BioWorld International Correspondent

COPENHAGEN, Denmark - DeCode Genetics Inc. put Iceland on the genomics map by gaining exclusive rights to exploiting the country's population genetics resources. Prokaria Ltd., a more low-profile venture, is taking a similar tack with Iceland's unique microbial riches.

In 1999, the Reykjav k-based company obtained a five-year license from the Icelandic government entitling it to exclusive bioprospecting rights in hot springs found in 28 of the most accessible geothermal areas in the country. The first products are now beginning to flow from this arrangement.

The company was founded in 1998 by its president and CEO, Jakob Kristj nsson, along with Kari Stefansson, the founder and CEO of DeCode, also of Reykjav k. It raised US$13 million in 2000 from five Icelandic venture capital funds: Throunarfelag Islands, MP-Bio, Viljandi, EFA Ventures and Talenta Ventures. The terms of its license require it to spend a minimum of US$1 million annually on bioprospecting research.

Kristj nsson, a professor at Reykjav k Technical University, has spent two decades researching the biology of bacteria that inhabit extreme environments. The species Prokaria is working with can withstand temperatures ranging from -20 degrees C to more than 100 degrees C; pH environments from 0 to 11; and salinity concentrations from 0 to 5 percent.

The company has built up a culture collection of 4,000 thermophiles, 2,000 psychrophiles and some 200 species of lichens. It has sequenced five bacterial genomes, including Geothermus vaporicella, Thermus flavus and Rhodothermus marinus, in its hunt for enzymes that possess novel properties. It has a current pipeline of more than 300, which it is developing for three markets: research and diagnostics, enzymes for biosynthesis of chiral intermediates and industrial enzymes.

The phages harbored by thermophilic bacteria are of particular interest, Kristj nsson told BioWorld International, as bacteriophage are essentially "DNA multiplication machines."

"The need to work with thermostable enzymes in molecular biology is not limited to PCR," he said. "The key molecular biology enzymes used today come from E. coli phages," he said. "Nobody has really looked at these thermophilic phages."

Its lead product is a phage-derived thermostable RNA ligase, which is now in a final product form. The company is looking for a partner that would incorporate it into a kit and market it to the research community. The company also is developing DNA ligases and DNA polymerases for the same market.

It is developing dehydrogenases and acylases for the biosynthesis market and has formed partnerships with a number of companies that specialize in biosynthesis and chiral synthesis, including Edinburgh, Scotland-based start-up Ingenza Ltd., and ThermoGen Inc., of Woodridge, Ill., which is now owned by DeCode. Its industrial enzymes effort is focused on the development of cellulases and amylases for the breakdown of starch.

Prokaria will be the outright owner of the products it develops, but it will have to conclude agreements with the landowners on whose property it is working. "We need to negotiate some royalty [agreement] with the owner of the geothermal site, which in most cases is the government," Kristj nsson said. The company's license is valid until 2004. It plans, he said, to ask for a limited extension to enable it to continue selective enrichment studies in particular environments.