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Power Partnering

Power Partnering

How Alliances Fuel Brazilian Biotech

Tightening the Focus
To bring readers closer to the exciting developments in biotechnology around the world, we once again present our Scientific American Worldview Profile section. Here, we dive deeper into the countries, companies and people who work so hard to make this industry thrive. Adopting a tighter focus than in the past, this year we take readers on a tour of the biotechnology sector in Brazil—an energetic upstart that has earned a striking level of confidence from venture capitalists—via on-the-ground reporting to get a clear picture of what it is that makes this country a beacon to investors.

However, with an area larger than the continental US to investigate, one visit to Brazil cannot reveal more than a fraction of its flourishing biotech industry. The country’s diversity extends not only to its terrain—composed of beaches, rolling hills and mountains—but also to its people, many of whom have emigrated from around the world. Consequently, it’s not surprising that Brazil’s approach to biotechnology exhibits a similar diversity. To the best of our abilities, we have covered a variety of regions within this nation and consulted with a wide range of its biotech firms and experts, some focused on healthcare, others on agriculture and energy.

By exploring biotechnology around the world, we obtain a better understanding of the vast array of challenges and capabilities that it offers. The Brazilian biotech industry, in particular, reflects the international character of this field—with its entrepreneurial spirit and reliance on global teams built to solve problems together, and then to share their solutions with neighbors near and far.

We deeply appreciate the generosity and kindness of our Brazilian hosts. Without them, we could never have gained the level of insight into their country’s biotech sector that we present here. We hope that our readers enjoy the results of our journey as much as we did taking it. –The Editors

Illustrations by Clayton Junior


On a Thursday afternoon in June 2013, 72,000 people crowded into Maracanã Stadium in Rio de Janeiro for a match between Spain and Tahiti. Although this game of football (a.k.a. “soccer” in the US) was dominated by the extremely polished Spanish players, the Brazilian fans cheered for the struggling squad from Tahiti. Whenever a Tahitian player kicked the ball, even out of bounds, the stands erupted. On two occasions, Tahiti got a decent shot on goal, and the crowd went wild—even after the Spanish goalkeeper blocked the kick. Clearly, the Brazilians love the underdog (Spain won that match, 10 to 0) and it’s that same spirit that drives their country’s burgeoning biotech sector.

Like the football crowd cheering the Tahitian players through a challenging match, government and industry leaders in Brazil are supporting the country’s biotech sector in its efforts to become a major player in the field. And, as the Scientific American Worldview Scorecard has illustrated, Brazil is showing improvement. In 2010 and 2011, it finished in the bottom 10 percent of the nations on the Scorecard. It climbed above the bottom 20 percent in 2012, and nearly out of the bottom third in 2013. With some changes in this year’s analysis, Brazil lost some ground, but still finished nearly out of the bottom 20 percent. Moreover, in a 2012 Deloitte poll that ranked the confidence levels venture capitalists had regarding investment in various countries, Brazil placed second, behind the United States. Overall, this biotechnology underdog—ranked fifth in area and population in the world—deserves its growing respect.

Despite the improvements in Brazil’s biotechnology industry, the nation does lack some of the resources necessary for taking on the role of an international power player. As I found out during a tour of some of the country’s facilities, more than a few Brazilians plan to accomplish their goals in the field through collaborations with foreign partners.

Building a Biologics Industry
Before the football match, Odnir Finotti, CEO of BioNovis, sits down with me in the lobby of the JW Marriott Hotel Rio de Janeiro. He explains that Brazilians get free healthcare, but they do not get access to all medicines, especially some of today’s most advanced biologics. Finotti leans forward in his chair and says, “Monoclonal antibodies are quite expensive, and normal families cannot afford treatment for cancer, et cetera.”

The difficulty is that Brazil cannot make these drugs. “We have no plants dedicated to producing monoclonal antibodies, so we’re almost starting from scratch.” He hopes to solve that problem through partnering, particularly with companies that have desirable monoclonal antibody–based drugs that are off patent. A company with such a drug could partner with BioNovis and get 10 years of exclusivity selling the drug in Brazil. Such a partner, he explains, must simply agree to manufacture the drug in Brazil at a BioNovis facility.

But many biologics makers won’t find that deal so simple. It entails bringing a cell line to Brazil and replicating the entire manufacturing process in a Brazil-owned facility. The technical issues create some challenges, but the larger concerns probably revolve around intellectual property. If a company holds the cell line that generates the biologic and the manufacturing know-how to make it, maybe it doesn’t really need Brazil’s promise of a decade of exclusivity. Maybe no other company—in Brazil or beyond—can make the biologic anyway.

When I ask what response he gets when he offers a firm this deal, he says, “Some companies agree, and others are struggling to understand.”

Still, BioNovis plans to build a manufacturing facility and, eventually, its own R&D center, where it can develop innovative biologics. All of BioNovis’s advances so far have depended on government-funded “productive development policies,” or PDPs. The PDPs range from government loans to tax breaks. At the time of my visit, BioNovis had received seven PDPs.

The Brazilian government also provided four PDPs for Orygen Biotecnologia, which emerged as a joint venture between four Brazilian companies: Biolab, Eurofarma, Cristália and Libbs. Later, Libbs and Cristália withdrew from the partnership, but Orygen pushed forward. As Bruna Alario, strategic innovation manager at Biolab, told me over dinner, “The remaining companies put their biotech projects in Orygen.” Orygen has already received approval for four biosimilars, and has several innovative products in its pipeline.

Recepta, located in São Paulo, is another Brazilian biotech that knows the value of teamwork. José Fernando Perez, the firm’s president, says his company is dedicated to conducting R&D and clinical trials for new cancer treatments, including monoclonal antibodies and peptides. Recepta has partnerships with the Ludwig Institute for Cancer Research in New York City and 4-Antibody in Basel, Switzerland, to develop antibodies for cancer therapy.

However, working with Brazil’s regulatory agency, Agência Nacional de Vigilância Sanitária (Anvisa), takes experience. “Because this is a new field we’re exploring, the people at Anvisa don’t always know what to do technically,” Alario says. Priscila Scheinberg, regulatory affairs manager at Orygen, agrees: “Companies should not expect Anvisa to tell them what to do.” Which means that Brazilian pharmaceutical firms need to develop their own expertise if they want to take a biological drug through the regulatory process.

Beyond the Beach
My biotechnology tour starts in earnest with a Friday morning cab ride with Norberto Prestes, a Bio-Rio consultant, along the Copacabana beach—a world-renowned stretch of sand longer than 30 football fields. The driver turns north, working through small streets before emerging on a highway that passes the ports. We cross a bridge to an island in Guanabara Bay and stop at the Bio-Rio Biotechnology Park.

Bio-Rio started promoting biotechnology in Brazil in 1988, without any financial support. Eventually, in 1995, it received government funding. To survive that long, Katia Aguiar, business manager at Bio-Rio, relied on her natural instincts. “We are fighters,” she says. They had to be. Aguiar and her colleagues nurtured this organization from nothing to become what it is today, an invaluable source of support to 472 projects. Basically, when a person or company comes to Aguiar with an idea, she determines if Bio-Rio can help. The assistance it offers ranges from providing space where the company pays rent to a variety of free services, including legal advice and reviewing budgets.

To work with Bio-Rio, a company must meet two criteria. First, it must be innovative. Second, as Aguiar says, it “must work for life, not against it.” Thus, a firm developing biological weapons, for instance, would not be eligible. Aguiar would have it no other way. As she walks me through the buildings housing Bio-Rio partners, she says, “These are my babies.”

On this winter morning—hot enough to be considered summer in any temperate country—we tour the Bio-Rio campus as Aguiar explains that each company needs to plant a garden around its building. “You should be as comfortable at work as at home,” she says, pointing out fruit trees, some bearing young mangoes, which surround several buildings. Nearly any place in Rio de Janeiro feels closely connected to the natural world, and at Bio-Rio, that connection stretches from fruit trees on the ground to dozens—sometimes hundreds—of magnificent frigate birds circling in the sky.

This organization’s first partner, AMBIO, also reflects that bond with nature, with its mission of producing systems that use microorganisms to treat water and wastewater. Likewise, other Bio-Rio companies blend technology with human biology. For instance, Cryopraxis collects and stores stem-cell samples taken from umbilical-cord blood.

Bio-Rio partners also focus on building bonds between academia and industry. For example, Hygeia Biotech works as a contract research organization (CRO) that helps university scientists turn ideas and research into products. To fund future projects, Hygeia Biotech developed a 50-50 partnership with the Brazilian pharmaceutical company Cristália. This collaboration, says Joari De Miranda, Hygeia’s scientific director, is pivotal to the firm’s success. “We are at the turning point,” he says, where Hygeia could become financially profitable. Like any young biotechnology company, though, only time will tell that tale.

The partnering underway at Hygeia is indicative of the way Bio-Rio works to advance its projects. It’s a tendency, Aguiar says, that applies to Brazil in general: “Partnering is in our blood.”

To witness this process in action, I wait in AMBIO’s lobby. As I relax on a couch with Aguiar and Prestes, Angelo Luiz Monteiro de Barros, founder of AMBIO and president of Bio-Rio, descends silently, 007-like in a pneumatic vacuum elevator that appears to consist of only a disk to stand on inside a plastic tube.

“Nice entrance,” I say.

Barros’s eyebrows rise high into his forehead and a broad smile covers his face as he shakes my hand. While driving me to lunch in his Range Rover, he says, “When you deal with life, with biotechnology, you need to understand that it’s like wine.” That analogy fits well with AMBIO’s mission. Treating water with microorganisms depends on where the process takes place and what gets added. Likewise, achieving success in the biotech industry depends heavily on where, when and what is in the mix.

Much of Bio-Rio’s work involves mixing the right partners. To extend the opportunities it offers, the organization has developed partnerships in Belgium, Poland and other countries, and has opened an office in Chicago. “We’ve talked to the governor of Illinois about developing some of our extracts as drugs,” Barros says. Bio-Rio has a lot to offer in this regard, as it possesses more than 36,000 samples of natural extracts—not surprising for a country that is home to about 60 percent of the Amazon rainforest.

Research is already in the works on how to aim that extract arsenal at Staphylococcus aureus. Barros calls this bacterium “the champion of hospital infections.” In the past it has flourished with deadly results, as a 1941 article in the Archives of Internal Medicine reported that it killed nearly 82 percent of the patients that it infected at Boston City Hospital.

In the 1940s, antibiotics were created that could control S. aureus, but not for long. It developed penicillin resistance in the 1950s, followed by methicillin resistance in the 1960s, leading to the so-called methicillin-resistant S. aureus, or MRSA. A 2012 article in Emerging Infectious Diseases reports that more than 31 percent of patients with MRSA at the Mount Sinai Medical Center died in 2002–2007. Worse still, this bacterium continues to acquire resistance to other drugs. In 2002, for example, vancomycin-resistant S. aureus emerged in the United States.

Over a delicious lunch of grilled salt cod, Barros explains that researchers screened the Bio-Rio extracts that held the potential for battling S. aureus, and 40 showed promise. “One can be formulated as a cream,” Barros says, “and it’s very effective.”

Vaccine Verticals
As Barros finishes that story, we drive through an extremely poor neighborhood. I begin to understand—seeing some of the disparity of wealth firsthand—why hundreds of thousands of Brazilians have been taking to the streets in protest during my visit. It all started over a 9-cent increase in the bus fares, but it soon spread to anger over taxes and a general lack of services, such as education and hospitals. At one protest in Rio, according to a CNN report, someone held a sign saying, “I’d swap 10 stadiums for one decent hospital in this country.” The stadiums that the protester had in mind were planned to enable Brazil to host the 2014 World Cup. As I watch people wandering by boarded-up buildings, I feel a long way from the champagne that was served in the guest suites at Maracanã Stadium.

Just then, Barros pulls into the Oswaldo Cruz Foundation, better known in Brazil as Fiocruz—part of Brazil’s Ministry of Health. In 1900, Fiocruz started as the Federal Seropathy Institute, which was created to fight the plague in Brazil. Now, more than a century later, Fiocruz makes up Latin America’s largest science and technology institution. He drops me off at Bio-Manguinhos: The Immunobiological Technology Institute, which was created to organize the production of vaccines within Fiocruz.

Moments later, vice director of production Antonio de Padua R. Barbosa explains that Bio-Manguinhos develops vaccines, biopharmaceuticals and in vitro diagnostics, or IVDs. “We provide to the National Program of Immunization, NPI, the majority of vaccines needed for Brazil, and the NPI distributes it for free to all the population,” he says.

In most cases, Bio-Manguinhos develops its products through partnerships. Fiocruz developed its first partnership in 1937 with the Rockefeller Foundation to develop the yellow fever vaccine. More recently, in 1999, Bio-Manguinhos established another partnership with the Belgium vaccine manufacturer SmithKline Beecham, now GSK, to produce the Hib vaccine against childhood infections of Haemophilus influenzae b. As Barbosa says, “Partnerships are the fastest ways to get products to the population.”

As of 2013, the Bio-Manguinhos portfolio included 10 vaccines, two biopharmaceuticals and 11 in vitro diagnostic reagents. In addition, it had 36 more products in development. Once the supply fulfills Brazil’s needs, Bio-Manguinhos exports the surplus to other countries. For example, from 2001 through 2012, it exported its yellow fever and meningitis vaccines to 74 nations. In 2013, Bio-Manguinhos expanded its portfolio with the biopharmaceutical Taliglucerase alfa, against Gaucher’s Disease.

The list of Bio-Manguinhos’s products is bound to get longer. A recent law was approved that will allow it to become a public company, which will enhance its flexibility. I see the preparations underway as Lucas Rossetti, of the firm’s business development and marketing division, gives me a tour of the new Integrated Center for Prototypes, Biopharmaceuticals and IVD Reagents, which will dramatically expand the potential output of Bio-Manguinhos. For Brazil, this expansion comes not a moment too soon. “Without this new facility, we have a bottleneck in production, because the demand from the Ministry of Health keeps expanding,” Rossetti says. As an example, he points out that the country’s need for vaccines alone surpassed 97 million doses in 2013.

Hoping to also help the families living nearby, Bio-Manguinhos provides education through social projects. Unfortunately, they represent just a fraction of Brazilians in need of assistance. According to The World Bank, Brazil’s gross national income per capita is US$11,630. While not high, that amount is far above the country’s 2003 figure of around US$3,000. It’s an impressive level of growth—nearly 300 percent in a decade—that most countries can only dream of.

Sweetening Sugarcane’s Success
Over the weekend, I fly to São Paulo for a tour of Centro de Tecnologia Canavieira (CTC). Early on Monday morning, Prestes and his colleague, Afonso Figueiredo, pick me up for a two-hour drive to the city of Piracicaba, northwest of São Paulo. The name of this city, coming from Brazil’s indigenous Tupi people, means the “place where the fish stops,” because the waterfalls of the Piracicaba River run through the city. But for me it seems more like the “place where the sugarcane starts,” since that is just what the scientists at CTC study.

The fields of sugarcane begin to appear not far beyond São Paulo. The longer we drive, the more they spread in every direction. This tall grass, growing higher than even the tallest humans, arrived from Asia. People domesticated it thousands of years ago, perhaps as early as 8000 bce in New Guinea. Most of us, including Prestes, think of sugarcane as producing a sweetener. “We’d take pieces of sugarcane and chew them as children,” he recalls.

Brazil grows more sugarcane than any other country. This crop covers about 9 million hectares—roughly three times the area of Belgium. Beyond using it as a sweetener, Brazil also turns sugarcane into ethanol. According to Brazil’s Balanço Energético Nacional, sugarcane generated almost 18 percent of the country’s energy in 2010—more than hydropower and second only to petroleum.

After a couple hours of highway driving, we turn onto a dirt road that wanders between sugarcane fields. Figueiredo negotiates around a few trucks loaded with sugarcane to get us inside the CTC. In just minutes, Jaime Finguerut, of CTC’s industrial strategic development group, starts a presentation about the history of sugarcane and its use in biofuels.

He states his central point concisely: “Sugarcane is quite far from the theoretical maximum yield.” Today’s fields produce about 73–78 metric tons per hectare, but Finguerut says that raising that number to 200 is reasonable. To get there, sugarcane needs to be optimized for its environment, and that takes breeding and biotechnology.

Currently, the CTC’s germplasma bank houses about 5,000 sugarcane strains. “So we can cover almost any situation for breeding sugarcane,” Finguerut says. The researchers at CTC use those strains and traditional breeding approaches to fine-tune the crop to specific conditions. “The idea of planting the right plant in the right area is growing,” he says. It reminds me of an agricultural version of the philosophy behind personalized medicine.

Nonetheless, improvements in the process of turning sugarcane into ethanol have plateaued in recent years. For example, the amount of sugar produced per hectare is leveling off. Moreover, the yield of ethanol from fermentation stopped growing in the early 1990s. To increase the output and profits from this industry, Finguerut says, “we need some breakthroughs. We need new ideas.”

Biotechnology could provide those ideas. As Finguerut walks me through one lab, he explains that he and his colleagues are already looking for molecular markers in sugarcane that indicate the likelihood of success under different conditions. “We are already ‘cracking the code’ of the sugarcane DNA in our own laboratory and experimental stations, using very expensive imported equipment,” he explains, “but we need much more analytical power.” He plans to solve this problem the Brazilian way—by partnering. “We want to attract partners not only for the molecular markers but to improve sugarcane using all the biotech tools we can imagine: genes, transformation techniques, propagation, synthetic biology, et cetera,” he says.

Finguerut hopes that the CTC will soon release a version of sugarcane that includes the pest-resistant features that come from Bacillus thuringiensis. This could help the plant to fight off its main pest, the sugarcane borer.

Obstacles in Agbiotech
On my last morning in Brazil, I sit in the lobby of Hotel Trianon Paulista, more or less in the center of São Paulo. While I wait for Paulo Andrade, a consultant on agbiotech regulations at TargetDNA who served for six years on Brazil’s National Technical Commission on Biosafety (CTNBio), I look over the country’s agbiotech statistics, which are impressive.

Only the United States grew more biotech crops than Brazil in 2012. That year, Brazil planted 36.6 million hectares—more than half as much as the United States—of biotech crops, including cotton, maize and soybeans. In fact, Brazil grew 21 percent of the world’s biotech crops in 2012, according to the International Service for the Acquisition of Agri-biotech Applications (ISAAA). Furthermore, Brazil’s agbiotech sector is poised to grow. Between 2009 and 2012, the country increased its area of planted biotech crops more than any other nation.

The expansion of biotech farming in Brazil is clearly documented in the ISAAA’s Brazil: Biotech Facts & Trends 2013: “Brazil approved no less than a record nine biotech crops in 2009, eight in 2010, an additional six approvals in 2011, with just three in 2012 (until October), making it the country with the fastest approval rate for biotech crops globally and one of the most rigid and detailed methods for approvals, by CTNBio.”

As I finish reading that statement, Andrade arrives. I soon realize that he might agree with ISAAA that Brazil’s approval system for biotech crops is “rigid and detailed,” but he considers that more bad than good. In fact, when I ask him his opinion of the biggest agbiotech challenge in Brazil, he quickly says that it is reducing the costs of the agbiotech regulatory system. “It works,” he says, “but it’s very expensive.” Indeed, Andrade calls the system unnecessarily expensive. Describing the process of fulfilling the regulatory commission requirements for a new GMO crop, he says, “some of the questions are redundant and useless, and still they require experiments.” In some cases, he says, the regulatory hoops for a new GM plant can cost the developer US$4 million. As Andrade stresses, that cost really challenges small biotechnology companies, “which are the core of biotech innovation anywhere in the world, including Brazil. These costs prevent the Brazilian private sector from developing its own products and almost oblige the country to be just a technology importer.”

Buying Biotech Muscle
During my trip to Brazil, I didn’t meet anyone who suggested that the Brazilian government holds back on investing in biotech. Quite the contrary. One expert in Brazilian biotechnology, who didn’t wish to be named, even described the research system in São Paulo as “overfunded.” More than one person I spoke to echoed this account. While everyone knows that success in this industry requires major investment, the overall pot of Brazilian biotech dollars looms very large, and keeps getting larger.

At the 65th Annual Meeting of the Brazilian Association for the Advancement of Science in July 2013, Brazil’s science minister, Marco Antonio Raupp, underscored just how much the pot has grown. Between 2012 and 2013, he said, the country’s investment in science jumped from US$3.8 billion to US$5.6 billion. And to put this trend in perspective, Brazil only invested about US$575 million in science in 2002. In other words, in a little over a decade the country’s financial commitment to the industry has risen by more than 550 percent.

With that kind of spending supporting it, Brazilian biotech is not likely to stay an underdog for long. These exceptional resources—coupled with the country’s embrace of new technologies like advanced crops, its commitment to forming strong partnerships at home and abroad, and its determination to be a leader in the field of biotechnology—are sure to yield advances that will give Brazilians everywhere an awful lot to cheer about.

Illustrations by Clayton Junior

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