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Genentech Raids Stanford Lab

New research chief coming from academia

Tom Abate / SF Chronicle 22jan01

richard scheller genentech dennis henner genetech


Richard Sheller (left) will replace Dennis Henner as Genetech's chief research officer in march

It's part of the lore at Richard Scheller's laboratory, that the Stanford University neuroscientist has an uncanny knack for knowing when his graduate students have finished a difficult experiment.

"You'll be walking down the hall with a set of (biological) gels, and he'll see you and say, 'Have you got results?'," said Karen Ervin, who has worked in Scheller's lab for a decade. "It's almost like he can smell data."

Scheller will need his nose more than ever when he leaves Stanford in March to become chief research officer for Genentech Inc. There he will direct a staff of some 450 scientists at what will be the world's largest biotech research lab, once Genentech completes a 280,000-square-foot expansion at its South San Francisco headquarters.

In a recent interview, Scheller, 47, said he's not intimidated by the contrast between running a 25-person academic lab and directing Genentech's drug discovery factory.

"I don't think about the position in terms of pressure but in terms of what an exciting time it is to be a life-scientist," said Scheller, citing the Human Genome Project as one of many advances helping scientists understand the mysteries of disease.

genetech san francisco

The biotech research lab Genentech has planned for its South San Francisco would be the world's largest.

At the same time, Scheller said he knows his new post will require him to balance his excitement for what is scientifically fascinating against the realities of picking projects that stand the best chance of becoming marketable drugs.

"One of the most painful aspects of my job may be turning away from interesting science if the science doesn't fit in with a business objective," Scheller said. "I expect to have to make those decisions and I expect them to be painful."

The math bears out Scheller's assessment. In recent years, Genentech researchers have kept about 60 early stage projects bubbling along at any given time. These are relatively cheap experiments, involving a couple of scientists interested in seeing whether they can turn off a gene implicated in heart disease, for instance, or switch on a process that might slow the progression of cancer.

Of these 60 early stage ideas, about 15 projects usually move to the more costly stage of animal testing. This is as far as most ideas go. The proposed remedy may prove too toxic, or even if it seems promising in animal tests, it may be too expensive to make, or have too small a market to be worth the risk of further development.

Only three or four projects per year make it out of the lab, and move on to the next and most important step in the drug discovery process -- being picked as candidates for human clinical trials. Putting a research project into human trials can commit a company to spending as much as several hundred million dollars in an effort to prove a prospective drug is safe and useful.

What used to be a low-stakes project in the lab now becomes a high-stakes gamble, because the success or failure of a clinical trial is a public event that can drive the company's stock price.

All of this can put the research chief in a bind. Recommending too many risky projects can expose the company to embarrassing public failures. Yet picking only safe bets would alienate talented scientists and discourage them from doing the experiments that break through products.

"You have to strike a balance," Scheller said. "There has to be a level of risky research to encourage innovation. But you also need safer projects along with the riskier projects that might completely fail."

Corey Goodman, a neuroscience professor at the University of California at Berkeley said Scheller is the perfect person to strike this balance between the practical and the visionary.

"Richard is one of the smartest, most intuitive people I've ever known," said Goodman, Scheller's colleague in the early '80s, when they were both junior faculty at Stanford. "He has an incredible instinct for good science."

Goodman recounted a tale from Scheller's early academic career to illustrate his ability to balance risk and practicality.

In 1980, before he came to Stanford, Scheller was working at Columbia University with Nobel Prize-winning neuroscientist Eric Kandel. Scheller, who had by then earned his Ph.D. in chemistry from the California Institute of Technology, was doing a sort of on-the-job training that scientists call a post-doc.

Kandel, his mentor, had assigned Scheller to find and clone the genes that controlled the learning process in a sea slug that the lab was studying.

According to Goodman, Scheller decided that was an impossible task given the scientific tools available 20 years ago. So, instead of following orders, Scheller started examining the slug's brain through a microscope, and noticed large white nerve cells whose purpose was not completely understood.

Scheller, convinced he was on to something big, told Kandel that he intended to solve the mystery of the white stuff. That took some nerve, considering he was Kandel's apprentice. The upshot was that Scheller eventually proved that the white cells supplied the chemicals that regulated the slug's egg-laying process. It was one of the earliest experiments to show how a brain controlled specific bodily functions.

"This was a major discovery in the early 1980s," Goodman said. "It shows his instinct for how to identify problems that are solvable, and his willingness to change paths."

Goodman said Genentech is not alone in tapping talented academics to run drug research laboratories. Last month, Merck & Co., the New Jersey pharmaceutical firm, picked Peter Kim, a 42-year-old professor at the Massachusetts Institute of Technology, to take over its research operations.

The comparison to Merck, which is generally regarded as the scientific leader in the pharmaceutical industry, would please Genentech chief executive Art Levinson, who was Genentech's research chief before he assumed the company's top post.

Genentech's outgoing research chief Dennis Henner, who succeeded Levinson in that job in 1994, had nothing but praise for Scheller. "Richard is going to be an incredible head of research," Henner said. "Culturally, he'll fit in well. He's a no-nonsense, personable guy who's very interested in a wide breadth of scientific areas, and is always ready to discuss what's on his mind. "

Henner, 49, is taking an early retirement. "I've been here for 20 years and I've seen Genentech grow and become successful," he said. "I really feel it's time for me to step back and spend more time with my family."

Henner will leave Genentech a wealthy man. In addition to the $495,000 he earned in 1999, Henner realized $9.5 million from the exercise of stock options, according to company financial filings.

Scheller is not a complete stranger to Genentech. In the late 1970s, while a graduate student at CalTech, Scheller was one of the few people in the world who knew how to perform gene-splicing techniques. This brought him to the attention of Herb Boyer, Genentech's scientific co-founder, who hired Scheller to work on Genentech's first gene-splicing project.

At the time, Scheller was a self-described "lab rat," a graduate student who had no telephone, no TV and no car. But when Genentech went public in 1980,

Scheller, who was paid in stock, briefly became a millionaire.

"The day after Genentech went public I was on the cover of the L.A. Times with a pony tail and long hair," Scheller recalled. After its initial surge, Genentech's stock fell and Scheller's stake dissipated over time, as he turned away from industrial biotech in favor of doing basic research in academia.

Now, as his career comes full circle, Scheller said his first job at Genentech will be getting acquainted with his new research colleagues. He expects the scientists he'll work with at Genentech will be much like those he worked with at the university.

"The coolest feeling in the world," Scheller said, "the thing scientists live for, is that moment when you understand something you've been thinking about for days or months or years. I believe that's true at Stanford and I believe that's true at Genentech."

E-mail Tom Abate at tabate@sfchronicle.com

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