Firm sees bright future in glowing algae

Fluorescent protein could aid development of drugs, company says

Small Business

Howard Business

January 22, 2001|By TaNoah Morgan | TaNoah Morgan,SUN STAFF

The company that turned pond scum into an ingredient in infant formula is focusing on algae products that can help in drug discovery.

Columbia-based Martek Biosciences Corp., maker of DHA, a fatty acid found in breast milk, has been developing a sensitive fluorescent algae and is ready to market it to potential clients, company executives said.

The algae, which glows under light in bright red and orange, is used as a marker to identify specific proteins in cells. The ingredient could be used to help drug makers discover proteins they didn't know existed, or more quickly screen for proteins and accelerate drug development, a Martek executive said.

"From a commercial standpoint, this is like new cancer markers, perhaps," said David J. Kyle, senior vice president of research and development and one of the company's founders. "The question now is, is there a value there?"

Marketing for fluorescent algae would be the second major product push for the 16-year-old company that was started by scientists from Martin Marietta who were searching for ways to help astronauts grow food in outer space.

From a core group of eight, the company has grown to 140 employees, half of them at its research, development and administrative headquarters in Columbia. The company also has a production plant in Kentucky.

Martek's main product, Formulaid, is used as an additive in infant formula in more than 60 countries. Clinical studies have shown that the additive helps mental development and visual acuity, the company has said. While Formulaid and other nutritional products containing DHA have been the company's chief breadwinner - accounting for 61 percent of revenues in its latest annual report - Martek awaits Food and Drug Administration approval before Formulaid can be added to infant formula in the United States.

In the meantime, Martek has been working on other products more typical for a biotechnology company. One of them, the fluorescent algae, has been tested at the National Cancer Institute, part of the National Institutes of Health, and is being scrutinized by diagnostic companies. Research papers discussing the benefits of Martek's fluorescent algae are being published, and more are expected this year, Kyle said.

The results of the testing could make a big difference in the future of the company, one analyst said. Because fluorescent markers are available and widely used by drug companies, the question becomes whether Martek's marker, which the company boasts is at least five times more sensitive than other fluorescent markers, could make a difference.

"I think they would need to show an ability to improve drug discovery," said Alex Zisson, an analyst with J.P. Morgan & Co. "It's up to the drug companies to say ... whether added sensitivity gives a better result."

Kyle said he believes it does.

"We can now detect things we could never detect before, or we could detect things at about the same level of sensitivity but at smaller volume," he said. "Detection technology is a billion-dollar business. We're cutting out a piece of that that we can grab hold of. The applications are enormous."

He said the more sensitive marker would allow companies screening for enzyme levels, proteins, DNA and drug effectiveness to work with less material, thus screening more quickly and speeding up the discovery process.

If the test results prove positive for Martek, analysts say the company has a good chance of making a dent in the drug discovery market, though it is too early to tell how much of a dent.

"Any tools you can provide to help drug discovery, you have an opportunity," said Scott VanWinkle, an analyst with Adams, Harkness & Hill Inc. "They've got a product that looks to be pretty marketable. They just have to get out there and see what the market is for their customers."

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