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Human Genome Sciences Dominates Biotech
By Rebecca Bredholt
06-30-00
Thanks to the latest breakthroughs in gene research, investors are pushing the health industry to record breaking heights. For an industry many analysts thought had seen its day in the late 1980s, biotechs are receiving a lot of news coverage. Though the products from gene research are yet to be seen, the genomic research itself has generated huge investor excitement. And leading the pack is Human Genome Sciences (Nasdaq: HGSI), which researches and develops novel, proprietary pharmaceutical and diagnostic products based on the discovery and understanding of the medical utility of genes. William Haseltine, Ph.D., started this history-making company in 1992 - the same man who founded the first educational department for research on AIDS in 1984 at the Dana-Farber Cancer Institute. With $150 million in venture capital and a radical idea, Haseltine set out to decode human genes. In early March, Human Genome Sciences stock reached $232.75 a share. In this interview with Haseltine, he explains why his company's stock may not necessarily be overvalued.
Q: Did you decide to go into medicine before you went to Harvard? If so, why?
A: I've always been interested in the treatment and elimination of disease. I first thought I'd be a physician. Later I determined I could make a bigger difference by being a scientist and applying that knowledge to medicine. But my professional goals have been twofold, to advance science in the service of medicine and to alleviate human suffering.
Q: Is there anything personal that initiated this interest?
A: Well, we all have things in our background. I was sick as a child. My mother, in particular was sick. But regardless of how I got here, I was determined to make a difference in medicine.
Q: Did you start the Journal of AIDS?
A: I did start it and was Editor-in-Chief. Actually I created the first department for AIDS research in the world, I think, at the Dana-Farber Cancer Institute. I first founded an academic environment dedicated to research on AIDS.
Q: There's been a change in the way people are researching in the biotech industry. Can you expand on the way you decided to systemize research?
A: In the late 1970s a new drug manufacturing technology was discovered called recombinant DNA. This technology offers the ability to take a human gene and transplant it into another organism, or another cell, and grow the pharmaceutical product. We knew in those days which products needed to be made: insulin, clotting, and growth factor. There was a race to find the genes that made those elements and manufacture them.
The winners of that race defined the shape of biotechnology. In the second phase of biotechnology, companies tried to do two things; they tried to discover new drugs and to apply the new manufacturing methods. The weak part of that equation in the early 1990s, was discovery. The tools related to the discovery of new genes and their function were simply too weak to sustain the industry. That has now changed. The third phase of biotechnology is systematic use of robots, computers and laboratories to allow discovery to flow forward quickly. By allowing a series of laboratory instruments to replace scientists we can now do literally a million data points a day, of biological interest, instead of 10 or 20.
Between 1993 and 1996, our company discovered most of the human genes. Between 1996 and now, we've worked out new methods to find what those genes do that is of medical interest. Already we've field patents that describe the structure, the function, the nature and potential uses of almost 10 percent of all human genes. We've made extraordinarily rapid progress. What weÕve then done is use that knowledge to develop new drugs. Our company is the first to take that new paradigm from gene to patient. We now have initiated clinical trials on three gene-based medicines, and very shortly, a fourth will follow.
Q: Why did you decide to work with Compugen on splicing variants?
A: That's a technical detail. We work with a lot of companies but we've recently formed an alliance with an Israeli company to span three types of gene analysis. One, where the genes are located on the chromosome. We found them without knowing where they map. Mapping can determine what a gene's role is in inheritance. Second,we wish to compare genes obtained for variation. Variation can be useful for a number of different purposes. Finally we wish to analyze what are called splice variants. One gene can give rise to several different proteins depending on how it's processed in the body. Since we've isolated our genes from all areas of the body we know a great deal about how they are formed, what their variants. So-called splicing variants and the technology that Compugen has developed are suited for that purpose as well.
Q: How would proteins apply to curing a diseases?
A: We're not just trying to make medical discovery more efficient, although that's what genomics does. The way to think of genomics, is a way of increasing pharmaceutical productivity to have more drugs per research dollar. Increase it by 10- to 100-fold. We believe our research ability is about 100 times that of the large pharmaceutical companies and that's because of technological innovation; it's about productivity. But it's more than that. It's about creating a new kind of medicine. We call the new kind of medicine we're developing, regenerative medicine - using the body's natural substances as drugs.
These are the substances the body uses to build itself, maintain itself, and repair itself. Those are our genes and our proteins. We believe those will be the best drugs. We isolate the gene, make the protein, and determine the natural function of the protein in the body relevant to medicine.
What do these drugs do? They allow us to repair injury. We have a drug that repairs injury to the lining of the mouth or the intestine or the bladder. They allow us to rebuild tissue. We have a drug that allows us to rebuild vessels in the heart. One drug inhibits blood cells from being damaged by chemotherapy. All of these are natural components of the body that we use as drugs; I think that is a new and better kind of medicine. These products are new, different and better.
Q: Will there be drugs with no side effects?
A: No drug is ever going to be free of side effects. For example, growth hormones - too much is not good for you. But because these are natural human components, they tend to be much safer, and have fewer adverse consequences.
Q: Is regenerative medicine a contrarian view in science?
A: It is a new view. it is so new, it is not contrarian. Tomorrow we are launching a new journal called E Biomed, the Journal of Regenerative Medicine. It is the wave of the future, I believe both in science and in medicine. It is too new, too popular to be controversial yet.
Q: I understand you share some of your findings with other companies. Are you obligated to share that information?
A: We are obligated to share some of our information, but not all of it. It is actually a pleasure for us to do so. There is such a wealth of information that we couldn't possibly use it ourselves. The way we look at it, we engage the attention of other organizations to work on problems and information that we provide. And if we do, we are handsomely rewarded. From most of our relationships, we are able to sell products they develop. There's nothing more valuable to a pharmaceutical company. If we can have a percentage of the sale of products that others develop we will be adding very substantial funding.
Q: Where did you get the original funding when you started HGS in 1992?
A: We got a dollop of venture capital and then we quickly received substantial funding from a pharmaceutical company. Shortly thereafter we raised money from the public market. Within a year of our founding we had commitments of cash totaling more than $150 million.
Q: So it wasn't hard to convince anyone that this was a good idea?
A: Well, I have to say that's not true. There were very few people but fortunately there were some. I was a well-known scientist. Most of the research directors at the local pharmaceutical companies knew this was a good idea. But few could convince their senior management that it was. Genomics was so new. It was really a radical departure.
Before we came on the scene, people looked for genes because people looked for their effect on animals and in test tubes, and then sought to isolate the gene. They believed that was the only way to find genes. We turned that around and said, first we are going to find all the genes and then we are going to find out what they do. In retrospect, it turns out, it is much easier to find out what a gene does once you find it, than to find it in the first place. A usable gene in your hand, what I call the philosopher's stone, allows you to turn genetic information into drugs.
Q: You've started seven companies since 1981. What happened to those companies?
A: I am happy to say that they are all successful in one form or another. Sometimes the success means being acquired either by another biotech company or a large pharmaceutical company. Some of these are freestanding on their own.
Q: What are your long-term personal goals?
A: I continue to want to advance science in the service of medicine. It's been a deeply rewarding and personally satisfying career. I have a feeling everyday when I wake up that I can make a difference in peopleÕs health. Now, in the current context, as the head of an emerging biopharmaceutical company, I have the chance to make an even bigger difference. $
Rebecca Bredholt is the editor of Financial Sentinel. |
