Wary Europe Enters Biotech Age

Swiss reject limits on genetic research in June 7 referendum. European firms see big money in the US-dominated industry.

European genetic engineers took heart this week from a landmark vote in Switzerland that encouraged them to keep up the struggle to catch their United States rivals in what promises to be one of the most lucrative industries of the next century.

In the first referendum anywhere on genetics, Swiss voters June 7 turned down a proposal that would have strictly limited genetic research into plants and animals. On a continent where the public has been very wary of tampering with the genetic structure of what goes into its food, the 2-to-1 vote to allow the research to continue, and to let companies patent their genetic discoveries, is seen as an important signal.

"A lot of people outside Switzerland were looking at this referendum as a test case in Europe on ... gene technology," says John Durant, a public-opinion specialist with the European Federation of Biotechnology.

"It suggests that when push came to shove, the Swiss decided that the gains outweighed the risks," Professor Durant adds.

The vote marked the second boost in a month for Europe's biotechnology industry. On May 12, after nearly a decade of wrangling and lobbying, the European Parliament in Strasbourg, France approved legislation allowing firms to patent inventions involving biotechnology, in the face of continued opposition by environmentalists.

Business was happy. "This represents a major step forward," says Brian Yorke, head of corporate intellectual property for Novartis, a giant Swiss pharmaceutical firm in the vanguard of genetic research into food and medicine. "It is essential to give the stability and assurance we need to develop our biotech business."

The two votes have encouraged European bioengineering companies fighting for a bigger slice of a global pie that will soon be worth tens of billions of dollars, analysts say, as scientists develop more pest-resistant, longer-lasting fruits and vegetables by altering their genetic makeup, and discover more effective medicines through research on genetically modified animals.

Europe has seen something of a biotech boom recently in the pharmaceutical industry. The number of biotech firms jumped from 584 in 1996 to 716 last year, as established companies such as Novartis were joined by new start-ups including Innogenetics in Ghent, Belgium.

When Rudi Marien launched Innogenetics in 1985, "it was impossible to find money," he recalls. "I invested a lot of money together with some friends." Last year, the company raised $80 million on a new high-tech oriented stock market, and financing has become much easier to find.

But Europe is still way behind the US in the genetic engineering business: In 1996, a total of 584 European firms generated sales of $2.2 billion, according to the European Pharmaceutical Association, against $7.7 billion worth of sales by 1,300 American companies.

"Americans see this as a technology that is rapidly reaching maturity," says Durant. "Europeans see it as a technology in embryo, where things are just beginning."

Put it down to different mind-sets: hard-charging American optimism and enthusiasm for the fruits of science against a more conservative and skeptical Europe. Certainly the regulations in Europe that govern genetic research are stricter than in the US.

In large part, this is because European consumers - and hence governments - are much more worried about the ethical implications and the environmental effects of genetically engineered organisms than their American counterparts. Half of this year's US soybean crop will be grown from genetically modified seed, which American farmers regard as entirely normal. France approved its first tentative planting of genetically modified corn last November, and experimental transgenic crops are being grown on fewer than 200 carefully monitored sites in Britain.

In the wake of last year's panic over so-called "mad cow disease," believed to have been caused by feeding cattle with bone meal from other animals, the British are especially concerned by the potential dangers of new and untested food technology. Prince Charles, an enthusiastic organic farmer, waded into the debate June 8 with an article in London's Daily Telegraph arguing against genetic engineering that he said, "takes mankind into realms that belong to God and God alone."

Chocolate recall

Consumer fears are continentwide: the Swiss manufacturer of Toblerone had to recall 500 tons of the country's most famous chocolate last year when it was revealed to contain genetically modified soybeans. They are better at stopping chocolate melting in your fingers than naturally occurring soybeans, the maker said in justification.

The Swiss referendum campaign explored all the arguments on both sides of the fierce debate. Proponents of continued research stressed the medical value of work that might lead to cures for disease. Opponents played on popular suspicion of scientists, noting they had once claimed that nuclear power was fail-safe.

In the end, it seems, it was the economic argument that weighed most heavily with the Swiss, amid fears that a "yes" vote would have outlawed some of the most economically promising areas of research. Pharmaceutical products are Switzerland's top export, earning the country $11 billion in 1997, and drug companies had warned that if they were not free to do the research they wanted, it would cost the country 42,000 jobs over the next seven years.

Similar arguments are winning converts elsewhere in Europe. Although ordinary Germans are among the most resistant to new genetic technology, their politicians backed the patent law approved last month by the European Parliament.

How to regulate?

But the new European legislation has not cleared up confusion about how foods that include genetically modified organisms should be handled. Under a European Commission regulation that went into effect late last year, food produced with genetically modified soybeans or corn should carry a label saying so. American producers say this is unrealistic, since in the US normal and genetically modified soybeans are shipped together, making it impossible to tell at a European port which bean is which. Consumers seem to want such labeling, however: 95 percent of respondents in a British survey published last week said they want to be told exactly what they are eating.

In a major effort to assuage European worries, the US agribusiness giant Monsanto launched a publicity campaign this week in British, French, and Belgian papers, arguing the virtues of genetically modified food, and offering information hot line numbers for consumers.

Certainly, the issues raised by genetic engineering have been little discussed in Europe, except in Switzerland. But that is changing. In France a "citizens' conference" - intended to launch a public debate - is scheduled for June 20, while in Britain, Charles's comments are sure to spark reactions.

More public debate

The time that all this public discussion takes, however, before governments feel confident enough of grass roots opinion to legislate, is intensely frustrating to US food and grain exporters, whose genetically modified products are being kept out of the European market by current health and environmental regulations.

"We're left in limbo," complains Tim Stocker, an official at Pioneer Seed, an Iowa seed-development corporation. "Everything is unclear and moves ahead so slowly." But if the Swiss referendum campaign is any guide, the more the public learns about genetic engineering, the more it comes to accept it. Six months ago, opinion polls suggested a majority in favor of limiting research; on June 7, after an intense public debate, the majority opposed to curbs was overwhelming.

Even leading consumer advocates came around, albeit reluctantly. Francoise Michal, editor of the Swiss Consumers' Union magazine Buying Better says, "Genetically modified substances are found in some 20,000 foods in Europe," explaining why she opposed limits on genetic research. "It isn't realistic to ban this.... It is irreversible."

"There is a sense that Europe cannot live without biotech," adds Brian Ager, head of the European Pharmaceutical Association. "Biotech is growing fast... but we still have a long way to go."

* William Echikson in Brussels, Elizabeth Olson in Geneva, and Alexander MacLeod in London also contributed to this report.

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