SINCE ADOLESCENCE, GEORGE RATHMANN (WCAS48) HAS BEEN FASCINATED BY CHEMISTRY. INSPIRED BY A "CANTANKEROUS" TO USE HIS WORD MILWAUKEE HIGH SCHOOL INSTRUCTOR, NOT TO MENTION AN OLDER BROTHER AND BROTHER-IN-LAW WHO CHOSE CAREERS AS CHEMISTS, RATHMANN FOLLOWED THEIR LEAD ALONG A PATH THAT EVENTUALLY LED TO HIS NOW WIDELY ACCLAIMED STATUS AS A FOUNDING FATHER OF MODERN-DAY BIOTECHNOLOGY, THE SCIENTIFIC ALTERATION OF LIVING ORGANISMS TO CREATE NEW PRODUCTS. HIS PROFESSIONAL REPUTATION IS AKIN TO HENRY FORD'S PLACE IN DEVELOPING THE AUTOMOBILE: BOTH MEN, THROUGH KEEN TECHNICAL SKILLS, INTELLIGENCE AND SHREWD BUSINESS ACUMEN, HELPED TURN FLEDGLING FIELDS INTO MULTIBILLION-DOLLAR PHARMACEUTICAL INDUSTRIES. TO RECOGNIZE RATHMANN'S LIFETIME OF ACCOMPLISHMENTS, NORTHWESTERN CREATED A NAMED PROFESSORSHIP LAST APRIL THAT IS CURRENTLY HELD BY CHEMISTRY PROFESSOR CHAD MIRKIN (SEE SIDEBAR).
"George knows the business, but his edge has always been his understanding of science. He's very creative," says Alicia Löffler, director of Northwestern's Center for Biotechnology. "He sees the impact biotechnology can have in health care, in society.
"He knows the technology more than the business but knows the business will come if you do good science. Most of the other companies do it the other way around: They look at the business side before they look at what they're producing."
At age 72, Rathmann came out of a short-lived retirement earlier this year to chair Sunnyvale, Calif.based Hyseq Inc., where he was named president and CEO in June. Through the 1990s he helped transform ICOS Corp. in suburban Seattle into a blockbuster biotech firm, serving as its chairman, CEO and president. Before that, from 1980 to 1988, Rathmann was board chairman of a tiny start-up firm in Thousand Oaks, Calif., called Amgen today a multibillion-dollar giant that is the world's largest independent biotechnology company.
Under his leadership at each of these companies, Rathmann managed to attract talented scientists to technology-driven laboratories, funded by investors with deep pockets who were intrigued by his vision for combating disease through genomics the study of genes, their functions, their interplay with environmental factors and the understandings of molecular mechanisms of disease.
Proteins, those essential biomedical building blocks, have played a key role in Rathmann's and biotechnology's success. "What has happened over the last 20 years in the biotech field is the discovery of proteins that can be used in therapy," he says. "The precedent for that was, of course, set when insulin was discovered in the early 1920s. Then, suddenly you were able to use a protein in therapy. In that case, because there was no way of getting human insulin, it was derived from slaughterhouses pigs and cows. But it told us that there's an exciting opportunity in medicine, because when you administer a protein...you're able to administer almost the perfect medication."
The first blockbuster drug developed under Rathmann's leadership came when Amgen received approval in 1989 from the Food and Drug Administration for Epoetin alfa, or Epogen as it's known under the Amgen brand. The drug supplements the supply of a natural substance called erythropoietin, produced by healthy kidneys to make red blood cells.
Before Epogen, dialysis patients suffering from anemia typically faced repeated blood transfusions a risky and sometimes deadly procedure, especially before adequate testing for the presence of HIV.
When Epogen was administered with dialysis, the results were amazing. "Within a matter of a few weeks, we had patients who could run a 10K [race]," Rathmann says. "I mean, it was just an astonishing fact. And [patients] could hardly believe it, because they thought their energy was being sapped by the dialysis itself. Actually, that was happening because their kidneys were not producing erythropoietin."
Rathmann's enthusiasm for the life-saving potential of biotechnology extremely useful for luring investors has earned him the sobriquet of "Golden Throat." Perhaps his most notable coup came in 1990 during ICOS' start-up days.
"We were about to have a private offering to start the company," Rathmann recalls. "And we heard from the banker that was going to coordinate the offering that [Microsoft Corp. chairman] Bill Gates might be interested in investing in a biotech company, particularly if it were in the Seattle area.
"Well, you know, it didn't take much genius to say, 'We're a biotechnology company, and we're in the Seattle area. Why don't we invite Bill over for dinner?'"
They did. Gates was impressed by what he heard from Rathmann, and by the time coffee was served, he had written ICOS a check for $5 million. That was a major reason the company started off with the highest financing of any biotech firm to that date.
Gates continued to invest in ICOS even when potential gave way to dismay and market prices plummeted during the 1980s. But Rathmann by then himself a multimillionaire also opened his wallet to keep research going at ICOS during those rather dismal times. To underscore his commitment to the company, he told Gates he'd match further investments by the software mogul in ICOS.
"Now, you call that 'Golden Throat,'" Rathmann says, laughing, "but it's more convincing when you put your money in what you believe in than if you just have a great line. And I think he was very convinced that I was sincere when I, with much more modest means than he had, said, 'Let's go 50-50 on the next one.'"
In hindsight the investment paid off handsomely. Two years ago Washington Technology Fast 50, an industry group, named ICOS the fastest-growing high-tech company in the technology-rich state of Washington. Between 1993 and 1997 the company enjoyed revenue growth mostly from investors of a whopping 35,000 percent, even though ICOS had not by that time brought a single product to market.
Rapid advancement has always been a Rathmann hallmark. As an undergraduate at Northwestern, he compressed his classes in a premedical degree program to finish in three years. Although he won admission to Northwestern University Medical School in 1948, Rathmann never intended to become a practicing physician. Instead, his goal was to be a researcher with both medical and doctoral degrees. His senior adviser, chemistry professor and Northwestern legend Robert Burwell Jr., suggested that in lieu of medical school, Rathmann attend Burwell's alma mater, Princeton University, for graduate work in physical chemistry. Rathmann took the advice and earned his doctorate there.
He says his Northwestern undergraduate work thoroughly prepared him for doctoral studies, and he credits Burwell and three other faculty members as being particularly inspirational. "I had an organic chemistry prof, Frederick Bordwell, who was an extraordinary teacher," says Rathmann. "I mean, he had that class just turned on. And Irving M. Klotz and Fred Basolo were such dynamic teachers and leaders. All three directed research, and they inspired the scientists."
Rathmann's management strategy, a page taken from the lessons of his mentors, is to direct his scientists to search for hidden gems presently locked in the human genetic code. In addition to Epogen, Amgen under Rathmann's leadership developed a highly regarded drug called Neupogen (generic name: filgrastim) that stimulates production of infection-fighting white blood cells in the bone marrow of chemotherapy patients.
At ICOS, Rathmann's focus was on developing medicines to treat chronic inflammatory diseases, such as asthma, multiple sclerosis and rheumatoid arthritis. The company also attracted considerable press attention when in 1998 it began testing its Viagra-challenging anti-impotence drug, code-named IC-351.
As more and more of the human genetic code is deciphered, thanks to the international Human Genome Project, Rathmann is confident that a greater number of medicines for a broad spectrum of illnesses will hit the market. But the process is laborious, and many times research ends without the payoff of a new pharmaceutical. "When you find a gene," says Rathmann, "you know precious little about what it's good for. Although every gene you find is essential to the human body, it may have absolutely no therapeutic value. So it's not a quick, immediate conversion of every piece of genetic information into a piece of property of great, exploitable value, as such. Still, we know that the overall payoff is enormous."
Rathmann's buoyant enthusiasm and rosy outlook for biotechnology is not universally shared. Just the word "biotechnology" invariably triggers a reaction in most people. Some see it holding the exciting possibility of miracle treatments for now-chronic or fatal illnesses. Biotechnology also raises promise for growing bountiful crops using little or no pesticides on marginal lands.
For others, though, this released "Genie of the Genome" carries a potentially exorbitant price: moving the practice of eugenics or other monstrous genetic manipulations beyond the realm of speculation to reality.
Rathmann appreciates the concern but dismisses the probability of such an occurrence. The cautionary cries were appropriate when modern biotechnology began its rapid growth in the early 1980s, he says. In the intervening 20 years, however, no "mad scientist" scenario has emerged, even after the recent animal clonings or the ever more widespread introduction of genetically modified crops.
If anything, the most devastating mutation to occur in the past two decades, says Rathmann, was a product of nature HIV, the virus that causes AIDS. "We've got to be responsible when we get this biotech knowledge," says Rathmann, "but we certainly should not let anything interfere with our acquiring that knowledge. I think the most unethical behavior of all is anything that would stand in the way of correcting the human conditions of pain and anguish."
Rathmann's professional peers tend to echo his enthusiasm for biotechnology's unlocked potential and credit him for cheering on others to further the effort. H. Stewart Parker, CEO and president of Seattle-based Targeted Genetics Corp., has known and worked with Rathmann since 1983. She calls him a "visionary" in the field of biotechnology and one who is extremely open with colleagues. "He's always been willing to share his insights and thoughts and his knowledge with other companies and fellow managers in the industry," says Parker. "He sees this industry as a collective effort in terms of establishment and making its mark. That's particularly true for a small company or for people who are looking for mentors or for ways to get validation of their ideas. George has been a phenomenal resource for that."
Gordon Binder, Amgen board chair, was chief financial officer at the biotech company when Rathmann was CEO during the 1980s. Binder singles out Rathmann's ability to attract and keep talented people in what is an exceptionally mobile field. "I think he doesn't need to receive credit for things, so he's very generous with crediting other people with successes as they come along," says Binder. "He's certainly an excellent listener, and he is, in his own right, a good scientist, so he can listen to intimate technical details of some scientific thing and understand completely what's being talked about."
David Kelso, associate professor of biomedical engineering at Northwestern, has known Rathmann since 1976, when the two worked together at North Chicagobased Abbott Laboratories. Kelso believes that what sets Rathmann apart from other leaders in the field of biotechnology is his knack for balancing business and science.
"He knows you need new discoveries to create high-margin products, and that the scientists need some room to wander around, get lost and even fail," says Kelso. "He knows you can't always predict on Day 1 how it will all turn out, so you need several ways to succeed. George's companies have always had 10 to 20 products under development. That way, he would be sure to have one or two successes."
Rathmann is also well aware that it takes a lot of capital to fund that kind of development effort, and he finds the funding to do the research the way it should be done. "Now that he's made so many fortunes for so many investors, that's a relatively easy job, I would suspect," Kelso says.
Both Kelso and Löffler see Rathmann's outward modesty as still another key to his success. The Argentina-born Löffler describes him as "a very Midwestern type of guy, very approachable, completely charming," with Kelso noting that "many people with his intellect think they know it all. George is so smart that he knows he doesn't know it all and that he has much to learn every day from all kinds of people. He will listen intently to what people have to say, but he processes it critically."
Today, George Rathmann has all the money and toys including a private jet to beckon him to stop working and enjoy retirement. Some of that money has gone to the Rathmann Family Foundation, which funds educational projects especially in science, math and the environment along with scientific research and the arts in St. Paul, Philadelphia, Baltimore, Seattle and the San Francisco area, locations where Rathmann, his wife, Joy, and their children live.
Yet after flirting with the notion of retiring, Rathmann has rejected it. He still enjoys the wonders of chemistry, especially at a time when the potential for new discovery has never been greater.
His almost childlike joy in his work remains as fresh today as when he first started mixing chemicals as a boy with sometimes spectacular reactions.
"When you learn about chemistry, the first thing you want to do is practice it," says Rathmann. "And one of the ways to do that is to get your hands on nitrates and potassium and sodium and things that blow up."
He developed a neighborhood reputation as a fireworks impresario, attracting among other spectators his future wife. But Rathmann dismisses the pyrotechnic factor during his courtship days as secondary to his family's botanical skills.
"I don't think she was really all that impressed by the fireworks. My family grew gardenias, and I gave her some once in a while. I think that reached her more than the explosions."
Paul Francuch, a Chicago-based freelance writer, is a former news editor and radio correspondent for the Voice of America.