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BUSINESS STRATEGY

Sherlock Meets The Other Dr. Watson

Applied Biosystems sees growth opportunities in databases of DNA samples from criminals.

DANIEL S. LEVINE

The Burrill Report

“Solving crimes through a DNA database is completely a numbers game. It's all data driven and it's pretty simple: the more data you have in the database, the more effective, the more efficient the database is at solving crime.”

When New York Governor Eliot Spitzer called for expanding his state's collection of DNA samples earlier this month to include anyone convicted of a crime—not just convicted violent felons—it was welcome news to Applied Biosystems.

The Foster City, California-based life sciences tools company is looking to push its technology used in tasks such as mapping the human genome to new markets that extend its reach beyond its traditional customers. Applied has long supplied researchers with the instrumentation, chemicals and software needed to conduct scientific research. But now it's adapting its same basic technology for detection of biohazards, paternity and victim identification, food safety testing, crime scene investigations and, of course, the collection of DNA samples from criminals for databases.

Applied Biosystems sees big opportunities in efforts like Spitzer's to broaden the use of DNA databases. Under current law, New York state only collects DNA samples from about half of the defendants convicted of crimes. The governor's office said this severely limits available criminal evidence, and makes it harder to solve serious crimes. The new legislation mandates the collection of DNA from every person convicted of a crime, as well as individuals on probation, on parole supervision, or registered as sex offenders.

"Identification of criminals through DNA comparison is decisive, reliable, and even-handed," said Spitzer in a prepared statement. "This legislation will help us bring the guilty to justice, and exonerate those who have been wrongly accused."

Following The Money

The push in New York mirrors ones in other states and countries from the United Kingdom to China that are expanding their use of such databases. For Applied Biosystems, by far the leading supplier of the equipment used to collect and analyze DNA, it represents an important area of growth at a key time. Its traditional business of supplying tools to corporate and academic researchers has leveled off in the face of the National Institutes of Health's flattened budgets and ebbs and flows in the biopharmaceutical research budgets.

In 2005, Applied Biosystems established it applied markets division with the intent to capture new opportunities—a $6-billion market by the company's estimate—in taking its technology out of the lab and into the field. Ross Muken, a healthcare services and technology analyst with Deutsche Bank, estimates the applied markets division for the company represents about 20 percent of the company's $1.9-billion business today. He sees it as an important driver for the company and estimates the forensic portion of that will grow by about 20 percent a year for the next three to five years.

"The whole idea behind this was you have this wonderful collection of technologies," said Muken. "'How do we now follow the money?' NIH spending has been relatively putrid. Clearly, taking these technologies and then forming them into disruptive technologies for new markets that have significant investment capabilities is a nice growth strategy given you already have this capability in house."

Muken said New York was originally one of the last states to sign on to building a DNA database of criminals. Its push to expand that now is a reminder that such use of the technology is still in its infancy, he says. It's a sizeable opportunity for Applied, which has the lion's share of the market and provides the instruments and reagents used by New York State.

A Numbers Game

"When an investigator walks into a crime scene, what's on their mind? 'Where am I going to get fingerprints from?' We want them to walk into a crime scene and say, 'Where am I going to get DNA?' said Bob Barrett, vice president and general manager Applied Biosystems applied markets division. "'DNA has been most recognized as used to solve particularly heinous, violent offenses like murders and sexual assaults, but that's rapidly changing. It's moving more toward the high volume crimes in a fairly rapid manner."

Throughout the United States, the trend now is to go beyond just seeking DNA from convicted offenders, but to collect DNA from anyone arrested for most crimes, said Chris Asplen, vice president of the Washington, D.C.-based governmental affairs firm Gordon Thomas Honeywell. His firm lobbies on behalf of Applied Biosystems and other forensic technology companies. Though New York's proposal doesn't go that far, he said expansions like the ones being contemplated in the Empire State are important because they allow the technology to be more effective.

"Solving crimes through a DNA database is completely a numbers game," said Asplen. "It's all data driven and its pretty simple: the more data you have in the database, the more effective, the more efficient the database is at solving crime."

Barriers Remain

Civil libertarians have raised objections to the implementation of databases, with concerns ranging from invasion of privacy to illegal search and seizure. There are particular worries about broadening the use of database to include arrestees who haven't been convicted of a crime. Opponents of such practices complain that the databases make everyone a suspect for every crime.

But proponents of the technology argue that DNA samples are no different than fingerprints, which are captured from anyone arrested and remain in databases regardless if a suspect is ever convicted.

Civil liberties objections aren't the main barrier to expanding the use of DNA databases. Nor is the lack of funding, according to Applied's Barrett, at least not now with federal monies still set aside under the Bush Administration's DNA Fingerprinting Act. The act provides funding for such efforts at least through 2008.

The problem, he said, is human resources. "Right now, the barrier is laboratories gearing up," said Barrett. "It's trained personnel. This is a relatively new science and it's experienced such a rapid explosion that a lot of state laboratories are scrambling to find enough trained people to man these laboratories."



May 23, 2007
http://www.burrillreport.com/article-sherlock_meets_the_other_dr_watson.html

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