Subject: Top AIDS Researcher Is Considering Quitting U. S. Agency to Found Institute
Date: Published: 11/25/87 131 lines
Source:  WALL STREET JOURNAL. Copyright Dow Jones & Co. Inc. 

    Top AIDS Researcher Is Considering
    Quitting U. S. Agency to Found Institute
    ---
    By Marilyn Chase
    Staff Reporter of The Wall Street Journal

    Robert C. Gallo, the cancer virologist with the National
 Institutes of Health who has emerged as America's foremost
 AIDS researcher, is considering founding a privately funded,
 university-based AIDS research institution.
    Dr. Gallo, 50 years old, is chief of the Laboratory of
 Tumor Cell Biology at the National Cancer Institute, a unit
 of the Bethesda, Md.-based National Institutes of Health.
 After 22 years at NIH, he is contemplating quitting the
 federal agency to create a nonprofit institute for the study
 of human viruses and their role in cancer, immune deficiency,
 and neurological disorders such as multiple sclerosis.
    No decision has been reached, however.
    Dr. Gallo did not immediately return phone calls.
    "Looking at these viruses and clarifying their role in
 disease is a dream we all have," said Dani Bolognesi, a Duke
 University cancer and AIDS specialist.  The collaborator and
 friend of Dr. Gallo confirmed such an enterprise has been
 under discussion for two years.
    Although the brilliant and volatile Dr. Gallo has been
 involved in important AIDS research for most of this decade,
 a research institute could provide a single, well-funded
 research setting for scientists from many different
 laboratories.
    Dr. Gallo and his group are credited with making positive
 identification of a virus as the cause of acquired immune
 deficiency syndrome, following the first isolation of that
 virus by Luc Montagnier of the Pasteur Institute in Paris.
 The French-American rivalry spawned a lawsuit, settled in
 March when the two researchers agreed to an equal sharing of
 credit and royalties from the sale of AIDS blood-test kits.
 After years of wrangling over nomenclature, the virus has
 been named HIV, for human immunodeficiency virus.
    Discussions so far have focused on three possible sites
 for the research institute.  The Washington Post yesterday
 reported that Johns Hopkins University had emerged as the
 front-runner.  But late yesterday, a spokesman for the
 university said it was no longer talking with Dr. Gallo after
 financial sponsors withdrew their proposal Tuesday.
    Duke and Yale universities are also candidates, and are
 said to still be negotiating, said Dr. Bolognesi.
    James Wyngaarden, director of the National Institutes of
 Health, said a departure by Dr. Gallo would be "a major loss"
 and "a very serious setback" not just for the federal fight
 against AIDS, but for the anti-AIDS effort in general because
 it would likely take Dr. Gallo a year to regroup and gear up
 his research team.
    Dr. Wyngaarden pointed out, however, that Dr. Gallo makes
 between $70,000 to $80,000 a year plus a share of patent
 royalties, and has recently had his lab space increased.  He
 also noted it would be difficult to duplicate the agency's
 concentration of scientific talent and resources elsewhere.
 Nevertheless, most venture capitalists can secure income
 increases of 50% to 100% for scientists who join the private
 sector.
    As previously reported, venture capitalists have recently
 been courting many of the country's most esteemed AIDS
 researchers to join private ventures.  In addition, many of
 the country's major venture capital firms now are engaged in
 funding AIDS-related research enterprises.  Two principal
 groups have emerged in discussions regarding Dr. Gallo:  
 American financiers David and Issac Blech, and British
 publisher Robert Maxwell, chairman of London-based Mirror
 Newspaper Group.
    Messrs. Blech -- two Wall Street financiers with a flair
 for biotech ventures -- had been said by competitors to be
 amassing a $100 million war chest to invest in such a
 venture, involving capital infusions from the insurance
 industry, now exposed to heavy AIDS-related claims.
    But sources close to the negotiations said yesterday the
 Blech brothers withdrew their funding proposal on Tuesday,
 citing investors' impatience and fallout from the Oct. 19
 stock market plunge, which has made funding more precarious.
    It isn't clear how any venture capitalist would make money
 from a research institute that is expected to be nonprofit.
 However, some speculate that any practical products emerging
 from a research institute could later be licensed to
 companies.
    The Blech brothers have a long track record in backing
 biotechnology companies, including Nova Pharmaceutical Inc. 
 of Baltimore, Cambridge Bioscience Inc. of Cambridge, Mass.,
 and the Genetics Systems unit of New York-based Bristol-Myers
 Co. 
    Mr. Maxwell, who has declined to discuss his investment
 plans, was said to have wooed the American scientist last
 summer.  It isn't known whether Mr. Maxwell is still courting
 Dr. Gallo, but he was said to be pursuing other officials of
 the Department of Health and Human Services -- of which the
 National Institutes of Health is a part -- for such a
 research institute.
    Suitors are pursuing not only Drs.  Gallo and Bolognesi,
 but other prominent National Institutes of Health researchers
 as well, including Samuel Broder, director of clinical
 oncology at the National Cancer Institute.  Dr. Broder's tiny
 lab first discovered the anti-AIDS activity of the drug AZT
 and tested it in patients.  AZT subsequently was developed and
 sold by the Burroughs-Wellcome Co., under the brand name
 Retrovir, as the first Food and Drug Administration-approved
 drug for the fatal condition.
    Dr. Broder, however, has said he has no current plans to
 leave government service.
    Separately, officials of the Pasteur Institute in Paris
 said that Drs.  Montagnier and Gallo have scheduled a meeting
 in early December to discuss a foundation growing out of
 their legal settlement in March.  The two are expected to pool
 the proceeds of test-kit royalties, and apply them to AIDS
 research.
    However, the French-American foundation, while it would
 give the two erstwhile rivals a greater chance to cooperate,
 is believed separate from the university-based institute now
 under discussion by Dr. Gallo and his American associates.
    In Paris, a Pasteur spokeswoman yesterday denied that Dr. 
 Montagnier has plans to emigrate to the U. S.  "Oh no," said
 Caroline Chaine in a telephone interview.  "They will
 collaborate, but I spoke to Professor Montagnier this
 afternoon and he didn't say anything about relocating."

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