78 
Lpts of Qotppetition, — Genentech’s connection with uc-San Francisco has led to 
unease among scientists in Boyer’s labr— -a feeling that is shared by some science 
policy advisers within the White Hpu^e. And the advance comes at a time when 
many scientists and citizens still worry about recombinant-DNA research and its 
potential for harm- 
Nevertheless.; there are nearly 300 recombinant-PNA research programs now 
under way in the U.S,, most of them funded by the National Institutes of Health 
wmch oversee the safety of such experiments, Though Geuentech followed 
NiH guideline^, because, of thp unique arrangement covering its research, the 
company, wp bp first tp exploit, the somatostatin results commercially* Once., 
production is under way — perhaps by the middle of next year — uc-San Francisco, 
Will share in, the royalties, along with the City of Hope where the gene synthesis 
Work wa& dpne,; 
Funding suph research is expensive: The somatostatin experiments, slope cost 
several hundred thousand dollars. But Swanson claims to have raised nearly $1 
million in. bapking so far from sources such as International Nickel Co* and his 
former employer, the venture, capital, firm pf Kleiner , & Perkins. Despite the 
obvious neks of exploiting an unproven technology, Swanson insists, that “our 
mvestprs haye deep pockets. . 
Though Qqpentech seems to have a dear headstart, it is by no means alone in 
its: deterininftiipn to cash m on the potential of recombinant-DNA. technology. 
Across the bay in Berkeley, six-year-old Cetus Corp. is also opening a recomb inant- 
d^a facility to complement . its work on conventional chemical and, radiological 
means of mutating bacteria. “This is the hottest area in biology today/' says 
Peter X Parley, Cetus’ executive vice-president. Two months ago, Standard Oil 
Co. . (Indiana) bought one-fifth of Cetus for about $10 million. 
Elsewhere, Upjohn Co., will soon open its own recombinant-DNA lab. According 
to Joseph E- Grady, head of Upjohn’s infectious disease research, the company 
expects to develop marketable applications within five years. Abbott Laboratories 
is just now beginning work on recombinant dna, while Miles Laboratories Inc. is 
becoming the major supplier of the sen-called, restriction enzymes that scientists 
use to cut strands of dna for recombination. Altogether, between 10 and 15 indus- 
trial labs are now pursuing recombinant-DNA experiments. 
Trying for insulin. — The Genentech research began with the construction of an 
artificial gene by the team at the City of Hope under the leadership of molecular 
biologist Arthur D, Biggs. The scientists chose to construct the gene for somato- 
statin, because the hormone’s chemistry, worked out at the Salk Institute, is rea- 
sonably well-known, and because sensitive tests are available to measure whether 
it is actively working within a cell. More important, somatostatin seems to play 
ap important role in refloating body growth and inhibiting the production of 
insulin in the pancreas. Thus, it and other hormones now under study seem to 
have wide possible application in treating diseases such as diabetes. Today, 
somatostatin costs around $30,000 per gram to synthesize chemically, but Genen- 
tech believes it can bring the post down to $300 or less. 
Opce it had an artificial gene, Boyer’s team at uc-San Francisco used restric- 
tion enzymes to cut open a ring of dna known as a plasmid in the cells of a special 
strain of Escherichia coli, the human gut bacteria most commonly used in recom- 
binant-DNA work. 
o 
[Appendix B — 127] 
