Gene dreams : Wall Street, academia, and the rise of biotechnology / Robert Teitelman.

  • Teitelman, Robert
Date:
[1989]
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Licence: Attribution-NonCommercial 4.0 International (CC BY-NC 4.0)

Credit: Gene dreams : Wall Street, academia, and the rise of biotechnology / Robert Teitelman. Source: Wellcome Collection.

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    On the Far Side of the Bubble In early 1984, Nowinski leapt into the growing AIDS sweepstakes. Genetic Systems would produce a diagnostic based on the LAV virus from Pasteur, forming a joint venture with the institute's commercial arm. The Pasteur group had applied for a U.S. patent on LAV months before Gallo's NCI lab on HTLV-3. If Pasteur had won the suit, Ge¬ netic Systems, as the sole U.S. licenser, might well have been the only legal marketer. Was the AIDS test a blockbuster? The estimates looked solid: anywhere from $100 to $250 million. That would make it the largest diagnostic test of all. Unlike with chlamydia or herpes or Le¬ gionnaires' disease, blood banks would have to test for AIDS. Moreover, American Hospital Supply, with its large sales force, agreed to market it. Thus, for once, there was little risk that the market would turn out to be smaller than the numbers. Once a test appeared, the blood banks would quickly welcome it. The only issue was the up side: how big would it get, how profitable, and for how long? On July 18, 1984, Glavin and Nowinski appeared at Cable, Howse & Ragen on Fifth Avenue Plaza, in the heart of downtown Seattle. The stock had not yet recovered, the warrants were adrift, and another limited partnership sales blitz loomed. It had again come time to send a message out. Investors needed to be reminded of the glorious future. The pair talked to analyst Robert Kupor. Their discussions ranged widely, touching on the sexually transmitted disease tests (the chla¬ mydia test is the most successful, they reported to Kupor), the analyzer project (the real payoff in diagnostics will come when diagnostics can be run on rapid, automated machines), and the Cutter Pseudomonas project (marketing data suggest that the total market value for MABs against gram negative bacteria . . . could be $1 billion). Mostly, how¬ ever, they talked about AIDS: market size, patent speculation, LAV as compared to HTLV-3. AIDS and the tests bundled with it—hepatitis В and a viral cousin to HTLV-3, HTLV-1—would represent the com¬ pany's most ambitious project yet, they said. As a result, they were pouring 20 to 25 percent of its research and development resources into the AIDS test, with the intention of introducing it between Jan¬ uary and March of 1985. The company [wrote Kupor to his clients] may decide to introduce the test in conjunction with an automated diagnostic instrument, which would be competitive with or superior to the Abbott Quantum that now dominates the markets. Genetic Systems feels that it has an advantage over competitors because Dr. Nowinski's own background (along with that of many of his colleagues at Genetic Systems) has been in AIDS-like viruses. It was largely 139
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