The biotech industry on Long Island and elsewhere in the United States has grown up in the space between academic science, venture capital, and long-established industries such as pharmaceuticals and cosmetics. This position gives biotech startups their creativity and flexibility, but it also requires those in the industry to negotiate several different professional cultures.
The career of Jim Hayward, currently the head of Applied DNA Sciences, Inc. (Stony Brook, New York) highlights some of the twists and turns of this academic-corporate relationship.
Jim got his PhD in molecular biology at Stony Brook University in 1983, just a few years after Stanford University and the University of California were awarded a patent for Stanley Cohen and Herbert Boyer’s method for creating recombinant DNA molecules, which led to the spectacular IPO of Cohen and Boyer’s company, Genentech, in the fall of 1980. It wasn’t this wild west coast success story that got Jim interested in the possibilities of applying these new developments in molecular biology and genetics to medicine, however. The inspiration was closer to home — at Stony Brook University, in fact.
One of Jim’s two supervisors for his doctoral work was Barry Coller, who was in Stony Brook’s hematology department. “Barry was developing what was really the first blockbuster monoclonal antibody, a drug called ReoPro®. It was directed against two glycoproteins present on the surface of platelets… It reversed the effects of platelet-dependent strokes. It became used in high-risk angioplasty, and it was licensed to Lilly and became the largest licensing revenue in the history of Stony Brook University, but was also their first real [foray] into biotech commerce.”
Monoclonal antibodies were developed in the UK in the 1970s. They are a fusion of a specific kind of antibody-producing cell and a cancer cell. (These fused cells are now known as “hybridomas.”) Like cancer cells, they can be grown in vitro, while continuing to produce antibodies. This meant that specific antibodies could be produced on an industrial scale. The two researchers who developed monoclonal antibodies, Georges Köhler and César Milstein, did not patent their work, since the commercial orientation that would have facilitated this was not present among scientists in the UK at the time. This might seem like a grotesque oversight, but as historian of science Soraya de Chadarevian has noted, “British scientists have observed that the missed patent on the original hybridoma technology was not such a bad thing and that it even stimulated research.”
Jim describes how Coller at Stony Brook used this discovery from across the Atlantic to develop ReoPro®. The drug was first tested on patients who had no other treatment options. “[Barry] gained approval from FDA for what was then called compassionate use trials. This was when the patient was beyond recovery, and he would save them with his monoclonal antibody. It was just miraculous.” In addition to the dramatic benefits for the patients, the development of the drug changed minds at Stony Brook and elsewhere about the value of searching for commercial applications of the new molecular biology techniques developed in the 1970s. Jim describes Coller’s work as “courageous, because the faculty didn’t do those things in those days.” But ReoPro “changed everyone’s mind. Now everyone wanted to do it.”
Because he was working in Coller’s lab, Jim got to witness the excitement first hand, and it made an impression on him. Although many of his and Coller’s Stony Brook colleagues were skeptical about the commercial applications of basic research, this dramatic example reinforced the value of bridging the gap between the academic world and industry.
During the next stage of his career, as a postdoc, Jim worked with Dennis Chapman, described by colleagues as a “pioneering biospectroscopist,” who “had an extremely varied and influential career in both industry and academia.” (Biospectroscopy is the use of the tools of spectroscopy to study living tissue and cells.) Jim knew Chapman by reputation long before he went to the UK to work with him. He had been familiar with Chapman’s work for a decade already, and he “was kind of a hero of mine. He had spent his entire career with a leg on both sides of the academic/industry fence…He was the inventor of, as he called it, margarine [Chapman pronounced the word with a hard ‘g’] and artificial chocolate. He also played a significant role in the development of NMR and FTIR [nuclear magnetic resonance spectroscopy and Fourier-transform infrared spectroscopy].” Jim “worked with him for a couple of years” and the two researchers filed several patents together.
This was during the mid-1980s. In the United States, biotech was already big. Genentech’s famous IPO in the fall of 1980 had been followed by FDA approval of the company’s synthetic human insulin in 1982. Scientists and investors alike were eager to follow Genentech’s example. But biotech developed at a different pace in the UK than it did in the US. Jim explains that when he and Chapman were filing patents based on their work, “this was in 1984, ’85. The crest of the biotech revolution in the US had already preceded that in Europe by maybe as much as a decade. When we filed our patents, there really was no biotech presence in Europe.” This was an advantage, because rather than having to chase investors to fund development of their ideas, “remarkably, money began to chase us… When we stood still long enough, we ended up collecting enough money to really start a biotech company, which we did and took it public in only two or three years.”
This company was Biocompatibles, Ltd. Dennis Chapman died in 1999, and in an obituary published in Spectroscopy in 2002, two of his former colleagues explained the science behind the company:
“In London, Chapman began to investigate ways of manipulating lipid properties…with a view to developing novel lipid materials to be used in biomedical research. In particular, Chapman asked the question: how could mechanical devices used in medicine (such as catheters, stents, contact lenses) be made more “biocompatible”, and not be rejected by the body, or acting as foci for blood clots, crystallization or other irritations?”
How do clots and, in general, agglomerations of protein form? The work that Jim Hayward did with Chapman was an extension of Jim’s PhD work, and he explains the basic concepts behind Biocompatibles, Ltd. “We’d done a lot of work that showed that lipids on the outside of red [blood] cells, on the outer leaflet of the plasma membrane [cell membrane]” are “neutral in charge. Whereas the ones facing” inward, toward “the cytoplasm, were…negative in charge.” When platelets are activated because the body needs the blood to clot, “the phospholipids [the ones on the inside and outside of the membrane] flipped,” and the ones that were negative in charge “would move to the outside and provoke interaction with the clotting enzymes and support and add structure to the formation of a clot.” But if you wanted to avoid clots, or “protein adhesion” in general, the neutral lipids were potentially useful.
As Chapman’s colleagues explained in his obituary, “Chapman hit on the clever idea that it might therefore be possible to take a fragment of the electrically neutral lipid molecule and cover the surfaces of various medical devices, thereby making them biocompatible, and in 1984 he established the UK firm Biocompatibles International PLC. The basic hypothesis of biocompatibility was then rapidly expanded and it was found to be possible to actually polymerise lipid molecules [i.e. chain them together] with other species to form new plastics – a brilliant idea which resulted in an extremely broad range of ‘friendly plastics’ which are being used in contact lenses and other refractive and ophthalmic surgical devices (Biocompatibles Eye Care Division) as urologic stents and catheters (manufactured by Biocompatibles’ wholly owned subsidiary, Urotech, GmbH), and lipid coated coronary stents are now the first choice of many cardiologists. The firm, head-quartered in Surrey and with manufacturing facilities in the US, Ireland and Germany, was floated on the London Stock Exchange in 1995,” and in 2002 had “over 300 employees and has raised £50M for product development.”
The technology has had a long life. Jim notes that “I believe there’s a contact lens from the ’80s still marketed using the basis of that original chemistry.”
The needs of his family brought Jim back to the United States, and to Long Island. His wife was an administrator at Stony Brook, and “I came back first as a research assistant professor at Stony Brook here.” But the medical needs of their oldest child meant that “the income that I could have as an academic” wasn’t sufficient, and he began to do consulting work for the skin care industry, including “L’Oréal, Shiseido and Estée Lauder.” These companies were “mad about liposomes and their capacity to work in skin care.” Liposomes are a type of human-made vesicle. A vesicle is a tiny biological package of liquid or cytoplasm encased in a lipid bilayer; vesicles are used by cells to perform all kinds of tasks, including storing and transporting materials. Liposomes, the artificial equivalent, can be used as a delivery mechanism for drugs or cosmetic products. Liposomes are typically made of phospholipids, the same type of molecule that Jim had worked with in his collaboration with Chapman. He was precisely the kind of expert that the cosmetics industry on Long Island was interested in. Jim had been doing consulting work for a while when “[Estée] Lauder made me an offer I couldn’t refuse.”
Initially, despite his experience working in Coller’s lab and his work with Chapman for Biocompatibles, Jim had reservations about accepting a job in industry. “I have to admit, I wasn’t happy initially, stepping into a cosmetic company.” Asked if he had been worried about not being a ‘real’ scientist anymore, Jim says that he was at the time, but experience has changed his perspective. “The fact is that they do remarkable science, and unlike academia, they do it fast.” At the same time, working for Estée Lauder had its limitations. “Ultimately, I realized I could do more with that science outside of Lauder than I could at Lauder.”
At this point Jim left to form his own company, the Collaborative Group. Here, his earlier involvement with Biocompatibles, Ltd., proved key, as did his experience at Estée Lauder, although in different ways:
“I had been exposed as a scientist to the need to raise money when we started Biocompatibles. I did all the US pitches for the company and many of the European ones, and we were quite successful, our initial seed funding.” Dennis Chapman’s name had been very useful here. “There was a reverence for Dennis Chapman. The central issue was not me and my contributions to the science, even though I was the spokesperson, but it was the connection to Dennis Chapman, a revered, respected scientist. That’s really what raised the money….Then my time at Lauder, of course, I had nothing to do with that end of the world, but in leaving to start the Collaborative Group, I had enough funding myself from the proceeds of Biocompatibles that I didn’t really need investors. I thought, well, we can utilize the speed and margins of the personal care industry to fund a biotech business that actually made medicines and developed new discoveries that would benefit people in deeper ways.”
The Collaborative Group was an umbrella organization that included a number of smaller companies that developed and produced a range of products. One of these companies, Collaborative Labs, “worked in the personal care industry and developed raw materials… on the edge of biotech and consumer” products. “We became the largest supplier of liposomes in the world.”
Collaborative was also one of the original tenants of the Stony Brook Center for Biotechnology’s incubator program. The concept of a business incubator was relatively new in the 1980s and 1990s. Jim recalls that when he was looking “for a space in the UK for Biocompatibles, I looked for university-affiliated space, and we found it. They didn’t call it an incubator. They spoke about clusters in those days, and the clusters were focused by science. Italy had one kind of cluster, an optics cluster was in Rochester in New York.” The name was different, but the concept was the same: space and resources were provided to give new companies a hand-up during their first years, with the expectation that what would emerge would be a fully-fledged enterprise ready to operate independently.
Jim has been a key figure in the growth of incubator programs on Long Island, beginning in the 1980s. He has always been a strong supporter of incubators and the scientific and business culture they promote. Sharing resources can save significant amounts of money, and the “the sister- and brotherhood that develops in an incubator can be very important.” In the 1990s, Jim was asked by Governor Pataki to serve as the chair of the Long Island Regional Incubator Task Force. This organization’s “goal was to recommend policies for the management of incubators and to recommend a strategy for Long Island. What should we be incubating in?” Biotech was one of only several options at the time. Printing and aeronautics were others, although Long Island’s economy has changed enough over the past decades that the last two are no longer realistic options. “We assembled quite a crew of board members, and we studied incubation, as it became to be known, all over the world to try to develop the best model for managing it.” They got funding for multiple incubators on Long Island and elsewhere. “Eventually, there were about 35 of them built throughout the state.”
But when he and Collaborative moved in as one of the first tenants of the incubator at Stony Brook, the set-up was still pretty minimal. The program was launched in the 1980s, but did not have its own building until the 1990s. Before that, tenants were in the basement of the Life Sciences building, and as Jim recalls, a little stage management was sometimes in order: “when we had to impress potential customers, we just put lab coats on any student who walked by at that time.”
Thirty years later, Jim is CEO of Applied DNA Sciences, which is located on campus at Stony Brook University. This company does several different things. One division of the company manufactures nucleic acids, RNA and DNA, for therapeutic purposes. “Another division is diagnostic. We have a diagnostic lab and we’re just launching the pharmacogenomic platform.” Pharmacogenetics is the use of genetic markers to predict how a given individual will respond to a specific drug. Jim sees this platform as providing both a medical and a social benefit, something “that we think can benefit the local community.”
Jim Hayward, interviewed via Zoom on June 28, 2023
Interviewer: Antoinette Sutto
Antoinette: How so?
Jim: I think it’s a great way of getting medical equity amongst different incomes. It’s a great way to just improve overall wellness and precision medicine, which is one of our areas of interest. Pharmacogenomics is when you examine a panel of genes. We look at 120 alleles in a single assay and help select the right psychotropic medicine with the mental health issues so important to the federal and state government and to the community. Psychotropic drugs are often prescribed in a method not unlike throwing darts.
In our case, we can tell you which psychotropic drug you’re likely to respond to and which ones would cause adverse effects or just be ineffective altogether. We do that for hundreds of drugs. I think that it is a method that should be utilized in hospitals that a patient shouldn’t be admitted, patients likely to receive a drug over the next few days.
Antoinette: Hospitals being hospitals, yes.
Jim: Yes, and so it would be good to know that that drug will be effective.
Antoinette: You guys, do people come to you, individuals come to you, or do you guys create the tests for this person, we do a genetic test on this person, then we send the results back to their-
Jim: We’ve developed an unusual financial model for our diagnostic lab. We spawned the lab in response to COVID. We are experts at PCR. When we realized what was happening in 2019, we created our own COVID diagnostic and quickly got that approved by FDA. We did just short of 1 million COVID tests, but we never billed an individual. We established institutional relationships. For example, for almost three years, we tested 310,000 students and faculty at CUNY.
We would test them routinely on a schedule to limit the amount of transmission at the school. It worked wonderfully well. It prevented us from having to chase insurance companies, which is not a productive way to spend your time. We committed ourselves to this kind of institutional customer business. We worked with about 20 colleges and did their testing and a variety of companies and middle schools. Now with pharmacogenomics, we want to do the same. We want to be involved in testing institutions. Mind you, our assay is not yet approved by New York State.
We expect it any day now. When you have an institution, it’s much easier to do the kinds of controlled studies where you can show to other institutions that there is a return on investment. That your employees, for example, if you’re a large company and self-insured, that your employees are healthier, more likely to work. They’re more compliant with their medications because the medications are actually working and they have fewer adverse drug responses.
Antoinette: So it’s like you have some company, and they say to the employees, “Okay, send a sample to applied genetic–” Sorry, I’m blanking on the name of the company again.
Jim: Applied DNA Sciences.
Antoinette: Applied DNA Sciences. “Send a sample cheek swab to Applied DNA Sciences, and they will tell you whether your markers in this, this, this, and this gene match up to this, this, and this and this. If this is the case, you should take this antidepressant and not this one,” or things like that.
Jim: Yes. In the end, we provide telemedicine consult back to the patient and to the patient and their doctor. It’s a test you only have to do once in a lifetime. They enjoy the benefit thereafter.
Antoinette: Do people worry about the security of their genetic information? Have you gotten pushback, from people saying, “Well, where’s all this going?” How do you guys ensure that kind of privacy for the patients?
Jim: Sure. The consent agreement has to be very thorough. That’s for conspiracy theorists, no consent agreement is going to give them a level of comfort, unlike the COVID assay which was mandatory at a lot of the institutions. Pharmacogenomics will be voluntary, but the same issues will arise. People worried we were cloning their children when we tested them for COVID. I would call them up and go visit and have a town hall meeting at a school just to explain exactly how we worked and what our motives were.”
The third division of the company is supply chain security. Specifically, Applied DNA Sciences “manufactures small DNA tags and uses them to protect industries against counterfeiting.” This technology has applications in a wide variety of fields, from consumer goods to nutritional supplements to the supply chain for the Missile Defense Agency, part of the US Department of Defense.
For example, “right now one of the areas we’re working on is cotton,” specifically “preventing the importation of Uyghur-farmed, forced-labor cotton from China. We have tagged about 450 million pounds of American cotton and then tracked it all the way through its trip to Southeast Asia and its eventual conversion to a cotton shirt. Then we can identify what fibers are in that piece of apparel.” How does the tagging process work? “We have a device generally that we put in a cotton gin,” which is a massive apparatus used to clean cotton after it is harvested and get the seeds out.
“It’s a federal crime to bale cotton with one seed. You can’t have seeds in it. You also have to get the bird poop and the soil off the cotton. That’s done on a fluidized bed of air about 20 feet up in the air, and the seeds all fall down. By the time it reaches the end of that line, the cotton is desiccated from all the flowing air. If you put that under 14,000 psi to bend at the bale,” when the cotton fibers are rolled into a large mass for transport, “the fibers would break. So just before it’s baled, the cotton has to be rehydrated. In that water, is our DNA,” multiple copies of the same little snippet that acts as a tag. “We can encrypt information in that snippet.” For example, that “this is Pima cotton from the San Joaquin Valley” such and such a “gin or farmer. We can track that throughout the system. Then we use genomics also at places like the spinner which is where the cheating typically takes place. The spinner has a warehouse full of bales of cotton. Target, for example a couple of years ago was warned that there was no Egyptian cotton in their Egyptian cotton sheets. As a consequence, they had $180 million class-action suit. The spinners will buy inexpensive cottons the world over, and then simply if they can match the specifications for the yarn that they have to make, they’ll put in inexpensive cotton from India or China. China produces 20% of the global cotton. A lot of the Uyghur cotton is already across the entire planet waiting to be used.” The supply chain is fully of “suspect cotton” and “we help brands ensure that they are not supporting human trafficking.”
Jim Hayward’s career highlights the porousness of the boundary between industry and academia, even though individual researchers who cross this boundary from the academic side into industry sometimes feel uneasy about doing so. The variety of the biotech enterprises that he has been involved in — everything from technology that hinders protein deposits on plastic to liposomes for drug and cosmetic ingredient delivery to supply chain security — suggests the breadth of problems that technology built on the revolutionary molecular biology advances of the 1970s can address. That Jim’s current company, Applied DNA Sciences, is based in the same place, Stony Brook University, as Jim was when he witnessed Barry Coller’s biotech breakthrough with the drug ReoPro forty years ago also reveals the range of innovative science being done on Long Island, then and now.