A Menlo Park firm has announced a pioneering East-West business deal that would likely put a smile on Mikhail Gorbachev's face.
The deal, a prime example of capitalist ingenuity, will give a branch of the Soviet Academy of Sciences a piece of a Menlo Park biotechnology start-up called RiboGene Inc. RiboGene, in turn, will benefit from a new Soviet technology that has the potential of turning the U.S. biotechnology industry on its ear."It's a very, very good example of what Gorbachev is coming here to promote," said Petri Vainio, an associate with Sierra Ventures, the Menlo Park venture capital firm that engineered the deal.
The agreement, signed in Moscow last week, is a first for the biotechnology industry, and officials hope it will be a model for future Soviet-American technology ventures, Mr. Vainio said.
It's an example of how U.S. industry can corral Soviet technology to the economic benefit of both parties, experts say.
"There is a deep amount of real science - physical science, engineering science and electronics that has been accomplished by the Soviets," said Mark Muchnick, president and chief executive officer of Global Development Corp. in Santa Clara, a sponsor of the upcoming Soviet Silicon Summit.
"They have some very significant technology - from software to semiconductor chips to robots and some unique medical devices. The Soviets are very advanced in this area. The problem is they don't manufacture anything anybody can use," he said.
During his June visit here, experts say Mr. Gorbachev will be seeking the money and mechanisms to bring some of that Soviet ingenuity into the commercial, i.e. capitalist, marketplace.
He'll also be looking for ways to bring back American know-how to help modernize and bring economic reform to the Soviet system.
"We can provide technology for them, and they can provide technology for us, and we can make it profitable, in my belief, in both directions," said Steven Puthuff of Saratoga, Calif., the chief of an American delegation that's advising the Soviets on economic reform.
A former Commerce Department official, Mr. Puthuff has assembled a team of experts, including Jeffrey Sachs, Harvard economist, and Milton Friedman, Nobel laureate, to school the Soviets on the workings of competitive markets.
Mr. Puthuff also is the chairman of Econotech, a Soviet-American venture seeking to create commercial ties between American companies and Soviet ministries, including the U.S.S.R. Academy of Sciences. Much of the academy's work, he said, gathers dust in its laboratories because of stiff Soviet bureaucratic requirements.
That includes such valuable advances as semiconductor laser technologies, thin film technologies, advanced methods of toxic waste disintegration and advances in biotechnology, he said.
The latest Sierra Ventures deal will bring to commercial light some of the academy's work in the biotechnology arena.
The work, first published in 1987, offers a much faster and cheaper way of mass-producing proteins than the current method of genetic engineering, Mr. Vainio said.
Using the Soviet technology, RiboGene plans to develop an automated protein synthesizer that doesn't rely on animal cells. The technology could greatly simplify the process of making biosynthetic drugs.
"You can translate genes into proteins in a matter of hours, as opposed to a matter of weeks or months," Mr. Vainio said.
In exchange for use of the technology, the Institute of Protein Research, part of the Academy of Science, will get a 15 percent stake in RiboGene. The Soviets plan to cash in on their investment in five years, when the company
plans to go public, Mr. Vainio said. "When you think of that, that's a very capitalistic notion," said Mr. Vainio, who helped negotiate the deal over the past year.