At Biogen, Meade wasn't always confident that his bosses supported his plan to marry biotech with bovines. During analyst meetings, he recalls, "I had this feeling they were trotting me out for comic relief." He didn't feel truly in his element until he was managing research at GTC, a company devoted mostly to goat/human chimeras.
The Dolly Difference
In principal, giving Sweetheart and the rest of her herd the machinery to make human proteins is basic college biology. It's a matter of inserting a copy of a single human gene into her DNA and programming it to turn on in her mammary gland. But in the early days, GTC's method for tweaking the goat's DNA was so clumsy that only 5% of the kids were born carrying the human gene. Over the years, a string of scientific breakthroughs enhanced the process. Topping the list was the sheep called Dolly. After the Roslin Institute in Scotland cloned the now-famous sheep, GTC adapted the technology to its newest breeds of drugmaking goats -- boosting the success rate to nearly 100%.
Investors at first went wild over GTC's goats. In the late 1990s demand for biotech drugs was skyrocketing, and drugmakers faced a dire manufacturing crunch. GTC promised virtually unlimited capacity at a fraction of the $500 million it costs to build the typical biotech factory. It made perfect sense: You need more drugs? Breed more goats. Even some majors like Bristol-Myers Squibb (BMY ) and Johnson & Johnson (JNJ ) began talking with GTC. Investors piled in, pumping GTC's stock up to $50, which gave the unprofitable biotech a market value of more than $1 billion.
This wasn't sustainable. Drugmakers gradually improved the traditional way of making biotech proteins -- in cells housed in giant steel vats. Fears of a biotech manufacturing shortage subsided, and one by one, GTC's deep-pocketed partners pulled out. Investors bailed, too, driving GTC's stock down to single-digit territory. "You don't get many swings at the bat in this business," Meade says. "People lost faith."
But Meade himself remained steadfast. He was certain that his goats could correct a major shortcoming of steel vats -- the latter are terrible at churning out complex proteins. Sweetheart's protein, called antithrombin, is one such molecule. And to this day it can only be harvested from donated human blood, which is often in short supply. So, armed with $75.7 million from a stock offering GTC pulled off during the 2000 market boom, the company charged ahead on its own. Executives at GTC's former parent Genzyme Corp. (GENZ ) were impressed that Meade and his team never seemed to get discouraged. "There were enormous challenges. Some people thought they were crazy," says James A. Geraghty, senior vice-president at Genzyme, which still owns 9.6% of GTC's stock. "But crazy is not that different from passionate."
For Meade's old partner, Lonberg, passion has always come in a small package: mice. As a boy, in Arlington, Va., he took two gerbils his grandmother gave him and bred them into a colony of 56. And Lonberg met his scientist wife in a lab at Sloan-Kettering. "We literally met in a mouse house," he says. He remembers the two of them attending a transgenics conference in 1989, where a scientist announced a new technique for knocking out certain genes in mice in order to make them more like people. "Everyone got up and applauded," he says.
That same year, Lonberg joined a company with an ambitious plan to make mice more like men. Scientists in the early 1980s had already figured out how to produce human proteins in mice. But there was one snag: Resulting products would have bits of mouse protein in them, which would make people sick with side effects.
Ensconced at his new company, called GenPharm, he created and then bred two different varieties of gene-modified mice. One had a disabled immune system -- it couldn't produce any of its own antibodies. The other bore the genes that are responsible for making human antibodies. Immunologically speaking, the offspring of these two rodents is more human than rodent. Provoked by a disease-causing agent -- bits of a human tumor, for example -- "their cells produce antibodies in exactly the right form to go into humans," Lonberg says. The antibodies can then be mass-produced as drugs.
Triumph to Turmoil
What should have been a triumph led instead to a period of turmoil. After Lonberg trumpeted his mice at a 1993 conference, rival Cell Genesys (CEGE ) filed suit against GenPharm, claiming theft of trade secrets. GenPharm answered with claims of patent infringement. As the battle dragged on, chewing up the company's scarce capital, GenPharm was forced to pare down from 110 employees to seven. Still, amid general despair, Lonberg was determined to keep the technology alive. "We were so sad to see our good team falling apart," says former co-worker Frank Pieper. "One day Nils took us aside and spent a great deal of time explaining why GenPharm was right and how he was going to make sure we came out as winners." Three years later the parties settled. Cell Genesys (now called Abgenix (ABGX )) dropped the theft charge and paid GenPharm $40 million to cross-license its patents.
Once the legal hurdles were cleared, other biotechs started approaching Lonberg. One company that was particularly interested was Medarex, which like hundreds of other biotechs was pursuing antibodies, but without a distinctive technology that could quickly identify and generate the most promising molecules. "We needed a tool," recalls Donald L. Drakeman, CEO of Medarex. "Nils's transgenic mice gave us that." Medarex bought GenPharm in 1997 for $62.2 million in stock. Around this time, the stock market once again began to smile on biotech after a long slump. In March, 2000, Medarex made a smart move, just as GTC had done. It raised $388 million in a stock offering. "This changed Medarex," Lonberg says, by allowing it to build a research facility.
As if to remind Lonberg of his ongoing battle to conquer transgenics, a giant framed photo of a mouse stares down at the scientist in his Milpitas (Calif.) lab. Down the hall, more than 6,000 mice live in pathogen-proof rooms, hidden behind double doors. The scientists who wish to enter must first take showers and don cloth gowns from head to toe, to avoid passing along their germs to the valuable and pampered rodents.
But what if the protected mice were the ones that posed the threat? In Greek mythology, the chimera was a hybrid beast that breathed fire and foreshadowed natural disasters. Some experts take that as a metaphor. They worry that transplanted human genes -- particularly in farm animals -- could "leak" into the food supply, say, if a genetically modified critter were to run off and mate with a non-GM cousin. One of the last things you'd want is a bit of human protein -- one that could make healthy people sick -- turning up in the goat cheese that's sprinkled on top of your salad. Some people call this the "ick" factor. "Even when you have an ethical rationale for doing this work, people find it troubling," says Michigan State University philosophy professor Paul B. Thompson.
It would help if the regulations meant to prevent nightmarish accidents were actually enforced. Critics blast the Food & Drug Administration and U.S. Agriculture Dept. for failing to tighten regulations that will keep transgenic animals used in health care out of the food supply. Lobbying groups such as the