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Building a Biotech Business

Famed for its computing research, SRI International has grown into a biomedical powerhouse as well. CEO Curt Carlson discusses the companys past, present, and future plans for biotech.
October 8, 2004

Curtis R. Carlson trained as a physicist. But over lunch during last weeks Emerging Technologies Conference at MIT, the president and CEO of SRI International commented, Biology is the most exciting field in the world right now. Under Carlsons direction the nonprofit research institute, best known for its pioneering work in computing, has devoted more and more resources to its decades-old biomedical research program. After participating in a conference panel discussing the problems of taking products from research to the marketplace, the amiable scientist-turned-executive sat down to talk about SRIs biotechnology researchand how the companys unique innovation model can help advance medicine.

Technology Review: SRIs work in computing, particularly artificial intelligence, is world famous. But the companys involvement in biotech research remains pretty invisible.
Curtis Carlson: That may be true in the private sector. Weve actually always done it, but it was below the radar. SRI is 57 years old and weve been a contractor to the National Institutes of Health for most of those years. We were founded to promote business development in the West and to help develop what has turned into Silicon Valley. We worked mostly with industry in the beginning, on a lot of great projects. Shortly after our founding, we started a life sciences group, which has turned into an end-to-end drug discovery and development organization. We do drug discovery, preclinical development work, and with our partners, we get involved in clinical testing. We actually have a pipeline of drugs that would be the envy of most midsize pharmaceutical companies.

TR: How much of SRIs R&D is in biomedicine?
Carlson: It is approaching one fourth of our business. Its been growing very rapidly.

TR: Some say that while the last century was the information technology century, this will be the biotech century. Whats your take on that?
Carlson: We certainly believe that. Its not just biology itself; its all the things that biology inspiresbiomaterials, biodevices, biosensors, and bioinformatics. Its really biocomputation thats the exciting part of it. Its going to be a long time, but were slowly moving toward the dream of being able to know your genome, and then from that, infer your pathways, and from that, use tools to identify areas of concern. Its going to happen bit by bit, but its a very exciting prospect.

TR: How is SRI furthering that cause?
Carlson: The future of biology is information processing: using genomic data to find pathways and to find targets for new therapies. So we have a comprehensive program on developing metabolic pathways. It is run by Peter Karp, a pioneer in that field. Weve mapped 13 organisms so far, and now Peter is working on what he calls HumanCyc, which is the metabolic pathway for humans.

The second program we have is a project to build a workstation that would allow you to bring all these data together and share it, manipulate it, do computation, and be able to send it back out to others. That project is called BioSpice. Its named Spice after the analogous software environment that integrated-circuit designers use, and its inspired by the fact that, looked at from a distance, a biological pathway resembles a wiring diagram of a very complicated chip. Once you have these wiring diagrams, all these pathways, the next thing you have to do is be able to find function. We are developing a tool that allows you to look at this pathway data and ask what kind of functions are going onwe call it pathway logic. For example, is there a clock, is there an oscillator, is there an amplifier?

TR: When you do have a drug that youve developed within SRI, do you transfer it out to a company for them to do the final development and marketing?
Carlson: Yes. We have our own drugs, which we generally license to big pharma. Big pharma gets many of their drugs from smaller biotechs or from university labs. Our university partners, such as Stanford, own their intellectual property and in that case, our role is to help them move along far enough so they can get funding, either from a venture capitalist or from big pharma, and to provide development services.

TR: That seems pretty important.
Carlson: Were trying to address the problem that National Institutes of Health director Elias Zerhouni called the valley of death. There are three big phases of drug discovery and development: the research part, the preclinical and the clinical. University researchers dont do preclinical or clinical research; its not the sort of thing they give tenure for. But we have an excellent preclinical research organization. For example, weve never had any study rejected by the U.S. Food and Drug Administration in our entire history. So we teamed up with Stanford, and the three big biotech campuses of the University of CaliforniaSan Francisco, San Diego, and Berkeleyon a program called PharmaStart to help them move their leads through the initial preclinical stages. The first thing we do is create a drug development plan for them. Were now helping them get funding to take things a little bit further, so we can do tests on toxicology, efficacy, and manufacturability.

We are also exploring a new partnership with the University of Arizona and the FDA to more directly tackle this problem of expediting drug development, specifically by speeding up the process at the preclinical and clinical stages. It would have an educational component, where we would be training people about the drug development process, and we hope to help the FDA modify its acceptance procedures so that pharma can use the latest techniques for developing their drugs.

TR: What you describe sounds like a university biology department, but reaching out more into the world.
Carlson: Well, our work bridges with that of universities and companieswere in the middle. And were a nonprofit institute, so it makes the universities and the companies comfortable working with us; were not going to compete with them. One thing that makes SRI special is our breadth: we have world-leading groups in biotech, in infotech, and in nanotech. This lets us work at the boundaries between these fields.

TR: How much back and forth is there among the groups?
Carlson: If we want to develop, for example, a pathogen detection chip, that effort involves everybody. Part of our innovation process is a formalized way to get people togetherwe call them watering holes. The technical experts meet with the business development and legal folksits a very heterogeneous group of people.

TR: SRI seems to look outwards a lot, to other companies and to universities.
Carlson: Yes, very much so. The process of innovation is not rocket science. If you want to solve the toughest problems in the world, you cant do it alone.

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