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Cover Story: Lee Hood's $200 Million New Thing


In 1955 in Shelby, Montana, a little old schoolmarm named Miss Dunster told her star science pupil: “I want to put things in perspective for you, Leroy. You might turn out to be the most successful student I’ve ever had, but you’re certainly not the smartest.” Lee Hood, inventor of the instrument that made the Human Genome Project possible, quite probably has ended up as Miss Dunster’s most eminent scholar. But 45 years later, whether Hood is more brains or bravado depends on your perspective.

Late last year Hood, fit and energetic at 61, quit his plum post as William Gates III Professor of Biomedical Sciences at the University of Washington Medical School not to settle into an avid outdoorsman’s early retirement, but to induce a revolution in biology.

Standing in the chef’s kitchen of his custom-built home on Lake Washington, Hood describes his self-appointed new mission: to build, from the ground up, the world’s most cutting-edge interdisciplinary research site. The Institute for Systems Biology in Seattle, he says, will employ scientists from a range of specialties to “push the leading edge technologies in modern biology—computation, microfabrication, nanotechnology, single molecule and single cell analysis, genomics, proteomics, and all these kinds of things.”

Hood goes so far as to say that the institute, which he founded in January with a $5 million anonymous donation, will transform medicine. Between gulps of an orange juice, bran, vitamin-crystal breakfast concoction he says, “It’s the culmination of everything I’ve done.”

Or it could turn out to be his Waterloo. For how Hood will fare is far from certain.

Sure, he has a winning record: he has had a hand in founding seven companies including Amgen and Applied Biosystems and he boasts that his DNA sequencer is the best-selling high-level analytic instrument in the history of biotech. Nor could anyone argue that Hood lacks the drive to execute on his plan. He’s proud of what he calls his “career of pushing the edge” and doesn’t apologize for making “a lot of people uncomfortable.”

Skip Garner, who runs the Center for Biomedical Invention at University of Texas Southwestern Medical School, calls Hood one of those “people who have great vision who have to operate with a certain directness and push obstacles out of their way.”

Still, Hood has some high hurdles to scale this time. One is money. Aside from the $5 million gift, Hood has transferred about $6 million in grants from the University of Washington, and reeled in another $5 million commitment from Merck. But he says his vision requires a $200 million endowment—an awful lot of money to raise from a standing start.

Hood has been barnstorming his systems biology concept since the mid-1980s. Alan Aderem, an institute cofounder and scientific director, says he was “blown away” the first time he heard Hood lecture: “He seemed to be able to see over the horizon. He sees into the future.” But seven months after startup, no endowment has materialized.

Too, there’s the matter of whether the ideas Hood describes can actually be developed. His vision relies almost entirely on technology that has yet to be invented. In fact, Hood maintains that raising capital is a trivial obstacle compared to finding the right inventors. Five are on board thus far, but Hood acknowledges, “For some time to come, there just aren’t going to be enough people.”

Asked what sort of team he’s recruiting, he says, “I want to work with people who think science is fun and who are interesting and fun to work with.”

It’s clear that Hood is the type who enjoys being at the center of activity. His home, with two dishwashers, two refrigerators, and a guest cottage, is equipped for entertaining. He and his wife, Valerie Logan, belong to a book club with four other couples and take summer vacations with the Wilderness Society.

Similarly, Hood’s institute would be at biology’s crossroads. Post-genomic research will demand integrated, super-high-throughput platforms, Hood contends. He imagines himself at the helm of a worldwide hub for Big Science, playing host to the brightest minds in biology.

Would Miss Dunster tell Hood to get ahold of himself?

Still Gelling

Six months after launch, on a Thursday morning in late June, Hood sweeps into his office at the Institute for Systems Biology fifteen minutes late for a meeting, a Starbucks coffee cup in hand. He bears no trace of the red-eye flight from DC that he disembarked a few hours earlier and launches promptly into a three-hour explanation of his achievements, past and predicted.

More salesman than scientist in presentation, Hood is prone to using superlatives like “best,” “world’s leading,” and “most successful.” But, he admits, the institute has a way to go to live up to those labels. Technicians who populate the laboratories in the 28,000-square-foot facility aren’t yet addressing the complex systems questions that he describes. Instead, they make plates, prepare solutions, run samples, and tool instruments for several ongoing projects that have been transferred from Hood’s former labs at the University of Washington.

Other telltale signs of an upstart operation: an industrial-sized whisk left behind by the previous tenant, Zymogenetics, is propped against the wall in a large, vacant room; a ladder stands erect in a hallway; framed art awaits hanging; toolboxes lay open on a lab bench; and Steve Lasky, the institute’s IT director, sits in a stark computer closet reading instructions for installing a Sun enterprise server.

“This place hasn’t really gelled yet,” admits Lee Rowen, longtime manager of Hood’s genome sequencing team. “We need to get funding and a focus and some specificity onto what it is that we’re going to try to achieve,” she says. “There are a lot of ideas.”

Indeed, Hood’s four cofounders seem still to be sorting out their roles. Protein mass spectrometrist Ruedi Aebersold is perfecting his patented Isotope Coded Affinity Tags (ICAT) technology, which he and Hood say will enable the institute to lead the world in high-throughput proteomics research. Aderem, whose immunology team has also relocated from the university, says he’s investing time now just getting the institute in working order. “I want to focus on setting up an infrastructure that allows us to do the bigger biology because right now I’m looking far into the future,” he says.

George Lake, a computational astrophysicist who ran the nation’s largest theoretical astrophysics group at the University of Washington, claims that his experience with biological experiments is limited to what’s growing in his refrigerator. But as Hood’s chief information officer, he’ll draw on his knowledge of how to model galaxy cluster structures and the origins of planetary systems, as well as his ties to NASA and DARPA, to “connect [the institute] in an interdisciplinary way to reach out more to computational science.”

Ger van den Engh’s multiparameter high-speed cell sorter is the other core technology, with Aebersold’s ICAT, that Hood expects to put the institute on the map.

Within one year, Hood declares, the institute’s staff, which numbered 80 this summer, will move into a 200,000 square-foot space. It will burn through as much as $100 million on instrumentation in its first 10 years and ultimately will house some 30 faculty and 400 staff, he says. In terms of scientific genius, the place will out-rock Rockefeller University. In terms of technological innovation, he says, it will be the Mecca to biologists that Switzerland’s CERN particle accelerator is to physicists.

Asked how she imagines it all coming together, Rowen laughs, “I don’t know, Lee’s a genius at pulling good people together and then stuff happens.”

Aderem says he can’t remember a more exciting time in his career since his postdoc days when he argued ideas through the night. “A month ago there were no chairs to sit on. Now science is happening. Every week it’s another quantum of activity,” he says.

Cash Flow

The question remains: is the excitement Hood generates contagious enough to infect a donor (or donors) who might cough up $200 million?

A look at Hood’s inner circle indicates that cash flow is a priority. His board of directors is star-studded: George Rathmann, former CEO of Amgen and ICOS, and current CEO of Hyseq; William Ruckelshaus, cofounder of the Seattle-based Madrona Investment Group, ex-chairman of Browning-Ferris Industries, and two-time administrator of the US Environmental Protection Agency under Presidents Nixon and Reagan; Roger Perlmutter, former chair of the University of Washington Medical School’s Immunology Department, now executive vice president of Merck Research Laboratories.

In addition, Hood is negotiating a long list of corporate partnerships. Among those that he says are confirmed is a five-year, $5 million discretionary investment from Merck; proteomics deals with AxCell Biosciences, Dow Chemical, and Oxford GlycoSciences; and software and instrumentation deals with Compugen, Illumina, Lynx, Orchid BioSciences, Paracel, and Rosetta Inpharmatics.

Companies with which Hood says he has “explored” relationships include Applied Biosystems, Compaq, Immunex, Microsoft, Oracle, and Sun. He aims to establish exclusive deals with five or six major companies — makers of instruments, hardware, and software, as well as a few pharmaceutical and agriculture firms. “We are asking these larger companies for very substantial funding for a long period of time,” Hood says.

His pick for chief operating officer indicates another means of moneymaking that is on his mind: Louis Coffman is an intellectual property consultant. IP licenses were a point of contention for Hood with his former employer, which recently instituted a policy regarding faculty-industry relationships that he says “will stop the creation of new companies dead.” The institute, he notes, will export its discoveries to society. In other words, explains Aderem, “We want to spin out and incubate companies that permit us to exploit intellectual property and bring it to the clinic and gain control of it.”

The institute has already spun one of its developments off into a cancer research company, Macrogen, in which it holds an equity stake. Once Aebersold moves his lab to the institute, he plans to expand upon the proteomics reagents that he patented at the University of Washington and that Applied Biosystems is now commercializing.

Captivating Gates

Hood also has some extremely wealthy acquaintances he could tap for an endowment. Among them is Microsoft chairman Bill Gates, who in 1992 endowed Hood’s chair at the University of Washington with $12 million, and James Stowers, founder of American Century Investments, who gave $330 million this year to create the Stowers Institute for Medical Research in Kansas City. Hood chairs Stowers’ scientific advisory board. Stowers, Rathmann, and Hood himself are each rumored to be the source of the Institute for Systems Biology’s still-anonymous seed fund.

But philanthropy on this scale doesn’t happen every day. When it does, the patron typically has some affiliation to his benefactor. Last October, for instance, two gifts to create genome research facilities were given by billionaires to their alma maters. Financier Carl Icahn produced $20 million to house Princeton’s new Institute for Integrative Genomics. And the $150 million that Silicon Graphics and Netscape founder Jim Clark gave to Stanford’s BioX initiative was the largest donation in the school’s history. Clark, a former electrical engineering professor at Stanford, told the press that the campus was one of the few places with the critical mass to make productive use of his money.

Hood isn’t discouraged. In fact, he fully expects to find just one or a few individuals willing to deliver his entire $200 million. “This will be an incredible legacy,” he says. “If we really succeed this could be Seattle’s first private university.”

Who better to fund Seattle’s first private university than its wealthiest resident? Gates is the most conspicuous target of the institute’s fundraising campaign. Several months ago Hood and his co-founders spent four hours pitching their plan to him. Flipping through a spiral-bound booklet of color illustrations on heavy stock paper — a prop designed especially for the Gates dog and pony show — Hood remarks, “Bill Gates understood everything about this and he had one or two good suggestions.”

But as yet, Gates has not come through for the institute. His spokeswoman declined comment due to the “personal nature” of the topic.

Biology’s CERN

Are seven of the world’s brightest academics and a visionary strategy enough to captivate Gates? Skeptics say Hood’s vision might not be so visionary—that others are already a step ahead of him.

Charles Cantor, who in 1985 sat in with Hood on the meeting that gave birth to the Human Genome Project, agrees that biology needs “a paradigm shift to achieve economies of scale.” And he echoes Hood when he says “universities aren’t conducive to the scale and the interdisciplinary effort that’s required to pull these things off, and government agencies fund them at one-tenth the proper level.” But Cantor isn’t convinced that Hood’s group will be the one to blaze that trail.

“When he went into DNA sequencing he had something no one else had—four-color sequencing,” Cantor says of Hood. “But I don’t know that he or the people he has collected today have anything that you would call breakthrough technology. I understand they’re interested in transgenic animals and yeast as a model system and proteomics and expression arrays and modeling single-cell physiology. So is everybody else.”

For instance, Cantor, who is now chief scientific officer for Sequenom, points to Skip Garner at the Center for Biomedical Inventions. The center, which has a partnership with Sequenom, was established several years ago by an interdisciplinary group of faculty members to develop and export technological innovations. Garner, who acknowledges that “Hood is the kind of guy who can mobilize the resources,” says he has given advice to and hosted visits from leaders of similar genome technology efforts around the US, including Hood.

Cantor is also skeptical about Hood’s ambition to build biology’s CERN. Hood describes a place that will “bring people from the outside in to do systems biology and let them spend a week or a month or a year and then go home and do the hypothesis-driven science that they’re used to.”

That idea might not wash, some suggest. Protein crystallographers already travel to large light sources to conduct their research, but otherwise, biologists are not accustomed to working in large teams on location the way physicists are. “I couldn’t do that unless I moved all of my people there,” says Garner, noting that the cost would be prohibitive.

Adds Cantor, “Mass spectrometers aren’t like synchrotrons. So much of biology is easily transportable, it doesn’t have to be located in a physical center. I just don’t know if biologists will go. It’s not been their tradition.”

But Hood’s supporters say that thinking lacks vision. “Extrapolating from the past is pretty dangerous,” counters Dave Galas, chief academic officer of the Keck Graduate Institute for Applied Life Sciences, who cofounded the genomics company Darwin Molecular with Hood in 1993. Even CERN might be too antiquated an example for what Hood will do, he adds.

According to Aderem, the institute will balance traditional academic-style science with an approach more common to industry, where a team of 100 people tackles a project with large platform technologies and expansive resources. The place will house 25 permanent investigators, and as many as 15 additional labs dedicated to outsiders’ rotating research projects. The key to attracting these people, and the main difference between this institute and a university’s core lab or other new biology research facilities, which Hood calls “fragmentary visions” of his concept, will be integration.

In fact, without a setup that can capture information at each of a cell’s hierarchical levels ¯ DNA, RNA, proteins, pathways, networks ¯ Aderem says there’s “no approaching” the problems he wants to look at in macrophage cells.

In core labs where large sums are invested in single instruments, “technology is pushing biology,” Aderem contends. Research gets shoehorned to fit the technology that’s available, he says. Instead, the institute will design technology to answer specific biological questions as they arise.

Hood calls the plan “totally different from anything else that’s out there.” Others, he says, “have no idea about the systems biology and no idea about the need to integrate things together.”

With the unshakeable confidence that has been his hallmark since the days of Miss Dunster, Hood holds his ground. “In five years, all these people, once they think about it, will see it’s pretty obvious that this is the right way to go,” he says. “It’s just that they’re not there yet.”

The U-DUB Walkout

Lee Hood’s supporters say he tried for years to build his institute within academia, but was spurned at every turn. Now Hood is convinced that you just can’t “do something new and innovative in the context of an old bureaucratic system” and says he only regrets not recognizing that sooner.

“The beginning of the end” came last summer, Hood says, when Paul Ramsey, dean of the University of Washington Medical School, appointed Bob Franza, not Hood, to establish a scaled-down version of Hood’s idea called the Cell Systems Initiative.

Determined to see his own plan through, Hood notified Ramsey in October 1999 that he would set up his institute independently and henceforth share his time 50-50 with the university. Ramsey responded that such a move would be a breach of state ethics law. So in December Hood resigned from his posts as William Gates III Professor of Biomedical Science and chair of the department that he had founded seven years earlier. He also ceased university operations at a Monsanto-funded sequencing shop in Seattle’s Queen Anne section.

He then promptly opened the Institute for Systems Biology. With intellectual property consultant Louis Coffman, Hood filed the paperwork to form a nonprofit organization, banked a $5 million anonymous donation, transferred about $6 million in research grants from the university, and registered a domain name, This was all accomplished so quickly that it’s not clear that the Institute wasn’t actually born before Hood signed his resignation letter.

In rapid succession, four star scientists from U-Dub, as the school is known locally, and scores of their lab technicians, research assistants, and computational biologists, followed.

Alan Aderem, a U-Dub immunology professor and former head of Rockefeller University’s laboratory on signal transduction, signed on as scientific director. Aderem, 46, had been hatching the institute scheme with Hood ever since being recruited to Seattle in 1994. When Ramsey told Aderem that he could not hold joint appointments at Hood’s institute and the university, he too resigned.

Ruedi Aebersold, 45, another professor in Hood’s department, had also long been helping to hammer out the institute plan. But as inventor of a promising new proteomics technology, he has been reluctant to relinquish lab time to carry out the chores required to create an organization from scratch. He has pledged to move his lab from the university once Hood has an infrastructure in place this fall.

Also early aboard was George Lake, 47, an easygoing computational astrophysicist who ran the nation’s largest theoretical astrophysics group in the University of Washington’s College of Arts and Sciences. Lake made headlines in 1995 for discovering a phenomenon he called galaxy harassment. He says Hood’s institute looked to him “like a great new thing.”

For multiparameter cell sorting expert Ger van den Engh, Hood’s institute was a lifeboat that came along just as he was being forced to consider jumping ship. According to Hood, van den Engh recently founded a company, Cytopia, to commercialize his high-speed cell sorters. But policy prohibits the university from licensing intellectual property to any company in which faculty are equity stakeholders.

From outside U-Dub, Hood has recently recruited a rising star: John Aitchison, an assistant professor of cell biology at the University of Alberta, who worked with 1999 Nobel Prize winner Gunter Blobel.

How is the University of Washington handling the vacuum Hood has left behind? Ramsey’s office referred inquiries to Maynard Olsen, another of Hood’s recruits-turned-rival who fled the medical school’s Molecular Biotechnology Department in 1994 for the College of Arts and Sciences but has stepped back in as Hood’s interim replacement. Olsen describes Hood’s departure as a “very small blip” for the university.

Asked if he foresees university collaborations with Hood, Olsen says he could envision cooperation among individual scientists, but not between the two institutions. “There will be nothing comparable to the intimate ties between the university and the Fred Hutchinson Cancer Research Center,” he says.

Perhaps, if history doesn’t repeat itself. Legend has it that the Hutchinson, too, was established by breakaway faculty members who fought 15 years for university affiliation. Today a shuttle bus connects the two campuses every half hour.


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