ATP Working Paper Series—Working Paper 04-01
Catalyzing the Genomics Revolution: ATP's Tools for DNA Diagnostics Focused Program

The Opportunity for ATP

In the early 1990s, public funding of DNA analysis technology was primarily spearheaded through efforts at NIH and DOE via the Human Genome Project. These agencies funded projects targeted toward the sequencing and mapping of large genomes, but it was not the intent of these projects to develop technologies needed for commercially viable, cost-effective analysis methods with broad applicability. Many companies were well positioned to develop DNA diagnostic tools but were hesitant to push forward without adequate financial support. Betting on one technology was generally considered too risky to receive significant investment because any of a number of competing technologies could have turned out to be the one most suitable for DNA diagnostics. Technologies with high technical risk were considered inappropriate for internal corporate funding because spending was limited mostly to revenue-generating projects. Development of unproven technologies with uncertain payback was too much of a business risk. Venture funding was scarce as well. Venture capitalists required companies to focus on lower risk projects that could be quickly commercialized in established markets. Spurred by the risk-averse funding environment of the time and the biotechnology industry's input to ATP on their scientific vision for the broad application of DNA technologies, ATP believed that a strategic investment in DNA diagnostics could be of critical importance to accelerating the practical application of the emerging genomic information generated by the Human Genome Project.

ATP Funds Innovation

ATP provides funding for the development of early stage, high-risk technologies across a wide variety of industries, including biotechnology. Awards are given directly to individual U.S. companies, joint ventures, and other commercial research entities that pass rigorous peer-reviewed funding competitions. ATP is a cost-sharing program, in which award recipients are required to cover a portion of project expenses with their own funds. ATP's unique blend of technical and economic/business criteria target proposals that fall in the private sector funding gap between basic science and product development. Research proposed to ATP must be commercially promising-provided the technical hurdles can be overcome-but too technically risky to attract sufficient venture capital or other private funding. ATP's main objective is to speed promising basic laboratory research to the marketplace as useful tools to stimulate the U.S. economy.

Most ATP funding is currently awarded through competitions open to all technology areas. Between 1994 and 1998, however, ATP also supported "focused" competitions, developed with input from industry. Focused competitions were well-thought-out efforts to bridge technological gaps that hindered U.S. industry from being competitive in a variety of areas. As part of the planning for focused competitions, ATP worked with representatives from industry, academia, and government to define key fields of technology where further progress was impeded by major technological barriers. Focused programs were designed to overcome technical barriers rapidly, leading to a quicker route to commercialization than could be achieved with only private investment.

Tools for DNA Diagnostics Focused Program: A Public-Private Partnership

In the early 1990s, ATP recognized that most DNA-based diagnostic tests were limited in scope and required a high level of sophistication by the end user. This limited their application to only the most advanced laboratories, which raised costs and hindered dissemination. In 1993, ATP initiated a process of developing a broad range of focused programs with a call for white papers from industry, academia, and government entities describing their perceived needs for new technology. A significant number of white papers were received from industry leaders in the pharmaceutical, biotechnology, and analytical instrument sectors indicating a need for improvements in the field of DNA analysis techniques. The white papers were summarized and discussed at a public meeting in 1994, and, with additional private sector comments, ATP produced a final recommendation that provided the technical and business goals for the Tools for DNA Diagnostics focused program.

The program's overall technical goal was to develop cost-effective methods for sequencing, interpreting, and storing DNA sequences such that a patient's DNA sequence could be rapidly determined and made available for use by his or her physician. In essence, what the ATP was creating was the technological basis for what is now becoming known as "pharmacogenomics." The white papers indicated that such methods needed to be highly automated, miniaturized whenever possible, easy to use, inexpensive, and able to determine and analyze DNA sequences rapidly and accurately.

The overall business goal was to create a technological base that would enable a new multibillion-dollar industry in DNA diagnostics that could preserve the U.S. lead in biotechnology and widen the scope of industrial applications. For the technologies to be commercially successful, the white papers reported that DNA analysis and sequence interpretation would have to speed up by a factor of 10 and costs would have to fall between one-tenth and one-hundredth of the $100-per-test price tag in 1994. The white papers additionally revealed that the amount of technical expertise required to achieve all these technical and business goals was beyond the scope and capabilities of any one company; cooperation was essential. Government support was clearly indicated to catalyze alliance formation and technology diffusion.

As the program began to take shape, an important secondary benefit became evident. The technologies envisioned for diagnostic applications could also have a major positive effect on the time line of the Human Genome Project. As a result, the program received a high level of support from Dr. Francis Collins, head of the Human Genome Project at NIH. With his support, and the additional technical guidance from key NIH scientists, the new Tools for DNA Diagnostics program was established as a true interagency cooperative effort. Experts in DNA analysis from NIH, DOE, USDA, the National Science Foundation, and the U.S. Food and Drug Administration participated in ATP's peer-reviewed proposal selection process and provided technical advice to ATP's project managers. ATP also consulted with scientists at NIH during the monitoring of funded projects for additional expert review of progress and accomplishments.

The inaugural Tools for DNA Diagnostics focused competition was launched in 1994, with follow-up competitions in 1995 and 1998. These resulted in the funding of 26 projects (table 1), with total ATP funds committed of approximately $99 million. In addition to the projects funded during the focused program competitions, 16 DNA technology projects were funded in ATP general/open competitions through 2002 (table 2) at a commitment level of approximately $39 million.

Table 1: Companies Funded under ATP's Tools for DNA Diagnostics Focused Program

Table 2: DNA Diagnostic Tool Companies Funded under ATP's General/Open Competitions

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Date created: August 1, 2005
Last updated: August 5, 2005