Venture capitalist Steve Gorlin planted himself in a classroom at the Johns Hopkins University's medical school and listened for two days as, one after another, nearly a dozen top researchers pitched ideas and promoted discoveries. Gorlin quickly cut deals to launch two companies to exploit the most promising work.
The Florida investor routinely scouts academic labs, seeking new medical technology or products that could be turned into money. But Hopkins particularly impressed him. Its scientists were world class; its administrators could not have been more obliging. Eager to do business, they arranged those marathon meetings three years ago and a party months later at the president's mansion.
"I've done a lot of deals over the years," Gorlin said. At Hopkins, "it was total cooperation."
Not so long ago, Gorlin's experience would have been unthinkable at most medical research centers and especially at Hopkins, which had long been hostile to industry. But its culture is being transformed as it embraces business opportunities. Today, the nation's first university dedicated to pure research is fast becoming one of its most entrepreneurial schools.
Scientists at Hopkins serve as consultants and paid scientific advisers to corporations. The university filed more patent applications in 1999 than all but two other major research centers. It has helped launch 18 companies in recent years, and corporate-sponsored research at the medical school has nearly quadrupled in the past decade.
By commercializing its medical research, Hopkins hopes to tap new sources of revenue, advance the search for lifesaving treatments and promote economic development in Baltimore. If it hesitates, Hopkins could drift behind in the competition for research money and top-notch faculty and students.
"Ten or 15 years ago, a lot of what we're doing would have been heresy," says William P. Tew, head of business development at the medical school. "Now there is a greater understanding that business licensing and development are part of the university mission."
But this new mission carries risks: for the integrity of research, for the safety of patients participating in experiments and for the university's most valuable asset - its reputation. President William R. Brody, a major force behind Hopkins' new enterprising spirit, recognizes the perils, saying that academia's alliance with industry has created a "minefield of potential conflicts."
The Baltimore institution has not been tainted by scandals like those that have embarrassed other top schools. While Hopkins was painfully reminded of the risks involved in medical experiments when a healthy young woman died June 2 after participating in an asthma study, there is no evidence that the doctors involved had any financial interest in the outcome - and therefore no suggestion that their judgment might have been clouded by financial incentives.
But elsewhere at the medical school, officials have given their blessing to the kinds of financial deals that have caused trouble at other universities.
Hopkins recently allowed a senior scientist to inoculate volunteers with an experimental vaccine developed by a company he co-founded. It permitted physicians to do human testing of tiny Magnetic Resonance Imaging devices that they had invented - instruments being developed by a company that the doctors and Hopkins partly own. A Hopkins neurologist recently tested a drug that could earn millions for Hopkins, some of its leading scientists and a company closely tied to both.
According to Brody, the benefits of academia's new partnership with corporations outweigh the risks. "To move your research forward, you've got to do partnerships with industry," he says.
Some administrators even say the lure of money can help focus scientists on important work. As former Hopkins Vice Dean David Blake often told colleagues: "No conflict, no interest."
Unlike Harvard University, its chief rival, Hopkins does not bar scientists from conducting certain research - when, for example, they have more than $20,000 invested in the company sponsoring the work. Instead, Hopkins officials say they "manage" financial conflicts of interest by taking steps to discourage abuses - requiring scientists to place stock in escrow and to disclose to patients and publications their financial ties in drug trials.
Many medical researchers indignantly insist that the prospect of wealth would never lead them to cut corners or take unnecessary risks with patients. But many experts are unconvinced.
"It's the kind of arrogance you see in no other field," says Dr. Marcia Angell, former editor of the New England Journal of Medicine. "What would be considered a grotesque conflict of interest if a politician or judge did it is somehow not in a physician."
Publicly, Hopkins describes itself as moving cautiously into what Brody calls the "no man's land" between universities and corporations. But privately, school officials at times have adopted a bolder tone.
Dr. Bart Chernow, then vice dean of research at the medical school, strode into a corporate boardroom in Rockville in September 1998 and pumped the hand of J. Craig Venter, who had just launched a company to decipher the human genome.
Proposing a business partnership, Chernow boasted that Hopkins was "one of the biggest biotech companies in the world." Perhaps the school could supply Venter with blood and tissue samples from some of the 100,000 patients Hopkins sees each year, he suggested. The material is a treasure-trove of disease-related genes, ripe for discovery and patenting.
"There is this supposed immorality in trying to patent genes and develop new medicines," Chernow said, shaking his head. But Hopkins, he said, had finally recognized that industry was not its adversary but its greatest ally.
"We as a university have become very entrepreneurial," he said. "We as an institution have taken our heads out of the sand."
The new entrepreneur
No one better embodies the new Hopkins culture than Dr. Solomon H. Snyder.
He is one of Hopkins' marquee names, an authority on how brain cells communicate with one another. At 31, he became the youngest full professor in the school's history. His work has helped revolutionize drug research; he's won dozens of major prizes and is considered a contender for the Nobel.
Snyder's discoveries have earned 37 U.S. patents. He co-founded two biotech companies, including Baltimore's most successful - Guilford Pharmaceuticals Inc., where Snyder is on the board of directors, chairman of the science committee and a $213,000-a- year consultant. Genetic Engineering News recently listed him among the nation's top 100 "molecular millionaires," with biotech stocks worth $24.6 million.
Back when he was a medical student at Georgetown University, Snyder says, future surgeons and anesthesiologists asked why he wanted to go into research. How do you make money doing that? Today, he says, "I do a lot better than they do."
Snyder, 62, is slight, pale and, as a former collaborator calls him, "scary smart." His business success has drawn praise, envy and whispered criticism from colleagues.
"The thing that I find distressing is that because I engage in that process, people say, 'Oh, well, Snyder must be a crook because he makes money,'" he says. But there's nothing wrong with pursuing wealth, he says. "Enlightened self-interest is not a bad thing."
As Guilford's chief scientific adviser, Snyder sets the company's research agenda. He often writes papers with company scientists. Two top Guilford researchers were once his students, and eight other employees had worked at Hopkins.
Sometimes, Snyder helps guide work on a daily basis. "If something interesting is happening, e-mail can fly back and forth," said Joseph P. Steiner, chief of neurobiology at Guilford. Much of the work by researchers in Snyder's Hopkins lab parallels that at Guilford. A scientist in Snyder's lab, for example, is studying how a Guilford drug promotes nerve cell growth.
Snyder insists, though, that Guilford's commercial goals don't steer his academic research, which is funded by $1.5 million in annual grants from the National Institutes of Health. "I make discoveries and I publish them in the public interest," he says. "Everything I do is available to every scientist on Earth."
For most of this century, medical researchers prided themselves on working for the advancement of science, with little prospect of financial riches. Most schools discouraged scientists from seeking patents, the main method by which ideas are turned into money.
Two University of Toronto researchers who learned how to collect human insulin in 1922 patented the process, but only to prevent industry from monopolizing it. After a Rutgers University scientist discovered the antibiotic streptomycin in the 1940s, he patented the drug so he could give the manufacturing rights to several companies and keep prices low.
The Johns Hopkins University, founded by a well-to-do Quaker in 1876, was dedicated to research. From the start, the institution disdained business.
After Professor Ira Remsen and a student discovered saccharin in 1879, the student patented the sweetener and built an industrial empire. But Remsen, who became Hopkins' second president, wanted no part of it; he feared that the pursuit of profits could divert the school from the pursuit of knowledge. He said he would never "sully" his hands with corporate money.
For more than a century, Remsen's stern ideals defined Hopkins. Scientists there discovered adrenaline in 1897, the anticoagulant heparin in 1916 and the antiseptic mercurochrome in 1919. Not one, apparently, was patented by Hopkins.
The faculty voted in 1933 to bar the medical school from owning patents and to discourage professors from seeking them. In 1949, Hopkins' medical school dean, Alan M. Chesney, icily declined an invitation to a conference on academic-industry relations. There had been "no change in the attitude of the faculty" about patents, he wrote.
A few schools, including Stanford University and the Massachusetts Institute of Technology, sought commercial ties. Both were competing against established rivals - the University of California at Berkeley and Harvard, respectively. But most elite universities were not interested. After Hopkins physician Hugh J. Davis co-invented a contraceptive device called the Dalkon Shield in the late 1960s, he offered to let the school patent it. When the dean turned him down, Davis sold it himself, earning more than $500,000.
But the device was flawed. Terrible infections caused many women to become sterile, miscarry or die; victims eventually collected $3 billion in damage awards. Hopkins was not liable, but the school was embarrassed. Maryann Feldman, an economist studying Hopkins' ties to industry, says the episode cemented the institution's distrust of commerce.
Then came the biotech revolution, which opened up novel ways to discover and manufacture drugs. It was spurred by the discovery at Hopkins of the first chemicals for cutting and splicing genetic material. The breakthrough would earn two Hopkins scientists, Daniel Nathans and Hamilton O. Smith, a Nobel Prize in 1978 and create a $300 million-a-year industry. Yet neither the scientists nor the school considered patenting the work.
Down from the ivory tower
Hopkins remained a spectator as other schools plunged into the commercial world. Genentech, a biotech company tied to Stanford and the University of California at San Francisco, went public in early 1980. Within hours, its stock price leapt from $35 to $89. Daniel Kevles, a Yale historian, said scientists and investors were dazzled by "the expectation of medical miracles and profit spectaculars." That year, Congress passed the Bayh-Dole Act, allowing schools to patent taxpayer-subsidized research.
Snyder didn't pay much attention until 1982, when David and Isaac Blech, two biotech promoters, called him. Over lunch at Danny's, an expensive Charles Street restaurant, they struck a deal. Snyder and the Blechs co-founded Nova Pharmaceuticals in 1983. The brothers quickly sold $6.2 million worth of stock in the new company. "I was just amazed that out of thin air you could raise money," Snyder says.
Some at Hopkins disapproved. "You either saw Sol as a prolific scientist who was greedy and therefore had a company or you saw him as a terrific scientist who was a trailblazer in making commercial success out of his discoveries," recalls Blake, the former Hopkins administrator.
Blake and Snyder, friends and tennis partners, believed the medical school needed to encourage business ties. They gained a powerful ally in 1987, when William Brody became head of Hopkins' radiology department. An MIT-trained electrical engineer and Stanford-educated physician, Brody had co-founded three medical device companies while on Stanford's faculty and taken a leave of absence to run one of them. Stanford was a commercial hothouse, planting the seeds of the companies that today form Silicon Valley.
When he arrived in Baltimore, Brody says, "Hopkins was a cloistered environment in which almost none of this was being done." He launched seminars to sell entrepreneurship and asked Snyder to be a featured speaker.
They found a ready audience. A new generation of scientists was coming to Hopkins. And as senior faculty members watched colleagues elsewhere earn millions, their anti-business attitudes softened. They talked wistfully about discoveries they hadn't patented, fortunes they hadn't made.
In 1992, the medical school dean encouraged more business activity by faculty. Hopkins changed its rules so it could accept stock instead of cash in return for rights to its patents. Finally, Brody became president in 1997. The school's trustees, seeking to steer Hopkins in a different direction, wanted someone who understood industry.
"There was a feeling," says Feldman, "that the time had come."
'The Big White Pill'
One of the most promising discoveries to come out of Hopkins' expanding alliance with industry is nicknamed "The Big White Pill."
The drug, created through research at Snyder's Hopkins lab and Guilford Pharmaceuticals, could stop the memory loss of Alzheimer's victims, halt the shaking brought by Parkinson's disease, reverse the paralysis caused by strokes. It might do what nature can't - significantly repair or regrow damaged brain cells.
"That's the end of the rainbow for all neuroscience research," Snyder says.
Stock analysts call the pill a potential "blockbuster," a drug that earns $1 billion or more in annual sales. The biotech giant Amgen has licensed it from Guilford in a deal worth up to $427 million. Hopkins holds patents on the drug, called NIL-A, as well as about $839,000 worth of Guilford stock. "That could be a huge benefit to JHU," says Dr. Craig Smith, Guilford's chief executive officer.
Amgen launched the first large-scale study of the drug last year, testing it on 300 patients, but the trial is not yet completed. Hopkins was one of 40 testing centers. Dr. Stephen G. Reich, a neurologist, enrolled seven patients at the hospital.
Reich says he doesn't have a financial stake in the work. Hopkins obviously does. Critics such as Angell, the former medical journal editor, argue that institutions should not test drugs in which they have an investment. They are "no longer able to act as watchdogs," she says.
Hopkins' chief shield against bias in corporate-sponsored research is disclosure. University policy, officials say, is to tell volunteers in drug studies when Hopkins has a financial interest. But patients in the Parkinson's study were not told.
"I was not aware of the university's licensing agreement until after all participants had enrolled in the study," Reich said in a written statement.
Hopkins' Committee on Conflict of Interest, which oversees research projects in which faculty members or the institution have a financial stake, did not learn about the tests until reporters asked about them.
The tests were no secret within the medical school, though. Neurologist Ted Dawson, who holds patent rights with Snyder on the drug, said he was following Reich's work. (Dawson did not participate, he added, because of his financial interest.)
Corporate-sponsored drug studies are increasingly important to Hopkins. Pressure from regulators and insurers to curb costs has hurt teaching hospitals, forcing them to seek new sources of income. While federal grants pay for most of Hopkins' medical research - $297.8 million - corporate money nearly quadrupled over the past decade, from $12.5 million to $49.5 million.
But research paid for by industry often is controlled by the sponsor. A 1996 article in the journal Annals of Internal Medicine found that 98 percent of scientific papers on corporate-sponsored drug trials favored the company's drug.
"The company often keeps the data tapes, does the analysis - they decide if and when a paper is published," says Angell. "What does that do for an investigator? It makes him a tool of the drug company."
Last year, Amgen asked a University of Rochester neurologist if his Parkinson's Study Group, a network of academics, would run the NIL-A drug study. However, the talks broke off and Amgen is now running the trial itself.
Dr. Ira Shoulson, the Rochester physician, declined to discuss the talks, but said his group demands unrestricted freedom to publish data and prohibits consulting contracts for researchers. "One of the reasons commercial companies decide not to work with the Parkinson's Study Group is we are unyielding on these principles," Shoulson says.
Cash and conflict
The prickliest ethical issues arise when doctors test drugs on patients for companies they partly own.
A new biotech company may own the rights to promising compounds but have no actual products. Good news can send a stock soaring and attract fresh capital. Bad news can wipe out the company. Scientist-entrepreneurs have powerful incentives to get favorable results and may be tempted to spin, squelch or hype data. Worse, they might allow their investments to compromise the safety of patients in drug trials.
Many researchers point out that they already face pressure to produce impressive work so they can win federal grants, promotions and recognition; they say money is no greater a temptation. Hopkins officials are confident that they have adequate safeguards, but they acknowledge that as physicians start business ventures and test their products, more conflicts arise.
Dr. Lawrence M. Lichtenstein, director of Hopkins' allergy and asthma division, served as co-investigator in a test of a ragweed vaccine made by Dynavax Technologies Corp., a California company he co-founded. The study was led by Dr. Peter Creticos, an associate professor working under Lichtenstein and a paid consultant to Dynavax.
The two scientists tested the vaccine on 20 volunteers. Creticos declined to be interviewed; Lichtenstein acknowledges that he had a conflict of interest, but said it was not a problem because he discloses his investments and Hopkins holds his stock in escrow.
Why not let others test the vaccine?
"I'm the best-skilled person in the country to study this," he says. "Moreover, I want to study it."
Hopkins officials asked Dr. Charles W. Flexner, a pharmacology professor, to monitor the Dynavax study. Flexner reviewed the study plan, he says, and toned down an overly enthusiastic press release. But he says his role was mostly to address the "false perception" that there was a risk of bias or wrongdoing.
"An investigator with a financial conflict is often the most qualified scientist to study the intervention," says Flexner, a consultant to several drug companies.
Dr. David Blumenthal, a health policy expert at Harvard, says his university's rules would not have permitted the Dynavax trial.
"It's a bad idea," he says. "It's important [that] the public perceive the research enterprise as free of commercial taint, especially where the lives of individual patients are involved."
In another venture, a group of Hopkins scientists co-founded Surgi-Vision, a company that makes wirelike antennas that can be inserted into the body and enable Magnetic Resonance Imaging devices to take high-resolution pictures of diseased tissue. Hopkins owns an undisclosed amount of the company's stock, along with Steve Gorlin, the venture capitalist who helped start the business.
Researchers have tested three of the company's products on Hopkins patients. It makes sense for the people who best understand the inventions to do the testing, said Dr. Elias Zerhouni, chairman of the radiology department and Surgi-Vision's co-founder.
"You can't really take a technology like this and throw it in somebody's lap and say, 'Do it,'" he says.
Dr. Joao Lima, a co-inventor of the devices, tested one on more than 20 healthy volunteers and patients at Hopkins. He says he has qualms about his investment and plans to donate his Surgi-Vision stock - held in escrow - to Hopkins.
"My involvement with the effort has forced me to think very clearly, very intensively about this," he wrote in an e-mail to The Sun. "If all of us start working for companies, no one's going to be left to do independent research. And in the end, it's bad for business, it's bad for everybody."
Dr. Drew Pardoll, a top Hopkins cancer researcher, also has misgivings about pocketing corporate money. He is working with a biotech firm to develop a genetically engineered cancer vaccine. He earns about $100,000 a year from the collaboration but says he plows it all back into his research. If his stock options are ever worth anything, he says, he'll donate them to Hopkins.
"I consider it an obligation for the science and medical community to gain and maintain the public trust," he says. And he could lose that trust, he fears, if he had a fortune riding on the outcome of his work.
Fighting off piranhas
As universities become more entrepreneurial, they sometimes act aggressively in protecting their business interests.
Last year, Columbia University tried to get Congress to extend the school's patent on a drugmaking process that would have generated at least $70 million a year - and cost consumers millions.
Hopkins officials decided in the early 1990s that the university could cash in on a heart researcher's automated cardiopulmonary resuscitation machine, which could save thousands of lives. The school took a 22.5 percent stake in CardioLogic Systems Inc. in exchange for patent rights. But the company's plans were thwarted by new FDA restrictions. The agency barred CardioLogic and other trauma researchers from testing new treatments on unconscious patients, who could not give consent.
Hopkins lobbied to relax the informed-consent rule, the cornerstone of modern medical ethics. Blake, then Hopkins' dean of research, wrote letters to members of Congress. He insisted recently that his goal was to advance lifesaving technology, not to protect Hopkins' investment.
"I would argue that it was unethical not to pursue that with vigor," he says.
The FDA eventually agreed to allow testing of patients without their consent under certain conditions. Ethics experts were dismayed.
"I don't think you should do research without consent, period," says George Annas of Boston University. "Just because someone is lying down on the street with a heart attack, they did not consent to be a research subject."
After limited testing, the company gave up. Dr. Henry R. Halperin of Hopkins, the inventor, says the machine was probably too big and expensive to be practical. The company shut its doors in 1998 after investors lost about $25 million, one insider said.
Medical schools pride themselves on generating research that leads to breakthroughs in treatment of disease. Yet, driven by its commercial concerns, Hopkins forced an effective cancer therapy off the market.
Dr. Curt I. Civin, a pediatric cancer specialist at Hopkins, developed a method for purifying stem cells, a discovery that helps restore blood and immune systems of cancer patients.
Hopkins patented the discovery and licensed it to Baxter Healthcare, a medical products company. But a Seattle biotech firm called CellPro beat Baxter to market with a suspiciously similar machine.
Hopkins sued, alleging that the Seattle company had stolen Civin's research. After six years, the university and two co-plaintiffs won a $15 million judgment and CellPro shut down. Some doctors using the device said leukemia patients were denied an effective treatment for a time. Hopkins insists that never happened. Still, the school and Civin endured an acid bath of bad publicity.
"It was horrible," he says. "They were implying that I was doing things that might hurt patients."
As chairman of the medical school's Committee on Conflict of Interest, Civin plays a key role in monitoring researchers' corporate ties and reviewing commitments to ensure that they do not compromise their independence. Every year, Hopkins scientists with financial ties to their work propose about 110 research projects involving human subjects, according to the university.
The panel generally provides sympathetic oversight. Hopkins does not prohibit such conflicts; instead, it requires researchers to put stock in escrow and disclose their financial ties to the university, to patients and in publications. Rarely, it appoints overseers such as Flexner. Hopkins says it has disciplined two scientists in recent years for violating rules on conflict of interest.
Some at Hopkins jokingly refer to the 12-member panel as "the committee of people with conflicts." That's because several high-profile panelists have patented inventions, started companies or served as consultants to industry. Snyder, its longest-serving member, says one of the committee's unofficial jobs is to protect Hopkins faculty against lawsuits. "We're concerned about the piranhas, the lawyers," he said.
Hopkins only recently started looking at the school's own conflicts of interest, partly as a result of questions raised by the Guilford study. But some key people remain skeptical that a problem exists.
"I tend to fall asleep during these discussions, because it doesn't seem to be for real," Snyder says.
"I haven't really thought about institutional conflicts of interest," Brody says. "We rely on the principal investigator for the integrity of the research."
Brody said Hopkins' purpose in investing in biotech companies and forming other partnerships is to advance medicine and science. "The public view is that you do these commercial deals and they're very lucrative," he says. Few, he points out, make money.
True, patents are like lottery tickets: It's hard to predict which will pay off. But if one does, profits can be staggering.
Some of Hopkins' best bets to hit it big? Dr. Francis P. Kuhajda and others founded FASgen Inc. last year to exploit a compound that could cure obesity and earn billions. VIRxSYS Corp., founded by Boro Dropulic, a former Hopkins professor, has found a way to control gene replication that could lead to new treatments for AIDS and cancer. A public health professor is trying to make a breath analyzer that can diagnose injury and disease.
And Dr. Bert Vogelstein, a world-renowned cancer researcher whose work has earned 78 patents and attracted generous corporate support, has developed a more accurate method of detecting disease-causing mutations in a patient's DNA.
Eyeing new standards
The integrity of medical experiments has become a matter of intense public concern since the death two years ago of 18-year-old Jesse Gelsinger in a gene therapy trial at the University of Pennsylvania. The physician overseeing that trial and the medical center had a financial stake in the therapy being tested. Government regulators cited the Penn researchers for numerous safety violations.
That incident and other lapses prompted calls for closer government monitoring of experiments and better self-policing by medical centers. At a Baltimore conference last November, Dr. Greg Koski, director of the federal Office for Human Research Protections, warned university officials that "we better clean up our act or the bottom will fall out" of public support for medical research.
Research at Hopkins and other academic medical centers is governed by a patchwork of rules and guidelines enforced by numerous federal agencies. Mostly, schools are expected to police themselves. Even the minimal rules that exist are rarely enforced, according to Michael J. Malinowski, a law professor at Widener University in Delaware. "It's like having a tax code without having an IRS," he says.
Last month, a presidential commission called for creation of a new federal office to oversee all research involving human subjects. A congressional subcommittee is planning hearings on clinical trials and conflicts of interest. Sens. Edward M. Kennedy, a Massachusetts Democrat, and Bill Frist, a Tennessee Republican, are working on legislation that would strengthen protections for participants in clinical trials.
Meanwhile, universities are scrambling to find solutions that preserve their historic autonomy. Harvard fears that its strict conflict-of-interest rules could make it difficult to compete for top faculty against schools with less stringent standards, such as Stanford and Hopkins, and is leading an effort to persuade other universities to tighten their rules. That could take at least two years while a task force that includes industry officials, patient advocates and university leaders reviews guidelines.
But Hopkins, convinced that collaborating with industry is the best way to advance medicine and save lives, is unlikely to turn back.
"The days of being able to live in the ivory tower are really gone," says Tew.