At first sight, it seems that the Estonian chemical and biotechnology sector is experiencing obvious growth problems. Estonia is a small country, with just 1.3 million inhabitants, and hence there is probably a lack of bright chemists and biologists and, due to its young age, the state’s experience in sales, marketing and entrepreneurship is not that great. There is probably not enough money for research and development activity either.

But lo and behold, upon closer inspection, there are several valuable “gems” in this field currently being polished.

Estonian science is on a good international level and provides a favourable environment for scientific activity – several spin-off companies with strong international potential in their niche have grown out of the University of Tartu and the Tallinn University of Technology.

Providers of diagnostic services and companies linked to the research and treatment of cancer, among others, stand out, having developed a network of global partners and customers.

Celecure starts clinical trials for a new cancer drug

In 2002 Professors Priit Kogerman and Andres Valkna of the Tallinn University of Technology made a deal with the venture capitalist Rainer Nõlvak, and the company Celecure was born.

The first project of the company turned out to be quite scandalous, as they started working on a discovery of a Russian scientist who had worked for the military industry of the Soviet Union: preparation CC0101, which kills cancer cells.

“It was a cancer drug candidate which consisted of one protein and a cytotoxin, and which took a certain kind of cancer cells into apoptosis, or programmed cell death,” says Tarmo Kivi, Manager of Celecure. “However, nothing came of this development work. It remained incomplete, as producing the animal protein needed for the preparation was too complicated and costly due to the existing conditions set on medical preparations in the Western world.”

The preparation has a US patent, but the development is more or less stuck away in a drawer. The scandal, however, had to do with critics enquiring whether Celecure was developing a biological weapon at the request of a foreign state. The Estonian Defence Police ran an investigation and disproved all the conspiracy theories.

Today Celecure is in its fourth year of developing a new cancer drug. The goal is to start clinical trials in 2011 and to sell the license of the product to a large pharmaceutical company. Initial negotiations with several companies are underway.

The angiogenesis inhibitor is primarily meant for cancer treatment, but it may turn out to be of use in the treatment of certain eye and skin diseases. These include adult blindness and macular degeneration caused by the inflammation of the eye retina due to diabetes, as well as psoriasis and various chronic conditions.

Animal tests have shown that administering the drug stops the development of blood vessels in cancerous cells, which in turn means that the cancer cells have no opportunity to get the nutrients and oxygen they need to survive.

Tarmo Kivi says that a couple of drugs which work on the same principle are already successfully on the market, one of which is Avastin, which generates several billion dollars in revenue each year. The drug developed by Celecure should bring better results due to its new and more effective mechanism, as this drug has a direct influence on cells which lead to the formation of new blood vessels in tumour tissue. Celecure will be able to bring its product onto the market in five years, at the earliest.

If everything goes according to plan, the Celecure cancer drug could become the grandest business project of Estonian biotechnology to date. The pharmaceutical industry is growing – people live longer and suffer more from cancer, heart and coronary diseases and other health problems related to age. There is a constant demand for new and better medication with fewer side effects, even when similar products already exist in the market.

The intellectual property which forms the basis for Celecure’s development work has been developed by the scientists who founded the company in cooperation with Swedish scientists. The key figure in Celecure is the biochemistry doctor Andres Valkna, who received his PhD at the University of Tartu and has worked as a visiting researcher at the University of Stockholm and the Scripps Research Institute in the USA.

Estonian researchers collaborating with big Pharma

In addition to drug development, Estonian scientists are working on the diagnostics of different diseases, including cancer. It is well known that detection of a disease, including cancer, at an early stage will result in the best treatment results.

Professor Toomas Neuman of the Tallinn University of Technology has ambitions in this field. The network of companies linked to him works on biomedical research and the development of diagnostic systems for early detection, prognostics and treatment monitoring of several diseases. The most well known of such enterprises is Protobios.

Neuman’s team is working more closely on biomarkers and is conducting several clinical trials to validate the clinical significance of discovered biomarkers. Biomarkers are molecular indicators which characterise the condition of the human body. For example, the presence of specific antibodies or a certain insulin level can be biomarkers. The scientist claims that there are as many biomarkers as one is able to measure.

Kaia Palm, Managing CEO of Protobios, explains that the company investigates which markers characterise specific illnesses. They try to find opportunities to improve on cancer diagnostics – whether to make an early diagnosis or to monitor the course of the disease and the efficiency of the treatment.

Understanding cancer at the molecular level is complicated, since there are numerous intracellular molecular networks involved in different cancer types. Basically, each patient’s cancer is unique and a self-contained illness for which there is no standard treatment.

Neuman’s research group is studying the human immune system to identify its responses to disease and to identify immune system related biomarkers that can be used in clinical diagnostics. The immune system responds to diseases by developing specific antibodies and T cells that recognize diseased cells and disease-related molecules. The obtained information concerning immune system response to molecular events related to disease can be used to develop a variety of diagnostic systems.

“Scientists still have a really hazy idea of what happens inside cells. We know what a human being is made up of – what kind of genes and proteins are there and which gene encodes which protein, but how all 25,000 genes work inside a cell—which is ten to fifty microns in size and hence invisible to the human eye—in a coordinated way, still needs to be clarified,” explains the cell biologist.

Neuman says that clinical trials are underway in Estonia and elsewhere. Researchers are pinning their hopes on faster success in trials which are taking place in two US cancer treatment centres at the University of Pittsburgh and the MD Anderson Cancer Centre in Houston. These centres have good biospecimen collections and this research focuses on lung cancer. Together with the Oncology Centre of the North Estonia Medical Centre, Protobios’s team is working on creating the methodology for diagnosing breast cancer. This is a future-orientated study, the results of which will be seen in years to come.

There are eight patents and several patent applications for using biomarkers registered in Neuman’s name. “There is no point in leaving your house without a patent; you will immediately be outmanoeuvred. There are thousands of people in the world working with biomarkers. This applies in every field – you have to be on the ball and keep an eye on what others are doing,” he says.

This activity has a clear business aim as people strive to create their own products. What is unique is an approach involving the development of a system of biomarkers, using existing techniques, which can be applied to get results. Neuman promises that in a couple of years it may be possible to diagnose cancer on the basis of a drop of blood.

Neuman admits that, as medicine is also a kind of business, he hopes for a breakthrough in the large and solvent US market, as well as in the developing markets of India and China. “With our partners in the US, we have licensed a set of biomarkers discovered by Protobios to a large international pharmaceutical corporation and will co-develop a lung cancer test for worldwide use.

Neuman, who worked for sixteen years in the USA, was already fascinated by science, especially biology, as a schoolboy when he came across the book Guide to the Century of Biology. His interest took him to the University of Tartu to study cell and developmental biology. His interest in business was born in 2000, when he and his colleague Kaia Palm founded a company in the US.

An US stock exchange company acquired the Estonian business

Estonian science is on a decent international level and the price of research and development as a service is cheaper than in the USA or other European countries.

The chemical industry conglomerate Cambrex Corporation—listed on the New York Stock Exchange, with a 450 million dollar turnover and 800 workers—realised this and bought Prosyntest (now Cambrex Tallinn), a spin-off company of the Tallinn University of Technology.

Cambrex is a leading supplier of products and services to Life Science Industry. Products include Active Pharmaceutical Ingredients (API’s) and
advanced intermediates for the synthesis of API’s, as well as biologically active compounds. Services include the development of synthesis, analysis and technology platforms needed for product development and production.

The Managing Director of Cambrex Tallinn, Kaarel Siirde, says that the company offers research and development services in the field of custom organic synthesis. It develops and introduces various chemical technologies and works in the field of producing chemical products and test productions.

Last year one of the leading Estonian biomedical companies, Icosagen (formerly Quattromed), sold its diagnostic division (Quattromed HTI Laboratories OÜ) to the investment company BaltCap Private Equity Fund. This diagnostic division provided molecular and conventional diagnostic services to Estonian hospitals and now plans to expand its business considerably. The biotechnology division of Icosagen AS (Icosagen Cell Factory OÜ) is involved in the development, production and sales of biochemical, molecular- and cell biological products and technologies to different customers. Icosagen AS has created a network of dignified customers and partners, including such well-known corporations as Bayer HealthCare and Sanofi-Pasteur.

The development work of Icosagen takes place in immunoanalysis, biochemistry and microbiology laboratories in Tartu. They work on creating technologies for the production of therapeutic proteins, antibodies and cellular tests. The company’s product catalogue has a wide choice of molecular biology products: monoclonal and polyclonal antibodies, enzymes, DNA & RNA cleaning kits, etc. Under the trademark of FITkit®, they offer natural rubber latex (NRL) to detect allergens in rubber materials and produce the necessary reagents for determining allergens.

The antibodies of Icosagen have been used in the development of the HIV vaccine for over a decade. These reagents are available from major distributors in Europe and the US, as well as directly from Icosagen AS.

There are also first-rate companies in the field of genetic testing, for example Genorama, which is linked to the biotechnology entrepreneur Indrek Kask.
Genorama was founded in 2008 with the aim of bringing Genorama QuattroImager, the four-colour microarray detector designed for arrayed primer extension (APEX) based genotyping, onto the market. This is an appliance costing approximately 50,000 Euro, which to date has been purchased by twenty-five leading genetics labs all over the world. Six instruments have been sold in 2009.

Indrek Kask says that QuattroImager stands out from competing appliances in terms of its favourable price and high technological flexibility which makes it possible to develop specific genetic tests for any illness.
“In the near future we would like to get diagnostic accreditation for the appliance, as well as for the first products. Following this, we will market the Genorama platform, as one of the best genetic testing solutions, more actively to genetics laboratories,” says Kask.

QuattroImager is another good example of an Estonian product that has been successful in the global market. Kask believes that promoting active business development and sales are the most important aspects of development. “As more quality products which are produced in Estonia reach the market, awareness of our existence grows and turns into more proactive interest from the market in what is going on here,” he says.

Asper, globally leading DNA tester of eye disease

One of the most successful biotech companies based on Estonian capital is Asper Biotech, which, with its eye disease tests, is the leading global producer of corresponding genetic analyses. The company has over four hundred clients in fifty countries and its leading position has opened quite a few doors. Asper is also a participant in the Development Centre of Reproductive Medicine, which started activities this year and which provides access to the newest knowledge on problems related to infertility. It is an example of the general product development strategy of the company: to cooperate with the best in its field from Estonia and abroad.

The company’s Marketing and PR Manager Terje Behrs says that they provide the service of DNA testing and have, together with their partners, developed over thirty DNA tests, and this number is growing. In 2008 Asper Biotech laboratories conducted genetic analysis of thousands of people.

Twelve DNA tests related to hereditary eye disease have been gathered together under the internationally known brand name Asper Opthalmics, which belongs to the company. Asper is the only company in the world able to test different genetic eye diseases in such quantity.

In addition to ophthalmological tests, the company works in branches of oncology and reproductive medicine in cooperation with practicing doctors.

Behrs claims that the main markets of the company are North America and Western Europe. The customers include genetic scientists, medical geneticists and a growing number of practicing doctors. As a new service, there are plans to provide some genetic tests directly to private clients.

Clients worth mentioning are the universities of Stanford, Columbia and Pennsylvania, as well as the International Cancer Research Centre and Baylor Medical College, the University College of London and Regensburg University.

The research and development work at Asper is bearing fruit. “In the last year, we have developed several tests which help to determine the causes of infertility in individuals, which is a very important research area throughout the world. Starting this year, we will offer the service of genetic testing for colorectal cancer,” says Behrs.

In the future, the primary emphasis will be on developing the test portfolios of oncogenetics and reprogenetics, and on increasing turnover and the number of services available, thereby providing new jobs in Estonia for people with higher education, and encouraging doctors to use genetic tests as a normal part of medical diagnostics.

Behrs: “Genetic tests are nothing superhuman – they are simply new and very effective ways of reducing and preventing damage which may be caused by genetic illnesses.”

A productive exporter in the field of Estonian biotechnology is the company Solis BioDyne, which produces, develops and sells reagents for DNA research, mainly DNA polymerases and linked products, to research centres and private companies. In 2008, their products were sold to 26 countries.

“Our competitive edge is the quality and price of the products, and stability at room temperature – our products can be stored for weeks at room temperature, as opposed to those of competitors who transport and use their products on dry ice,” says Member of the Board Olev Kahre. The company intends to secure related intellectual property to facilitate its global competitiveness.

Solis BioDyne has had a representation in the USA since 2007, and it has the task of finding new customers and interacting with existing clientele.
“We’ve been guided by a well-known Estonian proverb: ’A bold start is half the victory’, or persist and you’ll succeed,” says Kahre.

How Solis Biodyne solved the “cold chain” problem of Bill Gates’ HIV mission in Africa, read from here.

This story was first published in the quarterly magazine Life in Estonia Winter 2009/2010 edition. I’d like to thank my mom, Hille Tänavsuu for helping me with this post!