DR GREG WINTER

TUESDAY 19 NOVEMBER 2002

  566. Good morning, Dr Winter. Can we welcome you this morning. I wonder if you could tell us a bit about your involvement and how you commercialised your research. Was it simply to make money? Was it because it offered greater prospects for the realisation of your ambitions? Or are there different motives?

  (Dr Winter) Can I break it into several bits. First of all, how did I do it and then secondly what the motives were, because the motives were different in each case. You have to understand a little bit about the science, I am sorry to say, and the area that I became interested in was the area of antibodies. These are natural therapeutic agents in your body and are used generally for killing viruses and bacteria. When we get infected we create a whole spectrum of antibodies. In the mid-70's a way was developed of making individual antibodies, so-called monoclonal antibodies. These could be used as magic bullets for attacking cancer. For example, researchers were able to make monoclonal antibodies that could kill cancer cells in the test tube without killing normal cells. The technology worked very nicely, but there was a serious clinical problem. If you tried to put those into human beings, because these antibodies were mouse antibodies, you tended to see them as being foreign and you mount a reaction to them. In fact, that not only blocks the therapy, but it can also provoke anaphylactic shock. The area that I was interested in was in fact solutions to this problem. That involved making humanised antibodies which was essentially a strategy to turn the mouse antibodies into human antibodies by genetic engineering. Another approach, later on, was to make human antibodies. The strategy of making the humanised antibodies involved basically cutting little bits of the mouse antibody genes out and stitching them into a human antibody framework. In fact, in that way we could create an antibody that was largely a human antibody and had the same activity as the mouse antibody and could target and kill tumours and it was not seen as foreign. By 1988, with some Cambridge University colleagues, we created a genuine therapeutic humanised antibody and showed that we could burn away a huge mass of tumour in a couple of patients. There was immediate interest from the pharmaceutical industry, as you might expect. We filed a patent and on that occasion we licensed it, this is the Medical Research Council, licensed it non-exclusively to many companies. There were some limited areas of exclusivity to Celltech and to Wellcome. There are now five humanised antibodies on the market against leukemia, breast cancer and viral infections. That was the first piece of work that I was involved in. The second was to try to make human antibodies directly. So basically, having had the idea of creating humanised antibodies, I started to wonder why we could not make human antibodies to start off with, why bother going through animals, why can we not find some way of doing it? In fact, there are all sorts of technical problems with doing that, and again I came up with a genetic engineering solution which effectively created an artificial immune system in the test tube and like a real immune system it makes many millions of different antibodies and then you select the ones that bind to antigen. This approach was commercialised through a startup, in fact Cambridge Antibody Technology (and Alex Duncan who has just testified was my second PhD student). I was a founder in that company and the MRC had an equity stake, that company floated and their first antibody is due on the market next year. Those two things, the humanised antibodies and making human antibodies had different motivations, different reasons why I came to do it. I think you have to bear in mind that I did not start as an industry scientist; I am not an industry scientist at all. I consider myself as a scientist, inventor, entrepreneur. I had one year in industry when I left school in Procter and Gamble soap granules section and that was enough to persuade me that really was not my cup of tea. I then focussed on academic research. But my career stretches over 30 years. I started off being interested in the origin of life and that very early period where the first cell is crawling out of the primaeval soup. I was interested in how proteins were built, how they are made, and in the first 15 years of my research career that is all I was really interested in. I was not remotely interested in commercialisation. But during that period I acquired some formidable skills of reading genes, sequencing genes and being interested in how to create and manipulate the fabric of life. The commercialisation started with the antibodies. I had actually become interested in antibodies not for commercial reasons but because they are created by an evolutionary process in the body. So here I am as a fundamental scientist interested in anything that gives light on the evolution of proteins, of life itself, and antibodies are created in the evolutionary system. What interested me was that the same basic architecture could be used to create a myriad of different binding sites because you can count lots of different antigens and you always manage to find an antibody that will react with it, so how was this? This was very interesting. It was only really when I was doing that study that I then thought "Oh, my God, I've got an insight here. This could provide a way of humanising antibodies". I thought that was a good idea and I got on with it. That is how I started. It came from an inspiration arising from basic research in which, from one day to the next, I completely changed my direction because I thought it would be a jolly exciting experiment to do. It was actually a risky experiment, but it worked and created that technology. The later work on making human antibodies was more a follow through. In other words, having made the humanised antibodies you then become obsessed with the Holy Grail. Maybe we could develop another evolutionary system and do it a completely different way and produce the ultimate human antibody without any mouse in there at all; without having to use animals, doing everything in a completely artificial evolutionary system. That is the way I came to the problem; that was the motive.

  567. As a layman I just about understand what you are saying and I am very grateful to you, but can I just put it a slightly different way. You characterise yourself I think as a scientist, researcher and entrepreneur. The first two are 10 a penny, maybe in varying qualities. But the idea of having the first two plus an entrepreneur and also an entrepreneur who obviously has been breaking new ground in ways that other people have not, you had, as it were, the ability to identify a scientific and a commercial opportunity perhaps in sequence. But do you think there are enough people in the UK looking out at science in the round and saying, "This could be a possibility". Are we losing too many things because there are not enough scientists like yourself who see the entrepreneurial possibilities on the one hand, and on the other we do not have within the UK people who can identify the entrepreneurial opportunities which scientific research can throw up?
  (Dr Winter) I do not know the answer to your question. I do not know whether we are looking at lots of people or whether there are very few. I think that one of the problems—and certainly as I was growing through this period—is that there is a tendency to straightjacket people. You are either a scientist or you are one of these people who mucks around in soap granules manufacturing at Procter and Gamble or wherever, in other words you are a dirty industrialist. You can be a proper scientist, or you can be involved in grubby money making and all that other kind of stuff. There are a number of people who said to me that if I really wanted to get involved in industry then why do I not go and join them? My view was that, being semi-intellectual, what right have they got to make these ethical judgments on me. Why should I not have my cake and eat it? Why should I not stay where I am and why should I not make a load of money and why should I not be involved in this kind of research which was very satisfying? There were patients who were cured. There were patients whose tumours you could see burning away. The thing that inspired me the most was not actually making the money. It is actually what you can do for the public good. When you see a little old lady who is on her death bed and you give her an antibody and you burn away a mass of tumour and then you find that she has another year or so of her life because of that (and has a chance to make peace with God and her grandchildren and her husband) then it is satisfying.

  568. Can I just clarify, for 15 years you were looking at the origin of life.
  (Dr Winter) And the universe and everything.

  569. And then when you became more commercial was that because it was a means to further new lines of research?
  (Dr Winter) I do not quite like the word commercial. Yes, I am commercial, but I see commercialisation as a way of getting things applied. In other words, you cannot get it in the market place, you cannot effect the cures you want to unless it is commercial. You can have a wonderful drug, but if no-one is going to buy it or it is too expensive you simply cannot take it forward. I would rather use the word application. I became interested as a result of my work with antibodies and realising that there was this work which I was doing which you say was a kind of curiosity—working out how molecules worked, trying to understand evolution—and I suddenly thought that here we are, perhaps we can be masters of these forces of nature and start creating new types of molecules which can be really very helpful. So that was very exciting.

  570. It was not an institutional pressure that you should be trying to be more commercial, more productive?
  (Dr Winter) It was not an institutional pressure. The institutional pressure was, if anything, do not get corrupted by it. It definitely was not trying to shove me down that line.

  571. It is very nice to see you again. Can I just start with the question of commercialisation or the exploitation of research in an institution like the LMB. Seeing it from Parliament's side, as it were, there is that whole area of: there should be a return to the research institute and the establishment itself. Which is, in a sense, trying to make sure that if there is substantial intellectual property there is a return to the institute, that helps it to do more research in the long run and that is a good thing for science. But there are two other potential motivations. The second would be that commercialisation means that the science itself can be exploited more effectively in the way you do it, the way you disclose your research can have an impact on how effectively it is exploited. It does not automatically follow that simply putting something up on a website means that it is going to be exploited effectively. Sometimes exclusive arrangements can make sure there is subsequent investment that then delivers a product. Thirdly—and this, I suppose, from this Committee's point of view, is the unique characteristic of what we look at—is how do we make sure that that turns into an industrial benefit for the United Kingdom? Perhaps you could just take me through quickly which of those motivations has been part of your thinking. I am sort of assuming number one must be because the MRC requires it.
  (Dr Winter) Sorry, number one was what, exactly?

  572. The return to the LMB itself. It is better funded and is able to do more in the long run as a consequence. The second is how you went about commercialisation. Was it really geared to maximising return, exploiting the science more effectively, or doing something for the UK?
  (Dr Winter) I am not really sure it was any of that. In the late 1980's the LMB did not really have a culture of commercialisation or of application. In fact at that stage we were debating on how to deal with the exploitation of the humanising patent. It was clearly going to be important; we had a lot of interest from pharma companies. So what was our priority? We decided our priority was to see it being used for the benefit of patients. We felt that as the Medical Research Council that was the most pressing priority. Nothing to do with UK industry, but taken forward for the benefit of patients. The second priority was that we realised that for this to happen you have to involve the inventor. You cannot just ride roughshod over him; he is going to be required for pushing this forward following through some of the intellectual property, he may have to continue doing some research in the area. So you have to respect the wishes of the inventor. The third thing, consistent with those two, we try to maximise our revenue. What we decided, therefore, for the humanising patent—the appropriate strategy given that this was a patent where we had already demonstrated utility, we had burned away a huge mass of tumour, there were companies falling over to use the technology—was to have a non-exclusive and wide licensing policy. That, in fact, has proved very successful. There are five antibodies on the market all done by different companies. The total return to the MRC on that patent has been about £31 million to date and we will probably—providing we can maintain the patent and defend it, et cetera—expect to see in the order of more that £10 million a year for the life time of the patent. I think that broadly that has been successful in getting it to the patients and also if you can cure patients then you will make money. So in the end I think the strategy was the right strategy. The UK angle is something which perhaps we had in the back of our minds, but it is quite difficult to simultaneously optimise four or five things. In the case of the Medical Research Council it had previously had a special relationship with Celltech and in fact in respect of the humanising patent there were certain exclusivities built in for Celltech and for GlaxoWellcome for products that they were particularly keen to take forward or areas they wanted to take forward. So we were able to build the UK angle into the picture.

  573. So in the first case there was a series of licensing arrangements, but in the second case it was effectively a spin out company. So you have clearly taken different routes.
  (Dr Winter) The first one, what we had was a fairly mature technology and people keen to use it, believing they could pick it up and use it straight away, then you can license it. In the case of the work with Cambridge Antibody Technology I had had the idea and had done the experiments which were really half the picture. It became quite clear that this was going to require quite a lot more work and that would require further investment. But if it worked then it would be very commercial. At that point I looked around to try to work out a way of being able to get further investment in and since there was not any further investment from the Medical Research Council at that time the only possibility was the private sector. In fact, I was able to find some money from an Australian company to set up Cambridge Antibody.

  574. And the return to the MRC was in the form of its equity stake. Presumably they also licensed the technology.
  (Dr Winter) Interestingly enough, the deal which we negotiated with the founders of Cambridge Antibody and the Australian investor were very advantageous because we had both an equity stake in Cambridge Antibody and we also get a cut of the royalties that they make. This has not been mirrored in some later agreements that the MRC have subsequently made with other venture capital organisations.

  575. And the relationship between you—or in other circumstances your colleagues—and the spin out companies, does the logic of your retaining the inventor's connection with the discovery imply that spin out companies should really be established in circumstances where the inventor is willing to become a part of that spin out company?
  (Dr Winter) With spin outs it is difficult to be too prescriptive. I think that you have to meet several conditions to have a spin out. A spin out is a huge effort. One of the boxes to tick is that you have an inventor who is prepared to be associated with it. That does not mean to say that you could not get it to work, if you had enough other ticks, by perhaps the inventor not being directly involved in it. For a spin out you need a significant portfolio of IP; you need to have a business plan; you need to have focussed management; you need to have finance; you need to have the inventor. There are probably more things as well that I have not thought of at the moment. But spin outs are not something that you spin out in an afternoon. It took a huge amount of my time, effort, endless calls to Australia and dealing with the Medical Research Council head office and also the Medical Research Council locally in order to try to spin this thing together. The reason I think the inventor is so important is that he is probably the only person who really understands what his invention can do. You can explain to money men, but they tend to think of it in terms of the market. The questions they always ask you are "What%age of the market are you going to take?" Frankly, if you have a new technology, you create a new market and that they do not understand. This is what happened in the case of the humanised antibodies, the market for therapeutic antibodies was pretty much zero in the mid 80's; we are now talking about a market of at least $2 billion per year and expanding rapidly (25% of all new products in clinical trials being antibodies).

  576. In exploring your research, what support did you get from the LMB? Were they enthusiastic and encouraged you or did you have battles with the establishment as such when you wanted to explore this research? Give us a flavour of what did happen.
  (Dr Winter) I think we are talking about the startup rather than the licensing, are we?

  577. Yes.
  (Dr Winter) In terms of the licensing of humanised antibodies there were differences of opinion on the strategy we should use. There was one view which said the whole thing should be given to Celltech to deal with, but I could not see the point of that since it was not clear what we would get back. It also was not clear whether Celltech could exploit such a wide technology, and there is not point in giving a company technology that it cannot exploit. It seemed to us that the wide licensing policy in that case was best and I think that was the predominant view that in the end prevailed. In the case of Cambridge Antibody Technology, I do not remember any specific battles about it. I have to say that I had the advantage at that stage in that there was no official technology transfer organisation so in a sense there was not a group of bureaucrats who might have interfered with the process. In general it was dealt with at a high level by very intelligent people who could see the strategic advantages of the kind of thing we are doing, and merely wanted to make sure that we could deal with issues of conflict of interest which obviously had the potential to become quite serious.

  578. You also said they received £31 million.
  (Dr Winter) So far, yes.

  579. Is that the only thing, or is there anything else that they received? What was the return for them aside the money? Was there anything else?
  (Dr Winter) In the case of the licensing deal where they got £31 million to date over a period of time, largely since the mid 90's, that has largely been the return that they had. That is the return directly to the Medical Research Council. As I said, there are some benefits to the UK—in the case of Celltech there is a product they are developing based on this technology—but the other advantages will have gone overseas to American companies. In the case of the startup, the benefits that we get so far from share sales we have about £10 million in the company. Next year, when we should get royalties on the first product made by this approach which is being put on the market by Abbot, there will presumably be between £5 million and £10 million a year coming in from one antibody. As others go onto the market they will also give money back. In terms of other things apart from money, I think there has been some advantage in having Cambridge Antibody close by. I am no longer associated with Cambridge Antibody, but I think that this provided a place where our postdocs could go after they had worked in the laboratory and it provided a natural contact with industry, people you felt could understand where we were coming from (because many of them had come from our laboratory).