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The pharmaceutical multinational Glaxo Wellcome and a small Brazilian biotechnology company signed a $3.2-million contract last week to screen up to 30,000 compounds of plant, fungus and bacterial origin from several regions in the country. The initiative is described as the world's largest natural product sampling and screening programme.

As part of the three-year deal, the companies have agreed that one-quarter of any royalties arising from successfully exploited patents will be used to support community-based conservation, health and education projects. This reflects recent heated debates over how compensation should be paid by companies that turn ‘indigenous knowledge’ into commercial products.

According to Jorge Raimondo, Glaxo's regional director for Latin America, a further 25 per cent of the royalties will go to the university group responsible for isolating and identifying the product in question. Glaxo Wellcome will pay for all research and development costs in Brazil. The research will focus on compounds found in the Amazonian and Atlantic rainforests, and Glaxo Wellcome will have an option to license any product arising from it.

Raimondo says the agreement reflects the company's view that, despite the increasing use of combinatorial chemistry to screen large quantities of artificially synthesized molecules, there is still much to be learned from traditional remedies. “One of our main interests, for example, is the way that some of these compounds control pain.”

Officials from Glaxo and the Brazilian company, Extracta, point out that the agreement has been made possible by — and conforms with — new legislation on intellectual property introduced in Brazil after a fierce political debate on the protection of genetic material (see Nature 392, 538; 1998). They say that it also conforms with the United Nations Convention on Biological Diversity, which specifies that the interests of local communities must be taken into account.

“With both Brazil's new patent law and the country's rich biodiversity, the moment is now appropriate to invest in Brazilian science,” says Padraic Ward, Glaxo's manager for business development in Latin America.

Antonio Paes de Carvalho, Extracta's director-general and a biophysics professor at the Federal University of Rio de Janeiro, says Brazilian researchers often complain that multinationals do not invest in local research. “This contract opens the way for similar companies to join other university centres,” he says. “It is the beginning of a change in attitude.”

Paes de Carvalho says the Glaxo-Extracta contract is different from the $1-million screening deal signed a few years ago by Merck and Costa Rica's INBIO. In contrast to that agreement, scientists in Brazil will work on the identification of molecules and the study of their biological properties, rather than just processing plant extracts for analysis abroad.

According to Raimondo, Glaxo is particularly interested in molecules with potential antibiotic, anti-inflammatory and possibly antifungicide properties. Paes de Carvalho says that one of his goals is to create a databank of all the samples and molecules screened.