D-N-A spells opportunity
Companies build on Virginia's reputation as a forensic science leader

by Garry Kranz
for Virginia Business
November 2005

The building that houses Bode Technology Group in Springfield gives no indication of the company’s stature as a world leader in human forensics. It could easily be mistaken for a call center or a warehouse. Once inside, however, the walls tell the story. Hanging in a glass frame near the lobby is a white polo shirt. Scrawled across the shirt in colored ink are the signatures of Bode scientists. A stitched logo bears an image of the World Trade Center towers and a fateful date: Sept. 11, 2001.

Bode scientists spent nearly a year and a half helping collect and examine human material recovered at Ground Zero in lower Manhattan. Bode’s technology can extract DNA from remains subjected to 2,000-degree heat for extended periods. To date, the company has analyzed roughly 40,000 biological samples, mostly bones, trying to return the remains of victims to their families.

Bode (pronounced BO-DEE) also sent teams of scientists to Sri Lanka during the summer to identify remains of people swept up by a deadly tsunami. Soon some of its 85 forensic experts could be dispatched to the Gulf Coast to perform similar duties in the wake of Hurricane Katrina. Despite the grim nature of the tasks, Executive Director Kevin McElfresh knows his company performs groundbreaking work. The unusual business means following a different set of rules than most companies. “When the market you deal in is murder, madness and mayhem, the normal questions don’t apply,” says McElfresh.

Bode, along with Commonwealth Biotechnologies Inc. and Fairfax Identity Laboratories in Chesterfield County, illustrates how private companies are boosting Virginia’s reputation as a leader in applied forensic technologies. In 1989 Virginia was the first state to successfully use DNA evidence to win a capital-murder conviction. That same year, it became the first to create a DNA databank for testing some convicted felons. “Virginia always has been fairly proactive in being an early adopter of new technology,” says Dr. Robert Shaler, a former director of forensic biology for the chief medical examiner in New York City, who supervised DNA testing following the 9/11 attacks.

Since reliable statistics aren’t available, it’s hard to assess the dollar size of Virginia’s forensic industry, but private companies are playing a crucial role in its growth. The Computer Solution Co. in Midlothian, for instance, got its start 25 years ago by writing accounting software. These days, it sells software to help forensic labs track guns, blood and other physical evidence recovered at crime scenes. Sales of these software licenses should reach $3 million by year’s end, says company President David P. Romig II.

Public interest in forensic science has reached near cult levels, thanks to the best-selling crime novels of Patricia Cornwell — who got her start after working in Richmond’s forensic lab — and popular television shows such as “CSI.” In reality, though, what happens in DNA labs seldom mirrors the images conjured by pop culture. On TV, an attractive woman in tight jeans quickly isolates a damning DNA sample. In reality, such work is painstaking, done in virtual anonymity, and the examiners must become inured to the acrid stench of decaying human material.

Bode focuses mainly on forensic casework. By 1994, Virginia’s databank of convicted felons had produced a “cold hit,” which occurs when forensic evidence from unsolved crimes matches a DNA sample on file with the state. In 1998, the state hired Bode to expand the databank by processing a backlog of convicted felon samples, and that’s when it began producing large numbers of cold hits. Meanwhile, Commonwealth Biotechnologies (CBI) and Fairfax Identity Laboratories (FIL) completed a $1.1 million transaction in 2004 to become a combined company, angling for an expected rash of new federal DNA contracts. The CBI-FIL deal creates an entity that’s pioneering advances in the field of microbial forensics, particularly isolating potentially deadly poisons like anthrax and ricin.

Public labs drive private growth
Private labs play a huge role in processing DNA evidence for Virginia’s four crime labs in Richmond, Roanoke, Norfolk and Fairfax. Virginia’s Department of Forensic Science chose Bode over CBI and FIL when expanding its databank. Authorized and funded by the Virginia General Assembly, the department now contains DNA profiles of nearly 240,000 felony offenders and some arrestees. Thus far about 2,500 cold hits have been produced, including perpetrators from out of state, giving thousands of cold cases a jumpstart.

On the flip side, some people wrongfully accused of crimes have been cleared using the same process. “We lead the country in terms of cold hits,” says Dr. Paul B. Ferrara, the visionary director of the state’s forensic agency, who conceived the idea and pushed for the state databank.

Bode’s $9 million contract with Virginia is a paragon for other states. The company is building DNA databanks for 21 other state crime labs in the country. More work is likely to follow as a result of a DNA initiative signed by President Bush. The federal program allocates $1 billion over five years to help states process a backlog of untested forensic evidence. According to estimates from the National Institute of Justice, DNA evidence remains unprocessed in 300,000 to 500,000 cases nationally. “Our mission is to solve crimes and bring closure to victims and their families,” says McElfresh.

Privately held Bode doesn’t disclose sales figures. Its ability to marry high-tech science with sound business principles led to it being acquired in 2001 by ChoicePoint, a Georgia holding company with $918 million in revenue. The deal gave Bode access to a company with deep pockets while enabling it to remain an independent subsidiary. “Without the support of ChoicePoint, 9/11 would have wiped us out,” says McElfresh.

Bode also is the first private company to commercially develop a technique that blends two DNA-typing technologies, one known as PCR and another called STR. The high-tech method has been in use at some government crime laboratories but was not widely available elsewhere. Bode’s reagents enable trace amounts of forensic material, including blood and hair, to be precisely analyzed in ways never before possible. That includes lifting DNA from cigarette butts, latent fingerprints and other evidence that is difficult to test. “People were talking about the technology, but we were the first private company to have it in practical use,” says McElfresh, a population geneticist by trade.

He rocks back in his chair when recalling his journey into forensics. In the mid-1980s, just a few years after earning his doctorate in population genetics from the University of Georgia, McElfresh was working for Lifecodes Corp. in New York City, the largest commercial forensic DNA lab in the country at that time. His specialty was building and adapting databases for use in forensic genetics. Yet he also began doing forensic casework, became fascinated by it and never looked back. “Forensic genetics is one of the few biotechnologies to make good on the promise to really do good for mankind, and has done so in a big way. So it’s been remarkably exciting getting involved in all that,” he says.

In 1994, he and co-founder Thomas Bode Sr. spun Bode Technology Group out of a DNA lab funded by the U.S. Department of Defense. He says Virginia’s abundance of federal research labs proved a strong draw for keeping the company here. Bode employs about 115 people, including its 85 forensic examiners.

Despite Bode’s reputation, not every customer is happy with its work. The Illinois State Police in August broke a $7 million contract with Bode, alleging the company erroneously processed some DNA samples. Illinois officials also sent a letter alerting other agencies for which Bode performs DNA analysis. The controversy revolves around different testing methodologies. McElfresh says Illinois officials are relying on older serology techniques that require examiners to see sperm cells when viewing samples under a microscope. Bode’s method isolates sperm by screening DNA found in male chromosomes, which McElfresh says provides a more reliable test.

“This is probably one of the more interesting problems in forensics. We have a lot of technology that’s really, really good relative to DNA. And yet very often states will still hang on to some of the older technologies,” says McElfresh.

Fighting disease and terror
Another company making breakthroughs is Commonwealth Biotechnologies Inc. Originally a spin-off of Virginia Commonwealth University, CBI went public in 1997. Although the company lost out to Bode in a bid to expand Virginia’s databank, the setback turned out to be a blessing in disguise. “We were quite upset because we felt we were in as good a position as Bode to do the work,” says Dr. Tom Reynolds, CBI’s senior vice president. “But it actually caused us to invest in a broader area of technology than we would have otherwise.”

CBI is becoming a leader in microbial forensics for detecting deadly poisons. Customers include the Federal Bureau of Investigation, which hired CBI to perform forensic analysis of suspicious substances associated with a series of anthrax scares two years ago. The company also runs a sophisticated facility for testing ricin, a highly toxic substance produced by castor beans. Antiterrorism experts fear ricin could be used in biochemical weapons.

Reynolds says his company was the first to develop a definitive testing procedure for ricin, replacing methods that render only presumptive results. Its testing is highly classified as part of the Defense Department’s bio-defense initiative. CBI researchers are trying to find antidotes as well. The company runs a modern new virology lab to foster research and development of vaccines for nerve agents and other toxins. To win federal money, CBI is partnering this year with DynPort Vaccine Co. of Frederick, Md., which makes vaccines and other therapeutics for the U.S. military.
Federal contracts, in fact, helped CBI turn an operating profit for the first time in 2004. After several years of hand-to-mouth existence, CBI posted record revenue of $5.7 million. More than $4 million, or 70 percent, stems directly from contracts for bio-defense initiatives. All told the company signed multiyear research contracts exceeding $8 million.

It has been a long, hard road to profitability. CBI started out performing research and development on contract for drug makers, biotech companies and other research labs. The company went public at the height of an economic boom, armed with private-sector contracts that accounted for nearly 60 percent of its money. Then the tech wreck ensued, drying up many private contracts. Share prices for CBI stock, which traded as high as $25 in 2000, tumbled to penny-stock status. NASDAQ threatened to de-list the stock.

Shares since have rebounded to trade in the $4 to $5 range. Hedging against the inevitable decline in government contractors, CBI is trying to capture more business from private customers. A distribution deal with Fisher Scientific Inc., a Pittsburgh conglomerate, makes CBI’s products and services available to a wide swath of companies, including drug makers and life-sciences firms. Meanwhile, the company is reaching other milestones. The National Cancer Institute tapped CBI to test the effectiveness of the first DNA-based diagnostic for bladder cancer. Under a key contract with the federal Centers for Disease Control and Prevention, CBI is doing forensic research into treatment of infectious diseases. The company developed, patented and sells a clinical testing procedure for identifying certain strains of herpes.

Easily the most significant development is CBI’s acquisition of Fairfax Identity Laboratories (FIL), a DNA-profiling company. The transaction appears to complement the strengths of each company. CBI’s work includes DNA testing of about 120,000 inmates in the Ohio prison system. FIL, meanwhile, performs DNA testing for the Florida Department of Law Enforcement. “I think we compete much better now that we’re a combined company,” says Reynolds.

CBI is gearing up to serve niche markets. The company’s lab is in the midst of validating a new technology that exploits DNA samples obtained in microscopic amounts from cigarette butts, soda cans and the like. The work is painstaking yet profitable: a single test could generate $10,000 to $20,000.

Under the microscope
Private companies aside, many people credit Ferrara for placing Virginia at the epicenter of forensic applications. Ferrara is a tireless advocate for the power of DNA technologies, testifying before Congress and the Virginia General Assembly. It was Ferrara who persuaded state lawmakers to fund the statewide DNA database, and he has served on national commissions regarding DNA technology. Experts from around the world seek him out. On a recent day, he met with the head of England’s forensic science program and did an interview with National Public Radio.

During the 1989 groundbreaking capital murder case, Ferrara’s lab played a vital role in presenting DNA evidence in the trial of Timothy Wilson Spencer. McElfresh, then working for Lifecodes, examined biological samples and gave testimony. DNA analysis of genetic material identified Spencer as the Southside Strangler, responsible for murdering three women in Richmond and another victim in Arlington. Spencer was executed in 1994.

Being among the leaders also means receiving higher levels of scrutiny. Ferrara’s lab received unwanted publicity in 2000 stemming from the case of Earl Washington Jr., a mentally retarded man who spent nine years on Virginia’s death row. Washington, who has since been pardoned, nearly was executed for a 1982 slaying of a Culpeper woman. Tests performed by the state forensics lab failed to find the DNA of another man in a vaginal swab recovered from the murder scene. Other tests subsequently cleared Washington, but the incident prompted Gov. Mark R. Warner to order an independent audit of the state’s testing procedures. The Innocence Project, which pushed for a review of the evidence in the Washington case, blames Ferrara for failing to initiate an internal audit.

The auditors appointed by Warner reviewed 123 cases worked by the state lab. Last month the audit team reported finding no “technical procedure errors or deviations” affecting the integrity of the results in the cases, although a minor error in a case did lead to some organizational changes at the lab. Auditors recommended a series of steps to improve the accuracy of future tests. Also, new legislation took effect this summer that makes the Department of Forensic Science a separate department with its own scientific and advisory boards for greater oversight. Previously the lab was a division of the Department of Criminal Justice Services.

DNA technology is evolving so rapidly that confusion seems unavoidable, as illustrated by Bode’s dispute with the Illinois State Police. Yet one thing appears beyond dispute: DNA evidence will play an increasing role in the U.S. criminal justice system, spurring demand for still better technology and greater innovation. Since not many companies are equipped to do the sophisticated testing, Virginia’s private companies should be at the heart of the new advances — especially as crime labs across the country seek to process massive backlogs of forensic material now sitting in evidence lockers.

It’s still true that crime doesn’t pay. For companies like Bode and CBI, however, solving crimes most certainly does.