From the beginning, Philip Goelet and Michael Knapp have been renegades of the biotech world.
When the scientist-entrepreneurs decided in 1988 to start a Baltimore company that would offer cheap, quick genetic testing, did they go to venture capitalists for financing? No. And did they decide to go after the most obvious markets in the health industry? Of course not.
Instead, the two men chose a route that led them to Lexington, Ky., not the heart of the biotechnology world, but definitely a center of horse racing.
It's there, they believe, that they have found an instant cash machine and guaranteed sales.
The Jockey Club, which sets the standards for the horse-racing industry, has paid large sums of money -- Dr. Goelet won't say exactly how much -- to Molecular Tool Inc. in Baltimore to ensure one thing: that a foal is really the offspring of the parents its owners say it is.
In thoroughbred horses, parentage might not ensure winning, but it will bring money. So, beginning next year, Molecular Tool is TC hoping to verify the parentage of 30,000 to 35,000 foals. That parentage is already traced, but the company has designed a test that is quicker, cheaper and more accurate.
It works this way: The inside of the noses of a stallion, foal and mare are swabbed to gather mucus, which contains DNA. The company then examines the DNA, the genetic material that determines everything from eye color to predispositions for disease, for 30 specific sequences.
All of that can be done in many laboratories, but the company has developed a technique that quickly screens the DNA sequences. Like a computer that can search an article for a misspelled word, the test scans the DNA with chemicals to look for the specific sequences. The company than looks for matches among the DNA samples from each animal.
In addition, the company is using robotics to do the tests quickly and cheaply.
Dr. Goelet claims his company will be able to determine parentage with greater than 99 percent accuracy, for $30 a horse. In addition, the company promises to do 80,000 tests for the Jockey Club each year, a rate that is probably 10 times the number of tests the FBI does during the same period.
The Jockey Club has not only funded much of the research and development work of the 12-person company for the past two years, but it now has a joint venture that would ensure it a piece of future company profits. Molecular Tool is seeking a 10-year contract with the Jockey Club to do its parentage tests.
But horses aren't Molecular Tools' only interest. The two entrepreneurs are moving slowly toward the health care market, which is fraught with ethical and regulatory issues.
In fact, they said the biggest question in the company's future was how quickly the public would accept genetic testing.
As researchers begin to identify genes for specific illnesses, people could be tested to see if they will develop the disease. Molecular Tool would like to begin by developing quick, cheap paternity tests to be used by local governments to decide who pays child support. The more lucrative market, however, lies in the murky waters of genetic testing to see if a person has an inherited genetic disorder or a mutation that predisposes him to a particular illness.
The company realizes that not everyone will want such a test. For instance, people with a family history of Huntington's disease, an incurable illness that strikes in midlife, might not want to know whether they will contract it. But a person with a family history of breast cancer might choose to have a test.
"The next big question is what happens to the result and who getsaccess to the result," said Neil Holtzman, professor of pediatrics at the Johns Hopkins School of Medicine. He expects concerns that a person's genetic profile could result in discrimination in employment or health insurance.
Dr. Goelet and Dr. Knapp are betting that the need for testing will become prevalent in the future and that they can adapt their technique to create many different tests. But they acknowledge that the market is still speculative. So they are looking for a corporate partner before they enter the health field.
In addition, the company will have competition, which includes large pharmaceutical companies such as Abbott Laboratories of Illinois and Hoffmann-La Roche Inc. of New Jersey.
The company now is searching for 2,000 square feet of space in Baltimore to move into this year. It has outgrown its current space in the Alpha Center, a building on the Johns Hopkins Bayview Research Campus that houses several small biotech companies.