Stuart K. Hayashi
The following is a section of the longer essay, “How Billionaires and Capitalism Save Billions of Lives — Including Yours.” That essay includes an index listing various case studies of a for-profit initiative saving lives. The blog post below is of at least one such case study. You can return to that index here.
That Genentech’s executives were initially unsympathetic to the efforts of Axel Ullrich and Dennis Slamon is disappointing. It is also surprising as the company got its start through producing comparably revolutionary lifesaving treatments.
Genentech’s ascension began in the 1970s. Academic biologists such as Stanley Cohen had found that by exposing a strand of DNA to particular enzymes and viruses, they could splice off a section of DNA from one spot and preserve it. Cohen collected many separated DNA strands in this manner, but did not yet know what to do with them. Meeting another academic biologist, Herbert Boyer, at a conference in my home state of Hawaii, the two planned an experiment
in 1972 on whether they could attach one DNA strand to another. They removed a DNA strand from an
E. coli bacterium and, in its place, inserted a strand from an African clawed toad. They did not know what the outcome would be.
Not only did the bacterium accept the toad DNA as part of its own; it replicated that DNA strand in its own cell division.
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This was the first documented instance of human beings succeeding in a conscious effort to splice one species’ DNA into that of another, a practice that came to be known as transgenics. In the case of the bacterium replicating toad DNA, Boyer and Cohen had discovered a lower-cost method of putting bacteria to work in mass producing the DNA of species of far greater cellular complexity.
Venture capitalist Robert Swanson recognized the commercial potential for such a system of manufacture. In 1976, he approached Boyer about starting a company together, and Boyer put in an initial $500. By 1980, Boyer and Cohen would patent their more-generalized method of gene splicing. According to the conventional policies of academic institutions of the United States, Boyer and Cohen had to share this patent with the school that provided the facilities in which they conducted their research, the University of California at San Francisco. They did not anticipate that by the patent’s expiration in 1997, it
would generate a total $200 million in royalties for the institution.
With the zeal of true believers, Boyer and Swanson started “GenEnTech” — an abbreviation of the
GENetic ENgineering TECHnology that they would employ. On the other side of the continent, Massachusetts scientists led by Kenneth Murray and Harvard’s Walter Gilbert — the same man who helped Fred Sanger sequence a virus’s DNA — formed their own rival firm, Biogen. The two companies set about in a race on which could be the first to apply the new recombinant DNA technology to the production of insulin.
Prior to any biotech solution, insulin had to be harvested from the pancreases of barn animals.
Starting in 1923, two tons of hogs had to be slaughtered to extract a mere eight ounces.
Even in 1972, seventy pigs had to be killed to supply a diabetic for a year. And because this insulin came from a different species, there
was always a risk of the human body rejecting it.
Boyer thought there had to be a better technique. He and Robert Swanson set to task their company’s first hire, David Goeddel. Goeddel knew the sequence of nucleotides — G, C, A, and T —comprising the human genes that produce insulin in the pancreas. He pieced together the DNA strand
synthetically and inserted it into the
E. coli bacteria. Once again, the bacteria mass-produced the desired gene.
Walter Gilbert went with a different strategy. He planned to extract directly the necessary DNA from the human body. Then, at Harvard, opposition stalled his efforts. Other faculty members
objected to such genetic engineering as dangerous, a creator of a possible Frankenstein monster. The biologist had to defend himself in front of the Cambridge City Council. He ended up being forbidden from such operations on Harvard’s grounds; he had to slink off to a high-containment laboratory in a top-secret biological warfare laboratory in England.
It was Goeddel who won the race. The
E. coli bacteria mass produced and human insulin DNA sequence that he assembled and spliced in. Genentech patented its method and licensed it to the drug manufacturer Eli Lilly. When Genentech’s shares went public in October of 1980, the original investment by Boyer of $500
had become a $37 million personal fortune.
Not everyone was impressed. For biologists to apply their academic findings to commercial pursuits was much more frowned upon in that time. Colleagues thought that something as noble and idealistic as pure science should not be defiled by an influence as base and crass as moneymaking. Two months after Genentech’s IPO, Boyer
told Time magazine that he judged that having a for-profit corporation apply his research findings was more helpful in treating disease than in expecting academia to do it alone. In his mind, “Business is more efficient. It will bring benefits to the public much faster.” In 2003, Boyer
further reflected on this damage to his reputation, “There comes a point in a man’s life when he knows not everybody loves him — being accused of being greedy. But, you know, that’s way in the past. It doesn’t bother me anymore. But it was tough at the time. It was difficult to deal with.”
David Goeddel would also use bacteria to produce human tissue plasminogen activator (tPA) in 1982 — a protein the human body applies to break down blood clots. But he eventually left Genentech. The respect redounding upon him for his creation of bacteria-made human insulin made it easier for him to raise capital to start his own companies. One of those companies — Tularik, cofounded in 1991 — he would
sell to Amgen in 2004 for $1.3 billion.
William McGinnis, a former molecular biologist of the University of California at San Diego,
evaluates, “Dave is a hero. He’s made a huge difference in a lot of people’s lives. Over the decades, I’m sure it’s hundreds of millions.”
And, as a result, Goeddel has had access to hundreds of millions of dollars.
According to Aperion Care, insulin
has saved 15 million lives. Insulin had already been saving lives for over four decades prior to Goeddel’s techniques. Still, what Goeddel achieved at Genentech has made a contribution somewhere to that 15 million.
Despite losing the race to be the first in producing human insulin, Walter Gilbert and Biogen still made off well. Working at Biogen, Kenneth Murray developed the first genetically engineered vaccine, one for Hepatitis B, saving
upward of 15 million lives. Murray then arranged that the royalties he would collect from his vaccine patent be set to a charity he founded, the Darwin Trust. This organization would assist in the provision of science education at the University of Edinburgh. It
has collected more than $60 million.
That any commercialism was involved at all, however, was
reason enough for colleagues to malign Kenneth Murray and Walter Gilbert for “disgusting activities.” The same prejudice that bedeviled Herbert Boyer likewise greeted his commercial rivals.
Although a power struggle among Biogen’s board of directors would eventually force out Walter Gilbert, he
walked out with over a million dollars.
Following that humiliation, Gilbert would assist Mark Skolnick in a pursuit similar to the one that made Axel Ullrich famous. Gilbert and Skolnick discovered two oncogenes that cause breast cancer, BRCA1 and BRCA2. In a move that proves controversial to this day, Gilbert and Skolnick had their company, Myriad Genetics, patent these genes in the context of their being isolated and used in developing treatments for breast cancer. The man’s creativity has not ceased.
Return to index of case studies of lifesaving for-profit ventures.
