The $2 billion error

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Fascinating story from the early days of biotech: How three errors in a 166 amino acid protein sequence ended up being the deciding factor in a showdown between two companies who both wanted to patent the genes behind the protein that triggers red blood cell formation.

I have some big problems with patenting of naturally occurring human genes, but that issue aside, this a great tale of corporate espionage gone wrong. The setting: It's 1981, and the biotech company Amgen is trying to sequence the protein erythopoietin—or Epo—so they can use that data to work backwards and find the DNA in the actual human genome that coded for it.

And here is where it gets interesting. Rodney Hewick, one of the co-inventors of the protein sequencing machine, was one of the people who carried out the sequence analysis. After sequencing Epo, Hewick abruptly quit on Sep. 1st 1981, only to immediately join a Boston biotech, Genetics Institute, as a senior protein chemist. He arrived at the new company bearing gifts, and the gift was the sequence of Epo.

But Rodney Hewick made exactly 3 errors out of 166 amino acids in the protein sequence of Epo. And he didn't even know it. After 3 year of failure, Genetics Institute finally realized that their protein sequence was wrong. They purified their own Epo, sequenced it again, and finally found the full gene for Epo. They submitted the article to Nature on Dec 7, 1984.

But by then it was too late. Fu-Kuen Lin, who had joined Amgen as their 7th scientist in 1981, had single-handedly identified Epo in the human genome using Goldwasser's protein. More important than getting a Nature paper, he had filed a patent for Amgen in Dec 13. 1983, a good year before Genetics Institute's Nature article. In the world of big pharma, it is the patent that matters. Amgen got FDA approval in on June 1 in 1989. EPO was Amgen's blockbuster drug, which attracted 460 million dollars from the government in the first year. It is now worth 2 billion dollars of income, and almost half of Amgen's income in 2002.

Amgen became a biotech behemoth, whereas Genetics Institute eventually got bought out by Wyeth.

Read the full story, via Daniel MacArthur.

Image of red blood cell models at the Museum of Science and Industry in Chicago, courtesy Flickr user rpongsaj, via CC