March 2005

Genetic Savings and Clone: No Pet Project

Can it cash in on cloned cats?

By Wade Roush

A scientific victory can quickly devolve into a public-relations disaster, as Lou Hawthorne, CEO of Genetic Savings and Clone (GSC), learned the hard way in February 2002. Researchers funded by GSC at Texas A&M University in College Station, TX, had just produced the world's first cloned cat, CC. The achievement was a critical step toward GSC's goal of helping bereft pet owners duplicate their aging or deceased cats and dogs. The problem: CC wasn't a very faithful copy. She was a gray tiger tabby and looked nothing like her genetic donor, an orange calico named Rainbow.

The scientific explanation was simple. The color of a calico's coat is determined by genes on its X chromosomes, and in each cell of a calico's body, one of the two X chromosomes is randomly inactivated. In the cell scientists took from Rainbow's body to make CC, the orange-coat genes were apparently dormant. But disparaging newspaper reports didn't capture these details, and Texas A&M's communications staff didn't try very hard to explain them, says Hawthorne. "The line they used again and again was, 'We always said it was reproduction, not resurrection,'" he recalls. "Which could not be better engineered to damage our brand than if they had just said outright, 'Clones won't resemble their donors.' Who would want a cloned pet if the resemblance is not going to happen? That is what we are selling! It doesn't get worse than that for a pet-cloning company."

Of course, there aren't any other pet-cloning companies -- which means GSC has had to craft its own solutions to a series of unusual business problems, of which the Texas debacle was only the first. The company's biggest challenges: disentangling the company from its origins in academe and then finding the techniques needed to avoid future CCs and turn pet cloning into a reliable, assembly-line-like process. Then there are the inevitable charges from critics that pet cloning is dangerous, exploitative, sacrilegious, or wasteful. The San Francisco Chronicle, for example, has referred to GSC's cloned cats as "Frankenpets," and columnist Debra Saunders has called for a moratorium on pet cloning.

Indeed, the company's undeniable eccentricities make it an easy target. Its capital, for example, comes solely from 84-year-old billionaire John Sperling, a notorious business maverick who made his fortune by founding the for-profit University of Phoenix. In recent years, Sperling has raised eyebrows by investing tens of millions in the controversial fields of antiaging science and medical marijuana legalization. Hawthorne, meanwhile, is hardly a typical science-educated biotech CEO; rather, he is a former filmmaker, interactive media producer, and former Zen practitioner who in 1996 documented Hell's Buddhas, a spiritual pilgrimage across India by motorcycle. Moreover, GSC has set its prices so high -- $50,000 for a single cat clone -- that only the wealthiest and most obsessed pet lovers are able to afford the service, at least for now.

Nonetheless, Hawthorne says Genetic Savings and Clone is a serious business and that Sperling is "a master of tough love" who expects a return on his investment. The company is already reaching its first critical milestones. But whether it can turn pet cloning into a profitable industry will hinge on what Hawthorne calls "the three pillars" of the company's business strategy: cutting-edge science, scalable operations, and extensive communications.

It was over breakfast with Hawthorne in 1997, shortly after Dolly the sheep made headlines as the world's first mammalian clone, that Sperling decided he wanted to clone Missy, a high-spirited Border collie-Siberian husky mix belonging to his friend Joan Hawthorne (Lou Hawthorne's mother). Hawthorne wrote a feasibility study, Sperling gave the go-ahead, and thus was born Missyplicity, a three-and-a-half-year, $4-million project assigned to Texas A&M cloning expert Mark Westhusin and his team.