BIO profile: Mervyn Jacobson, Genetic Technologies

A keen fascination in the creative ideas of others and a willingness to take risks are hallmarks of Australian biotechnology entrepreneur Dr Mervyn Jacobson's outlook on life.

"I'm fascinated by creative people. By definition these days, creative people are thinking outside the square, and I'm not afraid of that," he says. "What I have found to be attractive to me has been to pursue things that are highly novel -- novel notions have often resulted in novel inventions. There's a certain willingness to take the risks -- I've done that most of my life."

The executive chairman of Melbourne-based biotech and genetic testing company Genetic Technologies may be one of the better-known of Australia's biotech players, in part because of the company's controversial patents covering the use of so-called 'junk' (non-coding) DNA for mapping and analysis, which have raised the hackles of some members of the genetics and genomics community both in Australia and internationally.

Jacobson is a former clinician who got his start in the biotechnology industry in the late 1980s, when he co-founded flow cytometry company Cytomation, which became a world leader in high-speed cell sorting. The association between Jacobson and Cytomation lasted until the Colorado-based company was acquired by Danish company DAKO in 2001.

Jacobson's dealings with Cytomation also led to the formation in 1996 of XY, another Colorado-based company that is now a leading player in sex selection in livestock, zoo and endangered animals, and companion animals.

But his main venture in Australia is Genetic Technologies (GTG), an ASX-listed company that grew from GeneType, a small research company formed in 1989 with Dr Malcolm Simons and funded by investors in Switzerland. Simons had the notion that maybe junk DNA wasn't junk at all, and used non-coding motifs in HLA to prove that junk DNA sequences could be used for analysis and later for mapping. From those beginnings, GTG now has a portfolio of analysis and gene mapping patents issued in all 24 countries where applications were filed.

While the company started out with a research focus, it soon added a revenue stream in the growing field of genetic testing.

"We had more ideas than funding, so we decided to set up a business of paternity testing as a means to generate revenues -- at that time it was expected to be a temporary source of cash," says Jacobson. "But as it turned out, it has become the leading paternity testing group in Australasia, and we have more recently expanded into cancer and disease susceptibility testing, animal and plant testing and other areas like forensics. It's becoming an increasingly important part of GTG.

"Our mission in relation to service testing now is to become the leading genetic testing facility in the Asia-Pacific region -- the biggest and the best."

GTG's other main focus is its licensing program, which it has pursued with vigour over the last few years. With 17 agreements under its belt, ranging from university research licences to licences for services providers offering genetic tests, and to developers of related technology, GTG is slowly working its way through the 2000 or so companies and research institutions it has identified to date as needing access to the patents.

Wherever possible, GTG uses its patents to leverage an advantage for its testing business, gaining access to new technology or diagnostic tests it can bring into its Australian genetic testing operations. The deals have included one with Myriad Genetics which has given GTG the rights to offer the Myriad cancer susceptibility tests in Australia, a similar deal with Orchid Biosciences with access to forensic and paternity SNP tests, and a deal with Swedish company Pyrosequencing including access to sequencing technology and diagnostics.

"It's all about being creative [with the licensing terms] -- every licensing deal we make is different, unique," Jacobson says.

But while licensing and genetic testing forms the major revenue-based focus of GTG, the company also has a number of research projects underway. Among them are the RareCellect program, which is developing novel prenatal diagnostic techniques using foetal DNA present in maternal blood and the Pathogen Genomics and Genetics Program, which is developing diagnostics and therapeutics based on genetics to treat parasitic diseases in livestock. A small subsidiary company, ImmunAid, is investigating the role of regulatory T cells in HIV and the possibility for therapeutic intervention.

Jacobson says he is not averse to expanding the company's portfolio through acquisitions if the right opportunity comes up. But right now, he says, the company is trying to maintain its focus on its licensing program, which includes the added distraction of a major ongoing lawsuit against biotechnology giant Applera, one of three filed by GTG in defence of its patents (the other two have since reached settlement).

"A lawsuit like that is a major focus and also a major distraction," Jacobson says.

The company is also focused on upgrading its Nasdaq listing from an ADR level 1 to an ADR level 2 status, which will allow GTG to trade on the Nasdaq board, and more importantly provide US investors and institutions with easier access to the stock. The process has been delayed somewhat due to 2002-2003's slow down in the economy, but Jacobson expects to be able to upgrade by the middle of this year, with the possibility of doing a placement on the US market at some point in the future.

Another potential opportunity for growth comes from GTG's 80 per cent Canadian subsidiary GTech, a Vancouver-listed former mining company, which is also looking to convert to a biotechnology focus in the near future.

Jacobson is not apologetic for recognising opportunities when they came his way and then making the most of them.

"A lot of our projects have run contrary to traditional views, and those traditional views have turned out to be wrong. I'm not smug about that. But science is incremental, that's its nature. We're just part of the process, adding our little increment to that total body of knowledge," he says.

"In some ways, looking back, it is humbling to realise how many things we have promoted that have turned out to be important."