For the past three years, a team of scientists at a small Rockville firm called Genex Corp. has been contributing to a scientific revolution.

Genex is one of only a handful of companies engaged in the research and commercial application of gene-splicing. It is a small but fiercely competitive industry, in which new technology is being developed at a tremendous rate.

The Supreme Court's recent decision allowing new forms of life to be patented has touched off a storm of controversy over this new and relatively misunderstood industry. But while the debate rages over the ethics of genetic engineering, one thing is clear -- the potential, both scientific and economic, is enormous.

Genex is the product of a venture capitalist, Robert Johnston, and a molecular biologist, J. Leslie Glick. The two men saw the potential of recombinant DNA and went about recruiting the best brains they could find. Twenty of Genex's 40 employes have PhDs.

"It's very expensive to get started," said Johnston. "It cost us $2.5 million just to open our doors." Johnston says the company is now worth about $75 million.

Most of the company's work involves research contracts in specialty chemicals. But they also are performing preliminary research into finding a genetic method to correct sickle-cell anemia, a genetic defect affecting thousands of black Americans.

Earlier this month Genex reached an agreement with Bristol-Myers Co. for research on the production of leukocyte Interferon using recombinant DNA techniques. Under the contract, Bristol-Myers has exclusive rights to manufacture and sell the cancer-fighting interferon.

"It is definitely a race," remarked Johnston about the interferon competition. Several firms are involved with interferon research but approaches may differ. Flow General of McLean, for example, is using a traditional tissue-culture technique, said Johnston.

Gene-splicing changes the list of instructions that DNA gives the cell by cutting the DNA molecule and inserting a different set of commands. "You can change the code set to actually make the product you want," Johnston said.

Because of confusion and misunderstanding about the work they do, Genex has had some difficulty finding corporate sponsors. "The major problem is psychological," said Johnston. "You say genetic therapy, and people don't want to get involved. They have a lot of reservations."

Johnston is not very enthusiastic about the Supreme Court's decision. "The patents would not be a godsend," he said. With the rapid rate of technological progress in the field, Johnston feels that it may be very easy to get around patents.

The people at Genex and other private companies, such as Bethesda Research, are aware that their work is being monitored closely. Currently there are no official restrictions or guidelines for recombinant DNA research. Instead the companies are voluntarily following a set of guidelines laid down by the National Institutes of Health.

"They are extremely sensitive to the fact that if there is a mistake, very stringent regulations would be passed," Johnston said.

Johnston claims a mistake is highly unlikely because the work is done under such tight controls and because the chance of a strain surviving outside of a controlled laboratory environment is remote.

"Most of the work we're doing, you could do in a high school laboratory," he concedes, however. "The real risk is in terms of some crazy scientist off somewhere and no one knows what he's doing. We all have too much to lose to cut corners or become careless."

Johnston has nothing but optimism for the future of the genetic industry. "One of the criticisms is that there is not a great deal of exchange of information among competing companies," he said.