Program, inspired by the US system, and this offers transgenic seeds to companies, big and small. This means that even small companies can compete if the quality of the seed is good. Scientists in Brazil in the future hope to make grasses that fix nitrogen, so that poor people do not have to buy urea to use as chemical fertilizer, which pollutes the soil and the water. EMBRAPA scientists released in 2012 the first green bean engineered to become resistant to the Golden Mosaic Virus, using RNA interference technology (Bonfim et al. 2007). Few countries made use of the gene revolution, particularly as related to developmental biology, to advance agriculture as we did in Brazil. We verified in addition that genes do not have to

6 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

be transferred as transgenics require, because genes are common to all species. The strategy is to release genes, such as the anti-fungic dermaseptin peptides found in frogs and in plants, to work as anti-fungic peptides in soybeans. This concept is called intragenic by Carlos Bloch (Brand J.D., et al. 2012), a scientist working at EMBRAPA the largest institution of its kind, with offices in the five continents. That’s solid progress, but the question is, why did it take so long to see biotech crops released in Brazil? We had a biosafety law in operation since 1995, but literally lost 10 years disputing and at the end were restricted by the judiciary in Brazil, which took sides and made political decisions against science and scientists. After 2005 everything changed. A new biosafety law stimulated the combination of tropical genetics and biotech so much that Brazil is second only to the US in biotech crop production. We will come back to this issue later. We have in fact few plants entirely engineered in Brazil, but Brazilian corporations take advantage of our breeders’ expertise and release the best crops for all Brazilian biomes. Still, the gene revolution has not resolved a few important things. We still have not produced in the world plants that can defend themselves against bacteria and fungi. This technology is available in the US and at the Fraunhofer Institute in Germany. Few institutions have reliable genes to generate plants resistant to drought and to soil aluminum toxicity that together affects more than 80% of tropical soils. There is work to do, but Brazil can make the gene revolution work in the same direction as the green revolution did decades ago, by the hands of Norman Borlaug who left us few years ago, with more powerful science tools available. THE ORDEAL OF GENETICALLY MODIFIED (GM) ANIMALS IN THE US (DE CASTRO, L.A.B., 2013) The NY Times in April of this year questioned ongoing projects in the US under the regulatory advisement of FDA for the extremely long time that the Agency is taking to approve GM animals. The article considering the seventeen years that were necessary to AcquaBounty to approve its GM salmon in FDA (and has not

Biotechnology and its Applications

Opportunities and Limitations for Biotechnology Innovation in Brazil

7

concluded this process to date) concluded that FDA must make sure that other promising genetically modified animals do not come to the same end. Of course every application needs to be painstakingly evaluated says the article, and not every modified animal should be approved. But in cases like AquaBounty’s product, where all the available evidence indicates that the animals are safe, we should not let political calculations or unfounded fears keep these products off the market. If we do that, we’ll be closing the door on innovations that could help us face the public health and environmental threats of the future, saving countless animals — and perhaps ourselves end the article. Unfortunately, this process does not come in isolation. To date only one GM product resulting from the gene expression in animals was approved by the Agency: ATryn produced by GTC Therapeutics of Boston, (now rEVOBiotherapeutics) an antithrombin protein effective to prevent thromboembolitic events. Genetic engineering celebrates in 2013 forty years since Herbert Boyer expressed an insulin gene in a bacteria: Escherichia coli and marked the onset of this technology. This happened twenty years after Watson and Crick conceived the Genetic Code. Genetic Engineering progressed to a point that today one can express any gene in any organism from bacteria to animals. Complex genes structurally speaking require complex models for their expression and such bacteria will not serve adequately for these genes that require other systems like CHO cells (Chinese Hamster Ovary), plant and animal gene expression. GM plants progressed tremendously since the first GM plants were taken to the market in 1996. Now 16.7 million farmers in 29 countries planted in 2011 one hundred and sixty million Ha, a sustained increase of 8% annually since 1996 (James C., 2011). What happened to GM animals? They struggled to be approved at FDA and in addition to the example of the GM salmon this context stimulated scientists in the US to look for collaboration in other countries to succeed. James Murray and Elizabeth Maga from UC Davis are working with Brazilian scientists to obtain GM caprines to express Lysozime and Lactoferrin to prevent infant diarrhea that takes the lives of 2 million children every years (Jackson et al. 2010). Their effort at FDA is four years old and changed almost nothing. Surprisingly the UC Davis tried twice to obtain funds from the Gates Foundation unsuccessfully. They came

8 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

to Brazil where they obtained funds from the Ministry of Science and Technology when I was an R&D Secretary at that Ministry and where diarrhea claims the lives of thousands of children in the Brazilian Semi-Arid. Adding that to the Sub – Sahara and number climbs to billions we may be able to take safely (Lysozime and Lactoferrin are proteins found in humans) these products to the market in Brazil earlier than FDA because diarrhea cannot wait forever. Will Acqua Bounty be capable to transfer this technology to other countries such as Brazil?hardly after waiting for eighteen years without their product in the market. Funds will be scarce. Biofuels During the last four decades, Brazil developed a major industry to produce ethanol from sugar cane (CONAB - 2010). A vast literature about this issue can be found in CGEE (Centro de Gestão de Estudos Estratégicos), a public Brazilian institution linked to the Ministry of Science and Technology and Innovation. It soon became evident that for ethanol to be competitive globally it had to deal with what is called the second generation ethanol as a biofuel. A key factor to determine this competitive was identified as producing cheap enzymes capable to hydrolyze cellulose like bagasse a derivative from the sugar cane industry. Hundreds of thousands of tons of bagasse, chiefly cellulose are a sub-product from the sugar cane industry and today are burned to produce electricity. If digested competitively to produce ethanol it would increase the ethanol yield from 20 to 30%. For this reason Novozyme focused in this area in Araucaria – Parana. The international headquarter of Novozyme announced at Bio Georgia three years ago that it would release an enzyme that would render ethanol from cellulose competitive with regular ethanol from sugarcane but this product has not yet been introduced in the market. In Brazil two public institutions made advances in this area. One is LADEBIO operating at the School of Chemistry at the University of Rio de Janeiro under the leadership of Elba Bon. LADEBIO developed a crude extract from fungi that is capable to produce sucrose from bagasse, and it is scaling it up now. Another Public Institution in Brazil – CTBE (Laboratorio Nacional de Ciencia e Tecnologia do Bioetanol) is working in Second Generation Enzymatic Hydrolysis and claims that it is next to release an enzyme product to the sugarcane industry to. Several private companies recently came to Brazil with

Biotechnology and its Applications

Opportunities and Limitations for Biotechnology Innovation in Brazil

9

different technologies to benefit from the Ethanol Industry in Brazil. The first one was Amyris that produces farnesane/farnesene from recombinant yeast, and will commercialize the product industrially in 2013. Solazyme came more recently to produce diesel derived from algae. Proterro will move in 2013 to Brazil to produce sucrose from recombinant Cyanobacteria that uses basically CO2 and light from a photosynthesis process. Finally CERES is in Brazil for a few years now to produce ethanol from Sorghum that can produce the biofuel as a catch crop to sugarcane. Biofuels will write a successful page in the history of Biotechnology in Brazil. WHO WILL FEED THE WORLD IN THE TWENTY FIRST CENTURY? Food security for billions of poor was published in Science few years ago as an Editorial by Uma Lele, (Lele, U., 2010). However a major question was left unanswered. Who will feed the world in the 21st century? The challenge: lifting a billion people from poverty and feeding an extra 2.3 billion people by 2050, will require doubling cereal production of developing countries to increase cereal production by 70% as proposed by FAO. We will need all together 100 million Ha to accomplish this task in Brazil. This means to use 50 million Ha of degraded pasture out of 200 million available in the Country to complement the agricultural production area in the future. The rest of it probably will go for ethanol and other forms of bioenergy. The late Norman Borlaug visited Brazil three years before he passed away. In a press release he said: the next revolution in agriculture will happen in Brazil. In fact moving back Brazil used to produce 40 million tons of grain forty years ago compared to over 170 million tons we produce today (Economist 2010). More important this was done without substantial increase in acreage, which remains still under fifty million hectares. This success history started in 1965 when Brazil established the first law to regulate the commercialization of seeds as also previously mentioned. The Seed Commercialization Law adopted in the sixties set the grounds for a seed industry that would never prosper in Brazil without it. Plant breeding performed by a dozen good geneticists built continuously the cultivars to feed the seed industry. How far is the sub Saharan Africa from performing the same "revolution"? From our experience a dozen good geneticists and good seed laws. I said this in an International Conference in Bologna some years ago when many said that the

10 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

gene revolution had not reached the poor which is true, (de Castro 2011). In parallel science in Brazil was multiplied by five since the seventies and the global scientific output in Brazil is 2.67% of the world scientific output today. In addition science in Brazil is growing at a rate comparable to or higher than most developed countries, www.mct.gov.br/indicadores. Funds for molecular biology applied to plant genetic engineering and consequently to plant breeding improved substantially since the nineties. Funds were created by law in areas such as Biotechnology and Agribusiness. Now the task as previously said is to increase production under adverse conditions. A global science based effort focusing on major constraints for agriculture development in the tropics is imperative and urgent. Plants resistant to drought, soil aluminum toxicity which affects more than half of tropical soils. Grasses capable of fixing nitrogen, are also needed following up the work by Johanna Döbereiner, who died some years ago. The cost of oil derived urea which pollutes the soil and underground waters we emphasized can be saved this way. We in Brazil have the best genetics for the tropics. Genes to be moved from incompatible plants are needed. To face the challenge of Uma Lele´s Editorial we will take the best science in the world. CENARGEN scientists will release and make it available to Africa the first green beans engineered to become resistant to the Golden Mosaic virus using RNAi technology that gave the Nobel Prize in medicine to Craig Mello and Andrew Fire in 2005. The gene revolution produced plants that can defend themselves from insects and viruses but has not advanced much with respect to resistance to bacteria and fungi. The task of feeding the world will be under the responsibility of Mercosul countries to reduce environmental pressure. Brazil and Argentine together lead the world today in soybean and meat production and rank second in Biotech crop production. Science of these countries is complementary. We need a very effective strategy to unite the world in this goal: hunger. Hunger is the world’s major problem. Poverty in Brazil is a small fraction of the world`s poverty. There are around 9 million people living at extreme poverty levels less than 5.0% of the Brazilian population mostly in some rural areas of the Semi Arid in the Northeast of Brazil. The poverty average there reaches twice the

Biotechnology and its Applications

Opportunities and Limitations for Biotechnology Innovation in Brazil

11

national average. Other regions in the South Sahara in Africa are much worse. Thousand die hungry daily, mostly children. The advances from bioscience can be used to attenuate the problem. LIMITATIONS OF AGRICULTURE

BIOTECHNOLOGY

AS

IT

APPLIES

TO

I stated before that beginning in the eighties, Brazil prepared internally for a gene revolution. Patent, cultivar and biosafety laws were enacted in the 90’s before the commercial release of agricultural biotech products. Brazil has consistently invested in human resources training in science for the last 30 years. Science in Brazil is growing at a rate comparable to or higher than most developed countries. Biotechnology as it applies to agriculture started early in the eighties. During the past 25 years, Brazil has trained excellent plant cell, molecular and developmental biologists at EMBRAPA research center CENARGEN (the National Research Center for Genetic Resources and Biotechnology). Funds for molecular biology were applied to plant genetic engineering, but still, somehow plant breeding disappeared in Brazil during ten years starting in 1995. Why did that happen? When the first genetically modified plant was commercially released in 1995, non-governmental organizations (NGOs) gathered in Brazil to protest against it, a movement supported by the Judiciary system Ministry of Environment and sectors of the Parliament. The campaign was called: Brazil free of transgenic. Biodiversity was going to be destroyed by transgenic plants according to them. We lost every legal action against the NGOs from 1997 on. One judge voting against the release of GMOs said he was judging a dispute between Greenpeace and Monsanto (de Castro 2011). The decision had nothing to do with science or what would be the best for Brazilian agriculture. It was a political and ideological decision (de Castro 2012). The consequence was that from September of 1998 until 2005, Brazil could not commercially release genetically modified plants in Brazil. Those willing to do plant molecular biology and genetically modify plants even at scientific level were denied funds, as rules created by the Ministry of Environment in the country required years of endless justifications for scientists to approve a simple field

12 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

experiment (de Castro 2002). Beans engineered to be resistant to the Golden Mosaic Virus by applying RNA interference methods took almost 10 years to be released, with considerable opposition coming from NGOs, which garnered support by sectors of the Executive in Brazil. What is really sad is that this was not isolated to Brazil. Plant genetic engineering in Europe is a shadow of what it was during the 80’s, when Marc Montagu and Jeff Schell built the scientific basis for plant genetic engineering. Twenty years later, Ingo Potrykus is still struggling in Europe to bring his Golden Rice to market. This genetically modified rice has the potential to save the lives of millions of children in the developing world by fighting vitamin-A deficiency. Potrikus also had to struck deals with dozens of biotech companies for patents on the technologies he used to create his rice. Potatoes engineered to resist Phytophthora which was behind the hunger in Europe in the nineteen century were prevented to enter the market by fungicide companies. It is well known that in 1845, a plant disease known as late blight, caused by the fungus-like oomycete Phytophthorainfestans, spread rapidly through the poorer communities of western Ireland, resulting in the crop failures that led to the Great Irish Famine. Today a variant of the fungus will repeat the disaster and no fungicide available is effective against this new strain that appeared in Mexico, center of origin of the fungus. It is on the other side true that the world’s poorest regions of Central and West Africa might gain the most from the gene revolution but are not. Most work in biotech by the large corporations is directed to soybean, cotton, canola and corn — not much for staple crops. No wonder those representing developing countries feel excluded from the gene revolution. Science and scientists are on the spot. Ignoring that thousands die daily by hunger mostly children and we are not using the bioscience advances to attenuate this problem is morally unacceptable. High protein cassava is available and it has not yet been taken to the market. Brazil surveyed recently its poverty. The extremely poor in Brazil, close to 5.0% of the Brazilian population do not have enough money to eat two meals/day as said before. It is imperative to have a global, science-based effort toward a less hungry world that builds jobs and focuses on major constraints for agriculture development in the tropics. We need an effective strategy to unite the world in this goal. This effort cannot be achieved unless we stop demanding never-ending

Biotechnology and its Applications

Opportunities and Limitations for Biotechnology Innovation in Brazil

13

biosafety analysis of products known to be safe. How do we explain to the developing world that more than a decade was required for the innocuous rice produced by Potrikus to be released, while a fast-track was found to commercially release a cosmetic that prevents wrinkles, purified from a neurotoxic protein from the Clostridium botullinum? Hunger is a world problem. Wrinkles are not. Poverty in Brazil is a small fraction of the world`s poverty, and Brazil will face it. What about the rest of the world? Can we ignore the advances of biosciences in this context? NO GENES NO FUTURE The biotech industry relies strongly on genetic engineering, and on genes being characterized and properly expressed. As a member of the Brazilian Academy of Science, I have continuously stated that countries that do not identify genes will never build a competitive pharmaceutical industry, or an agribusiness industry, or what in the picture today, the biofuel industry. The genes coding for the enzymes capable of converting cellulose to ethanol will come from public initiatives and from large corporations, such as Novozymes, Amyris, Solazyme Proterro and Ceres – all of which are already working in Brazil, benefiting from its sugar cane industry as already mentioned. Monsanto acquired Alellyx and CanaVialis, both related to sugar cane. Because it’s important for Brazil that the best technology reaches consumers, I do not criticize that (de Castro 2011). Good partners are of course welcome. The problem is that when we move to agriculture, Brazil does not have a clear strategy to identify and use the genes needed for the plants of the future. Nevertheless Brazil is second in genetically modified organisms (GMOs) cultivated, behind only the US. So what is the problem? The price we have to pay for the genes. The RR gene from Monsanto, for making plants tolerant to glyphosate, last year cost Brazil US$200 million for our soybean farmers that weakens Brazilian competitiveness. Other necessary plant genes are in the hands of the large corporations. We can imagine that Brazil won’t be able to compete with China in the cotton business unless Brazil does not need to pay for the genes for the Bt technology. China has its own Bt genes. Fortunately for Brazil, we have a unique Bt gene toxic to Boll weevil, coming from Embrapa, the Brazilian Agriculture Research Corporation. Boll weevil costs the cotton farmer $150 per hectare. EMBRAPA has a rich Bt collection with 4,000 mutants, and other Bt

14 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

genes may be there. But it asks the question: Why doesn’t Brazil have the genes to build the pharmaceutical industry? Brazil has not identified the needed genes and has to rely on genes of others to survive. This is “feasible” in agriculture but the pharmaceutical industry has accumulated a US$7 billion debt due to lack of recombinant pharmaceuticals, when comparing sales between what is exported and imported. Laws in effect prevent scientists from finding these genes both for agriculture and for pharmaceuticals in our own biodiversity – a problem that has existed since 2000 and controlled by the Ministry of Environment. There is a council called CGEM, but it does not work properly. It is so restrictive, it prevents The Butantan Institute from working with its own snakes (which they have being doing for more than a century), unless authorized by this law. Institutes like Vital Brasil, in business for more than a century, suffer from the same fate. More than hundred legal processes are suing scientists and institutions for collecting plants without authorization from the Brazilian Institute for the Environment and Renewable Natural Resources (IBAMA) – the right arm for the law. Even though he was authorized, researcher Elibio Rech, from EMBRAPA, was fined 100,000 reais (US$45,000) because he developed a technology from a spider web coding gene. Using spiders would not of course jeopardize the spider population in Brazil. He’s allowed to do the science, but not develop a technology. Then, what is Brazil’s famous biodiversity good for? This never happened, of course, with the Canadian Air Force, which has used this spider gene for more than a decade (de Souza 2013). The law (called a provisional measure) has been a disaster for the Brazilian biotechnology industry. We tried to get a new law to be approved during the last 15 years, but never succeeded. Brazil cannot waste more time. Will we develop the Bt genes? Who knows. The matter should move from the hands of the Ministry of the Environment, to the hands of the Ministry of Science Technology and Innovation, which previously had control of such matters through the National Council of Research, before the Biodiversity Convention and before the the provisional measure passed as just mentioned. What do I think should happen to the provisional measure? It should disappear, legally. It is judicially possible for this to happen.

Biotechnology and its Applications

Opportunities and Limitations for Biotechnology Innovation in Brazil

15

THE PUBLIC PERCEPTION OF GM PLANTS When recombinant DNA technology started early in the 70’s, it was unknown to of all us. And the unknown always scares people as Exupery thaught us. The majority was worried about experiments performed with viruses as vectors to modify the genome of humans. There was an expectation then that one day we could do what is now called gene therapy. The Asilomar Conference on Recombinant DNA was organized in San Diego to deal with concerns, and immediately a moratorium was established for over a year, until the NIH delivered rules for using this new technology. Europeans, to a certain extent, took advantage of this historical moment. Marc Montagu and Jeff Schell built the scientific basis for genetic engineering in plants and in the laboratory of Marc Montagu Luiz Herrera Estrella, produced in 1982 a tobacco genetically modified to grow in the presence of an antibiotic. In that decade, there were a few examples of plants genetically modified: tobacco resistant to insects using Bt (a toxin found in Bacillus thuringiensis) as example. So one can say that plant genetic engineering is in fact less than 30 years old. The first commercial release of an RR soybean came in 1992. So, commercially it was 20 years in 2012. During this 20 years, the technology grew and was adopted worldwide by over 16 million farmers, big and small. In 2011, more than 165 million Ha of genetically modified plants will be cultivated. Yet this is only about 10% of the total arable land on the planet. If we add all the area cultivated with GM plants since the early 96 till 2011, it would be today more than 1.25 billion Ha. During these 20 years, not one accident has occurred due to the use of plants genetically modified. Not one relevant environmental impact, not one relevant impact to the health of humans or animals. Viruses as a vector for gene therapy claimed the life of one patient in Pennsylvania. Altogether, genetic engineering compared to other technologies has proved safe precisely because there was competent control of the technology, from the very beginning. So, why do some continuously fight against GM plants, as seen in Brazil and Europe mostly? I repeat, the reasons are political but also economical. GM plants are being led by large corporations like Monsanto (de Castro 2011 op.cited). Those who fear that these large corporations will control the agriculture worldwide react against GM plants because they see these products as an

16 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

instrument of large corporations. In addition, agriculture in Europe cannot compete with our agriculture in Brazil or in Argentina, a situation made worse by Brazil and Argentina ranking second and third for GM plants, behind the US. One cannot however conceive of agricultural growth today without GM plants. It’s the only strategic way to deal with climatic changes already in progress. I have said previously that most GM plants cultivated in the world are confined to few species: soybean, corn, cotton and canola. Little or nothing for the staple crops such as cassava, sweet potato sorghum or pearl millet. So what will happen in Sub Sahara countries? I published recently (http://blogs.nature.com/tradesecrets/ author/lbarreto) that the gene revolution has arrived in Africa. People do not see yet this technology as a way to reduce poverty or hunger. The perception most people have about genetically engineered plants is that they do more bad than good. To change this perception, we have to demonstrate that the technology can also resolve important social problems. When I started doing plant genetic engineering in Brazil my first project was to engineer green beans rich in methionine needed for the brain development of children in Brazil. I could not do it in the eighties because we could not then synthesize genes as we can today nor regenerate beans from tissue culture. I am still trying with modified versions of my 2S albumin from the Brazil nuts. I cannot do it at the pace I would like because I do not have a laboratory anymore and have to use other’s. Now we’re expressing in goat milk Lysozime and Lactoferrin, to reduce diarrhea that causes deaths in the Semi-Arid region of Brazil and at a much higher level in some Countries in the Sub Sahara. We are doing this in partnership with Elizabeth Maga and James Murray from UC-Davis, teaming up with Marcelo and Luciana Bertolini from UNIFOR – a private University in Fortaleza, the capital of the State of Ceará in Northeast Brazil. Surprisingly however the UC scientists have taken more than four years to have their products approved at FDA. Francisco Aragão as said engineered beans (Phaseolus vulgaris) at the CENARGEN in EMBRAPA are resistant to golden mosaic using RNA interference. Controlling this virus is otherwise impossible for small farmers, yet NGOs were against it in Brazil. Beans are a staple crop, not a commodity, and provide food for the small farmer. This GM bean was not developed by “multinationals.” EMBRAPA is a Brazilian institution. Yet still, NGOs were

Biotechnology and its Applications

Opportunities and Limitations for Biotechnology Innovation in Brazil

17

against it. This is how far we are from the correct perception of GM plants. Plenty of people defend the sole use of “organicos.” Unfortunately, that will never feed the world’s 7 billion people. We should consider again the Editorial by Uma Lele published in Science and mentioned before here. Acquabounty is struggling for more than twelve years to get a genetically modified salmon at FDA approved. The product they will sell are embryos that produce only females and as such cannot cross. The GM salmon cannot compete in the open and yet is being only released to be cultivated in confined areas. To date only one product was approved by FDA in the area of genetically modified animals: ATRYN from GTC. So, even in the US genetically modified organisms face problems. OPPORTUNITIES FOR BIOTECHNOLOGY INNOVATION AS IT APPLIES TO THE PHARMACEUTICAL SECTOR Indicators of the Context of the Pharmaceutical Sector in Brazil •

Financial crises which have hit heavily the Euro Zone, England the US and Japan had not the same consequences in Brazil as demonstrated by the fact that Brazil has developed in the last ten years to become the sixth economy in the World.

•

Banks are funding the pharmaceutical industry in Brazil. BNDES and FINEP are two important funding Agencies. Loans are to be paid in ten to fifteen years, 4.5% interest /year (still high but below inflation) and 3 to 5 years of ”waiving” for the first payment to be made.

•

SELIC rate is falling down. It used to be 20%/year some years ago. It is now 8.0% /year. The same for bank interests applied to the loans for the industry in Brazil. More investments for the industrial sector are taking place as consequence. Not only Public but also Private Banks are reducing their spreads.

•

Science global output in Brazil was multiplied by five since 1980. Human resource training is the most consistent policy of the country

18 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

during the last 30 years. It defied political changes that obliged the country to work under different ideological tendencies. Brazil will train 100 mil young scientists (see CiênciaSemFronteiras www.cnpq.com.br) till 2016. This never happened in our history. •

The average consistent growth of top 93 enterprises operating in Brazil was 14.03% in 2011. Shortly Brazil will become a relevant power in the pharmaceutical industry. Some important companies in the area believe Brazil will jump from the 8th place to the 5th by 2015. The private sector is being stimulated to take the management of important sectors, such as highways, harbors and railroads to reduce the rampant cost of the industry that has to deal with an inefficient transportation system due to the lack of governmental funds that are necessary to keep these sectors operating properly.

•

However, the pharmaceutical sector has many limitations. We do not have one CMO to scale up products of recombinant technologies in Brazil. Manufacturing Units and Pilot Plants are being built by private companies. However, this is unnecessary. It takes too long and costs too much. For this reason, Brazil has no “blockbuster” in the sector and has never taken one product to the FDA.

There are signs that Pharmaceutical Biotechnology may grow in the near future in Brazil. Some indicators in favor of this possibility have been presented above. The Pharmaceutical sector is growing in Brazil but has not reached the level of other countries nor produced one innovation. Part of the problem is that there is competition with other countries, particularly China, India and Korea. In addition, there are the regulatory limitations in Brazil, particularly in the area of intellectual property rights (IPR). I see some signs; however, indicating that international companies, are interested in moving to Brazil. One of these companies — Amgen based upon the growth rates of about 14% per year of the pharmaceutical sector in Brazil expects that the country will become the fifth largest pharmaceutical market in the world by 2015 (up from 8th today). Amgen hopes to make its medicines available to patients in major markets around the world, including Brazil and it is quickly expanding middle class. A key element of Amgen’s

Biotechnology and its Applications

Opportunities and Limitations for Biotechnology Innovation in Brazil

19

strategy is to ensure that the medicines produced by the company will in time be recognized by the Brazilian government, medical professionals and patients as best-in-class. They believe that despite regulatory difficulties, Brazil provides a favorable environment for clinical trials. Thus, Amgen will invest not only in clinical trials but also in scientific research to demonstrate the quality of their products in their main therapeutic areas: oncology, hematology, nephrology and bone health. Its development interests span areas, such as inflammation, neurology and metabolic disorders. Considering clinical trials, Amgen distinguished in Brazil an interesting multiethnic population with a balanced age profile, competitive costs and high quality of research standards and professionals. Laboratorio Bergamo, a local, traditional therapeutics company bought by Amgen last year, will offer products for clinical trials. One can see that Amgen took its decision after an in-depth analysis that might eventually be followed by other companies in the pharmaceutical sector. Korean high tech companies are also interested to work in the pharmaceutical sector. Other companies such as GTC and DSM are also considering this possibility. The strategy is to bring from these companies the best technologies to compete globally and seek for funds in Brazil as the country expands financially. Internal efforts must equally be included in this Biotechnology agenda. One is human resources training as mentioned in the “Brasil sem fronteiras” (www.cnpq.gov.br). Regions where human resources training are mostly needed are the Northeast and North of Brazil. In the Northeast, we established RENORBIO a regional network to develop the Semi-Arid of Brazil built with the same concept of the Graduate Groups that exist in California since the seventies. Now more than forty institutions and few hundred PhDs train some 400 Doctors as PhD students which have already deposited over 150 patents in the INPI mostly. Patents will never become products unless they are treated as they are by non-profit association such as the Wisconsin Alumni Association that deals with this issue in Wisconsin for almost a century. This RENORBIO Association should be located at an innovation center in the northeast of Brazil I proposed recently. Funds are needed to assure that these patents will be of use for the industry. It is too early to say if risk capital will be shortly available in Brazil. There are few examples in place. If it does not work, Brazil will attempt a tax deduction from

20 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

Northern States and Counties. Nine Northern States in Brazil collected an estimated US $25 billion in taxes in 2011. If that holds, 0.1% would be enough to establish an Innovation Pole in the Northeast of Brazil and small startup biotech companies would then have a future. ENCOURAGING PHARMA IN BRAZIL The pharmaceutical industry in Brazil grew 12% last year. Are there any indicators suggesting that growth is sustainable? What are the political policies behind this growth? Brazil confronted hyperinflation from 1965 till 1994. The inflation climbed for three decades, comparable only to what happened in Germany during the 1920s. In June of 1994 alone inflation was 46.58%. In 1994 the Plano Real (Real Plan) was launched when Itamar Franco was the president of Brazil and Fernando Henrique Cardoso was Ministry of Finance (elected President of Brazil in October that year). Brazil adopted a new currency: REAL but the world recognized this currency internationally only a couple of years later. Inflation dropped dramatically in later years but the cost of money to promote technological development in Brazil for many years and even today is the highest in the world. Why could we not yet promote technological development in Brazil? For almost two decades, one could buy public bonds and collect returns of 12 to 14% a year after deducting the inflation rate. Inflation was still very high, in the range of 6%, and when deducted from these bonds it would assure these returns extremely high with zero risk. Who could possibly think to invest in technological development instead? In recent years, President Dilma Roussef decided to adopt a series of measures to reverse this trend. Public banks (Banco do Brasil and Caixa Econômica Federal) decided to adopt lower tax rates for lending money as mentioned before. Of course private banks had to review their position, which for decades had resulted in the highest Bank profits worldwide. The common citizen and the small enterprises are now encouraged to obtain loans to promote their business. Interest rates (The Selic Index) are falling. For a long period this index was as high as nearly 20% yearly. Now it is down to 8.0% which is still very high, says Dilma Roussef. In the US, this rate is close to zero. However, when we compare inflation with the new interest rate, the difference is gradually dropping, and those that benefited from easy money with zero risk might need to consider alternatives and eventually move in the direction of risk capital and technology

Biotechnology and its Applications

Opportunities and Limitations for Biotechnology Innovation in Brazil

21

development. In truth, though, private risk capital is still scarce. So what is it that has promoted the growth in the pharmaceutical industry? Financing agencies (the Project Financing Agency, also called FINEP, and the National Bank for Social and Economic Development, BNDES) are lending money for technological development, including the pharmaceutical industry, to be paid back in 10 to 15 years, at subsidized interest rates coming in below inflation: 4.0 - 4.5% per year. The loans also include three to five years during which only the interest needs to be paid. This is of course only available to enterprises that can demonstrate assets to back up these so-called reimbursable loans. When we compare these policies to the series of crises prevailing in Europe, the US and even countries like Japan, still struggling to recover from natural catastrophes, Brazil emerges as a new potential partner. In addition, Brazil is growing heavily in the area of generics. Brazil imports active principles formulate and sell. It begs the question, though: where will the intelligence come from to support these pharmaceutical partnerships, should they take place in the coming years? As an answer, Brazil has adopted the most ambitious program in the history to train young scientists abroad. Historically, Brazil extends 3000 to 5000 scholarships a year to train students in foreign countries. President Roussef now will fund more than 100,000 scholarships over a four-year period. However, budgets are not elastic. This investment of billions of US$ dollars came with sacrifice to other initiatives linked to the Ministry of Science and Technology. Until 2012, the general policy was clear: funding of the private sector and scholarships under government control. Dilma Roussef however announced in 2013 that Biotechnology was elected as the top priority to promote technological development in Brazil. We anticipate that the Government will be offering a huge investment now for this area shortly. LIMITATIONS OF BIOTECHNOLOGY AS IT APPLIES TO THE PHARMACEUTICAL SECTOR The Patent System in Brazil and the Plant Variety Protection Law During the 60’s, biology was not patentable. Genetic engineering started during the 70’s, but it was called recombinant DNA technology back then. Investments made in this area demanded a solution for intellectual property (IP) rights being

22 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

applied to biology. Though living organisms were not patentable before, genetic engineering and particularly applications in the pharmaceutical area gave rise to the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, which allows patent protection to be accorded to inventions in the area of Pharmaceuticals (The TRIPS Agreement is Annex 1C of the Marrakesh Agreement under the World Trade Organization, signed in Marrakesh, Morocco on 15 April 1994). Brazil signed the agreement, with 13 other WTO members. When Brazil signed TRIPS, it automatically had to reorganize its patent regulatory system. Brazil then approved a patent law in 1996 (Law 9279) and the next year approved a plant variety protection law (Law 9456). These adjustments came a few years after TRIPS, and the Brazilian patent law incorporated what was minimally required in the TRIPS Agreement. Our patent law offered the possibility to patent (recombinant) microorganisms that satisfied what was required for granting patents — a not-obvious invention. However, it also provided the option to adopt a sui generis system (the UPOV system) to avoid patenting genetically engineered plants and animals – both not required by TRIPS. Patent law and the plant variety protection are hardly compatible. Those who have genes and protect the gene technology by the Patent Law also want to have the ownership of whole genomes of plants. The negotiation with agribusiness has progressed however, since in Brazil farmers can measure the benefits and thus pay for the technology fees, mostly charged by large corporations. This has made Brazil second in the world to the USA in biotech crops. The big disagreement came in pharmaceuticals. The Brazilian law incorporated TRIPS-endorsed principles that were never accepted by the international pharmaceutical sector, particularly compulsory license. The Brazilian law allows for patented products to be manufactured in Brazil if it’s deemed that prices established by pharmaceutical companies (mostly multinationals) are abusive. Next the Brazilian government, under the stimulus of the health public sector, modified the Patent Law and established with ANVISA (equivalent to FDA in the

Biotechnology and its Applications

Opportunities and Limitations for Biotechnology Innovation in Brazil

23

USA and to EMEA in Europe) that those willing to patent in pharmaceuticals, and had applied for this purpose at the National Institute of Intellectual Property, needed an agreement from ANVISA. This rule makes the Brazilian process longer than any other in the world, and it is under judicial dispute. The Brazilian Patent Law is very restrictive, as we can see in the Article 18 of the Law, which deals with biology matters. The Law 9279 prevents patenting parts of organisms, be it microorganism, plant or animal. Cells are not patentable. Genes are not patentable, unless essential for a patented process. Biopharmaceuticals are not patentable. Molecules derived from the huge Brazilian biodiversity are not considered inventions even if these molecules are isolated and their function demonstrated. As a result Brazil has not one molecule patented from our biodiversity. In addition, the general patent performance of Brazil, as compared to Korea, for instance, is extremely weak. Patenting is an essential instrument for partnerships, which is an absolute requirement for the pharmaceutical industrial sector in Brazil, that is funded with national money, to partner with large corporations (which have been in Brazil for decades, some for a century) to ascend to the large international market. This strategy is the only one that will allow these “native” pharmaceutical companies to become relevant actors in the international scene. Fortunately, the private sector is aware of the importance of patents as an instrument for partnerships. Thus partnerships are occurring in Brazil, despite of our patenting restrictions in biology. Consequently, the Brazilian pharmaceutical industry is growing and is responsible today for 40% of the market in Latin America. The demand for pharmaceuticals is growing at 10% per year. In fact Brazil is leading an emerging biotech boom in Latin America. But it could do a lot better if our regulatory patents system was reviewed. Partnering Brazilian Biotech Globally to Assure the Future of Startups in Brazil Brazil is an emerging power in the area of science. The remaining challenge for the country is to move from science to industry in major areas, including

24 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

biotechnology. The laws created to approach this challenge affect mostly medium and large-size companies, because those can demonstrate incomes from which fiscal incentives can be applied and deducted from income tax. What happens to small, start-up biotech companies? Do they have a future? Brazil has launched a system called “subvençãoeconomica”. Since 2006, there has been an annual call for proposals, inviting companies to apply for funds that don’t need to be paid back. Last “subvenção” call offered about $300 million in reais (US$190 million) and the demand was four times of that amount. Two hundred and fifty-two companies qualified for funds. Biotechnology and health together totaled 25% (67 companies). Overall, small companies asked for 72% of the funds, which is remarkable. Nevertheless, these small startups get an initial push but do not have a mechanism to scale up their business later. The laws mentioned previously do not apply to small biotech companies because they do not have incomes from which to deduct incentives, and also they cannot offer guarantees to back up bank loans. One component of the Innovation Law provides tax deduction for entrepreneurs investing in technological innovation and as such could give rise to funds from entrepreneurs to small business companies. However, biotechnology does not stimulate the immediate economy because the projects are long term. So the only attractive factor coming from these small companies could be IPR to be offered to larger companies as a means to assure that investments can be made under the protection of the Brazilian Patent Law – Law No 9726/96. The Patent Law in Brazil is however restrictive to innovations related to biology as mentioned before. So we have left the possibility of partnering of small and big companies. Previous analysis of the Brazilian health biotech sector published in recent years have highlighted several challenges to sustainable development, including inefficient interactions between the public and private sectors a lack of venture financing and a paucity of legal incentives to encourage commercialization of the region’s rich biodiversity. All these issues have or will be treated in this eBook but I want to emphasize the importance of another issue that prevents Brazilian biotech enterprises from successfully bringing innovative drugs to market: the lack of local partnerships between small and large companies and the poor level of collaboration between Brazilian companies and multinational pharmaceutical companies that can accelerate late-stage clinical development. One illustration of

Biotechnology and its Applications

Opportunities and Limitations for Biotechnology Innovation in Brazil

25

the behavior of the local health biotech sector is the lack of interaction between the two main industry associations in the country the National Association of Pharmaceutical Laboratories (ALANAC-http://www.alanac.org.br) and the Brazilian Research-Based Pharmaceutical Manufacturers Association (Interfarma: http://www.interfarma.org.br). This weakens the Brazilian industry by preventing both collaboration and pooling of complementary scientific and financial resources that might otherwise bankroll innovative drug development. Most local funded companies are insufficiently capitalized to carry out innovative R&D activity in the biopharmaceutical field, let alone investments over a billion dollars to fund the core process from target discovery to a regulatory approval or registration in agencies, such as FDA and EMEA. As a result of the weakness of the pharmaceutical sector, no tone blockbuster drug has been developed in Brazil throughout its history. Equally we do not have one CMO or CRO in Brazil or a cGMP as said before in the Abstract. The lack of this infrastructure prevents the scale up of good quality R&D when available and obliges companies to invest to establish these infrastructures in Brazil wasting time and money. Moreover, many ALANAC member companies are opting to produce less R&D-intensive products, such as generics and biosimilars, instead of innovative drugs. The recent created consortia: BIONOVIS and ORIGEM which pull together locally funded pharmaceutical industries are too early to be analyzed as to the results that will outcome from these initiatives. Against this background, the Brazilian Federal Government has implemented several initiatives to create a local environment that is more conducive to innovative product development, thereby enriching the pool of partnering opportunities for pharmaceutical companies. In 2004, the ‘Innovation Law’ (Law 10,973) was introduced to encourage the sharing of intellectual property and other resources between public and private entities and allow direct support of R&D activities in private enterprises. Although, the number of Brazilian biomedical inventions licensed at the US Patent & Trademark Office has doubled over the past two decades, it is still only a small number (http://www.uspto.gov/web/offices/ac/ido/oeip/taf/cst_utl.pdf). The situation in Brazil is complicated further by the country’s cumbersome patenting process mentioned previously. Under Patent Law 9,279, the National Institute of Industrial Property can grant a pharmaceutical patent related to a

26 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

product only after agreement has been obtained from Brazil’s National Health Surveillance Agency-ANVISA. This rule makes the Brazilian process longer and more unwieldy than that in any other territory in the world. Even so, progress in fostering an innovation- and enterprise-friendly environment is being made. Two laws to create favorable fiscal incentives for R&D investment (the ‘Asset Law’; Law 11,196) and income tax exemptions for enterprises involved in R&D (Law 11,487) were introduced in 2005 and 2007, respectively. Although, these laws had only a minor impact initially, in 2008 the income tax deduction derived from Law 11,196 amounts to ~0.05% of Brazilian gross domestic product (http://www.mct.gov.br). Even greater benefits could potentially be accrued if Law 11,487 could be extended to private enterprises, rather than applied solely to public research institutions, as it does at present. To support basic scientific research and facilitate the translation of products from the bench to industry, Brazil has recently invested over $200 million to establish 123 science and technology national institutes (virtual networks of linking individuals in different centers of excellence), 34 of which are in the area of human health. Finally, the Ministry of Health is attempting to fund partnerships between the private and public sectors to reduce Brazil’s $7 billion (see Fig. 1 for details) accumulated deficit and satisfy the needs of its major public health program, SUS – Unified Health System (http://portal.saude.gov.br/portal/saude/ default.cfm). Vaccines --------- 116,160.6 Recombinant*---- 88,774.0 MABs**------------- 29,093.3 Total ----------------- 234,027.9 ------------------------------------------------------------------------------------------*Interferon alfa, factor VIII, interferon beta **Rituximab Trastuzumabe Figure 1: Few most imported pharmaceutical products in Brazil- in US$ x 1,000 (CGEE – Centro de Gestão e Estudos Estratégicos - Adelaide Antunes - Editor, 2006).

Biotechnology and its Applications

Opportunities and Limitations for Biotechnology Innovation in Brazil

27

Governmental funding is equally needed to support preclinical and phase 1 clinical research of certain compounds selected by specialists from academic laboratories. It is hoped that these activities will complement and synergize with the activities of the small number of private contract research organizations in Brazil that carry out preclinical work. Indeed, there are clear examples of companies in the ALANAC group that are now attracted in the development of new drugs. Such initiatives are critical to move lead molecules to a stage of validation, where the pharmaceutical industry is willing to license in, or collaborate in the development of a molecule. Domestic Brazilian Pharmaceutical companies, as mentioned previously, are in general not financially capable of performing clinical testing alone, particularly phase 2 and 3 trials. To address this problem, the Brazilian government is actively funding pharmaceutical enterprises to propel compounds into early trials through a competitive system called ‘subvenção’. In addition, foreign venture, capital funds specialized in biotech are now setting up in Brazil to further contribute to this role and grow the national health biotech industry. For example: San Francisco—headquartered Burrill and company is now solely fully operational in the country, with a $150 million life science venture fund slated to launch in 2012 although it has not celebrated one funded project to date. Thus, more than ever before, the Brazilian biotech sector has an opportunity to develop innovative drugs. As many of the large pharmaceutical companies have been functioning in Brazil for many years, and some for more than a century. There is also a customer base for licensing such drugs—if only the bridges could be made. Fostering big pharma–Brazilian biotech partnerships will be crucial for the further development of the sector and its ability to successfully access the $7 trillion global pharmaceutical market. REFERENCES Br Biotech (2011) Brazil Biotech Map 2011 CEBRAP,Br Biotech, 39 pp. CAPES (2013) Coordenação de Aperfeiçoamento de Pessoal de Nivel Superior. http://www.capes. gov.br Berg, P., Baltimore, D., Brenner, S., Roblin, R.O and Singer, M., (1975) Summary Statement of the Asilomar Conference on Recombinant DNA Molecules. Proc Natl Acad Sci USA 72: 1981-1984. Bonfim, K., Faria, J.C., Nogueira, O.P.L.E., Mendes, E.A., e Aragão, F.J.L., (2007) RNAiMediated Resistance to Bean golden mosaic virus in Genetically Engineered Common Bean (Phaseolus vulgaris). Molecular Plant-Microbe Interactions 20: 717-726.

28 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

Brand, G.D., Magalhães, M.T.Q., Tinoco, M.L.P., Aragão, F.J.L., Kelly, S.M., Cooper, A., and Bloch, Jr.C., (2012) PLOS One 7: 458-462 Probing protein sequences as sources for encrypted antimicrobial peptides. CONAB - (2010) Companhia Nacional de Abastecimento, Acompanhamento da safra brasileira: cana de açúcar, segundo levantamento, agosto de 2010, http://www.conab.gov.br/ OlalaCMS/uploads/arquivos/4a7c6ac74f1a96b2d636d58f0a003879.pdf de Castro, L.A.B., (2002) Carta ao Lula: A verdade sobre a campanha: Por um Brasil livre de transgenicos. de Castro, L.A.B., (2011) GM Plants and 7 billion people. Nature Bioentrepreneur http://blogs. nature.com/tradesecrets/author/lbarreto de Castro, L.A.B., (2011) The Public Perception of GM Plants, Nature Bioentrepreneur http://blogs.nature.com/tradesecrets/author/lbarreto de Castro, L.A.B., (2011). No Genes No Future Nature. Bioentrepreneur http://blogs.nature.com/ tradesecrets/author/lbarreto de Castro, L.A.B., (2012) Sobre o processo de liberação da soja transgênica pela CTNBIO analisada tecnicamente em função dos argumentos que constituem a sentença do juiz Antonio Souza Prudente que impediu a comercialização de plantas transgênicas no Brasil desde 1998, e em resposta a campanha “por um Brasil livre de transgenicos “ que propõe a revisão da decisão da CTNBio relativa a liberação da soja RR. 9.2 Liberação da Soja Transgênica pela CTNBIO. Historia da Ciência que eu Vivi 207pp. de Castro., L.A.B. (2013) http://blogs.nature.com/tradesecrets/ GM Animals in the US de Souza, C.M.R., (2013) Oficio para a Presidente Dilma Roussef. Economist (2010)Brazilian agriculture: The miracle of the cerrado. http://www.economist. com/node/ Herrera-Estrella, L., Depicker, A., Van Montagu, M., and Schell, J. (1983). Expression of Chimaeric genes transferred in to plant cells using a Ti plasmid-derived vector. Nature (London) 303: 209-213. Jackson, K.A., Berg, M.J., Murray, J.D., Maga,A.E., (2010) Evaluating the fitness of human lysozyme transgenic dairy goats: growth and reproductive traits. Transgenic Research 19(6)977-986. James, C., (2011) Global Status of Commercialized Biotech/GM Crops: 2011 ISAA Briefs, Brief 43 No 43 -2011.International Service for thr Agricultural for the Acquisition of AgriBiotech Applications. Lele, U., (2010) Food security for a billion poor. Science 327: 1554. Tollefson, J., (2010) The global farm. Nature. 466, 554-556.

Send Orders of Reprints at [email protected] Opportunities and Limitations for Biotechnology Innovation in Brazil, 2013, 29-66

29

CHAPTER 2 Biopharmaceuticals from Brazil Abstract: Biopharmaceuticals are mainly: recombinant proteins, monoclonal antibodies, products derived from nucleic acids and products derived from cells and tissues. The first product was humulin, released 28 years ago. There are 200 biopharmaceuticals approved for use in humans, and all but 2 are proteins. The global market value is close to 100 billion dollars, but there are 2000 products in development process which have not been released yet. As only 0.1% of the products released for human uses are derived from secondary metabolism metabolites, we may clearly notice that even among the 2000 products under development, only a small fraction belongs to the secondary metabolism group. Actually, the biotech pipelines overwhelmed by proteins. The Brazilian Biodiversity (Fig. 1) reserves this space among the biopharmaceuticals to toxins and poisons from reptiles, amphibians and insects, besides various microorganisms and substances from the marine biome. The following analysis, though, describes important adjustments, which are necessary, regarding the laws that regulate access to biodiversity and the patent law.

Keywords: Biopharmaceutical Blockbusters, The Good Law for Innovation, The Subvention law, Biomes - The Amazon Forest, The Caatinga, The Atlantic Forest, The Pantanal, The Cerrado, The Pampas, RENORBIO, The National Institutes for Science and Technology, ALANAC, INTERFARMA, Acheflan, UFC Pharmaceutical Research and Development Center, UFC’s National Laboratory of Experimental Oncology (LOE), Plants, Microorganisms. BIOPHARMACEUTICALS – OPPORTUNITIES AND CHALLENGES Indicators of the Context of the Pharmaceutical Sector in Brazil •

Financial crisis which have hit heavily the Euro Zone, England the US and Japan had not the same consequences in Brazil as demonstrated by the fact that Brazil grew in the last ten years to become the sixth economy in the World.

•

Banks are funding the pharmaceutical industry in Brazil. BNDES and FINEP two important funding Agencies. Loans are to be paid in ten to fifteen years, 4.5% interest /year (still high but below inflation) and 3 to 5 years of ”waiving” for the first payment to be made. Luiz A.B. de Castro All rights reserved-© 2013 Bentham Science Publishers

30 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

Figure 1: On the top, an adult specimen of Hypsiboas punctatus. Below, some structural representations of the antimicrobial peptide Hylaseptin P1 isolated from the skin secretion of H. punctatus (previously know as Hyla punctata) (Prates et al. 2004).

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

•

SELIC rate is falling down. It used to be 20%/year some years ago It is now 8.0% /year. The same for bank interests applied to the loans for the industry in Brazil. More investments for the industrial sector is taking place as consequence. Not only Public but also Private Banks are reducing their spreads.

•

Science global output in Brazil was multiplied by five since 1980. Human resource training is the most consistent policy of the country during the last 30 years. It defied political changes that obliged the country to work under different ideological tendencies. Brazilwill train 100 mil young scientists (see CiênciaSemFronteiras -www.cnpq.com.br) till 2016 scientist. This never happened in our history.

•

The average consistent growth of top 93 enterprises operating in Brazil was 14.03% in 2011. Shortly Brazil will become a relevant power in the pharmaceutical scenario. Some important companies in the area believe Brazil will jump from the 8th place to the 5th by 2015. The private sector is being stimulated to take the management of important sectors such highways, harbors and railroads to reduce the rampant cost of the industry that has to deal with an inefficient transportation system due to the lack of governmental funds that are necessary to keep these sectors operating properly.

•

The pharmaceutical sector has however many limitations. We do not have one CMO to scale up products of recombinant technologies in Brazil. Private companies are building Manufacturing Units and Pilot Plants. This is unnecessary. It takes too long and cost too much. For this reason Brazil has no “blockbuster” in the sector and has never taken one product to the FDA.

31

There are signs that Pharmaceutical Biotechnology may grow in the near future in Brazil. Some indicators in favor of this possibility were presented above. The Pharmaceutical sector is growing in Brazil but has not reached the level of other countries nor produced any innovation. Part of the problem is that there is competition with other countries, particularly China, India and Korea.

32 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

Surprisingly even countries like Egypt and Iran that do not have a critical mass of scientists as Brazil have pharmaceutical sectors more advanced than Brazil as far as innovation is concerned. In addition there are the regulatory limitations in Brazil, particularly in the area of intellectual property rights (IPR). I see some signs, however, indicating that international companies, are interested in moving to Brazil. One of these companies, Amgen based upon the growth rates of about 14% per year of the pharmaceutical sector in Brazil expects that the country will become the fifth largest pharmaceutical market in the world by 2015 (up from 8th today). Amgen hopes to make its medicines available to patients in major markets around the world, including Brazil and its quickly expanding middle class. A key element of Amgen’s strategy is to ensure that the medicines produced by the company will in time be recognized by the Brazilian government, medical professionals and patients as best-in-class (de Castro, L.A.B., 2011a). They believe that despite regulatory difficulties, Brazil provides a favorable environment for clinical trials. Thus, Amgen will invest not only in clinical trials but also in scientific research to demonstrate the quality of their products in their main therapeutic areas: oncology, hematology, nephrology and bone health. Its development interests span areas as inflammation, neurology and metabolic disorders. Considering clinical trials, Amgen distinguished in Brazil an interesting multiethnic population with a balanced age profile, competitive costs and high quality of research standards and professionals. Laboratorio Bergamo, a local, traditional therapeutics company bought by Amgen last year, will offer products for clinical trials. One can see that Amgen took its decision after an in-depth analysis that might eventually be followed by other companies in the pharmaceutical sector. Korean high tech companies like Alteogen are also interested to work in the pharmaceutical sector. Other companies such as GTC and DSM are also considering this possibility. The strategy is to bring from these companies the best technologies to compete globally and seek for funds in Brazil as the country expands financially. Internal efforts must equally be included in this Biotechnology agenda. One is human resources training (CNPq 2012). Regions where human resources training is mostly needed are the Northeast and North of Brazil. In the Northeast we established RENORBIO (de Castro L.A.B., 2009), a regional network to develop

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

33

the Semi-Arid of Brazil built with the same concept of the Graduate Groups that exists in California since the seventies. Now more than forty institutions and few hundred PhDs train some 400 Doctors as PhD students which have already deposited over 150 patents in the INPI mostly. Patents however will never become products unless they are treated as by non-profit association such as the Wisconsin Alumni Association that deals with this issue in Wisconsin for almost a century. A RENORBIO Association (RENORBIO 2012) should be located at an innovation center in the Northeast of Brazil I proposed recently. Funds are needed to assure that these patents will be of use for the industry. In order to accomplish that the Brazilian Society of Biotechnology is setting up the Biotechnology Brazilian Network offering to the 48 Graduate courses in Biotechnology access to a software where these courses can be virtually available to the industry. It’s too early to say if venture capital will be shortly available in Brazil. There are few examples in place. If it doesn’t work, Brazil will attempt a tax deduction from Northern States and Counties. Nine Northern States in Brazil collected an estimated US$25 billion in taxes in 2011. If that holds, 0.1% would be enough to establish an Innovation Pole in the Northeast of Brazil and small startup biotech companies would then have a future (de Castro, L.A.B., 2011b). ENCOURAGING PHARMA IN BRAZIL The pharmaceutical industry in Brazil grew 12% last year. Are there any indicators suggesting that growth is sustainable? What are the political policies behind this growth? Brazil confronted hyperinflation from 1965 till 1994 (de Castro, L.A.B., 2011c). The inflation climbed for three decades, comparable only to what happened in Germany during the 1920s. In June of 1994 alone inflation was 46.58%. In 1994 the Plano Real (Real Plan) was launched when Itamar Franco was president of Brazil and Fernando Henrique Cardoso was Ministry of Finance (elected President of Brazil in October that year). Brazil adopted a new currency: REAL but the world recognized this currency internationally only a couple of years later. Inflation dropped dramatically in later years but the cost of money to promote technological development in Brazil for many years and even today is the highest in the world. Why we could not yet promote technological development in Brazil? For almost two decades one could buy public bonds and collect returns of 12 to 14 % a year after deducting the inflation rate. Inflation was

34 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

still very high, in the range of 6%, and when deducted from these bonds it would assure these returns extremely high with zero risk. Who could possibly think to invest in technological development instead? In recent years, President Dilma Roussef decided to adopt a series of measures to reverse this trend. Public banks (Banco do Brasil and Caixa Econômica Federal) decided to adopt lower tax rates for lending money as mentioned before. Of course private banks had to review their position, which for decades had resulted in the highest Bank profits worldwide. The common citizen and the small enterprises are now encouraged to obtain loans to promote their business. Interest rates (The Selic Index) are falling. For a long period this index was as high as nearly 20% yearly. Now it is down to 8.0%. That’s still very high, says Dilma Roussef. In the US this rate is close to zero. However when we compare inflation with the new interest rate the difference is gradually dropping, and those that benefited from easy money with zero risk might need to consider alternatives and eventually move in the direction of risk capital and technology development. In truth, though, private risk capital is still scarce. So what is it that has promoted the growth in the pharmaceutical industry? Financing agencies (the Project Financing Agency, also called FINEP, and the National Bank for Social and Economic Development, BNDES) are lending money for technological development, including the pharmaceutical industry, to be paid back in 10 to 15 years, at subsidized interest rates coming in below inflation: 4.0-4.5% per year. The loans also include three to five years during which only the interest needs to be paid. This is of course only available to enterprises that can demonstrate assets to back up these so-called reimbursable loans. When we compare these policies to the series of crisis prevailing in Europe, the US and even countries like Japan, still struggling to recover from natural catastrophes, Brazil emerges as a new potential partner. In addition Brazil is growing heavily in the area of generics. Brazil imports active principles formulate and sell. It begs the question, though: where will the intelligence come from to support these pharmaceutical partnerships, should they take place in the coming years? As an answer, Brazil has adopted the most ambitious program in history to train young scientists abroad. Historically, Brazil extends 3000 to 5000 scholarships a year to train students in foreign countries. President Roussef now will fund more than 100,000 scholarships over a four-year period. However, budgets are not elastic. This investment of billions of US$ dollars came with

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

35

sacrifice to other initiatives linked to the Ministry of Science and Technology. Until 2012 the general policy was clear: funding of the private sector and scholarships under government control. Dilma Roussef however announced in 2013 that Biotechnology was elected as the top priority to promote technological development in Brazil. We anticipate that the Government will converge a huge investment now for this area shortly. LIMITATIONS OF BIOTECHNOLOGY AS IT APPLIES TO THE PHARMACEUTICAL SECTOR The Patent System in Brazil and the Plant Variety Protection Law During the 60’s, biology was not patentable (de Castro, L.A.B., 2011d). Genetic engineering started during the 70’s, but it was called recombinant DNA technology back then. Investments made in this area demanded a solution for intellectual property (IP) rights being applied to biology. Though living organisms were not patentable before, genetic engineering and particularly applications in the pharmaceutical area gave rise to the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, (The TRIPS Agreement 1994), which allows patent protection to be accorded to inventions in the area of Pharmaceuticals. Brazil signed the agreement, with 13 other WTO members. When Brazil signed TRIPS, it automatically had to reorganize its patent regulatory system. Brazil then approved a patent law in 1996 (Law 9279) and the next year approved a plant variety protection law (Law 9456). These adjustments came a few years after TRIPS, and the Brazilian patent law incorporated what was minimally required in the TRIPS Agreement. Our patent law offered the possibility to patent (recombinant) microorganisms that satisfied what was required for granting patents — a not-obvious invention. But it also provided the option to adopt a sui generis system (the UPOV system) to avoid patenting genetically engineered plants and animals – both not required by TRIPS. Patent law and the plant variety protection are hardly compatible (de Castro, L.A.B. 2011e). Those who have genes and protect the gene technology by the Patent Law also want to have the ownership of whole genomes of plants. The negotiation with agribusiness has progressed however, since in Brazil farmers can measure the benefits and thus pay

36 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

for the technology fees, mostly charged by large corporations. This has made Brazil second in the world to the USA in biotech crops. The big disagreement came in pharmaceuticals. The Brazilian law incorporated TRIPS-endorsed principles that were never accepted by the international pharmaceutical sector, particularly compulsory license. The Brazilian law allows for patented products to be manufactured in Brazil if it’s deemed that prices established by pharmaceutical companies (mostly multinationals) are abusive. Next the Brazilian government, under the stimulus of the health public sector, modified the Patent Law and established with ANVISA (equivalent to FDA in the USA and to EMEA in Europe) that those willing to patent in pharmaceuticals, and having applied for this purpose at the National Institute of Intellectual Property, needed an agreement from ANVISA. This rule makes the Brazilian process longer than any other in the world, and it is under judicial dispute. The Brazilian Patent Law is very restrictive, as we can see in the Article 18 of the Law, which deals with biology matters. The Law 9279 prevents patenting parts of organisms, be it microorganism, plant or animal. Cells are not patentable. Genes are not patentable, unless essential for a patented process. Biopharmaceuticals are not patentable. Molecules derived from the huge Brazilian biodiversity are not considered inventions even if these molecules are isolated and their function demonstrated. As a result Brazil has not one molecule patented from our biodiversity. In addition the general patent performance of Brazil, as compared to Korea, for instance, is extremely weak. Patenting is an essential instrument for partnerships, which is an absolute requirement for the pharmaceutical industrial sector in Brazil, that is funded with national money, to partner with large corporations (which have been in Brazil for decades, some for a century) to ascend to the large international market. This strategy is the only one that will allow these “native” pharmaceutical companies to become relevant actors in the international scene. Fortunately, the private sector is aware of the importance of patents as an instrument for partnerships. Thus partnerships are occurring in Brazil, despite of our patenting restrictions in

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

37

biology. As result the Brazilian pharmaceutical industry is growing and is responsible today for 40% of the market in Latin America. The demand for pharmaceuticals is growing at 10% per year. In fact Brazil is leading an emerging biotech boom in Latin America. But it could do a lot better if our regulatory patents system was reviewed. PARTNERING BRAZILIAN BIOTECH GLOBALLY TO ASSURE THE FUTURE OF STARTUPS IN BRAZIL Brazil is an emerging power in the area of science. The remaining challenge for the country is to move from science to industry in major areas, including biotechnology. The laws created to approach this challenge affect mostly medium and large-size companies, because those can demonstrate incomes from which fiscal incentives can be applied and deducted from income tax. What happens to small, start-up biotech companies? Do they have a future? Brazil has launched a system called “subvenção economica”. Since 2006, there has been an annual call for proposals, inviting companies to apply for funds that don’t need to be paid back. Last “subvenção” call offered about $300 million reais (US$150 million) and the demand was four times that amount. Two hundred and fifty-two companies qualified for funds. Biotechnology and health together totaled 25% (67 companies). Overall, small companies asked for 72% of the funds, which is remarkable. Still, these small startups get an initial push but do not have a mechanism to scale up their business later. The laws mentioned previously do not apply to small biotech companies because they do not have incomes from which to deduct incentives, and also they cannot offer guarantees to back up bank loans. One component of the Innovation Law provides tax deduction for entrepreneurs that invest in technological innovation and as such could give rise to funds from entrepreneurs to small business companies. However, biotechnology does not stimulate the immediate economy because the projects are long term. So the only attractive factor coming from these small companies could be IPR to be offered to larger companies as a means to assure that investments can be made under the protection of the Brazilian Patent Law – Law No 9726/96. The Patent Law in Brazil is however restrictive to innovations related to biology as mentioned before. So we have left the possibility of partnering of small and big companies.

38 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

Previous analysis of the Brazilian health biotech sector published in recent years have highlighted several challenges to sustainable development, including inefficient interactions between the public and private sectors (Rezaie et al. 2008) a lack of venture financing and a paucity of legal incentives to encourage commercialization of the region’s rich biodiversity (de Castro, L.A.B., 2011 f). All these issues have or will be treated in this eBook but I want to emphasize the importance of another issue that prevents Brazilian biotech enterprises from successfully bringing innovative drugs to market: the lack of local partnerships between small and large companies and the poor level of collaboration between Brazilian companies and multinational pharmaceutical companies that can accelerate late-stage clinical development. One illustration of the behavior of the local health biotech sector is the lack of interaction between the two main industry associations in the country the National Association of Pharmaceutical Laboratories (ALANAC-http://www.alanac.org.br) and the Brazilian ResearchBased Pharmaceutical Manufacturers Association (Interfarma: http://www. interfarma.org.br). This weakens the Brazilian industry by preventing both collaboration and pooling of complementary scientific and financial resources that might otherwise bankroll innovative drug development. Most local funded companies are insufficiently capitalized to carry out innovative R&D activity in the area of biopharmaceuticals, let alone investments over a billion dollars to fund the core process from target discovery to a regulatory approval or registration in agencies such as FDA and EMEA. As a result of the weakness of the pharmaceutical sector, not one blockbuster drug has been developed in Brazil throughout its history. Equally we do not have one CMO or CRO in Brazil or a cGMP as said before in the Abstract. The lack of these infrastructure prevents the scale up of good quality R&D when available and obliges companies to invest to establish these infrastructures in Brazil wasting time and money. Moreover, many ALANAC member companies are opting to produce less R&D-intensive products, such as generics and biosimilars, instead of innovative drugs. The recent created consortia: BIONOVIS and ORIGEM which pull together locally funded pharmaceutical industries are too early to be analyzed as to the results that will outcome from these initiatives. Against this background, the Brazilian Federal Government has implemented several initiatives to create a local environment that is more conducive to innovative product development, thereby enriching the pool

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

39

of partnering opportunities for pharmaceutical companies. In 2004, the ‘Innovation Law’ (Law 10,973) was introduced to encourage the sharing of intellectual property and other resources between public and private entities and allow direct support of R&D activities in private enterprises. Although the number of Brazilian biomedical inventions licensed at the US Patent & Trademark Office has doubled over the past two decades, it is still only a small number (http://www. uspto.gov/web/offices/ac/ido/oeip/taf/cst_utl.pdf). The situation in Brazil is complicated further by the country’s cumbersome patenting process mentioned previously. Under Patent Law 9,279, the National Institute of Industrial Property can grant a pharmaceutical patent related to a product only after agreement has been obtained from Brazil’s National Health Surveillance Agency-ANVISA. This rule makes the Brazilian process longer and more unwieldy than that in any other territory in the world. Even so, progress in fostering an innovation- and enterprise-friendly environment is being made. Two laws for creating favorable fiscal incentives for R&D investment (the ‘Asset Law’; Law 11,196) and income tax exemptions for enterprises involved in R&D (Law 11,487) were introduced in 2005 and 2007, respectively. Although these laws had only a minor impact initially, in 2008 the income tax deduction derived from Law 11,196 amounted to ~0.05% of Brazilian gross domestic product (http://www.mct.gov.br). Even greater benefits could potentially be accrued if Law 11,487 could be extended to private enterprises, rather than applied solely to public research institutions, as it does at present. To support basic scientific research and facilitate the translation of products from the bench to industry, Brazil has recently invested over $200 million to establish 123 science and technology national institutes (virtual networks of linking individuals in different centers of excellence), 34 of which are in the area of human health. Finally, the Ministry of Health is attempting to fund partnerships between the private and public sectors to reduce Brazil’s $7 billion accumulated deficit and satisfy the needs of its major public health program, SUS – Unified Health System (see Fig. 2 for details) (http://portal.saude.gov.br/portal/saude/ default.cfm).

40 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

Vaccines --------- 116,160.6 Recombinant*---- 88,774.0 MABs**------------- 29,093.3 Total ----------------- 234,027.9 ------------------------------------------------------------------------------------------*Interferon alfa, factor VIII, interferon beta **Rituximab Trastuzumabe Figure 2: Few most imported pharmaceutical products in Brazil- in US$ x 1,000 (CGEE – Centro de Gestão e Estudos Estratégicos - Adelaide Antunes - Editor, 2006).

Governmental funding is equally needed to support pre clinical and phase 1 clinical research of certain compounds selected by specialists from academic laboratories. It is hoped that these activities will complement and synergize with the activities of the small number of private contract research organizations in Brazil that carry out preclinical work. Indeed, there are clear examples of companies in the ALANAC group that are now attracted to developing new drugs. Such initiatives are critical to move lead molecules to a stage of validation where the pharmaceutical industry is willing to license in, or collaborate in the development of a molecule. Domestic Brazilian pharmaceutical companies, as mentioned previously, are in general not financially capable of performing clinical testing alone, particularly phase 2 and 3 trials. To address this problem, the Brazilian government is actively funding pharmaceutical enterprises to propel compounds into early trials through a competitive system called ‘subvenção’. In addition, foreign venture capital funds specialized in biotech are now setting up in Brazil to further contribute to this role and grow the national health biotech industry. For example: San Francisco—headquartered Burrill and Company is solely now fully operational in the country, with a $150 million life science venture fund slated to launch in 2012 although it has not celebrated one funded project to date. Thus, more than ever before, the Brazilian biotech sector has an opportunity to develop innovative drugs. As several of the large pharmaceutical corporations have been operating in Brazil for many years, some for more than a century there is also a customer base for licensing such drugs— if only the

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

41

bridges could be made. Fostering big pharma – Brazilian biotech partnerships will be crucial for the further development of the sector and its ability to successfully access the $7 trillion global pharmaceutical market (de Castro, L.A.B., 2011 c, op.cited). Biopharmaceuticals are a subset of a new section known as Bioeconomy, which has been gaining attention in the international market, if we consider plant-based products alone, as we may see below (Fig. 3), What are biopharmaceuticals? Perhaps it is important to view the new concept of Bioeconomy.

 
   
 
 


 
 




 

 

 
 







 
"



 &
$
"



!#





#$

"




 #
 




 

),-





).0+

#
#
-+-/$


%
 
#
'  







 
 

' 
#





!
#







 %
#

"


 &
!

$


 
!







 

#
 


#%



"



!
  
 


!#



#







#




%

 
,
-++1

Figure 3: The Concept of Bioeconomy: the words Bioeconomy and Industrial are overlapping each other.

According to the Gary Walsh’s definition, from the University of Limerick, Ireland, who has presented a recent lecture on the subject at the Biotechnology Congress in Fortaleza, Ceará in Brazil. The current state of the art highlights primary metabolism molecules as biopharmaceutical “blockbusters” (Fig. 4). THE LEGAL FRAMEWORK Science in Brazil has evolved considerably over the last three decades. The Brazilian Global Scientific contribution was multiplied by five since 1980

42 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

(Fig. 5). Human resource training caused to a great extent this scientific growth and was the only policy that resisted all the Governmental Political Alternatives that were exercised for three decades in Brazil. But, despite the growth of public investments, with the creation of sectoral funds managed by the Ministry of Science and Technology, as of the end of the last decade, our private investments do not level those of developed countries. For such reason, technology development and innovations need larger investments, which now barely exceed 1.0% of the Brazilian GDP (Fig. 6).

Figure 4: The blockbusters in the area of Biopharmaceuticals.

Brazil has been investing to fund companies through a competitive process, which pursues technology innovations in companies, with no financial return. The method

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

43

Figure 5: Brazilian scientific output with respect to the world (indexed by Thomson/ISI), and to Latin America from 1981-2008 In green: Brazilian output with respect to the world. In blue Brazilian output with respect to Latin America.

in a way copies the Small Business Enterprise from the US but do not discriminate between large and small companies. The fact is that most large companies when funded with no return by the so called Subvention Methodology could be funded by other very attractive mechanisms. The small companies however that do not have alternative, after being funded by the subvention strategy do not encounter means to scale up their business by lack of Bank support. Subvention started in Brazil in FINEP (Financiadora de Estudos e Projetos) in 2006 and even still important may gradually become less important as a tool to promote R&D and Innovation. Apart from that, laws were established recently which deal with innovation and aim at stimulating private investments mainly through fiscal exemption. Law no 10.973, of December 2, 2004, called “The Innovation Law”, reflects the country’s lack of efficient legal devices, which help building a scenario that fosters scientific and technological development as well as innovation. Law no 11.196, of November 21, 2005, known as “The Good Law”, in its 3rd Chapter, articles 17 to 26, ruled by Decree no 5.798, of June 07,

44 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

2006, consolidated fiscal incentives from which legal entities may benefit in the process of technological research and development and technology innovations.

Figure 6: Public and private investments in Science and Technology by country as % of the GDP. Public (yellow) Private (blue).

It has been edited by resolution in Law no 10.973/2004 – “The Innovation Law”, strengthening the new legal landmark in support of technology development and innovation in Brazilian companies. The major goal of these legal devices is to increase private investments and activities in Research and Development turned to innovation. Both laws are recent the results are increasing, but still modest, as quoted below, according to reports obtained from site: http://www.mct.gov.br/ index.php/content/view/8563.html. In 2006, investments in the R&D area on the part of companies that utilized these laws represented 0.09% of Brazil’s GDP, while in 2008 such investments represented only 0.30% of the Brazilian GDP. In the same period, the number of companies has increased 253% and the fiscal exemption has increased 574%. The Good Law (Fig. 7) provides fiscal incentives

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

45

to companies that perform innovation activities. In 2006, 130 companies declared investments of R$ 2.2 billion. In 2009, 635 companies invested more than R$ 9.1 billion. The number of companies increased 5 times, and investment, more than 4 times. We can see, though, that companies are not mainly from the health area. Most applicants belong to sections such as electro-electronic, mechanics/ transportation, and food. These legal instruments ought to be considered by the new platform to be established by a Brazilian Biopharmaceuticals Association still not in operation. In Brazil, risk investments in the so called Biological area are extremely scarce. Noticing that said mechanisms were not capable to move Technological Development and Innovation at a pace comparable to other countries the new Federal Government decided in 2010 to create several mechanisms to promote R&D seeking to reach Innovation. First the so called SELIC index once 20% /year dropped to 8.0 %/year. This investment allowed

46 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

Figure 7: contd….

Figure 7: Brazilian Laws which stimulate incentives for innovation.

Governmental Bonds to be purchased and with no risk at all to be sold with extremely high return after one year, inflation deducted. It was impossible to attract investment to R&D that would be more lucrative than this. This drop in the SELIC Index caused investors to start looking for alternatives R&D and Innovation becoming a new agenda for them. That happened because in addition the Federal Government reduced bank “spreads”. Starting by reducing interests in two major Public Banks the Government almost “obliged” Private Banks to follow this policy. Other policies are being adopted such as reducing the industrial tributes and offering reimbursable funds to the industry to be paid for ten to fifteen years, interest of 4.0 to 4.5% annual interest (below inflation) being the first three to five years not included in the capital payment, only interest being paid. The pack of policies is not complete and the Federal Government reserve other policies to stimulate R&D and Innovation. Among others the largest human

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

47

resource training Program in history (Brasil sem Fronteiras – www.cnpq.gov.br). One hundred thousand students will be trained untill 2016 Brazil has adopted law#9279/96 on patents which, as mentioned, prevents biodiversity byproducts from being patented. As Biopharmaceuticals are mostly biodiversity byproducts, their patenting in Brazil is not regulated by the Brazilian Patent Law. On the other hand, in other countries, as in Europe, the possibility of patenting biopharmaceuticals is broader, as presented below (Fig. 8). I highlight particularly biopharmaceuticals and plant extracts. The strategy to be adopted in the Country should be that of patenting abroad: USPTO and EPO. .




 &

• %

"!


"!
#!

• • • •

" 
"

% ! '
%! '
!
)
"! ) "!

• !
$!!
• 
"! • ! • ! ((!

Figure 8: Limitation imposed by the Brazilian Patent Law with respect to patenting of biopharmaceuticals.

The Brazilian Patent Law has undergone another constraint, which was introduced by Jose Serra, while he was the Minister of Health. The Patent Law was modified in 2000, to demand that the granting of patents in the pharmaceutical area should depend on previous consent from ANVISA the Agency in Brazil that is equivalent to FDA in the USA. This is unique and does not occur in any other Patent Law in developed countries. Finally, the INPI (The National Institute for Intellectual Property), which does not have the possibility, according to the scope of the law, of patenting biodiversity by products, was limited in its action to only reviewing patents for processes derived from biodiversity in order to patent those obtained with the approval of CGEN, the council that regulates access to biodiversity

48 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

through the current legislation. This Council, in the last decade, nearly prevented Brazil’s biodiversity from being accessed. As this council is unable to interpret properly the lawon access to biodiversity (Provisional Measure#2.186-16, of August 23, 2001), 107 processes were kept suspended, and finally, by a court decision, were conveyed to IBAMA (Instituto Brasileiro do Meio Ambiente linked to the Ministry of Environment), generating a US$10 million fine to NATURA alone. For all reasons mentioned, we recommended before that the Brazilian Biopharmaceuticals to be patented abroad: EPO or USPTO via PCT. It will not be possible to achieve innovations with biopharmaceuticals in Brazil unless we change the Provisional Measure #2.186-16 of August 23, de 2001. The Provisional Measure includes a new concept, created by the Biological Diversity Convention which, in its first article, deals with the sharing of benefits as shown below. THE BIOLOGICAL DIVERSITY CONVENTION - OBJECTIVES The goals of this convention, to be met according to the relevant provisions, are the conservation of biological diversity, the sustainable utilization of its components and the fair and equitable sharing of the benefits derived from the use of genetic resources, through the appropriate access to genetic resources and transfer of relevant technologies, taking into account all rights over these resources and technologies, and by means of appropriate funding, According to the first article of the CBD (CBD 1993). The Provisional Measure (MP 2186, 2001) considers the exercise of this concept in a way that has been preventing access to biodiversity at all, for it requests benefit sharing agreements before these benefits are defined. Besides, to collect biodiversity samples, one needs a permit from IBAMA, but to identify molecules in collected material, dead or alive, one needs a permit from another Institution, the Chico Mendes Institute, created by Minister Marina Silva, while she was the Minister of Environment. The rule promotes the absurd of demanding that the Butantan Institute that works with snakes for more than a century asks a permit from the Chico Mendes Institute to identify molecular components important to the pharmaceutical industry from snake poisons that integrate the Butantan

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

49

collection. Scientists from EMBRAPA are being fined for having collected arachnids to study the gene expression that encodes spider web proteins. The control over access to biodiversity must be under responsibility of the National Research Council of the Ministry of Science and Technology by law and finally it seem in practical terms that now it is. Another law may be elaborated by those interested in sharing benefits, without preventing the development of biopharmaceuticals in Brazil. FROM BIODIVERSITY TO BIOPHARMACEUTICALS (DE MORAIS FILHO 2010) By Wilson’s definition, biodiversity is the variability of genetic programming that allowed for the existence of all species, and includes all genes and products of their expression. Estimations indicate that, currently, about 1.7 million species of plants, animals and microorganisms are scientifically known in the planet (Fig. 9). If we consider the most coherent figures, the total number of live species must be something like 30 to 100 million. Among these, though, about 12.5 million species may be used with practical purpose, which means that a little bit more than 13% of these species are known. But being scientifically categorized does not mean that they have been evaluated regarding their economic potential. The destruction of biodiversity has never been so intense. According to the United Nations Organization Report - Global Biodiversity Outlook 3 (Professor Manoel Odorico’s project personal communication), more than 60% of all ecosystems in the planet are at risk. Of this total, 35% are mangroves and 40% are forests. These statistics show the absolute failure of the Biological Diversity Convention, which, in almost two decades, did not meet any of the planned goals. Between 2000 and 2005, the devastation of the forests in South America reached 4.3 million hectares, and 3.5 million took place in Brazil. Brazil, in 20 years, has witnessed the destruction of forests that, altogether, have the size of Germany. According to the Global Biodiversity Outlook 3, the deforestation and degradation of mangrove areas alone cause an annual loss of 2.5 to 4.5 trillion US $ to the World economy. The only way to gradually neutralize this world trend is to add value to biodiversity products, which is exactly what the development of

50 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

Figure 9: Number of known and estimated species on Earth.

biopharmaceuticals proposes. This concept adds a sort of law which I named as “biokeepers rights”, (de Castro, L.A.B., 1997) (Fig. 10). Brazil has an area of 8.5 million km
, occupying almost half of South America. This area has several climate zones, which include humid tropics up North, semi-arid climate in the Northeast and temperate areas down South. These climate differences lead to ecological differences, forming distinct biogeographic zones, called biomes. The

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

51

World’s largest tropical rain forest (The Amazon Forest), with more than 30 thousand plant species, and the World’s largest wetlands (The Pantanal) are part of these biomes, as well as the Cerrado (savannas and woods), the Caatinga (semiarid forests) and the Atlantic Forest (tropical rain forest). Brazil has a sea coast of 3.5 million km
with several ecosystems, including coral reefs, dunes, mangroves, lagoons, estuaries and swamps. Brazil is home to seven biomes, 49 already categorized eco-regions and countless ecosystems. Not to mention that it also has the largest river system in the World and an incredibly rich sociocultural diversity.

Figure 10: Outline of the SUSBIO project to aggregate value to the products of Biodiversity.

THE AMAZON FOREST The Amazon Forest occupies the Northern Region of Brazil, comprising about 47% of the national territory. It is the largest forest formation in the planet,

52 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

determined by the humid equatorial climate. It has a wide variety of plant physiognomies, from dense forests to fields. The thick forests are represented by dryland forests, floodplain forests, periodically flooded, and the igapó forests, permanently flooded, which take place almost everywhere in Central Amazon. The Roraima fields take place over poor soil in the northernmost tip of the Rio Branco Basin. The campinaranas develop over sandy soils, spreading in spots along the Rio Negro Basin. There are also Cerrado areas isolated from the ecosystem of the Brazilian Central Plateau Cerrado. On the hill tops, rupestrian fields usually take place which are similar to the Cerrado. The Amazon Forest is the biggest forest in the World, it equals to 35% of the forest areas in the planet. THE CAATINGA The Caatinga is an exclusively Brazilian biome. It occupies about 11% of the country (844,453 Km
), being the main biome of the Northeast region. The Caatinga is the less known biome in the country, since few collections were carried out in it. However, more recent data indicate a great variety of environments and species, with 932 plant species, 148 mammals species and 510 bird species, for instance, and many of these species exist only in the Caatinga. The higher areas, subject to less intense droughts, located closer to the coastline, are called Agreste. The transition area between the Caatinga and the Amazon is known as Mid-North or Zona dos Cocais. A large part of the Northeastern Sertão is at high risk of desertification, due to degradation of the plant layer and of the soil. Currently, about 27 million people live where the Caatinga used to be, and 80% of its original ecosystems have already been modified, mainly through deforestation and burning, in an occupation process that started in Brazil’s colonial times. A great part of the population living in the Caatinga area is poor and needs its biodiversity resources to survive. On the other hand, these very resources, if conserved and explored in a sustainable way, can drive the region’s development. The conservation of the Caatinga is closely associated to fighting desertification, an environmental degradation process which takes place in arid areas, semi-arid areas and dry sub-humid areas. In Brazil, 62% of the areas susceptible to desertification are in zones originally occupied by the Caatinga, and many of these areas have already been quite modified.

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

53

THE CERRADO The Cerrado occupies the Brazilian Central Plateau. The continuous central area corresponds to about 22% of the national territory, and there are large spots of this physiognomy in the Amazon, and some smaller ones in the Caatinga and in the Atlantic Forest. Its climate is particularly demarcated, presenting two well-defined seasons. The Cerrado presents various physiognomies, from clean fields with no woods to the cerradão, a dense tree formation. This region is pervaded by riparian forests and veredas, which follow the waterways. Nowadays, a large part of this biome is disturbed due to the expansion of the country’s agricultural frontier. However, only 17% of the Cerrado found when the journey of building Brasília started are left. THE ATLANTIC FOREST The Atlantic Forest, including the semi deciduous seasonal forests, was originally the forest with the largest latitudinal extension in the planet, from 6 to 32oS. It covered about 11% of the country’s territory. Nowadays, however, the Atlantic Forest has only 4% of its original coverage. The climate variability is wide, from temperate super humid climates in the far South to tropical humid and semi-arid climates in the Northeast. The rugged landscape of the seaside zone makes this ecosystem even more arid. In the valleys, trees tend to develop massively, forming a thick forest. On the slopes, this forest is less dense due to frequent tree fall. On the top of the hills, rupestrian fields tend to appear. In the far south, the Atlantic Forest gradually blends with the Araucárias Forest. In the Brazilian Southern Plateau, with altitudes higher than 500m, stands out the spreading area of the Paraná Pine, Araucária angustifolia, the Araucária Forest which once occupied about 2.6% of the country’s territory. In these forests, specimens of Brazil’s tropical and temperate flora coexist, but the Paraná Pine rules. The forests vary on vegetation high and tree density, and may be categorized, according to soil aspects, such as alluvial, along the rivers; submontane, which no longer exist; and montane, that dominated the landscape. The open vegetation of the grass and woody plant fields takes place on shallow soils. Due to its high economic value, the Araucária Forest has been suffering great deforestation pressure.

54 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

The Atlantic Forest The Pantanal of MatoGrosso is the largest continuous flooding plain in the Planet, covered predominantly by open vegetation, which occupies 1.8% of the country’s territory. This ecosystem is formed mostly by sandy soils, covered with different physiognomies, due the variety of micro-reliefs and flooding regimes. As an intermediate area between the Cerrado and the Amazon, the Pantanal bears a terrestrial ecosystem mosaic similar to that of the Cerrado. SOUTHERN FIELDS –THE PAMPAS In the temperate climate of the southernmost portion of the country, the Southern Fields, or Pampas, develop which once comprised 2.4% of the vegetal coverage of the country. The flat terrains of the gaucho plains and plateaus, and the coxilhas, with gently undulating reliefs, are colonized by pioneering countryside species which form a vegetation of the open savanna kind. Seasonal forests and fields also take place, with grass and wood coverage. THE COASTAL AND MARINE BIOME Brazil’s Marine Biome is located on the “Brazilian Marine Zone”, and it has different ecosystems. The “Brazilian Marine Zone” is the biotope of the Continental shelf, which has variable width, with about 80 nautical miles in Amapá, and 160 nautical milesin the mouth of the Amazon River, narrowing to 20-30 nautical miles on the Northeast region, where it is comprised, basically, by irregular depths with calcareous algae formations. As of Rio de Janeiro, towards south, the shelf broadens again, forming large depths covered by sand and mud. Thanks to natural products, including toxins extracted from animals, bacteria, fungi or plants, scientists were able to understand complex phenomena related to cell and molecular biology and electrophysiology, allowing for the identification of enzymes, receivers, ion channels and other biological structures, which were then isolated and cloned. This allowed the pharmaceutical industry to design drugs with higher selectivity, which are also more efficient against more complex diseases. Apart from that, natural products are used as raw material to synthetize complex molecules of pharmacological interest. Currently, the largest

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

55

pharmaceutical World industries have research programs in the natural products area, because they offer, among others, the following advantages: a large amount of chemical structures, many of them complex; many counterpart structure classes; bi and tridimensional chemical structures; potential use as molecule bank in high speed essays; saving time and resources; source of small molecules for complex molecular targets and, more important, capable of being absorbed and metabolized by the organism. PLANTS Plants are still critical in discovering new drugs. Both as source of active ingredients and as leading molecules used to develop synthetic or semisynthetic drugs, based on compounds from their secondary metabolism. One of each four medicines sold in drugstores is made from material direct or indirectly derived from plants, which represents about 193 billion Dollars. If we add informal economy to that value with the popular use of medicinal plants in developing and developed countries, we reach hundreds of billions of dollars a year. These values are even more significant in demonstrating the importance of plants in a way to stimulate their investigation if we consider them before the estimates that only about 10% of the existent plant species have been systematically studied regarding bioactive compounds, and that only 1,300 species among 250,000 known plant species have been studied regarding their medicinal properties. With the speed that plant species are becoming extinct, a huge number of plants with medicinal properties is at risk of disappearing before having their value recognized, which makes it even more urgent to improve investments in this area. MICROORGANISMS Estimations indicate that, worldwide, the diversity of microorganisms is much larger than that of plants and animals. Surveys suggest that, currently, only 5% of the fungi diversity is known, with approximately 69 thousand species described. The knowledge on microbial diversity is incomplete and fragmented but many fungi are known with direct application to medicine (Fig. 11). Except for rare

56 Opportunities and Limitations for Biotechnology Innovation in Brazil

Figure 11: Plant Derived Molecules that Originated Medicines.

Luiz Antonio Barreto de Castro

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

57

specialized relevant collections, microorganisms isolated in the country’s ecosystems are not available for biotechnological application. The taxonomic diversity of these microorganisms is more widely known and better documented for filamentous fungi, with diversified literature, including taxonomic reviews and survey of species in many regions and ecosystems; however, limited to a reduced number of taxa. In any survey on the Brazilian biota fungi, one can clearly notice that the knowledge on these microorganisms’ diversity in the country is still rather unexpressive and mainly focused on systematic research and taxonomy (Fig. 12).

FUNGUS

PHARMACEUTICAL

THERAPEUTIC USE

Streptomyces griseus

Streptomycin

Antibacterial

Streptomyces erytheus

Erythromycin

Antibacterial

Streptomyces kanamyceticus

Kanamycin

Antibacterial

Streptomyces fradiae

Neomycin

Antibacterial

Streptomyces nodosus

Amphotericin

Antibacterial

Streptomyces aureofaciens

Tetracycline

Antibacterial

Penicillium chrysogenum

Penicillin

Antibacterial

Penicillium notatum

Penicillin

Antibacterial

Penicillium chrysogenum

Ampicillin

Antibacterial

Penicillium patulum

Griseofulvin

Antimycotic

Aspergillus fumigatus

Fumagillin

Antiprotozoal

Cephalosporium acremonium

Cephalosporin

Antibacterial

Paecitomyces varioti

Variotin

Antimycotic

Aspergillus terrus

Statins

Hypolipidemic

Streptomyces tsukuboensis

Tacrolimus

Immunosuppressive

Actinomyces antibioticus

Actinomycin

Anticarcinogenic

Streptomyces verticillus

Bleomycin

Anticarcinogenic

Streptomyces peucetius.

Doxorubicin

Anticarcinogenic

Trichoderma polysporum

Cyclosporin A

Immunosuppressive

Figure 12: Some fungi derived pharmaceuticals and their applications.

58 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

SEA ORGANISMS All the knowledge accrued from studying natural sea products, especially in the academic medium, emphasizes the therapeutic potential of these molecules. Over the last years, some companies were founded with the goal of developing new medicines with sea originated prototypes. Like PharmaMar, founded in 1986 and, nowadays, a division of the Zeltia group, that over the last 20 years invested more than 420 million Eurosin researching sea originated drugs with potential to treat cancer. PharmaMar has a collection of more than 65,000 sea organisms, from which 700 new chemical entities were isolated and 30 new substance families were described. It is worth mentioning that, currently, 3 substances are on preclinical stage and 5 on clinical test stage, while Trabectedin (ET-743, Yondelis®) has recently been approved by EMEA to treat soft tissue sarcomas in patients refractory to anthracyclines and ifosfamide. Undoubtedly, over the last years, chemical and pharmacological investigation of sea organisms has contributed significantly also in discovering other new potentially active chemical substances for therapeutic purposes, apart from the antineoplastic activity, effective as anti-bacterial, anticoagulant, anti-thrombotic, antiprotozoal, analgesic, anti-asthmatic and antiviral. However, this area is still far from maturity and the search for new sources and large-scale production strategies goes on. ANIMAL TOXINS (REPTILES AMPHIBIANS AND ARACHNIDS) Estimations indicate that about 38 thousand spider species exist, but only a third of these species are currently known. Despite the large diversity in tropical and subtropical regions, there are few studies in these areas in what concerns to the arachnological fauna, represented in the country by about 4 thousand species. Amphibian reach more than 4 thousand species all over the World and Brazil has 517 categorized amphibians, 294 of them being endemic. As per reptiles, calculations indicate about 6 thousand species around the World, and 468 of them are in Brazil, 172 being endemic. Several species of these classes, such as frogs, snakes, scorpions and spiders have developed poison to defend themselves. These animal originated toxins have fascinated men for a long time, due to their dramatic pharmacological, systemic and neurochemical effects. Several

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

59

pharmaceutical laboratories have used natural toxins as pharmaceutical models to develop their products with pharmacological potential comparable to plant alkaloids or secondary microorganism metabolites. Researches in the animal originated toxin field have contributed enormously in understanding, for instance, vascular problems, inflammatory processes, pain mechanisms, allergic processes and bronchial asthma, amongst others. Researches on the poison of Brazilian snake Bothrops jararaca resulted in fundamental discoveries such as bradykinin, by Maurício Rocha e Silva, then Bradykinin Enhancer Peptides, that served as a molecular prototype in developing Captopril, an anti-hypertensive drug that dominates the international market, by Squibb. This is a classic example of a biomedical research carried out here in Brazil, but used by the multinational industry to produce a high impact pharmaceutical. Some initiatives destined to explore animal toxins of scientific, medical, social and economic interest derived from our biodiversity have been identifying molecules of interest to the pharmaceutical industry. Recently a team of researchers from the Butantãn Institute have patented a new anti-hypertensive substance, Evasin, also derived from BPP, more selective than Captopril in action and with less intense side effects. Anti-thrombotic drugs are being developed from snake poison by Genentech (USA). Wyeth-Ayerst is developing an anticonvulsant pharmaceutical from neurotoxins existent in the mamba snake’s poison (Dendroaspis). This snake has also other kind of toxin, known as muscarinic, which is being used by MarrioMerril-Dow as lead drug for the development of a drug that controls neurodegenerative diseases. Persisting in their search, pharmacologists and biochemists noticed that besides lowering blood pressure, poison from the wandering spider may enable erection, unlike most anti-hypertensive medicines, which cause impotence. Recently, researches developed in UFMG have identified in Lachesis muta poison (bushmaster snake) a peptide that works as anticoagulant and inhibits angiogenesis, being, therefore, a possible candidate in treating malignant tumors. Another relevant work shows the results obtainedfrom BJVIII protein, extracted and purified from Bothrops jararacussu poison, popularly known aslancehead snake, and Crotalus durissus cascavella, the rattlesnake, that presents hypotensive activity by increasing baroreflex sensitivity, which may originate a new class of anti-hypertensives.

60 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

BRAZILIAN BIOPHARMACEUTICAL AGENDA Human Resources for Prospecting of Natural Products in Brazil In Brazil, universities are the most important site in forming human resources, the main section responsible for scientific production and storehouse of ideas, supporting development both in the industry and services sections. According to the Brazilian Research Group Directory, in CNPq, the country has 22,797 research groups, along 422 institutions, including 104 thousand researchers, with 86,075 research lines. Of which, 14.7% belong to the biological sciences area. In this database, 1088 groups were found which focus on studying biodiversity and natural products (Fig. 13). Overwhelmingly chemistry, pharmacology and biotechnology groups which shows that the country has a scientific base to provide, identify and characterize molecules with medicinal potential. Despite all the potential and the considerable number of molecules extracted from natural products, especially plants, only a few are explored by the industry yet, which shows the need to add value to them, identifying potential therapeutic actions. NATIONAL SCIENCE BIODIVERSITY

AND

TECHNOLOGY

INSTITUTES

AND

Among the 123 National Science and Technology Institutes approved by the CNPq (Fig. 14), 36 are somehow involved in activities related to the study of Brazilian biomes and biodiversity. However, it should be emphasized that none of them has the purpose of prospecting molecules from our biodiversity with the intention of identifying potential medicinal basis. CONTRIBUTIONS OF THE FEDERAL UNIVERSITY OF CEARÁ´S PHARMACOLOGY AND CHEMISTRY SECTORS IN PROSPECTING BRAZIL´S BIODIVERSITY The Federal University of Ceará, through the sectors of Chemistry, Pharmacology and Natural Products Biology, has an experience of more than 30 years in bioprospecting plant molecules and, more recently, sea organisms and animal toxins. These research groups have also created successful postgraduate programs. In the

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

AREAS OF THE GROUPS DEDICATED TO STUDYING BIODIVERSITY AND NATURAL PRODUCTS

NUMBER OF GROUPS

AGRONOMY

31

BIOLOGY

08

BIOCHEMISTRY

52

BIOTECHNOLOGY BOTANY ECOLOGY

224 54 183

PHARMACOLOGY

61

PHYSIOLOGY

11

GENETICS

68

IMMUNOLOGY

12

MEDICINE

18

MICROBIOLOGY

48

MORPHOLOGY

08

PARASITOLOGY

17

CHEMISTRY ZOOLOGY Total

61

198 95 1088

Figure 13: List of research groups registered in the Brazilian Research Group Directory, CNPq, whose research lines refer to biodiversity.

Chemistry postgraduate program, until June 30, 2010, 163 dissertations and 69 theses were defended related to the Chemistry of Natural Products. In the Pharmacology postgraduate program, with 334 masters and 149 doctorates, of which 64 theses and 143 dissertations are related to researches on plant derived molecules, sea organisms and poisons. There are 64 researchers distributed in 8 research groups involved in bio-prospecting molecules with potential therapeutic activity. These researchers have published more than 6 hundred scientific essays in specialized periodicals on molecules extracted from biodiversity.

62 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

Figure 14: National Institutes for Science and Technology funded in Brazil in 2008.

The Example of the National Laboratory of Experimental Oncology (LOE) of the Federal University of Ceará in the Bioprospection of New Molecules with Therapeutic Potential to Treat Cancer (Fig. 15). Since the early seventies, the Department of Physiology and Pharmacology (DFF) of the Federal University of Ceará has been contributing significantly to the pharmacological study of natural products, with emphasis to the postgraduate program in pharmacology (master degree, professional master degree and doctorate) evaluated by Capes as a 6.up to June 2010, the program graduated 334 masters and 151 doctors, a large part of which in the natural products area, making this course a national and international reference in the study of plants and their chemical constituents. UFC’s National Laboratory of Experimental Oncology (LOE) is one of DFF’s laboratories dedicated to prospecting new molecules with anticancer potential extracted from natural products.

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

63

Figure 15: The Example of the National Laboratory of Experimental Oncology (LOE) of the Federal University of Ceará in the Bioprospection of New Molecules with Therapeutic Potential to Treat Cancer.

UFC’S PHARMACEUTICALS CENTER

RESEARCH

AND

DEVELOPMENT

Because of the growing demand of the national pharmaceuticals industry, regarding academic expertise in the drug research and development section and, due to incentives in the area of pharmaceuticals and medicines coming from the Industrial Health Development for Industrial Productivity Policy Complex, the construction of the Drug Research and Development Center (CPDM) was conceived, in Fortaleza, joining the expertise already existent in the Federal University of Ceará. In this context it is important to highlight that research and development of new drugs involve a multidisciplinary study which starts with a chemical approach, identification of therapeutic targets, pharmacological and toxicological pre-clinical tests in animals, pharmaceutical formulation technics, and culminates with the evaluation of security and efficiency in human beings. The MCT has invested in a relevant way in consolidating the CPDM and, also,

64 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

currently invests in developing pre-clinical tests in the Royal Institute, which will work in cooperation with the CPDM. NORTHEAST BIOTECHNOLOGY NETWORK – RENORBIO, (FIG. 16) In 2006, CAPES recommended a postgraduate program in Biotechnology, associating the expertise already existent in 40 Northeast universities that take part in RENORBIO, with the purpose of capacitating human resources on doctorate level, still lacking in the region. The model was copied by the author from the Graduate Groups at UC Davis in California but benefit from all the Technological Information available today compared to the other system that started in the seventies. Today this Biotechnology Graduate Program is the largest in this area in Brazil over 400 doctorate thesis were developed by RENORBIO since its inception in 2006 and more than 140 patents were deposited mostly at the INPI –The National Institute of Intellectual Property. None (or possibly only a few) of these Thesis and Patents got to become industrial products so far. In a recent call for proposal to be funded by CNPq (The National Council of Research and Development) to finance researches related to ongoing theses, 47% of these essays were found to be related to the natural resources area. The challenge to take RENORBIO to market and to establish what was initially conceived as the potential MERCONORDESTE is still pending. The author proposed to establish a Biotechnological Center funded by an Association such as the Wisconsin Alumni Association in operation since 1928 to convey the products of RENORBIO. Funding is not available to date and the Association was not established so far. For this reason we are considering now to play the same role through the SBBIOTEC Brazilian Biotechnology Association which I preside now. The Association was founded in 1988 but for almost ten years remained inoperative I recovered SBBIOTEC in 1998 and turned it in an “OSCIP” which is an organization of public interest and as such can receive funds from the Government. SBBIOTEC with funds from FINEP and Agency linked to the Ministry of Science Technology and Innovation previously mentioned established and managed RENORBIO. RENORBIO established its strategy that is expressed below in Fig. (16) SBBIOTEC is a small association, it has only over 500 associates mostly professors, scientists and students. Few private companies yet.

Biopharmaceuticals from Brazil

Opportunities and Limitations for Biotechnology Innovation in Brazil

65

SBBIOTEC is however the only one dealing with Biotechnology. For this reason it is critical to strengthen SBBIOTEC. I proposed to establish the Brazilian Network to organize the academic sector. Virtually through a software one can visualize everything related to the 48 Graduate courses: students, professors, disciplines, scientific papers produced and patents. This is needed because 80% of the Biotechnology companies are in the southeast of Brazil. A Northeastern Network –RENORBIO is in operation with a software of this kind. We have the know hoe to build a national one.

Figure 16: The strategy designed for RENORBIO.

REFERENCES CDB (1993) Convention on Biological Diversity –Text and Annexes 34 pp. CNPq (2012) Brasil sem Fronteiras www.cnpq.gov.br

66 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

de Castro, L.A.B., (1996) Sustainable use of Biodiversity – Components of a Model Project for Brazil. Brazilian Journal of Medical and Biological Research Volume 29: 687-699 de Castro,L.A.B., (1997) Sharing of benefits from the utilization of genetic resources:components of a model project for Brazil. Kalemany J Mulongoy; Veit Koester., (org) Transboundary Movement of Living Modified Organisms Resulting from Modern Biotechnology, Geneva: Geneva University Press Volume 1: 1-215. de Castro, L.A.B. & Barros, A.K (2009) Incentives for Brazilian health biotech Nature Biotechnology 27, 317 - 318 de Castro, L.A.B., (2011a) Brazil as host Nature Bioentrepreneur, http://blogs.nature.com/ tradesecrets/author/lbarreto de Castro, L.A.B., (2011b) The Future of Startups in Brazil.Nature Bioentrepreneur http://blogs. nature.com/tradesecrets/author/lbarreto de Castro,L.A.B., (2011c) Encouraging Pharma in Brazil. Nature Bioentrepreneur http://blogs. nature.com/tradesecrets/author/lbarreto de Castro, L.A.B., (2011d) The Patent system in Brazil Bioentrepreneur: Tech Transfer http://blogs.nature.com/tradesecrets/author/lbarreto de Castro,L.A.B., (2011e) Patent law and the plant variety protection are hardly compatible Revista da ABPI, March/April 2011. de Castro. L.A.B., (2011f) The innovation and the good law in Brazil e Bioentrepreneur http://blogs.nature.com/tradesecrets/author/lbarreto de Morais Filho, M.O. (2010) A biodiversidade brasileira como fonte de medicamentos inovadores: Proposta para criação de um Instituto Nacional de Ciência e Tecnologia para prospecção de moléculas com potencial atividade terapêutica na biodiversidade brasileira.ASCOF – Assessoria de Coordenação de Fundos Setoriais Lele U. Food Security for a Billion Poor Science; 327: 1554.(2010) MP (2001) Medida Provisória que Regula o Acesso a Recursos Genéticos e Repartição de Beneficios 2186-16. Prates, V.M., Sforça, M.L., Regis, W.C.B., Leite, J.R.S.A., Silva, L.P., Pertinhez, Thelma, T.A., Araujo, A.L.T., Azevedo, R.B., Spisni, A. and Bloch Jr, C. (2004) The NMR – derived Solution Structure of a New Cationic Antimicrobial Peptide from the Skin Secretion of the Anuran HylaPunctata. J. Biol. Chem., 279:13018-13026 issue 13 RENORBIO (2012) Estatutos Sociais da Associação da RENORBIO para o Desenvolvimento Regional –ADERE – RENORBIO Rezaie, R., Frew, S.E., Sammut, S.M., Maliakkal, M.R., Daar, A.S., & Singer, P.A., (2008) Brazilian health biotech—fostering crosstalk between public and private sectors Nature Biotechnology 26, 627-644 The TRIPS Agreement (1994) Annex 1C of the Marrakesh Agreement under the World Trade Organization, signed in Marrakesh, Morocco on 15 April 1994

Send Orders of Reprints at [email protected] Opportunities and Limitations for Biotechnology Innovation in Brazil, 2013, 67-108

67

CHAPTER 3 Partnering to Build Biotechnology Abstract: The strategies to be described in this Chapter emphasizes the importance of partnerships to build Biotechnology in Brazil. Partnerships include bringing together pharmaceutical companies funded with national capital with companies funded with international capital. These partnerships are absolutely essential. Describes in addition how networks can reduce the unbalance we exercise in Brazil, such that 85% of the Continent has only 35% of the science and technology critical mass and as expected only 30% of the National Growth Product. It considers amongst the partnerships in the pharmaceutical area how important is to internalize instruments and institutions such CMOs, CROs and cGMP, not existing in Brazil. It offers equally the possibility for Brazil to play a role in the Gene Revolution, not played before in the Green Revolution especially in agriculture. If successfully applied, the powerful science-based technology we have in our hands will contribute to extend the benefits of the Gene Revolution to the poorest countries; very much as the Green Revolution did in the past reducing the hunger syndrome which claimed the lives of millions of people in some Asian countries decades ago. Norman Borlaug, during a visit to Brazil in February 2004, stated that the 21st century revolution will come from Brazil in the area of agriculture. He further indicated that reducing hunger is essential for the world to achieve socio economic stability, in full agreement with the context of this paper. The FAO Annual Report (FAO 2004) listed the barriers preventing the Gene Revolution from reaching the poor countries: inadequate regulatory procedures, intellectual property rights (IPR) and biosafety, poorly functioning seed-delivering systems and weak domestic plant breeding capacity, all of which are discussed in this paper.

Keywords: National Growth Product, Geographic Unbalance in Brazil, Socio Economic Stability, Hunger Syndrome, Inadequate Regulatory Procedures, Biosafety Rules, Weak Domestic Plant Breeding, RENORBIO,BIONORTE, Semi Arid in Brazil, Global Sc & T, Infant Mortality, RECODISA, FILGRASTRIMA, LYSOZIME, LACTOFERRIN. NETWORKS TO NEUTRALIZE THE GEOGRAPHIC REGIONAL UNBALANCE EXPERIENCED IN BRAZIL Brazil is the sixth global economy and may become the fifth economy this decade. However the GNP/capita in Brazil is ranked 100th. This results in part for the profound geographic unbalance observed in the Country The GNP/capita in Brazil is close to 10 thousand US$. Countries that could serve as reference for Brazil have GNP/capita in the range of 30 thousand US $ (Italy, France, Spain http://www.indexmundi.com/) Luiz Antonio Barreto de Castro All rights reserved-© 2013 Bentham Science Publishers

68 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

Like we say in Plant l Physiology we have to grow and differentiate. In Fig. (1) we can compare the GNP/capita of the four geographic regions in Brazil and show the same index for the three leading States. The Federal District where Brazil houses the capital in Brasilia has a GNP/capita above 20 thousand US$ which compares to some East European Countries North and North East show GNP/capita five to seven times lower than States in the South East and the Federal District. Among the ten States in Brazil exhibiting the lowest GNP/capita nine are in the North East. It is possible that as the Brazilian economy grows the GNP/capita of the South East will be responsible for this process. The challenge is to promote the growth of the GNP/capita of the North East.

Geographic regions

US$

R$

SOUTHEAST

8. 141

15. 468

CENTER WEST

7. 686

14. 603

SOUTH

6. 951

13. 207

NORTH

3. 814

7. 247

NORTHEAST

3. 552

6. 749

Leading States

US$

R$

FEDERAL DISTRICT

21. 418,95

40. 696

SÃO PAULO

11. 930,00

22. 667

RIO DE JANEIRO

10. 128,95

19. 245

Figure 1: GNP/ capita/ geographic region in Brazil and the same index for three leading States.

SCIENCE AND TECHNOLOGY AND GNP/CAPITA There is a ratio between Science and Technology and the GNP/capita. Countries that promote their SC & T also promote their GNP/capita (Fig. 2). The second graph detach with a straight line, the one that has the steepest slope fifteen countries which cluster as the ones with the highest GNP/capita and the

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

69

largest investment in Sc & T. Brazil is in the intermediate cluster and a straight line with the intermediate slope. Investment in Sc & T come from public and private sector. The reason Brazil does not exceed much above 1.0% of GNP investment in Sc & T it is because the private sector invest much less than the public sector. In developed Countries the private sector invests considerably more than the public sector. The investment of the public sector in Sc & T in Japan is comparable to Brazil; but the private sector of Japan invests considerably more than the public sector (graph shown elsewhere in this eBook).

Figure 2: Ratio between Science and Technology and GNP/capita of Countries.

70 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

A database available at CNPq (www.cnpq.gov.br) shows that the number of Sc & T groups in each geographic regions compared to the GNP of the region. As an example: the number of Sc & T groups active in the Southeast of Brazil is 57% of the total. The GNP of the Southeast is precisely 57.8% of the country GNP. Equally if we add the critical mass of Sc & T of the geographic regions North, Northeast and Center West we reach 23% of the critical mass of Sc & T in the country. The GNP of the three added regions reach 24% of the total Country GNP. States could invest 1% of their taxes in Sc & T as São Paulo is being doing for fifty years (via FAPESP: http:// www.fapesp.br) and the State contributes with 40% of Brazil`s GNP. São Paulo invests in Sc & T almost the equivalent amount of money that the Federal Government invests for the whole country. Other States however do not do the same consistently as São Paulo does. The Amazonian region collects 1/5 of the taxes that São Paulo collects. It could invest 1/5 of the money invested by São Paulo which would be a lot considering the size of the Sc & T critical mass of the region that is ten times less than the critical mass of São Paulo. THE REGIONAL GEOGRAPHIC UNBALANCE IN BRAZIL AND THE ROLE OF THE REGIONAL NETWORKS OF GRADUATE AND SC & T Science has to produce development to stimulate Congress to invest in Sc & T. When FAPESP was created in São Paulo development was not an issue. It would never be created as such today. We considered this new context when proposed the Regional networks, initially the RENORBIO in the Northeast, and in sequence Bioamazonas (BIONORTE) and the Center West Networks (the first one somewhat redundant to the CONCERRADO). The Regional Networks belong to the regions, the Sc & T Secretaries in charge of this area in each region and strongly linked to the R&D Foundations and with total support of the Academy. The Federal Government catalyzes the process. Fig. 3 shows the Networks created since 2006. We will not describe all four Networks only the two most advanced ones: RENORBIO and BIOAMAZONIA (BIONORTE). In common these Networks exercise Multi institutional Graduate Programs. In addition the Netwoks focus on poverty, and other social problems (RENORBIO) and sustainable development

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

71

(BIONORTE) The PPG (Research and Graduate) Netwoks has a prime advantage to promote the convergence of the limited critical mass in the region limited in all of them. Article published in the Science Journal in 2008 shows that science and engineer output grows as groups collaborate. It measured this scientific output from 1975 till 2005 (Fig. 4).

Figure 3: Regional Netwoks established in Sc & T and Human Resource training since 2005.

THE SEMI ARID AND THE RENORBIO The Semi Arid in Brazil occupies close to 1.0 million km2 (the largest in the world), 86.48% in the Northeast. In the state of Minas Gerais (11.01%) and in the state of Espírito Santo (2.51%). Reside in the Semi Arid 36 million of people almost 20% of the Brazilian population. The semiarid in Brazil correspond to 17% of the biome globally mostly characterized as the Caatinga. It rains in the SemiArid from 300 to 800 mm of rain/year. Ovine and Caprine constitute the major animal production in the Semi Arid. Eighteen million out of twenty five million animals constituting the national population of these sheep. The activity is very important in the Northeast as an important source of protein. The production of caprine and ovine has challenges not resolved over decades which must be overcome because the demand for this product is growing considerably, particularly dairy derived products. Genetically important races are adapted and

72 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

available at an important EMBRAPA Center in Sobral in the state of Ceará. Most common races are Moxoto, Marota, Canindé, Azul, among others. These races are extremely resistant to adverse conditions and important to be used in transgeny as it was already demonstrated.

Figure 4: Global scientific and engineering output from 1975 till 2005 as related to the institutional interactions.

Because the Semi –Arid has the highest rank of mortality due to diarrhea. From 10 leading counties were diarrhea causes important infant mortality six are in the Northeast (some with 85/1000 four times the national average). Mortality rate is being gradually reduced (15% drop from 2002 till 2005) but 70 thousand babies died in the mid last decade due to diarrhea in the Northeast. From the six counties were the level of mortality is highest five are in the state of Alagoas with mortality in the range of 50/1000 twice higher than the national index. The national rate is now around 20/1000. In Japan this index is 3/1000 in Cuba 5.8/1000, in Chile 7.8/1000 in Argentine 16.5/1000 and in Mexico 19.7/1000.

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

73

RENORBIO received 17 million US$ from the Sc & T funds. Part of this money was used to establish a RECODISA network to express lysozyme in the milk of caprine to reduce diarrhea. As a proof of concept two transgenic animals were produced expressing Filgrastrima as shown below in Fig. 5 RECODISA, in collaboration with the University of Califórnia Davis (Fig. 6) intends to express in addition to lysozyme lactoferrin to lyse bacteria which cause diarrhea in the Northeast and in the Sub Sahara in Africa.

Figure 5: Transgenic animal expressing Filgrastrima - GCSF – Granulocyte colony stimulating factor indicated to recover immunological systems in several circumstances.

BIOAMAZONIA NETWORK The Amazonian Biome spreads itself for all Countries of the North of South America. In Brazil the Amazonian Biome covers 50% of the Brazilian continent 4 million km2. Live in the region more than 20 million people including 180 indigenal tribes and traditional populations like cablocos and quilombolas. The

74 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

Amazonia contains the largest biodiversity in the globe with repect to plants, fresh water fish and mammals. Species of flora and fauna have an important role in the dinamics of the Biome and have as well important genetic chemical and biochemical information which are important industrially for the pharmaceutical, cosmetic and nutritional sectors among others. In addition preserves a considerable portion of tropical untouched forest. The Amazonian biome houses a very importante mineral reserve strategic for the Country, including the largest reserves of iron oil and gas, bauxita, diamonds, uranium cassiterite among others. The biome suffers for one side devastations due to logging and from the other due to the advance of the área used for animal husbandry and grain production (Fig. 7).

Figure 6: Recodisa Network to reduce diarrhea.

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

75

Figure 7: Deforestation in the Amazonian forest.

In the last twenty years deforestation has taken from the Amazonian forest an area equivalent to Germany (Fig. 8), mostly in the state of Pará not much in the state of Amazon. The planet liberates 7 Gigabytes of CO2 in the atmosfera. The level of CO2 cannot surpass 420 ppm being today 370 according to IPCC to prevent global warming to reach beyond 2 degrees C until the end of the century. Brazil has the expectation to revert deforestation as proposed by INPA, in an article published in the Science Journal in 2009. THE AMAZONIAN PROJECT The Amazonia needs billions of US$ as it was done when Brasilia was built in Brazil. This money will come mostly from the private sector as an example from hydro electrics. Policies are equally needed to revert part of the taxes the Federal

76 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

Government receives from the Amazonian states to establish a regional Fund to be managed by FAPs to empower institutions such as EMBRAPA INPA, GOELDI, FIOCRUZ, IPEPATRO, EVANDRO CHAGAS, among others. Equally Brazil can negotiate as new IFM Credor an Endowment Fund for the Amazon. In case de EF is initially of 10 billion US$ 1% of this fund amounts to 100 million US dollars.

Figure 8: Deforestation in the Amazonian forest in the last twenty years.

To promote the Biome conservation it is necessary to aggregate value to the products of the forest as demonstrated elsewhere in this eBook. The Bioamazonia Network called also BIONORTE Network promoted a new approach. The context

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

77

we have today requires a program capable to promote the convergence of science to prevent the dispersal of efforts which is normally the case. Eight National Institutes of Science and Technology are actually funded by MCT and by FAPs of the region. The BIONORTE Network was established by the Sc & T Secretaries of all states and this decision was endorsed by Minister Sergio Rezende.

Figure 9: Cost of a Project to reduce to zero deforestation in the Amazonia in the next ten years.

HUMAN RESOURCES AND THE ROLE OF BIONORTE In the Amazonian region about geographically 50% of the continent, the scientific development is very restricted. According to CAPES (linked to the Ministry of Education and the Agency in charge of human resource training in Brazil), in

78 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

2008 only 2.681 graduate schollarships were offered to the nine States of the region while the South East of Brazil received 22.715 schollarships almost ten times more. The number of teachers and students also reveals the huge discrepancy between regions. Only 2.821 professors with PhD are active in the Amazonian region to teach 5.753 students while in the South East region there are 29.508 PhDs to teach 87.990 students. There is 1 professor for each 4600 habitants in the Amazonian region. This ratio is 1/ 2500 in the South East. So said ratio should be doubled in the Amazonian region to reach comparable numbers with the South East of Brazil Out of 4.356 graduate courses available in Brazil only 174 (4%) are operating in the Amazonian region and in Biodiversity and Biotechnology only 4 have a rank of 5 (a good rank) by CAPES The majority of the Graduate courses are ranked 3 or 4 indicating they must be strengthened (Fig. 9).

Figure 9: Graduate Courses (MsC and PhD) in the Amazon.

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

79

To assure that the Amazonian forest will be protected from deforestation a scientific and technologic revolution is needed to aggregate value to the products of the forest, and thus make these products competitive in front of the alternative: agricultural commodities. In fact the products of the forest are commercialized as “commodities”. This goal stimulated the creation of the BIONORTE Network (Biodiversity and Biotechnology for the Legal Amazonian Region). The main goal of the Network is to train PhDs. In the Amazon there are three Research Institutes linked to the Ministry of Science and Technology, about ten Federal Universities, five State Universities, more than ten Universitiy Centers (not at the same level as Universities). BIONORTE will consolidate the work of these institutions for human resource training to respond the demands of the region. Knowledge about natural products is essential. More qualified people to act in institutions of the region are needed. Brasilia did that when it intended to develop the Cerrado in Brazil. The Cientific Council of BIONORTE designed and submmited to CAPES a program for BIONORTE that was approved and ranked 4 by CAPES less than RENORBIO ranked 5. FINANCIAL FUNDS FOR BIONORTE Funds were destined for BIONORTE to satisfy a call for proposals as shown below in Fig. 10 BIONORTE intend to answer an important question: why bioactive molecules are not identified from the Amazonian biodiversity? In part this is due to the fact that collection expeditions are not done any more as usually done since 1974 when CENARGEN was created. Far from the billions needed. The CDB (Biológica Diversity Convention) established a new concept in its Article 1: to repart just and equitably the benefits derived from the utilization of genetic resources. CDB was initially understood as an instrument to protect the mega biodiversity of developing countries. Brazil was the first to sign it. Because CDB should be operated and negotiated among Parties: Countries. The understanding was that no other country could access the Brazilian biodiversity without our consent. Unfortunately the exercise of the principle by the Executive in Brazil was to internalize the principle to repart the benefits among populations within the Country to be operated by law. A CDB establish rules to be followed between Countries = Parties. The law was never approved by Congress by a

80 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

Provisional Measure assured to the Ministry of Environment the control of the access to biodiversity and the repart of benefits. Since this Provisional Measure no access to products of biodiversity was allowed by CGEM created to manage the Provisional Measure. A license by the Chico Mendes Institute (created by Marina Silva as Minister of Environment) in addition is needed if one wants to work with molecules already collected. Instituto Butantan cannot work with the snakes they have in their collection without this consent as we mentioned before. All agree that a new law is needed but this could never be done in more than fifteen years. Without this law Brazil is excluded from a market (Bioeconomy) that will reach 360 billion pounds in 2025 as estimated in TIMES in 2009. CDB brought no benefits to the Parties. The Cartagena Protocol is a disaster for the Brazilian development. Countries decided to create IPBES a kind of IPCC for the Biodiversity. This initiative recognizes that CDB was a complete failure. Could not even prevent the deforestation of biodiversity globally after two decades.

Figure 10: Financial funds for BIONORTE – 1 real = 0.5 US$.

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

81

PARTNERING WITHIN THE PHARMACEUTICAL SECTOR ALANAC – National Pharmaceutical Laboratories Association, and INTERFARMA – Pharmaceutical Research Industry Association, the first representing the Brazilian funded pharmaceutical industry and the second representing the large corporations funded internationally, some of them however residing in Brazil for over a century, were approached by the author to interact to create a Pharmaceutical Association capable to generate the largest Biopharmaceutical Industrial Platform to develop health inputs in this area in Brazil, from academy to the world market. We had a first meeting and no progress. Biopharmaceuticals are an area which offers excellent opportunities to Brazil, who owns the largest biodiversity in the planet as previously described, which may be accessed in several of the country’s biomes, including the ocean. Not to mention the great scientific expertise developed in this area. With this association, potential private investments in this area will increase, through legal instruments recently created in Brazil. ALANAC and INTERFARMA unfortunately still do not interact. This partnership was once considered by the author as essential to promote R&D and Innovation having Biopharmaceuticals as the central piece of this effort. However, recent policies described in this eBook and the fact that today Brazil became the sixth economy in the world reduced the relevance of this partnership and must take in consideration the fact that large corporations are more and more willing to invest in Brazil. Financial growth is happening in Brazil while the Eurozone, USA, Japan and UK suffer with never ending crisis. Brazil has and it is able to attract the best technology available globally and became important in the process that governs the growth of the pharmaceutical industry internationally for reasons that will be described here. Although modern national pharmaceutical industries have appeared in Brazil early in the last century, most companies funded with national funds have no financial resources to turn Brazil’s pharmaceutical industry into a structure big enough to act worldwide. The creation of a Brazilian Biopharmaceuticals Association had this goal in mind if established as we tried: to extend the research and development of innovative drugs in order to reach the market of industrialized countries. The beginning of this long journey will receive support from policies established from the Federal Government described before, in addition to what we

82 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

already mentioned, by means of INCT`s which have the purpose of offering bioactive molecules to the industry through the prospection of Brazil’s biomes, for a rational exploration of our biodiversity. Nowadays, Brazil’s biodiversity products have no international presence, with rare exceptions, like Acheflan (Fig. 11).

Figure 11: Acheflan, an anti inflammatory developed in Brazil from Cordiaverbenacea a plant found in the Atlantic Forest.

The diagram below (Fig. 12) defines how we can establish the platform to be object of the Brazilian Biopharmaceuticals Association’s activities. The logic of the platform, which aims at promoting enhancements of the private biopharmaceuticals industry in Brazil, including INTERFARMA and ALANAC companies, is that of partnerships between companies of both groups. The ALANAC companies have an extensive relationship with the Brazilian academy. Several projects resulted in patents obtained abroad. As already mentioned,

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

83

the MCT supports this strategy to allow products resulting from these partnerships to reach the stage of Clinical tests phase I, and a critical condition for public support is the intellectual protection of resulting products. The partnerships with INTERFARMA companies have the goal of taking these products to Clinical tests phase III, so they can be registered in FDA and EMEA, which is frequently not financially possible by ALANAC companies, even though many of them have grown financially in recent years. Brazil, however, has no molecules of great value in the international pharmaceuticals market, even though the goal is reachable through this partnership. In a not so recent example: SEMP (Sociedade Eletro Mercantil Paulista) was funded in 1942 in São Paulo. Confirming a high level of pioneering in 1972, SEMP took a major step in the market, bringing the country’s first 20" color TV. The year of 1977 was very important to SEMP, because it was then that the company celebrated a shareholding and technological deal with the Toshiba Corporation, of Japan, which gave birth to SEMP TOSHIBA, a 23 years partnership. Partnerships are, therefore, possible, among companies created in Brazil and companies created abroad, which are located in Brazil, some of them for more than a century. Examples like this are frequent in agriculture, which explain its success and the grain growth productivity that brings our agriculture close to 200 million tons. However, the pharmaceutical industry in Brazil still has no international size, which is desired by this initiative of partnerships. The Biopharmaceutical Association has a critical role in this process, promoting not only partnerships, but also R&D projects, patents of the products and obtained processes and participation in the legal framework that allows access to biodiversity, one of its primary missions, through laws that are more viable than the current ones. SOCIAL BENEFITS FROM THE GENE REVOLUTION The International Congress that took place at the University of Bologna* in May of 2003 “In the wake of the double helix: From the Green Revolution to the Gene Revolution” addressed a major question about the Gene Revolution: is it possible to extend its benefits to resource-poor developing countries? Some of the speakers representing the expectations of developing countries stated that such benefits had not yet reached the poorest countries, and the advances of biotechnology seemed

84 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

to be inaccessible to them. It has been recognized for many years that the Gene Revolution has made substantial advances in plant science that are applicable to agriculture (Abelson and Hines 1999). It is a fact, however, that the plant GM products currently available are not the answer to the major biological and environmental restrictions that prevent the growth of agriculture and mitigate hunger a major challenge of the poor countries particularly in the Sub Sahara region of Africa.

Figure 12: Partnering Brazilian biotech with the global pharmaceutical industry.

In many tropical/semi-arid countries, the limitations of plant productivity due to environmental stress factors were recognized more than 30 years ago (Boyer 1982). This subject went untouched by the Green Revolution and remain as a major challenge for the needed expansion of world’s grain production predicted by demographic pressure (United Nations 2003), which will require the utilization of infertile and physically very poor soils. Mechanisms to strengthen the international agricultural research collaboration in biotechnology between the public and private sector have been discussed since the 1980s (Cohen 1989). Efforts to enhance biotechnology research in Africa go back

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

85

to the early 1990s (Thottappilly et al. 1992). Literally billions of US dollars were spent during the last decades by both sectors. The context behind the adoption of agricultural biotechnology by African countries remains nevertheless very controversial and complex. Anti-GM campaigns, following the approval of the Cartagena Protocol (www.biodiv.org) which came into force in September 2003, have succeeded to block GM imports to hungry populations in Africa (Masood 2003). When we look to the adoption of GM technology in Africa we see South Africa as major actor and a couple of countries of less relevance Arguments in favor of and against the adoption of GM technology in Africa build up while crop production in the continent dropped 8% from 1980 to 1995, leading African countries to import rice to feed starving populations that grow consistently every year. In three decades, rice imports have increased over 12-fold, to about 3.2 million t/year, at a staggering cost of about US $1 billion, and the demand for more rice is growing by 5% every year (WARDA and AGCOM). Jean Ziegler, special UN representative of human right for nutrition declared at her Third Annual Report presented before the United Nations that one child under ten years of age dies every seven seconds directly or indirectly due to hunger. These numbers agree with another official report (FAO 2003) claiming each year the death of six million children under the age of five in the developing world as a result of hunger. UNICEF indicated that more than one billion children suffer the effects of hunger (Gordon and Townsend 2003). Jean Ziegler’s report states that hunger kills 100,000 people every day and that the number of people suffering from food nutrition deficiencies amounted to 840 million in 2002, and is going up. The conclusion in the report is that the international community objective to reduce by half child mortality and the number of people suffering from hunger by 2015 will not be accomplished. It is not surprising then that public opinion is claiming to have a solution for these problems under the expectation that the world’s poorest regions of Central and West Africa could gain the most from the advances of biology (New York Times 2003; Piore 2003). In May 2004, one year after the Bologna Congress previously cited, the FAO stated: “The Gene Revolution: great potential for the poor, but no panacea. Only a few countries are benefiting so far - food crops of the poor need more attention” (FAO 2004). The annual report recognizes that 70% of the world`s poor still live in rural areas and

86 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

depend on agriculture for their survival. As such, the report indicates that agricultural research can lift people out of poverty, by boosting agricultural incomes and reducing food prices. More important than that, though, is that agricultural biotechnology can aggregate value to the crops of the poor by making these crops work as factories of high value molecules for different applications, particularly in the pharmaceutical sector (Gomord et al. 2004). REGULATORY ISSUES HAVE INHIBITED THE ACCESS OF DEVELOPING COUNTRIES TO THE PRODUCTS OF THE GENE REVOLUTION When the first genetically modified plant was commercially released in 1995, world-wide campaigns began against it, led by NGOs. In Brazil, they succeeded in every legal battle against GM plants since 1997, not for scientific, but for political and ideological reasons. Farmers were legally denied this technology in Brazil from September of 1998 until July 2004, when the judiciary sentenced that the Biosafety Law in Brazil was not in conflict with the Constitution. However, during this period the illegal cultivation of glyphosate-resistant soybean increased considerably and estimates based upon the soybean cultivated area compared to the demand reduction of non-GM soy seed, indicate that the herbicide-resistant GM soybean may occupy 40% of the soy area planted commercially in Brazil, over 7.5 million ha. The legal battles are not over. The Legislature in Brazil has been reviewing Brazil’s Biosafety Legislation continuously. This is not, unfortunately, an experience restricted to Brazil. Mexico has the same problems (US Chamber of Commerce 2002; see www.aspb.org 2001). As compared to the 1980s, plant genetic engineering, in Europe has stepped backward owing to political reasons and lack of correct public perception. The Max Planck Institute, a pioneer institution in the area of plant genetic engineering in the 1980s, performed only 50 field tests with GM plants during 2001 (Gaskell 1999; Frank 2000; de Castro 2002b). In England, 154 field tests with GM plants were performed in 2000-2001. This number dropped to 42 in 2003-2004. Biosafety and Intellectual Property Rights (IPR) are often debated issues in relation to genetically modified crops (Kennedy 2003). In Africa, this task is presumably being facilitated by the African Agricultural Technology

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

87

Foundation (AATF). The Rockefeller Foundation has supported IPR and Biosafety issues in Africa (Masood 2003). However, problems related to IPR and Biosafety delayed the commercial release of the Golden Rice (Piore 2003). In fact, the commercial use of almost all crops produced by biotechnology depends on lengthy IPR negotiations, and in addition requires a compatible interpretation of the laws of Patent and Plant Breeders Right (WIPO/UPOV 2002). In the case of the Golden Rice, many companies claimed patents on the technologies used for its creation. In addition, despite the harmless nature of the traits involved, continuous biosafety requests prolonged and delayed the process of taking the Golden Rice to the market (see Potrykus 2005; references in this Chapter). It is needless to underline the importance of this genetically modified rice, which has the potential to save the lives of millions of children in the developing world from the deadly effects of vitamin A deficiency (Abelson and Hines 1999). Vitamin A deficiency kills one person every four minutes according to Jean Ziegler’s report previously mentioned. These tragic statistics cannot be ignored. Solutions cannot be postponed. It is imperative and urgent to have a global effort towards a less hungry world capable of building capacities and jobs, and focusing on major constraints for agriculture development in the tropics that can be resolved by the modern bioscience. Certainly, many issues need to be adequately debated in addition to the regulatory and public perception ones. Political and economic confrontations unfortunately may be at the bottom of this never-ending war that must be overcome in order to promote agricultural biotechnology worldwide. However, the most powerful instrument towards its adoption by the poorest developing countries will be science-based, despite some positions contrary to this assertion (Barinaga 2000). Elements for a strategy to accomplish this goal were presented earlier (de Castro 2002a). Additional comments to complement this strategy will be presented in this Chapter, with respect to some of the regulatory issues mentioned above. THE NEED OF A STRATEGY TO PERFORM LARGE-SCALE ECOLOGICAL MONITORING OF GENETICALLY MODIFIED PLANTS Previous risk assessment is the basis for the commercial release of genetically modified (GM) plants in the United States (Traynor et al. 2002) and in many other

88 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

countries. Biosafety monitoring of GMOs beyond experimentation scale, referred to sometimes as “Tracking and Surveillance”, is needed; but several pitfalls associated with large scale monitoring are mentioned in the literature, particularly methodological in nature (see Chapter 5 in Traynor et al. 2002). Although postcommercial ecological monitoring of GMOs was discussed at a Workshop organized by the National Academy of Sciences (National Research Council 2000), initiatives towards adopting large scale, long-term monitoring of GMOs were modest afterwards. Large-scale or farm scale experiments carried out prior to the commercial release of GM plants practiced in some European countries are inadequate as a model system for developing countries which are geographically sub continental in size. This methodology would require a large number of experimental sites to cover all agricultural areas. In addition, these experiments should be repeated many years in a row, due to the complexity and diversity of tropical ecosystems. Costs are unaffordable and shortcuts are not acceptable. As an example, the results of a three-year experiment performed in the UK led to conclusions that grossly underestimate the complexity of ecology Stokstad E. (2004) “because wild life depends on weeds, some native insects feed on them, butterflies sip their nectar and birds eat their seeds”. This poetic conclusion ignores the fact that the same weed species are of course massively available outside the area devoted to agriculture. Agriculture utilizes a very small area in the world and this area is declining due to urbanization of late-developing countries such as China (Brown 1995). The most astonishing remark in the paper previously mentioned was that: “populations of skylark, corn bunting and other common birds of the British countryside have declined over the past 30 years”. This of course cannot be associated to GM plants, which were never released in England and never commercially released world wide before 1995. On the other hand, chemicals have been sprayed all over the UK and infact all over the world for the last 50 years. It is well documented that million of tons of chemical chlorine-related insecticides were sprayed during the last five decades all over the world to reduce the loss of grains to insects. Today, we spend close to US $8 billion in insecticides, and have hundreds of insect pests resistant to chemicals, in addition to the hundreds of deaths caused by agrochemical intoxication every year in Brazil alone (SINITOX 2004). Short-term experiments are unable to predict

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

89

significant, long-term detrimental effects by GM plants to non-target populations of weeds and in particular, of insects, because the patterns of population fluctuation in nature are complex. In the case of insects, these patterns were shown to be under the influence of many parameters and as such can only be understood after long periods, sometimes decades, of observation (Jones et al. 1998; Zimmer 1999; Bjornstad et al. 2002). Unless the observation time is sufficiently long, it is unlikely that farm-scale experiments will be able to answer this central question related to gene flow and its potential detrimental effect to non-target populations. To further complicate the context, a comprehensive report from The National Academy of Science (National Research Council 2004) proposes to develop methods for the biological confinement of GMOs to prevent gene flow. One of these genetically related confinement methods cited as VGURT (Variety Genetic Use Restriction Technology), reopens a difficult discussion due to its association with the “Terminator” technology, designed to prevent gene flow, completely abandoned due to strong public campaigns against its use. The report-cites no hazardous consequences of gene flow from GM plants to wild species. However, to justify the need for confinement methods, the report mentions the examples of beet and rye, which became invasive as a consequence of genes flowing from cultivated (non transgenic) varieties to related wild species. One of the wrong conclusions derived from the previously cited report, extends the findings of the report on plants (Stokstad 2004) and indicates that the release of certain types of GM plants will require efficient confinement methods which may need five to ten years to be developed. The conclusion is based upon the argument that there is no efficient way to prevent gene flow, hence the long period of time needed to develop new methods to accomplish this goal. The wrong assumption behind this conclusion is to assume that gene flow from a GM to a wild species anticipates drastic environmental hazards. When biosafety regulations were established and exercised for almost 20 years now, it was never assumed that genes would not flow from GM plants as they do normally at a higher or lower rate depending on the species. The biosafety strategy for the commercial release of GM plants establishes a step wise exercise of previous risk assessment and risk management. Since it is disputed whether small-scale experiments are sufficient to predict how GM plants will behave in large scale

90 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

commercial fields, risk management strategies must be developed and adopted. However, it is a fact that (i) GM plants have been environmentally released continuously for more than two decades on an experimental scale and for almost two decades on a commercial scale, (ii) over 80 million hectares have been cultivated in 2004 with GM cultivars and (iii) the surface cultivated with GM varieties has increased every year. The evidence available (Dale et al. 2002) from the current state of knowledge is that the potential impact on the environment of transgenic crops is likely to be negligible. The need for confinement was, of course, never mentioned in the NAS report as an alternative for large-scale, longterm, ecological monitoring of GM plants or to prevent the release of the GM plants widely used in the world. Large-scale ecological monitoring of GM plants is indicated as the best solution to monitor the commercially released GM plants for two reasons: (1) to prevent a detrimental impact to the environment if these impacts are scientifically pointed out as likely to occur and (2) to demonstrate the opposite, e.g. the positive environmental impact of GM plant events as shown in the State of Rio Grande do Sul in Brazil with the gliphosate-resistant GM soybean in association with no tillage (author’s personal observations). The NAS report previously mentioned recognizes that human error does and will always eventually occur. Nevertheless, the withdrawing of GM plants from the environment when human error has occurred in a few cases, was performed without noticeable effects to human health or to the environment itself (see the NAS Report, page 19. The Starlink GM corn events). In fact, this occurred on a large scale in the past with non-GM citrus due to viruses, with non-GM coffee due to rust, and it is under way in Brazil with non-GM cocoa and banana due to “witches broom” and “black sigatoka”, respectively, all pathogenic fungi. One should hence adopt the assumption, based upon conceivable scientific evidence, that the flow of an inserted gene from a GM plant to a wild species does not constitute irreversibly an ecological catastrophe. GM plants are not intrinsically dangerous. The recombinant DNA technology was founded 40 years ago. Hundreds of GM plant events were properly handled through biosafety measures and the case studies of released GM plants that caused concern occurred because of human errors rather than from unpredicted potential dangers of the GM itself. Additionally, these mistakes were corrected without noticeable effects to human health or to the environment itself.

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

91

For the past 20 years, bioassays and molecular analysis have been used in Brazil for large-scale monitoring of a non-GM Baculovirus after its post-commercial release in 1983. The virus is used for the biological control of Anticarsia gemmatalis, an insect pest infesting soybean, and it is presently applied to 1.5 million ha of soybean each year. This is known as the largest biological control experiment worldwide, and after 20 years we have no evidence that the virus will become a plant pestas many had anticipated. In Brazil, the need for large-scale monitoring of GM plants has been recognized since 1998, as a precondition for the commercial release of the first genetically modified crop: the “Round-up Ready” soybean. The National Biosafety Committee in Brazil organized and later on approved the large-scale ecological monitoring of this GM plant for five years in seven states representing the soybean agricultural areas in Brazil and selected the parameters to be investigated such as physical and chemical soil properties as well as biological aspects related to nematodes, fungi, microorganism, gene flow, invasiveness/weed resistance to the herbicide, and plant and soil herbicide residue (CTNBio 1998). The experiment was concluded much later, in 2012 As stated before, five years may be too short a period to predict the potential damage or benefit of any GM plant event to the environment, but this proposal for the postcommercial, large-scale monitoring of a GM plant event was the first of its kind anywhere in the world. Large-scale ecological monitoring by sampling has been exercised for decades by institutions such as The Oak Ridge National Laboratory (Bartell 2000) and by USDA at the Natural Resources Inventory (Lee 2000). It is conceivable to develop methodologies to perform ecological monitoring of GM plants through sampling of specified parameters having the experiences of these institutions as reference. This methodology, unfortunately not yet exercised anywhere, will provide the answer to all the speculative questions related to the potential damage of GM plants that may result from gene flow from a GM crop to non-GM populations. THE PATENT LEGAL RIGHTS SYSTEMS APPLIED TO BIOTECHNOLOGY AND THE PLANT BREEDERS’ INTELLECTUAL PROPERTY RIGHTS: ARE THEY COMPATIBLE? Large private companies have announced their willingness to share their technology for free with African scientists who are working with small farmers in

92 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

sub-Saharan Africa. This willingness does not imply that the IPR issues are resolved. To make the advances of biotechnology available to breeders, it is necessary to have an approach to assure a fair coexistence between plant breeder’s and patent right regimes or laws, making them compatible. The boundaries between Plant Breeders’ and Patent Rights applied to biotechnology must be established to facilitate the adoption of agricultural biotechnology worldwide, particularly in developing countries where gene discovery is lagging behind and most genes are legally protected by others (WIPO-UPOV 2002). This issue has been discussed by both WIPO (World Intellectual Property Organization) and UPOV (Union International e pour la Protection des Obtention Vegetales) for at least two decades (UPOV 1982; WIPO 1987). Unfortunately, most attempts to determine the legal boundaries were coordinated by lawyers with no in-depth background in biology for identifying adequate solutions. This happened unfortunately once again when WIPO instituted a Working Group on Biotechnology (WIPO 1999), an effort that proved to be inconclusive. The basis to make the laws compatible should start by taking into consideration the definition by UPOV of an essentially-derived plant cultivars in its last version (UPOV 1991). When applied to GM plants, an essentially-derived cultivar differs from a commercially derived plant cultivar essentially by a transgene transferred to its genome. This is easily accomplished by crossing a GM plant event to the commercial plant cultivar of interest and by successive backcrosses in order to recover all the commercial characteristics of the cultivar to be released together with the genetically modified trait added to its genome. This link between molecular biology, molecular genetics and breeding, possible through essentially-derived plant cultivars (EDPCs), is the fastest and easiest way to combine transgenes from a genetically engineered plant, often offered by gene companies, with the best genotypes from plant breeding programs available and adapted to developing country conditions. This method reduces the probability of unintended release of engineered genes into the environment since the introgression of the genes can be made under confined conditions. Lengthy genotype/ambient field testing is often not required since the resulting EDPC, as the name indicates, is genetically similar to the commercial cultivars previously selected for the introgression of the engineered gene. The method is also easily

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

93

adaptable for crops such as rice and beans, important components of the diet of poor populations and small farmers in Brazil and Africa. In addition, in tropical countries where the winter is not severe, two and sometimes three generations can be produced in one year depending on the species considered. So, the simple question to be answered is the following: what should the legal right of the plant breeder be under the UPOV system and what should the right of the gene company be, or as it is often called, the life science company that patented the transgene under a patent law? If the final product of the breeding process is not related to the patented gene process, a plant breeder should be free to use a plant variety which includes in its genome a patented transgene related to a patented gene process. This means that the breeder used the plant variety or cultivar not to obtain a product related to the patented gene or patented process, and thus used the cultivar for other reasons, even if the cultivar had the transgene in its genome. Since the patented gene was not directly or indirectly used in the breeding process (because the plant product was unrelated to the patented transgene or gene process), obviously the breeder cannot claim in relation to the obtained product the advantages inherent to the products derived from the patented transgene or its related patented process. This is fair for the breeder because the owner of the patented gene does not have the right to block the use by a plant breeder of entire genomes expressing genes for thousands of other traits unrelated to the patented gene or process. Gene companies cannot legally claim the ownership under a patent law of entire genomes which they have not intellectually “invented”. However, the use by a breeder of any plant/variety protected or not, expressing a patented gene to obtain a new variety, to be or not intellectually protected, taking advantage of the patented transgene, as in the process of obtaining an EDPC, should not be allowed without the consent of the patent holder, even if the breeder does not make direct use of the patented gene as a marker or probe during the breeding process (de Castro 2002), which in fact may not even be necessary. Farmers in the State of Rio Grande do Sul in Brazil recognized under this principle the patent legal rights of Monsanto over the “Round-up Ready” technology and are paying a technology fee to the gene company (Rodrigo Almeida, personal communication). The other side of the coin is that gene companies cannot equally make use of protected plant varieties without the consent of the breeder even if the product is an EDPC. Normally, gene companies

94 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

are not experienced to do plant breeding, particularly in the tropics and tend to utilize EDPC for the reasons already mentioned as previously proposed (de Castro 2002a). The legal limits described may not resolve all possible quarrels between breeding companies and gene companies but establish an avenue to be followed by both sides because it makes the enforcement of the rights easy to be claimed when varieties are registered by the breeders or by the gene companies. The products of this Gene Revolution are the functionally characterized genes but the farmers do not plant genes, they plant seeds of protected varieties. The important characteristic of a law is not only to be fair, but to be enforceable. The last advice for gene companies, particularly when dealing with developing countries, is that the laws in these countries when they exist do not oblige farmers to buy seed every year. In fact, they assure the right of the farmer to save their own seed. Agreements must then be negotiated between gene companies and breeding companies. Seed companies (when they are not the breeding or the gene company) will add the final fees to the price of the seed and the farmer will choose considering the aggregate value of the technology built in the seed. BASIS FOR A STRATEGY TO EXTEND THE BENEFITS OF THE GENE REVOLUTION TO THE RESOURCE-POOR DEVELOPING COUNTRIES Brazil, continuously struggling to reduce hunger and poverty, the incidence of both parameters has been recently surveyed geographically. Considering income/capita, 57.7 million, i.e. 35% of the population in Brazil ranked below poverty level. There were 21.7 million, i.e. 13% of the population, living at extreme poverty levels when this survey was performed. It is a very likely that these numbers are reduced today e.g in 2012. The context however has not changed: more than half (53%) of this population resides in the northeast region of the country. Considering the 100 poorest counties in Brazil, 78% are also located in the northeast. In some rural areas of the northeast, the poverty average ranks twice the national average (Rocha and Albuquerque 2003). We have gradually succeeded in reducing child mortality during the last decades, but funds to be used in social programs to reduce hunger, as expected, increased. As an example, the cost of the Zero Hunger Program in Brazil was close to US $2

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

95

billion/year, just to assure two meals/day for each of the 44 million poor people (the Zero Hunger Program when established planned to benefit twice as many people as the population ranked at extreme poverty level). At cost of US $17/month. The Brazilian socio economic problem is small when compared to the world’s poorest regions of West and Central Africa, where 240 million people, one third of the African population, struggle for food on less than one US $/day (WARDA2003), and thousands die daily of hunger. Rice imports to feed African populations in these regions amount to US $1 billion/year, and they are growing at rate of 5% each year, similarly to what is occurring in Brazil. In order to reduce the gradual and consistent increase of hunger and the cost of social programs, it is imperative that in parallel to social programs, long-term strategies are implemented to build human survival capacity through jobs. We have learnt that agriculture is the most suitable instrument to accomplish these goals. The SemiArid National Institute (INSA) was established recently (not operative thoughin Brazil to develop and apply available agricultural technologies, including the advances of the Gene Revolution, to reduce hunger in this region. We are operating in the agenda of INSA, The Northeast Biotechnology Network Program (RENORBIO). Under this program, selected projects are being funded with the scope mentioned above. We are confident that these instruments now available can facilitate the extension of the results obtained in Brazil to reach the agriculture of the world’s poorest populations of Africa. The northeast of Brazil and the West/Central Africa have similar agricultural problems. It should not be overlooked though that the organization of the agricultural sectors required to extend the benefits of the Gene Revolution to the developing countries. Brazil tripled its production of grains during the last four decades but it was a long-term effort. First, geneticists learned gradually how to breed plants for the tropics. Then, a law to regulate the commercialization of seeds was enacted 40 years ago. Finally, foundation seed programs allowed to transfer the work of the geneticists to the farmers. Since the 1970s, in anticipation of the Gene Revolution, consistent investments in human resources training were made in Brazil in the areas of plant cell, molecular, developmental biology and genome analysis, to offer the advances of biology to plant breeders. A strategy to converge the advances of biological science to other developing countries, particularly to some of the

96 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

poorest African countries, calls for strengthening the cooperation between the best plant geneticists from these countries to team up with the best plant geneticists in Brazil in order to release adapted cultivars of a few grain and staple crops adapted to the Semi-Arid. To base this strategy on one staple crop as proposed recently (Varmus et al. 2003) would be too risky. All corn hybrids had to be replaced worldwide because an inbred line common to all of them was susceptible to a fungus. The above-mentioned cooperation is essential to properly design the additional activities to be implemented in the agricultural sector, and will add to the capacity building of the academics in Africa; this will be achieved by gradually making available the most advanced biological tools being used in Brazil, such as functionally characterized genes needed to produce the plant cultivars mentioned above. The incorporation of the best plant cultivars into foundation seed programs will yield certified seeds. The strategy as a whole will require establishing partnerships between on-going activities in Africa (e.g. WARDA, The African Rice Center and Syngenta Foundation for Sustainable Agriculture) and the EMBRAPA Research Centers located throughout several Brazilian States. This is a general summary description of the strategy and derived basic outputs needed to impact the agriculture of the poorest countries by modern science as a long-term effort aiming to reduce hunger and child mortality, to be expanded on below. FUTURE GOALS AND FUNDS FOR IMPLEMENTING THE STRATEGY We mentioned that the initiative described can be facilitated by the Semi-Arid National Institute (INSA) established in Brazil to apply the advances of the Gene Revolution and to reduce hunger in this region. No new laboratories will be built. INSA will have an office in the Northeast State of Paraíba and work virtually by networks. Unfortunately INSA is not operating as expected so far. It was also mentioned that we are operating the Northeast Biotechnology Network Program (RENORBIO). This Sc & T Program created in 2003 was adopted under the portfolio of programs of the Ministry of Science and Technology in Brazil. The Ministry of Science and Technology has initially assigned funds (US $3 million) from the National Biotechnology Fund to support RENORBIO. These funds were available in 2004 and 2005 for projects focusing on plants resistant to drought,

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

97

pests and to soil Al toxicity, which affects more than half of tropical soils. Additional funds (27 million R$, equivalent to 13 million US$) came from Science and Technology Funds established by Congress to fund biotechnology and agriculture projects. EMBRAPA and MONSANTO agreed to breed soybean RR varieties and derived fees also to fund biotechnology projects at EMBRAPA. It is conceivable to negotiate this strategy internationally. These financial resources will support and strengthen several on-going activities in Brazil which have goals related to those mentioned previously. Genes available in Brazil were expressed in plant genotypes adapted to tropical agricultural conditions and are ready to be backcrossed into genotypes adapted to the Semi-Arid regions. In fact, some plant cultivars such as dry beans resistant to the golden mosaic virus and potato cultivars resistant to viruses are ready to be released as proof of concept, pending on biosafety analysis and field testing. Other functionally characterized genes will result from the support of projects in progress in Brazil on rice genomics, nematodes and insect resistance, and nitrogen fixation by grasses. The development of grasses capable of fixing nitrogen from the air (Vargas et al. 2003) represents the most important agricultural project to support the increasing demand for food that will result from the demographic pressure on agriculture production (UNESCO 2003). The availability of oil-derived urea, which pollutes the soil and the water, will severely restrict grain production worldwide in the next decades (Teweles 1982). All the projects mentioned involve a number of institutions in Brazil and abroad but are housed to a great extent at The National Center of Genetic Resources and Biotechnology (CENARGEN), at the EMBRAPA Soybean Center in Londrina, State of Parana, EMBRAPA Corn and Sorghum Center in Sete Lagoas, State of Minas Gerais, EMBRAPA Rice and Beans Center in Goiania State of Goias, EMBRAPA Vegetable Crops in Brasilia, the Agro-Biology Research Center of EMBRAPA in the State of Rio de Janeiro and at the Biochemistry Department of the Federal University of Rio de Janeiro. Functional characterization of genes must elucidate important mechanisms to neutralize pathogen activity in plants for disease and pest resistance and to avoid environmental stresses. Advantage will be taken from the scientific developments obtained with Arabidopsis (Apse et al. 1999), tobacco (de la Fuente et al. 1997), rice (Goff et al. 2002; Yu et al. 2002) and C. elegans (Hodgkin et al. 1998) among

98 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

others. Genes will also be identified and cloned from cooperation with on going international projects in the verge to be funded - USAID (see Miftahudin et al. 2005), and other being funded such as the Challenge Program (see Zeiglerand Nelson 2005). Finally, genes could also be contributed by the private companies after the public announcement of their willingness to share their technology for free with African scientists who are working with small farmers in sub-Saharan Africa. The most important strategy for developing countries, however, in order to identify and characterize the genes needed for their breeding programs, is to deal with biology in a convergent way to compensate for the reduced number of scientists working in molecular biology. Technically this is, in addition, recommended because the functional analysis of genomes shows the possibility of using genes from organisms very distant phylogenetically to find their orthologs performing the same functions in other species. Finally, it is absolutely necessary to build up aggregate value to the crop of the poor countries. Several examples indicate that plants can become important protein expression systems for molecules of high intrinsic value such as pharmaceuticals. It is naive to expect, as said in the FAO 2004 Annual Report, that the “orphan crops” cowpea, millet and sorghum will lift people out of poverty, by boosting agricultural incomes. This will only happen if these crops express special protein molecules as already demonstrated (Gomord et al. 2004), and if Africa builds a Program that encompasses the right policies (please see Brazil and Africa Should Partner to Build the Biotechnology for the Poor in this eBook). BRAZIL AND AFRICA SHOULD PARTNER TO DEVELOP BIOTECHNOLOGY FOR THE POOR This coming year four decades will have passed since Herbert Boyer expressed an insulin gene in E. coli., which marked the onset of the gene revolution. Still the area is under continuous controversy. Last September experiments were made public by Giles-Eric Seralini a Molecular Biology Professor of the University of Caen in France that wanted to demonstrate that genetically modified corn caused cancer in rats that also died earlier. The results were strongly criticized but nevertheless added negatively to the public perception of GMOs as it happened in the past with professor Puzstai. The Pusztai affair is a controversy that began in

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

99

1998 after Arpad Pusztai went public with research he was conducting at the Rowett Institute with genetically modified (GM) potatoes. The potatoes had been transformed with the Galanthusnivalis agglutinin (GNA) gene from the Galanthus (snowdrop) plant, allowing the GNA lectin protein to be synthesized. This lectin has many other lectins are shown to be toxic to some insects and to humans. Rats were fed on raw and cooked genetically modified potatoes, using unmodified Desiree Red potatoes as controls. Twelve feeding experiments were conducted, ten short-term (10 days) and two long-term (110 days). Rats fed raw or cooked potato modified with the GNA gene showed statistically significant thickening of the stomach mucosa compared to rats fed the unmodified potato. As these effects were not observed in rats fed control potatoes injected with GNA protein, Pusztai concluded that the differences were a result of the transformation procedure. In a short interview on Granada Television's current affairs programme World in Action Pusztai said that rats fed with the GM potatoes had stunted growth and a repressed immune system. This resulted in Pusztai and the Rowett Institute receiving numerous phone calls from government, industrial, NGO and media organizations. Following the media frenzy, Pusztai was suspended and misconduct procedures were used to seize his data and ban him from speaking publicly. His annual contract was not renewed. The Rowett Institute and the Royal Society reviewed Pusztai's work, concluding that the data did not support his conclusions. The data was published in the The Lancet in October 1999, and reported significant differences in the thickness of the gut epithelium of rats fed genetically modified potatoes (compared to those fed the control diet), but no differences in growth or immune system function were suggested. After publishing, it was criticized on the grounds that the unmodified potatoes were not a fair control diet, and that any rats fed only on potatoes will suffer from a protein deficiency. Pusztai responded to these criticisms by stating that all the diets had the same protein and energy content and that the food intake of all rats was the same. Pusztai has been criticized severely for the quality of his experiments. His experiments have been attacked for their small sample sizes, the use of inappropriate statistical procedures, and the fact that a diet of raw – or even cooked – potatoes is a bad diet for rats (people too), even when supplemented with a bit of extra protein. But oddly enough, in all that has been written about these experiments, no one seems to have seen their central flaw, which was that

100 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

he did not use appropriate controls. In Pusztai’s experiments, the control potatoes had a different history than the transgenic potatoes and, in particular, that history included a culture procedure that induces somaclonal variation. The likeliest source of the variation he detected – and of the differences he attributed to the fact that they contained foreign DNA – was the culture procedure itself. In order to be able to attribute the deleterious effects of the transgenic potatoes to the newly introduced gene or to some other part of the introduced DNA, he would have had to make a comparison between potatoes that had the very same history, but either had or lacked the transgenic construct. This can be done, but the study that Pusztai participated in was simply not designed for such a test. Lectin is toxic as many other proteins found in Solanaceae or Leguminous species. Rats fed with raw beans die. Beans are cooked before served for eating. In my view the big mistake of Pusztai was to attribute the harm to rats to the genetic engineering process which used as promoter CMV. For a couple of decades plants have been engineered with CMV virus as promoter and never repeated Puzstai experiments. If the genetic engineering process was the culprit we would never see thousand of experiments and GM varieties that use the same experiment as Puzstai did. Why is the public perception with respect to the gene revolution so negative. The answer is that the Gene Revolution does not dedicate substantial effort to use the advances of bioscience to neutralize important social problems. Almost ten years ago I said (de Castro 2004) that Brazil could play an important role to build social benefits from the Gene Revolution in response to statements that said that the people who would most benefit from the gene revolution have been excluded from it – including the world’s poorest regions of Central and West Africa. (New York Times 2003), (op cited Piore 2003). In fact most work in biotech performed by the large corporations are directed to soybean, cotton, canola and corn. What’s lacking is inclusion of staple crops in the agenda of the large corporations which will never happen, reason why I propose a partnership between Brazil and Africa. Plant genetic engineering in Europe for political reasons is a shadow compared to what it was during the eighties. Given that it is hardly likely Europe will establish a strategy to bring to the poor the benefits of the gene revolution (breeding staple crops), I’ve said in the past that all Africa needs is 10 excellent geneticists – after all, the current state of agriculture in Brazil was built by a dozen excellent

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

101

geneticists. The soybean revolution in Brazil was done by Romeu Kihl, aluminum-resistant corn developed for the acidic cerrado soil was created by and Ricardo Magnavacca, and the foundations of maize breeding had been previously done by the late Ernesto Paterniani. Also, Eleuzio Curvello did cotton, Alcides Carvalho, coffee, during 52 years of his life. Dalmo Giacometti and Silvio Moreira citrus. Marcilio Dias and Hiroshi Ikuta are the fathers of the vegetable genetics; Raul Moreira tackled banana; Ady Raul da Silva, wheat; Frederico Menezes Veiga, sugarcane. Plant breeding, performed by a dozen good geneticists, has continuously built cultivars to feed our seed industry. High-tech seeds and low cost farming practices resulted in Brazil from seed laws and plant breeder’s law. The final verdict is that the agriculture in Brazil is competitive because it is cheap for the farmer. The same context can be built in Africa, though more difficult due to the many countries involved. Policies are needed for agriculture: seed certification, biosafety, patent and plant breeding rights and institutional funds. This September of 2012 I was in Uganda and realized that the Gene Revolution is was already in Africa. Yona Baguma from the National Crop Research Institute with little money, from the MSI a program of the Uganda National Council of Science and Technology - UNCST silenced with sRNAi viral genes responsible for Cassava Brown Streak a disease that causes 50% of yield losses and is transferred by an insect as vector (Bemisia tabaci) (Wagaba et al., under review) (Beltran et al., 2010). He plans to take advantage of the transgenic cassava rich in proteins produced recently and make cassava plants resistant to viruses and rich in proteins (op cited Wagaba et al., under review) to be introduced in varieties rich in Vitamin A. Tecpar (An agriculture institution head quartered at the state of Parana) in Brazil has an excellent cassava variety we are trying to make available to Baguma Cassava is a very important starchy crop in many parts of the tropics where it is vital staple for 500 million people globally and 200 million in the Sub Sahara. The Gates Foundation is already funding the use of the gene revolution to breed bananas rich in Vitamin A and it is working. I saw it when I visited NCRI. Uganda however needs a Biosafety Law (as reference, The Law 11.105 was the one sanctioned in Brazil) to make possible the safe use of these GM varieties that are coming. There is a Legal Project in Congress. Our law in Brazil established a

102 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

Biosafety Commission that exclusively decides about the safety or not of GMOs. Without a Biosafety Law the commercial release of GMOs will be illegal in Uganda. Even after the best science is performed results will never reach the farmer if quality seeds are not available. In the US non profit Crop Improvement Association are responsible for monitoring foundation and certified seed production in the process of seed certification for a limited number of generations. In Brazil, EMBRAPA produces Foundation Seed which is sold to seed producers under strict rules previous to being sold to farmers. In both countries seed laws are in effect for decades. Brazil passed a law to regulate the commercialization of seeds extremely simple the law essentially said: the seed sold inside of a container or bag should correspond to the label outside. This law, which is in effect since 1965 changed agriculture in Brazil and had the effect to stimulate a seed industry in the country. Africa needs a law to protect its breeding achievements. A Cultivar Law essentially based upon the UPOV System must be approved as a reference one can examine the Law # 9456 sanctioned in Brazil in April of 1997. This law established a registration database for varieties that resulted from plant breeding in Brazil and the system protects the right of plant breeders that must be consulted to allow their protected varieties to be used by others. The law also establishes the farmers rights and is compatible with the seed law and the patent law (de Castro 2011). Baguma is not alone (Uganda 2012). In the area of health Thomas G. Egwang, also funded by MSI, the head of Apac Laboratories designed a DNA vaccine comprised of a string of Plasmodium falciparum (human malaria) amino acid sequences representing B and T cell epitopes linked with or without gene sequences encoding the human chemokines CCL20 or RANTES as natural adjuvants. This is a new innovation in malaria vaccinology and might increase the efficacy of malaria vaccines. Charles Mondo Kiiza at the Uganda Heart Institute – Mulago Hospital, Department of Medicine –Makerere Medical School tackled Rheumatic heart disease. The project has established a world standard registry for the disease and benchmarks for managing patients with the disease. The resurgence of RHD and its pathogenesis are in the process to be studied in this project and depend on this important registry report. It is estimated that RHD causes 200 thousand deaths in incoming countries/year. In Brazil we spend over

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

103

50 million US$ every year with the disease. For this reason we started an exchange of emails between Charles Kiiza and immunochemistry scientists in Brazil. These are two important social problems examples that can be resolved by the Gene Revolution in the area of health. Brazil (CNPq) and Uganda (UNCST) must celebrate a R&D collaboration contract as we have with other countries. One was recently approved with Canada to develop molecular markers to identify early cancer processes. The effort of Uganda can go beyond and reach the whole Africa if initiatives are put in place to establish said policies for agriculture and funds for Biotechnology as a whole. For this reason a continental institutional program is necessary. Some policies needed are not of a legal nature but must be exercised strategically. One is networking, necessary because the critical mass of scientists in developing countries is always limited, although some projects achieved the quality level to play relevant international roles and can progress globally if partnerships between African institutions with equivalent institutions in other countries are exercised inside and outside Africa. The initiative dealing with institutional building requires to establish the AGBRI – African Genetic and Biotechnology Research Institute to bring the best geneticists in Africa to work together and in collaboration with Brazilian scientists. An Institute of this kind is now possible because biology converged. The AGBRI must in agriculture select staple crops: cassava, sweet potato, beans, sorghum and pearl millet. Varieties of these crops must be made free of viruses, resistant to drought, to aluminum toxicity and rich in protein, vitamin A and iron. In the area of health, hunger and tropical diseases is the agenda. An Institute of this kind will need funding. The Scientific Academy of São Paulo decided 50 years ago to invest 1% of all State taxes for Science and Technology. The State contribution of São Paulo for the Brazilian NGP is today 40%. Africa needs a long term commitment to science and technology and a tax deduction mechanism may be the way forward. The equivalent mechanism at Federal level in Brazil created 16 Funds by Laws approved by the Congress. In addition there is a good possibility made public by the CEWG (World Health Organization. April 2012). There are many examples of taxations possible to build AGBRI. Airline taxes were established by countries to generate a fund for health of 18 million euros. A large international African Fund of this kind can be built but Parliaments must be called upon action to assure a long term commitment of Africa with Science and Technology and in particular

104 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

with Biotechnology and the Gene Revolution. Why the Parliaments of African countries might tag a % contribution of their taxes to Sc & T. Budget decisions in any country are of course taken in the Parliaments, the Legislative. They vote the budgets. The main difference between developed and developing countries is that developed countries do not have acute social problems which compete with Sc & T for the budget. If the Academy goes to the Parliament asking money for Innovation to reach development and to increase the GDP, Congress may not understand. Money for innovation is needed but the road linking innovation to the growth of the GDP is very long. If the money is asked to resolve important social problems such as hunger, infant mortality and tropical diseases and mentioned previously and explained that the solution for these problems require the most sophisticated innovative approach such as Green Vaccines (see the http://blogs.nature.com/tradesecrets), at least legislators will give to the Academia the benefit of the doubt and there is a better chance of success. Why? Because innovation in itself does not render votes, but reducing infant mortality does, right at the districts where the votes are. Finally we are assuming that Sc & T is essential for development and the latter to provide quality for the lives of the populations of any Country and that can be easily demonstrated. Growth of Sc & T is related to the critical mass /intelligence of the population. In Brazil we multiplied in the last three decade the global Brazilian output in Sc & T by six from 0.4 to 2.7 % of the global scientific output. Human resources training was the only policy in Brazil in the last forty years that has not suffered with political changes. REFERENCES Abelson PH, Hines PJ (1999) The plant revolution. Science 285: 367-368. Apse MP, Aharon GS, Snedden WA, Blumwald E (1999) Salt tolerance conferred by over expression of a vacuolar Na+/H+ antiport in Arabidopsis. Science 285: 1256-1258. ASPB (2001) The history’s harvest, Where food comes from? By Robert B Goldberg.Emeritus Professor at UCLA. Tape produced by ASPB – 65 minutes http: //www.aspb.org Barinaga M (2000) Asilomar revisited: lessons for today? Science 287: 1584-1585. Bartell S (2000) Workshop on Ecological Monitoring of Genetically Modified Plants - Examples of Ecological Monitoring - Using Ecological Monitoring in Risk-Based Environmental Monitoring. The National Academy of Sciences July 13-14, 2000.

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

105

Beltrán J, Prías M, Al-Babili S, Ladino Y, López D, Chavarriaga P, Tohme J. Expression pattern conferred by a glutamic acid-rich protein gene promoter in field-grown transgenic cassava (Manihot esculenta Crantz).Planta. 2010 May; 231(6): 1413-24. Bjornstad ON, Peltonen M, Liebhold AM, Baltensweiler W (2002) Waves of larch bud moth outbreaks in the European Alps. Science 298: 1020-1023. Boyer SJ (1982) Plant productivity and environment. Science 218: 443-448. Brown LR (1995) Who will feed China. Wake–up call for a small planet. The World Watch Environmental Alert Series. State of the World and Vital Signs Series 163 pp Cohen LJ (1989) Strengthening Collaboration in Biotechnology: International Agriculture Research and the Private Sector. Proceedings of a Conference held April 17-21, 1988 in Rosslin,VA Agency for International Development Washington, DC 20523 480 pp Comissão Técnica Nacional de Biosegurança - CTNBio (1998) Instrução Normativa No 18, Comunicado54, www.ctnbio.gov.br Dale PJ, Clarke B, Fontes EMG (2002) Potential for the environmental impact of transgenic crops.Nat Biotechnol 20: 567-574. de Castro, L.A.B (2002a) A new strategy for the development of agricultural biotechnology in Brazil. American Society of Agronomy Annual Meetings, 12-14 November, 2002, Indianapolis, Indiana,USA. ASA Symposium Proceedings. de Castro, L.A.B (2002b) Proceedings of The Symposium on the Co-Existence of Patents and Plant Breeders’ Rights in the Promotion of Biotechnological Developments. Session III: Intellectual property strategy and licensing experience with the co-existence of patents and plant variety protection systems. Organized by The WIPO and The UPOV Geneva, October 25, 2002. de Castro, L. A. B.(2004). A Strategy for Obtaining Social Benefits from the Gene Revolution. Brazilian Journal of Medical and Biological Research, v. 37, p. 1429-1440 de Castro, L.A.B. (2011) A Compatibilidade Possível Entre a Lei de Patentes e a Lei de Cultivares. Revista da ABPI Edição 111 Março /Abril 2011 56-63. de la Fuente JM, Ramíres–Rodrigues V, Cabrera-Ponce JL, Herrera Estrella L (1997) Aluminum tolerance in transgenic plants by alteration of citrate synthesis. Science 276: 1566-1568. FAO (2003) Undernourishment around the world – Hunger and Mortality 1-12.www.fao.org FAO (2004) The gene revolution: great potential for the poor, but no panacea. Only a few countriesare benefiting so far - food crops of the poor need more attention. The state of food andagriculture.Annual Report.FAO NEWSROOM. Frank L (2000) Italian scientists blast GMOs restrictions. Science 290: 2046. Gaskell G, Bauer MW, Durant J, Allun NC (1999) Worlds apart?The reception of genetically modified foods in Europe and the US. Science 285: 384-387. Genetically Modified Food and the Poor – New York Times. October 3 - 2003 Goff SA, Ricke D, Lan T-H, Presting G, Wang R, Dunn M, Glazebrook J, Sessions A, OellerP,Varma H, Hadley D, Hutchison D, Martin C, KatagiriF, Lange BM, Moughamer T, Xia Y,Budworth P, Zhong J, Miguel T, Paszkowski U, Zhang S, Colbert M, Sun W-L, Chen L, Cooper B, Park S, Wood TC, Mao L, Quail P, Wing R, Dean R, Yu Y, Zharkikh A, ShenR,Sahasrabudhe S, Thomas A, Cannings R, Gutin A, Pruss D, Reid J, Tavtigian S, Mitchell J,Eldredge G, Scholl T, Miller RM, Bhatnagar S, Adey N, Rubano T, Tusneem N, Robinson R, Feldhaus

106 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

J, Macalma T, Oliphant A, Briggs S (2002) A draft sequence of the rice genome (Oryza sativaL. ssp. japonica). Science 296: 92-100. Gomord V, Sourrouille C, Fitchette A-C, Bardor M, Pagny S, Lerouge P, Faye L (2004) Production and glycosylation of plant-made pharmaceuticals: the antibodies as a challenge. Plant Biotechnol J 2: 83-100. Gordon D, Townsend P (2003). Child poverty in the developing world, UNICEF [email protected], [email protected] Hodgkin J, Horovitz HR, Jasny BR, Kimble J (1998) C. elegans: sequence to biology. Science282: 2011-2018. Jones GC, Ostfeld SR, Richard PM, Schauber ME, Wolff OJ (1998) Chain reactions linking acorns to gypsy moth outbreaks and lyme disease risk. Science 279: 1023-1026. Kennedy D (2003) Agriculture and the developing world. Science 302: 357. Kono T, Obata Y, Wu Q, Niwa K, Ono Y, Yamamoto Y, Park ES, Sun Seo J, Ogawa H (2004)Birth of parthenogenetic mice that can develop to adulthood. Nature 428: 860-864. Lee W (2000) Workshop on Ecological Monitoring of Genetically Modified Plants – The Logistics of Monitoring. The National Academy of Sciences, July 13-14, 2000. Masood E (2003) A continent divided. Nature 426: 224-226. Miftahudin, Milla RMA, Ross K, Gustafson JP (2005) Mapping aluminum tolerance in cereals using rice/rye synteny. In: Tuberosa R, Phillips RL, Gale M (eds) In the Wake of the Double Helix: From the Green Revolution to the Gene Revolution. Bologna, Italy, May 2731, 2003. National Research Council (2000) Workshop on Ecological Monitoring of Genetically ModifiedCrops, July 13-14 Commission on Life Sciences/Board on Biology /Board on Agriculture and Natural Resources National Research Council (2004) Biological Confinement of Genetically Engineered Organisms. Committee On the Biological Confinement of Genetically Engineered Organisms. The National Academy Press. http: //books.nap.edu New York Times (2003) Genetically modified food and the poor. October 13 Editorial Piore A (2003) What Green Revolution? Newsweek Magazine, September 8, 425 Potrykus I (2005) From ‘Golden’ to ‘nutritionally optimized’ rice and from a scientific concept to the farmer In: Tuberosa R, Phillips RL, Gale M (eds) In the Wake of the Double Helix: From the Green Revolution to the Gene Revolution. Bologna, Italy, May 27-31, 2003 Rocha S, Albuquerque CR (2003) Geografia da pobreza extrema e vulnerabilidade à fome. Seminário Especial Fome e Pobreza, Rio de Janeiro, Setembro de 2003. Estudos e Pesquisas No 54.Copyright 2003 – INAE – Instituto Nacional de Altos Estudos. http: //forumnacional.org.br Sachs J (2003) The Millenium Hunger Task Force Report (overseen by Jeffrey Sachs – Director of the Earth Institute of Columbia University, New York) SINITOX (2004) National Poisoning Information System [email protected] Stokstad E (2004) Genetically Modified Organisms. Experts recommend a cautious approach. Science 303: 449. Stokstadt E, Vogel G (2003) Mixed message could prove costly for GM crops. Science 302: 542543. Teweles WL (1982) The New Plant Genetics. Volume 1, Chapter V - Recombinant DNA and the Transformation of Plants, 235 pp

Partnering to Build Biotechnology

Opportunities and Limitations for Biotechnology Innovation in Brazil

107

Thottappilly GL, Monti DR, Mohan R, Moore AW (1992) (Edtors) Biotechnology: enhancing research on tropical crops in Africa. CTA/IITA co-publication. IITA Ibadan Nigeria 376 pp Traynor PL, Frederick RJ, Koch M (2002) Biosafety and risk assessment in agricultural biotechnology.A Workshop for Technical Training The Agricultural Biotechnology Support Project.Institute of International Agriculture Michigan State University, USA 142 pp Tuberosa R., Phillips R.L., Gale M. (eds.), (2003) Proceedings of the International Congress In the Wake of the Double Helix: From the Green Revolution to the Gene Revolution, 27-31 May, Bologna, Italy, 673-687, ©2005 Avenue media, Bologna, Italy. Uganda (2012) Building on MSI achievements to help Uganda Grow Uganda, September 26th 2012. UNESCO (2003) UNESCO Institute for Statistics www.uis.unesco.org United Nations (2003) World population prospects: the 2002 revision - Medium Scenario, 2003Population Reference Bureau UPOV (1982) La Engenieria Genetica y las ObtencionesVegetales. Simposio – XVI Sesion Ordinaria del Consejo de la UPOV Ginebra 13 Octubre UPOV (1991) Convenio Internacional para laProtection de las Obtenctiones Vegetales. Texto Oficial. Revisto em 19 de março de 1991. U.S. Chamber of Commerce (2002) Latin America Agricultural Biotechnology Initiative.LatinAmerican Agricultural BiotechnologyForum. Washington DC. December 16 Vargas C, de Pádua VLM, de Matos Nogueira E, Vinagre F, Masuda HP, da Silva FR, Baldani JI, Ferreira PCG, Hemerly AS (2003) Signaling pathways mediating the association between sugarcane and endophytic diazotrophic bacteria: a genomic approach. Simbiosys35: 155180. Varmus H, Klausner R, Zerhouni E, Acharya T, Daar AS, Singer PA (2003) Policy Forum – Public Health - Grand Challenges in Global Health. Science 302: 398-399. Wagaba et al., Expression of dsRNA derived from fused coat protein sequences results in protection against the two Cassava Brown Streak disease causing viruses (under review) WARDA and AGCOM International (1998) Bintu and her new African rice: a genetic bridge to food security and biodiversity. Video 28 min WARDA (2003) New Rice for Africa (NERICA) offers hope to women farmers and millions more.webmaster@warda, Côte d`Ivoire WIPO (1987) Industrial property protection of biotechnological inventions. Report of the Committee of Experts on Biotechnological Inventions, Revised by the International Bureau, Third Session, Geneva, June 29 to July 3rd WIPO (1999) Issues for Proposed WIPO Work Program on Biotechnology. Working Group on Biotechnology. Geneva, November 8-9 Research and Development to Meet Health Needs in Developing Countries: Strenghtening Global Finnancing and Coordination. World Health Organization. (2012) Report of the Consultive Expert Working Group on Research and Development: Financing and Coordination Yu J, Hu S, Wang J, Wong GK-S, Li S, Liu B, Deng Y, Dai L, Zhou Y, Zhang X, Cao M, Liu J,Sun J, Tang J, Chen Y, Huang X, Lin W, Ye C, Tong W, Cong L, Geng J, Han Y, Li L, Li W,Hu G, Huang X, Li W, Li J, Liu Z, Li L, Jianping Liu J, Qi Q, Liu J, Li L, Li T, Wang X, LuH, Wu T, Zhu M, Ni P, Han H, Dong W, Ren X, Feng X, Cui P, Li X, Wang H, Xu X, ZhaiW, Xu Z, Zhang J, He S, Zhang J, Xu J, Zhang K, Zheng X, Dong J, Zeng

108 Opportunities and Limitations for Biotechnology Innovation in Brazil

Luiz Antonio Barreto de Castro

W, Tao L, Ye J, Tan J, Ren X, Chen X, He J, Liu D, Tian W, Tian C, Xia H, Bao Q, Li G, Gao H, Cao T, Wang J, Zhao W, Li P, Chen W, Wang X, Zhang Y, Hu J, Wang J, Liu S, Yang J, Zhang G, Xiong Y, Li Z, Mao L, Chengshu Zhou C, Zhu Z, Chen R, Hao B, Zheng W, Chen S, Guo W, Li G, Liu S, Tao M, Wang J, Zhu L, Yuan L, Yang H (2002) A draft sequence of the ricegenome (Oryza sativa L. ssp. indica). Science 296: 79-92. Zimmer C (1999) Complex Systems: Life after chaos. Science 284: 83-86.

109

CONCLUDING REMARKS This eBook summarizes almost two years of my experience in the pharmaceutical area. This experience was new for me since I worked all my professional life in Agriculture. After thirty years of work in Agbiotechnology it is clear that this area has immense possibilities in Brazil because not only Brazil counts with EMBRAPA but also because the mechanisms of public private interactions are well designed and in operation. If problems have to be dealt with this is not a Brazilian problem, but rather a public perception problem that has to be faced globally particularly in Europe. The only solution for this problem is to build the Biotechnology for the poor that is discussed in one of the Chapters. In the pharmaceutical industry in Brazil the context is quite different. Brazil lags behind many developed countries and emerging countries as well. Brazil has not in the public pharmaceutical area an equivalent to EMBRAPA. Public private interactions do not take place in a long term basis. The mechanism changes as new Government representatives take action. The pharmaceutical area is growing (in 2011 -14%) because the market is a demanding one. It is however growing with no innovation. Initiatives that are pulling large companies nationally funded together as consortia (BIONOVIS e ORIGEM), propose biosimilars in the area of monoclonal antibodies which patents are expiring. Not innovative as an initiative. Brazil has not one CMO not one cGMP (the first one will be inaugurated by Cristalia this year). Brazil cannot scale up for this same reason their pharmaceutical products; neither properly conclude Clinical Studies needed for these products to be registered in ANVISA. In history Brazil has never registered a block buster in FDA. The pharmaceutical sector could interact (internationally and nationally funded companies) in the private sector but that is not taking place. The large corporations do not invest in Brazil although this scenario may be changing. Why investments from large corporations do not occur. They claim because the Patent Law is not adequate. In fact Brazil changed the patent law and requires to those willing to patent in the pharmaceutical sector to receive an authorization from ANVISA that has nothing to do with IPR. To complete the picture Brazil has not “risc capital” funds (Burrill & Company is a solitary actor). So who is working in the right direction? The Government that is funding reimbursable projects to be paid in 10 to 15 years, with subsidized interest and

110

“carencia” (absence of capital payment) for 3 to 5 years. In addition the Federal Government + the private sector are funding scholarships to train 100 thousand students in the next five years. Many problems to be resolved in this decade that is just beginning.

Opportunities and Limitations for Biotechnology Innovation in Brazil, 2013, 111-118

INDEX A Acheflan 29, 82 Adoption of agricultural biotechnology 85, 92 Adoption of GM technology 85 African agricultural technology 86 African populations 95 African Rice center 96 Agricultural biotechnology 5, 85-7, 92 Agricultural incomes 86, 98 Agricultural research 5, 86 Agriculture development 10, 12, 87 ALANAC 29, 81 ALANAC companies 82-3 ALANAC member companies 25, 38 Amazon forest 29, 51-2 Amazonian biome 73 Amazonian forest 75-6, 79 Amazonian region 70, 77-8 Animal toxins 58-60 ANVISA 22-3, 36, 47 Araucária forest 53 Asilomar 3-4, 104 Atlantic forest 29, 51, 53, 82 B Bagasse 8 Bio-prospecting plant molecules 60 Bioactive molecules 79, 82 Bioamazonia Network 73, 76 Biodiversity byproducts 47 Luiz A.B. de Castro All rights reserved-© 2013 Bentham Science Publishers

111

112

Opportunities and Limitations for Biotechnology Innovation in Brazil

Biofuel 8-9 Biological diversity convention 3, 48-9 BIONORTE 70-1, 76-7, 79-80 BIONORTE network 76-7, 79 Biopharmaceutical field 25 Biosafety 67, 87, 101 Biosafety law 6, 101-2 Biosafety law in Brazil 86 Biosafety Rules 3 Biotech crops 5-6, 22, 36 Biotechnological application 57 Brazil nuts 16 Brazilian biodiversity 4, 23, 29, 36, 79 Brazilian biomedical inventions 25, 39 Brazilian biomes 6, 52, 60 Brazilian biopharmaceutical agenda 60 Brazilian biopharmaceuticals 48 Brazilian biopharmaceuticals association 45, 81 Brazilian biopharmaceuticals association's activities 82 Brazilian biota fungi 57 Brazilian biotech enterprises 24, 38 Brazilian biotech sector 27, 40 Brazilian health biotech sector 24, 38 Brazilian law 22, 36, 46 Brazilian marine zone 54 Brazilian NGP 103 Brazilian output 43 Brazilian Patent Law 22-4, 35-7, 47 Brazilian population 10, 12, 71 Brazilian semi-arid 8 Brazilian snake bothrops 59 Brazil's biodiversity products 82 Brazil's biomes 82 Brazil's GDP 44

Index


Luiz A.B. de Castro

Opportunities and Limitations for Biotechnology Innovation in Brazil

Brazil's marine biome 54 Bt genes 13-14 C Caatinga 29, 51-3, 71 CAPES 3, 27, 62, 64, 77-9 Caprine 71, 73 Cellulose 8 CENARGEN 5, 11, 16, 79, 97 Cereal production 9 Cerrado 4, 29, 51-4, 79 Commercial release of GM plants 88-9 Confinement methods 89 Control potatoes 99-100 CPDM 63-4 Critical mass 67, 70, 104 Critical mass of Sc 70 Cultivars 9, 11, 92-3, 101 D Deforestation 49, 52, 75-6, 79-80 Desertification 52 Diarrhea 8, 16, 72-4 Diets 93, 99 E Ecological monitoring of GM plants 90-1 EMBRAPA 4-6, 13-14, 16, 49, 97, 102 Endemic 58 Engineered genes 92 Engineered plants 16, 22, 35, 92 Engineering process 100 Entrepreneurs 24, 37 EPO 47-8

113

114

Opportunities and Limitations for Biotechnology Innovation in Brazil

Essentially-derived plant cultivars (EDPC) 92-4 Ethanol industry in Brazil 9 F FAO 9, 67, 85, 98 FAPESP 70 FAPs 76-7 FDA 6-8, 16-18, 22, 25, 31, 36, 38, 47, 83 Filgrastrima 73 Fiscal exemption 43-4 Fungi 6, 8, 10, 12, 54-5, 57, 91, 96 G GDP 44, 104 Gene revolution 5-6, 10-12, 16, 67, 83-6, 94-6, 98, 100-1, 103-4 Gene technology 22, 35 Gene therapy 3, 15 General patent performance of Brazil 23, 36 Genetic resources 5, 11, 48, 79, 97 Genetically modified organisms (GMOs) 11, 13, 17, 88-9, 98, 102 Geneticists 9, 95, 101 Genomes 92-3, 98 Genomes of plants 22, 35 Geographic Unbalance in Brazil 70 Global biodiversity outlook 49 Global Brazilian output 104 Global pharmaceutical market 27, 41 Global Sc 10, 41, 72, 104 GM animals 6-7 GM plant events 90-2 GM plants 3, 7, 15-17, 86, 88-92 GM technology 85 GM varieties 90, 100-1 GNP 68, 70

Index


Luiz A.B. de Castro

Opportunities and Limitations for Biotechnology Innovation in Brazil

GNP/capita 67-8 Golden rice 12, 87 H Human resource training 11, 17, 19, 31, 32, 42, 71, 77, 79, 95, 104 Hunger Syndrome 67

I Immunosuppressive 57 Inadequate Regulatory Procedures 67 Infant Mortality 72, 104 Inflation 17, 20-1, 29, 33-4, 46 Infrastructures 25, 38 Innovation law 24-5, 37, 39, 43 Innovative drug development 25, 38 Innovative drugs 24-5, 27, 38, 40, 81 Innovative product development 25, 38 Intellectual property (IP) 21, 23, 25, 35-6, 39, 47, 64 Intellectual property rights (IPR) 18, 22, 24, 32, 35, 37, 67, 86-7, 91-2 Interfarma 25, 29, 38, 81 L Lactoferrin 7-8, 16, , 73 LADEBIO 8 Large-scale ecological monitoring 91 Large-scale ecological monitoring of GM plants 90 Largest biopharmaceutical industrial platform 81 Largest pharmaceutical market 18, 32 Largest pharmaceutical world industries 55 Lectins 99-100 Limitations of biotechnology 11, 21, 35 Lysozime 7, 8, 16

115

116

Opportunities and Limitations for Biotechnology Innovation in Brazil

Index


M Molecular plant-microbe interactions 27 MSI 101-2 N NAS Report 90 National biotechnology fund 96 National Growth Product 97 Native pharmaceutical companies 23, 36 Natural products 54, 60-2, 79 Natural products in Brazil 60 Non-target populations 89 Northeast biotechnology network 64 Northeast biotechnology network program 95-6 Northeast region 52, 54, 94 Northern region of Brazil 51 Northern states in Brazil 20, 33 O Open vegetation 53-4 P Penicillium chrysogenum 57 Pharma-Brazilian biotech partnerships 27 Pharmaceutical biotechnology 18, 31 Pharmaceutical companies 22, 25, 36, 39-40, 67 Pharmaceutical industry 3-4, 14, 17-18, 20-1, 23, 27, 29, 33-4, 37, 40, 48, 54, 59, 81, 83 Pharmaceutical partnerships 21, 34 Pharmaceutical sector 17-19, 21, 25, 31-2, 35, 38, 81, 86 Physiognomies 53-4 Plant breeders 5, 91-3, 95, 102 Plant breeders' and Patent Rights 92 Plant breeding 9-11, 94, 101-2 Plant cultivars 96-7

Luiz A.B. de Castro

Opportunities and Limitations for Biotechnology Innovation in Brazil

Plant derived molecules 56 Plant genes 13, 94 Plant genetic 10-12, 15-16, 86, 100 Plant species 52, 55 Plant variety protection law 3, 21-2, 35 Plants resistant 6, 10, 96 Prevented Brazil's biodiversity 48 Private enterprises 25-6, 39 Private investments 42-4 R RECODISA 73-4 Recombinant DNA technology 3, 15, 21, 35, 90 Recombinant technologies 18, 31 RENORBIO 29, 33, 64-5, 70-1, 73, 79, 95-6 Resource-poor developing countries 83, 94 Restrictive regulatory laws 4 S Seed certification 101-2 Seed laws 9, 101-2 SELIC rate 3, 17, 31 Semi Arid in Brazil 71 Small biotech companies 24, 37 Small business companies 24, 37 Socio Economic Stability 67 Staple crops 12, 16, 96, 100, 103 Subvention law 29 Sugar cane industry 8, 13 Sustainable agriculture 4, 96 T Technological development 20-1, 33-5, 43, 45 Transgene 92-3

117

118

Opportunities and Limitations for Biotechnology Innovation in Brazil

Transgenic animal 73 Transgenic potatoes 100 TRIPS agreement 22, 35 Tropical countries 93 Tropical diseases 103-4 U Union International e pour la Protection des Obtention Vegetales (UPOV) 92 USPTO 47-8 W Weak Domestic Plant Breeding 3 Wild species 89-90 Working group on biotechnology 92 World Health Organization 103

Index