Wary Europe Enters Biotech Age Swiss Reject Limits on Genetic Research in June 7 Referendum. European Firms See Big Money in the US-Dominated Industry

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European genetic engineers took heart this week from a landmark vote in Switzerland that encouraged them to keep up the struggle to catch their United States rivals in what promises to be one of the most lucrative industries of the next century.

In the first referendum anywhere on genetics, Swiss voters June 7 turned down a proposal that would have strictly limited genetic research into plants and animals. On a continent where the public has been very wary of tampering with the genetic structure of what goes into its food, the 2-to-1 vote to allow the research to continue, and to let companies patent their genetic discoveries, is seen as an important signal.

"A lot of people outside Switzerland were looking at this referendum as a test case in Europe on ... gene technology," says John Durant, a public-opinion specialist with the European Federation of Biotechnology. "It suggests that when push came to shove, the Swiss decided that the gains outweighed the risks," Professor Durant adds. The vote marked the second boost in a month for Europe's biotechnology industry. On May 12, after nearly a decade of wrangling and lobbying, the European Parliament in Strasbourg, France approved legislation allowing firms to patent inventions involving biotechnology, in the face of continued opposition by environmentalists. Business was happy. "This represents a major step forward," says Brian Yorke, head of corporate intellectual property for Novartis, a giant Swiss pharmaceutical firm in the vanguard of genetic research into food and medicine. "It is essential to give the stability and assurance we need to develop our biotech business." The two votes have encouraged European bioengineering companies fighting for a bigger slice of a global pie that will soon be worth tens of billions of dollars, analysts say, as scientists develop more pest-resistant, longer-lasting fruits and vegetables by altering their genetic makeup, and discover more effective medicines through research on genetically modified animals. Europe has seen something of a biotech boom recently in the pharmaceutical industry. The number of biotech firms jumped from 584 in 1996 to 716 last year, as established companies such as Novartis were joined by new start-ups including Innogenetics in Ghent, Belgium. When Rudi Marien launched Innogenetics in 1985, "it was impossible to find money," he recalls. "I invested a lot of money together with some friends." Last year, the company raised $80 million on a new high-tech oriented stock market, and financing has become much easier to find. But Europe is still way behind the US in the genetic engineering business: In 1996, a total of 584 European firms generated sales of $2.2 billion, according to the European Pharmaceutical Association, against $7.7 billion worth of sales by 1,300 American companies. "Americans see this as a technology that is rapidly reaching maturity," says Durant. "Europeans see it as a technology in embryo, where things are just beginning." Put it down to different mind-sets: hard-charging American optimism and enthusiasm for the fruits of science against a more conservative and skeptical Europe. Certainly the regulations in Europe that govern genetic research are stricter than in the US. In large part, this is because European consumers - and hence governments - are much more worried about the ethical implications and the environmental effects of genetically engineered organisms than their American counterparts. Half of this year's US soybean crop will be grown from genetically modified seed, which American farmers regard as entirely normal. France approved its first tentative planting of genetically modified corn last November, and experimental transgenic crops are being grown on fewer than 200 carefully monitored sites in Britain. In the wake of last year's panic over so-called "mad cow disease," believed to have been caused by feeding cattle with bone meal from other animals, the British are especially concerned by the potential dangers of new and untested food technology. …