Inventing Millionaires

Silicon Alley Duo Turn Scientists Into Fat Cats

But Wolf and Himawan, like Lewis and Clark, have serious support from the establishment. Take EluSys, developer of the blood-cleaning injection. Wolf passed its CEO reins to Stephen Sudovar, who had served as president of Roche Laboratories, Inc., a U.S. division of Hoffmann-La Roche, one of the top five global pharmaceutical companies. The start-up's board of directors includes a retired vice chairman of Bristol-Myers Squibb, a retired president of Merck Vaccines, and a former commissioner of the Food and Drug Administration. Nobel Laureate Joshua Lederberg, a founding father of modern genetics, is an active EluSys scientific adviser.

Neil Bush, younger brother of Republican presidential nominee George W. Bush and Florida governor Jeb Bush, is the board member credited with raising the initial cash to form EluSys. Though Bush says he no longer plays an active role, a board meeting was held at the family compound in Kennebunkport, Maine, and Wolf has returned for other visits. Bush pledges that, should George W. get elected to the White House, "I'm definitely going to resign immediately. Given the marketplace perception [of potential impropriety], it would be a terrible thing for the company."

Funding an upheaval that could shape the next century means risking the loss of a few million dollars today. Bush is a former wildcatter in the oil industry and was a poster child for the '80s Savings and Loan crisis. He's no stranger to playing business decisions on a hunch. "I'm probably the maverick of the family. My brothers have chosen more stable ways of earning a living. I pursued a course for me," says Bush. "Intuitively, EluSys was high risk, and it's still high risk. This is very, very speculative. We have a long way to go."

Prowling Wolf: Seed-One CEO Jeff Wolf searches the world for "Big Bang" ideas.
photo: Michael Schmelling
Prowling Wolf: Seed-One CEO Jeff Wolf searches the world for "Big Bang" ideas.

Human trials for the commercial product are a year away, but the feds might waive that requirement for antiterrorism applications, such as blocking the effects of anthrax, says Dr. Frank Young, the former FDA commissioner on the EluSys board.

The recipient of all this high-powered attention is biochemist Ron Taylor of the University of Virginia, who discovered the "instant immunization" technology while searching for a new lupus treatment. Taylor designed nontoxic molecules to hitch pathogens to the most convenient mules around, red blood cells, which drag the ill agents kicking and screaming to the liver, where they're destroyed. In a sense, the primate body already does this as a part of an immune response, only much more slowly. Taylor designed his system as an overwhelming and rapid deployment. Problem was, most experts said it would rip red blood cells open.

But there was one receptor (the little-noted CR1) the blood-cleaning compound could safely hook up to, and Taylor recognized it. That prompted the Pentagon's Defense Advanced Research Projects Agency—which was searching for shields against biological warfare—to fund further research. Even after the compound slashed viral infections in four primate species 1 million-fold, results DARPA termed "spectacular," it was still roundly dismissed as a fool's venture—until Seed-One came along.

"Ron Taylor found it very difficult to find research support for many years," recalls University of Virginia patent lawyer Bob MacWright. Then the Pentagon took a chance, and "the two Jeffs came along. The rest, as they say, is history."

Taylor told the Voice EluSys holds promise for fighting diseases from cancer to AIDS. Named the inventor of the year by the UVA Patent Foundation, he couldn't hide his joy during a May acceptance speech. "The work is very hard, very frustrating, but incredibly exciting and challenging," he said. "And we get paid to do it!"

MacWright made sure of that. He held Jeff 'n' Jeff to an agreement that they'd raise several million dollars for Taylor's research, or be gone. Bush accompanied the Jeffs to seal that bargain, though he downplays the effect of name recognition. "People who'd strike a deal or invest because of my family name are what the market calls 'dumb money,' " Bush says. "Since the first round there's been a lot of smart money put into this, people who performed due diligence."

By the time they got EluSys off the ground, Seed-One's partners already had a solid track record. They started billion-dollar companies while working for other groups prior to founding Seed-One in 1998. And they're undeniably scrappy and tenacious. But don't romanticize the underdog, cautions Mario Corso, a pharmaceutical industry analyst with ABN AMRO. "I don't think start-ups have a better hit ratio than the large firms," Corso says. "There are just more of them. You don't hear about the many failures."

For now, Seed-One benefits from a few generic advantages of being small. The firm can change course quickly, and is less susceptible to "NIH syndrome"—shorthand for not invented here—than big corporate research departments, which are loath to drop what they're doing just because some bright outsider comes up with a better mousetrap. And firms like Seed-One get a boost from the U.S. government, which since the passage of the Bayh-Dole Act of 1980 has strongly favored federally subsidized university labs marketing technology through small firms rather than large ones. But researchers schooled in Organization Man ways were sometimes slow to catch on. "Our policy toward licensing to start-ups is 'yes,' " says MacWright, but "it took a while to convince UVA's faculty we were serious."

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