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Appendix C.3

Department of Energy

Since 1994, the National Nuclear Security Administration’s Global Initiatives for Proliferation Prevention (GIPP) and its predecessor programs within the Department of Energy have engaged Russian scientists with experience in the defense sector and other technical specialists in civilian activities aimed at advancing global security and nonproliferation objectives. The program has financed more than 100 projects at a cost of $40–45 million in the biosciences in Russia. In 2011, funding levels were at or near their lowest level since the program began. Examples of projects that the department considered successful are set forth below.

Project: Microbial Diversity for Novel Biotechnology Applications

Russian and Other Partner Institutes:

Institute for Volcanology and Seismology, Russian Academy of Sciences Far-East Branch, Petropavlovsk-KamchatkaCenter for Ecological Research and BioResources Development, Pushchino Durmishidze Institute for Biochemistry and Biotechnology, Tbilisi, Georgia Institute for Microbiology, National Academy of Sciences of Uzbekistan, Tashkent, Uzbekistan

U.S. Industry Partner:

Diversa Corporation, San Diego, California

The project established a multiyear program of rational bioprospecting on the Kamchatka Peninsula. Environmental samples were exported to the United States by the Center for Ecological Research and BioResources Development to the industrial partner, Diversa Corporation. This multiyear program resulted in a large number of novel microorganisms that were later screened by Diversa researchers, a number of which were used in other GIPP projects that target



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Appendix C.3 Department of Energy Since 1994, the National Nuclear Security Administration’s Global Initia- tives for Proliferation Prevention (GIPP) and its predecessor programs within the Department of Energy have engaged Russian scientists with experience in the defense sector and other technical specialists in civilian activities aimed at advancing global security and nonproliferation objectives. The program has financed more than 100 projects at a cost of $40–45 million in the biosciences in Russia. In 2011, funding levels were at or near their lowest level since the program began. Examples of projects that the department considered successful are set forth below. Project: Microbial Diversity for Novel Biotechnology Applications Russian and Other Partner Institutes: Institute for Volcanology and Seismology, Russian Academy of Sciences Far-East Branch, Petropavlovsk-KamchatkaCenter for Ecological Research and BioRe- sources Development, Pushchino Durmishidze Institute for Biochemistry and Biotechnology, Tbilisi, Georgia Institute for Microbiology, National Academy of Sciences of Uzbekistan, Tashkent, Uzbekistan U.S. Industry Partner: Diversa Corporation, San Diego, California The project established a multiyear program of rational bioprospecting on the Kamchatka Peninsula. Environmental samples were exported to the United States by the Center for Ecological Research and BioResources Development to the industrial partner, Diversa Corporation. This multiyear program resulted in a large number of novel microorganisms that were later screened by Diversa researchers, a number of which were used in other GIPP projects that target 151

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152 APPENDIX C.3 transgenic plant generation for crop protection. Diversa’s most successful product was the laccase enzyme that it sold to the paper pulp industry to replace bleach in whitening of paper pulp. Project: Development of Recombinant Luciferase and Related Reagents for Portable Photometric Reagents Russian Institutes: Gamaleya Institute of Epidemiology and Microbiology, Moscow Moscow State University Industry Partner: New Horizon Diagnostics Corp. (NHD) The project resulted in the establishment of the company Lumtek LLC in 2004. Lumtek was tasked by NHD to improve current bioluminescence-based detector hardware and reagents for a range of commercial detectors. Lumtek successfully designed and manufactured a new Russian Luminometer. Lumtek continues to manufacture test systems, including a Luminometer device and reagents for biocontamination express control for customers in Russia, Ukraine, and France. The target markets are food industry, ecology, and medicine. In May 2012, NHD initiated quality control and assurance procedures of the Lumtek reagents and Luminometers. If successful, Lumtek plans to sell its products to NHD, and NHD will market them in the United States. NHD would like to con- tract with Lumtek for production of at least 100,000 test systems and 100–300 Luminometers per year. Combined Projects: Development of Microbiological Methods for Oil Pol- lution Decontamination in Soil and Water Surface and Symbiont—Plant Growth Regulator Russian Institute: JSC Biochimmash Industry Partner: Dye Seed Ranch Inc. An oil biodegradant prep was developed and successfully tested in Montana during this 3-year project. Dye Seed supported the trials conducted by Biochim- mash in Siberia and other parts of Russia and reported the results of the trials to the Montana Gas and Oil Committee. Under the Plant Growth Regulator project, Biochimmash developed a plant growth accelerator that shortens the cultivation period of agricultural products and grass. After successful completion of the project, Biochimmash renovated the pilot production facility to manufacture the oil-degrading prep and plant growth accelerator (entitled MICEFIT). After reno- vation, the pilot plant became the spin-off company Bioprogress that leases the facility and equipment from Biochimmash. Bioprogress produces the oil biode- gradant and plant growth accelerator and sells it to oil-production companies and farmers. Bioprogress produces other natural compounds as well. Bioprogress’s

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APPENDIX C.3 153 revenue has been steadily growing since 2006. Recently, Biochimmash received an invitation from NineSigma Inc. (Cleveland, Ohio) to submit a proposal for cul- tivation technologies that shorten the cultivation period of agricultural products. Project: Development of Effective Decontamination Methods and Technology Russian Institute: Institute of Highly Pure Biopreparations Research Institute of Influenza Industry Partner: Isonics Under this project, the biodecontamination method entitled PAEROSOL was developed. Two patents are pending. The Defense Threat Reduction Agency (DTRA) sponsored the validation of PAEROSOL at the Madigan Army Medical Center for its effectiveness in the decontamination of hospital pathogens that cause cross-contamination of patients and result in high morbidity and mortality. Estimates of the resulting costs to deal with hospital infections range from $4.5 billion to $11 billion annually. The validation was successful. A U.S. laboratory is developing a proposal to apply PAEROSOL for the decontamination of military vehicles, cargo, etc., that are returned from Afghanistan and the other military theaters. PAEROSOL will ensure appropriate disinfection to prevent transmission of dangerous human, animal, and plant pathogens to the United States. Accord- ing to specialists at Cornell University, importation of invasive species costs the United States more than $138 billion each year. Project: Antibody-Based Diagnostics and Production for High Consequence Animal Pathogens Russian and Other Partner Institutes: Russian State Diagnostic and Prevention Center for Human and Animal Diseases (DPC) Ivanovsky Virology Institute All-Russia Institute for Animal Health Institute of Experimental and Clinical Veterinary Medicine of the Ukrainian Academy of Agricultural Sciences Gamaleya Institute of Epidemiology and Microbiology Industry Partner: New Horizon Diagnostics (NHD) This project produced novel antigen and monoclonal systems capable of detecting an array of high-consequence animal pathogens including foot-and- mouth disease (FMD), African swine fever, H5N1 avian influenza, and prion diseases, among others. Three invention disclosures and one patent application were filed for novel reagents capable of diagnosing Porcine Respiratory and Reproductive Syndrome (PRRS), FMD, and prion diseases. The diagnostic kits and treatments being jointly developed and marketed by DPC and NHD are

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154 APPENDIX C.3 antibody based and designed to handle food and environmental matrices as well as antibody and enzyme treatments for animal diseases. DPC is also producing and marketing the reagents for diagnosing several diseases in Russia through a partnership with NARVAC, Inc. (Russia). NHD has received funding from the U.S. Pork Producers Association to complete development and validation of a diagnostic kit for PRRS. Project: Fluorinated Analogs of Bioactive Garlic Components Russian Institute: State Research Institute of Organic Chemistry and Technology (SRIOCT) Industry Partner: LifeTime Pharmaceuticals The focus of the project was to develop novel anticancer agents from gar- lic extracts and individual components known to exert a pronounced cytotoxic activity against malignant cells. The SRIOCT team designed and synthesized over 60 garlic analogs. Four were eventually selected for further development by SRIOCT and the commercial partner in collaboration with the U.S. National Cancer Institute, because they are stable and easily synthesized and demonstrated high antitumor activity. The project yielded four invention disclosures. Project: Anti-Cytokine Antibodies: Immune-Mediated Disease Russian Institutes: Shemyakin-Ovchinnikov Institute of Bioorganic Chemistry State Institute of Genetics Institute of Highly Pure Biopreparations Russian Research Center for Molecular Diagnostics and Therapeutics Industry Partner: Advanced Biotherapy Concepts, Inc. (ABCI) In this project, genetically engineered monoclonal antibodies were used to address efficacy and reactivity issues associated with antibody-based therapies, the rationale being that humanized antibody-based therapies would reduce severe immune reactions during repeated treatment, thereby increasing the life of the therapy when compared to mouse-based therapy systems. This project resulted in four invention disclosures. ABCI has sold its patent portfolio for proprietary antibody treatments that remove or neutralize certain interferons and other key cytokines induced by alpha interferon to another U.S. company that is currently negotiating with SOI and a national laboratory regarding further product develop- ment and clinical trials.

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APPENDIX C.3 155 Project: Antibody-Based Diagnostics Russian Institutes: Russian Research Center for Molecular Diagnostics and Therapeutics (RCMDT) Russian State Diagnostic and Prevention Center for Human and Animal Diseases (DPC) Gamaleya Institute of Epidemiology and Microbiology State Research Center for Applied Microbiology (SRCAM) Industry Partner: New Horizon Diagnostics (NHD) The project produced novel antigen and monoclonal systems capable of detecting an array of high-consequence pathogens, including anthrax, plague, tularemia, E. coli, Salmonella, and botulinum toxin, among others. Two pat- ent applications were filed for novel reagents capable of detecting E. coli and botulinum toxins. The diagnostic kits being jointly produced and marketed by RCMDT, DPC, and NHD in Russia and the FSU are antibody-based and designed to handle food and environmental matrices. Test kits for anthrax, plague, and tula- remia were independently validated by SRCAM. RCMDT is also producing and marketing these reagents in Russia and the European Community through joint stock companies in which the principle investigator maintains a business interest. NHD has received funding from the Department of Defense and Environmental Protection Agency to continue development of kits for biodefense and food and water safety applications, respectively. United States Industry Coalition Since 1994, GIPP and its predecessor organizations have also worked with the United States Industry Coalition (USIC) to direct investment toward Russia as well as other states that emerged from the USSR. The mission has been to engage Soviet-era defense scientists and engineers in sustainable and gainful civilian work. Over 150 U.S. companies have worked with 110 institutes in Rus- sia, Georgia, Uzbekistan, Armenia, Kazakhstan, and the Ukraine, with invest- ments totaling over $280 million—approximately a third of this applied within the biological sciences. Investments are profit driven, with profits accruing for both participants. These projects have resulted in diverse commercial successes at impressive rates, including efforts in the fields of radioisotope medical therapy, rapid diagnostics, drug development, crop projection, biodecontamination, vac- cine delivery, and wound healing. USIC reports that the projects related to the biological sciences are estimated to have had the following impacts: • Created over 700 sustained jobs. • Generated over $70 million in revenue for U.S. and FSU companies. • Attracted approximately $100 million in outside investment. • Created or sustained approximately a dozen independent and joint U.S.- FSU businesses.

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156 APPENDIX C.3 • Resulted in over 30 U.S., Russian, and other patent applications. • Achieved a 25 percent commercialization rate, with a further 24 percent resulting in substantial business achievements (e.g., royalties, grants, investment, etc.) • Approximately 30 projects resulted in follow-on activity. These early achievements are indicative of the impact of the program in bringing technological developments to commercially successful endpoints. The United States Industry Coalition has identified a few challenges for moving forward with this work, namely adaptation to an evolving Russia and developing viable cost-sharing models. Quantifying and valuing cost-sharing are also challenging. SOURCE: Information provided by Department of Energy, February 2012.