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of Ronald E. Cape, Ph. D. ~.S President,-.Cetus Corporation, Berkeley, California il4kt-l. ri , Before the House Subcommittee on + rp;~~~ ;~aAl Science, Research and'Technology .March 30, 1977 K ,~ ry ~~ ~n(e•5.5~~~} K'i. ^rR ` ~`i~1, Y~. ~;The:prospect of extensive academic and industrial research in the field of ~4C recombinant DNA.has resulted in intensive public discussion. -This hearing is a significant.elernent in that discussion. It is iiowwWidely recognized that the .-profound nature'of the~technology raises equally profound questions as to its ~;best-possible applications, and indeed, the ultimate question as to whether,'in fact, there is to be any application at all. ,There is the further question regarding how, in fact, these decisions are going to be made - an important 'public policy.question.that is by no means confined to the field of recombinant DNA. ~,. In.briefly addressing this latter point, I should state'my belief that no one ;speaks.for U.S._industry on this point. Perhaps I might even go so far as to say:thank God no.one speaks for the industrial establishment.' There are differ- ; ing views, and although I would hope that most reasonable executives would agree withwhat Isay,:Ispeak only for our company, Cetus Corporation. -ir` ,.. ..._-._~~. -..:., ,. . ~ - ., .. .ac.;.... . i...._.uw ....u•a•._ ..._ Industrial'research has its risks and rewards,-just as does`academic research. It's not as romantic as academic research, and its risks and rewards are most frequently stated in financial terms. if we properly address a need, we'll make money -.if the need is genuine and large, we'll make a great deal of money. If we guess wrong, we lose. Those are the rules, and we assume that most Americans are content with them. : So_let me begin by stating that we welcome this public inquiry and involvement. We firmly believe that science is for the people, that in basic research, the assumption underlying governmental support is benefit to the people, not amuse- ment of scientists or some obsession with the search for truth as an inalienable rright.--:Society wants a return on its investment.' By the same token, we believe ~ ;3;.that the way our society is organized, implementation of discoveries, commercial- ization, if you will, is the assigned task of industry `:'~x iG1Pgl1Y'+~!~r ~::a"t7'~4.~-b}t.J~" But we must also recognize that we are an integral part of this society, and our responsibilities run deep. So it's not a question of profits,'no matter what, and it's certainly not a question of our strategy, no matter what. - . - ... *.~: --a -_._ . _ , r. .__ ~ ._... .. ... :~, ... :i~y, ...•... . .. ......5-. .,- - These are not idle platitudes. Let me cite two examples. First, as we all O. know, the NIH Guidelines presently lack clout with any institution, group, or C company not presently receiving NIH funds. Compliance with the guidelines will cost money - a lot of money and it has to be spent now. Most of the more appeal- N ing commercial applications of recombinant DNA technology won't be profitable ~j for many years to come. Yet it is true for us, and I hope for other companies, (~ that there is utterly no intention of undertaking any work at all in this field except in full compliance with those guidelines. `Our views in this connection are further documented in our recent correspondence with Senators Javits and Kennedy, submitted here for the printed record. Further, many of us feel,

0 s ~ ., 9 ;r y 1 .M,-~.. •i- `,~r . f . .. . .. .. . . . . ~, ,. , . . „ .... ..,_ t:,^. ~7~~ ~"~, apprehensive though we may be about bureaucracy, that federal legislation„yclosing ''that loophole is in the public.interest, and very much to be desired. However, would add that because I believe that there is no likelihood of hasty," appro- '"~4r~priate industrial activity,:that such federal' legislation should not be prgcipi- ~~~,~`.tate. We feel that full public'discussion should precede passage of any"act °~ 'We support the legislation proposed by the Interagency Committee last week : M . r. ,. , . , . The second observation regarding our public responsibilities concerns a popular ~~; , .. misconception about our plans,and we suppose, about the plans of others !~'We s';.,cannot, and we will not, make plans at the specific level, until the legislative ~ and regulatory.environment is clarified. •:We regard our possible avenues'of behavior as being very dependent upon what makes sense after the public .~. ~-cu.ssion has culminated, as we hope it will, in legislation which we will regard ~j,as a public conclusion. Then we hope it will be clear to us how to plan 'intelli ~, gently for the future .i t }* ~ 4 l~.~~,~~:tt„t~'It:'"~~';..,'t~?'~•'V'1•'_~'` ~ ~,. ~4ur ho e is that it will be a,very exciting future. :`The beneficial outcomes of ;.'this work fall into two categories: 1) fundamental understanding of processes •T of life and disease, and 2) facilitation of heretofore impossible products`and' 'processes.. I will dwell mainly on the latter. _ We are already making commit ? ~~ ments imthe hope that there will be many beneficial outcomes. '-Thisinvolves, building teams, ordering equipment, and discussing many possible applications: ,{ ~..~. -~~4yAs I.said before, if we are wrong, and the work never gets started or success- ~~ fully completed,. we will have.gambled and lost. But we will not gamble with `-f'4'* 0.aJ 'u issues of safety and prudence. '~ We are not yet doing work with recombinant DNA. But we hope to. _If it is accepted that in this field, as in other fields, the practical application is the role of industry, what sequence of events can we xlook to? (On the other hand, if we assume that fundamental research funding ;:~•;rpresumes some practical applications, but that industry is not to be the vehi- , J ; ~ cle, I have no alternative sug9esti=as to how this implementation is to be . handled. ) :.^.>~ _0Z parameters like EK2 and EK3 in the research context. 'Work must anticipate ~~ by years the ultimate need for production organisms which satisfy a rigorous `• Xjn .,. ;, set of standards. We can'tl tell today whether or not E. Coli will ultimately ;;; ,;--be acceptable, no matter how crippl'ed, and to this end work should begin +;~.. soon to examine and prepare alternative organisms for commercial use. ";I- fs want to stress that such a prograni, which we are actively considering, does '! r'not, at first, require the kind of recombinant DNA experiments which led to the guidelines. What we're talking about is a large amount of pedestrian ~ ~. .a „hard work in conventional microbial genetics. j {, ~ '~.iLr •Z•i .... ,.. ...:.7 t.`l...".. . ....... .. .... _. 1:,- .7. . .. ?5 _1 :•r"?.,.... .. . . ,. r,... .~ ... - ° 'i b) .,:.Economics. -The ultimate commercial application of this technology will :. ,.=.,j:,;,•require a great deal of developmental work after most of the intellectual Ef.t,~= excitement has 9one. By way of illustration, I believe that the demon- ,,,';,,stration of the production of human insulin in E. Coli in a test tube will :occur sooner than many think but that it will be many years and many mil- : ,lions of dollars more before we see a production plant which utilizes a' ~ V!1 A f e 1W

J apprehensive thoi~gh we may be about bureaucracy, that`federal legislation closing + `-that loopholeis'in'the~public interest,'amd very much to be desired. However,~ ~'I would add that~because~I believe that there as no'likelihood of hasty,-inappro~ ~priat indstiliy'"t such f eura actvit,thaederal'legislation should not be precipi- A\ tate. "''We feel that fu11 ublic discussion 'should •" ~ ' p precede passage of any avt ' We support the'~egislation proposed by the Interagency Committee last week 6 g , r a v ~• a _ ~The second obser`vation regarding our publicpnsibilitic plr resoes conerns aopua - misconception"about our'plans, and we suppose, about the plans of others.'~'We ' cannot, and we will not, plans at the specific level, until the legislative take ~,.- . and re u7ator environmen 9 Y is clarified Y4" We"regard our'possible avenues of ~~ behavior as being'very dependent upon"what"~makes sense after the public dis ',; ~;;cussion has culminated; as we hope it-will, ~in`legislation which we will regard as a public conclusion. ~` Then we hope it will be elear to us how to plan intelli-~ t 4F, ~ • cjeatly for the future ~` ~'~r~1 ~ ~r ~ c~a ~sfa :~ sx ss a { }~ w r~~~ ++ t 1.~: S, .,~~~ M~~~~~C:: .'$ a ~1~'.eXlu-~.#~S~.~ y .y Our hope is that`7it will be a very exciting" future. • The beneficial outcomes of this work fall 1rito two categor`ies-' ``1)-fundamental understandin of ~_..:. , g processes. "~of lif ad disae;?ad"2`oe Yenesn) facilitation"f heretofor impossible products and processes .Z"will-dwell inainly`on the latter-~We are already making commit=' ments in the hope that there will be many beneficial outcomes.'L This involves` building teams, orderinq equipment, and discussing many possible applications . As I said before, if we are wrong,.and the work never gets started or success- fully fully completed, we will have gambled and lost. But we will not gamble with :~ r r `'' isss offt andi ` We are ue saey prudencee yet dong work with recombinant DNA. not =But'we-hope'to 'it`'i•s 'accepted that in this field, as in other fields, the ='practical application'is'the role of industry, what sequence of events can we look to? `(On the other hand, if we assume that fundamental research funding "'presuines some practical applications,- but that industry is not to be the vehi- ~cle,'I have no alternative suggestion as to how this implementation is to be r handled. Z ;''First,'`-it`is important to stage any proposed sequence of activity with several thoughts ln"mind ~8A cc..j* rt~.-"z; t~l) c3 +saErr p.. ` a) ,j'Safety. " Looking"ahead totany commercial application of recombinantDNA technology,e'must be aware that production organisms must be deemedfe `? sa ~under criteriaaiialogous"to•those now applied to the biological containment parameters like EK2 and EK3. in the research context. Work must anticipate - _by years the ultimate need for production organisms which satisfy a rigorous ~i set of standardsr-'We can't tell today whether or not E.-Coli will ultimately 'be acceptable, no matter how crippled, and to this end work should begin ~e'soon to examine and prepare alternative organisms for commercial use I '~ . iaant to stress that such a program,'which we are actively considering, does •'YY'2' 4~` .not, at first, require the kind of recombinant.DNA experiments which led to '•;"'the guidelines What we're talking about is a large amount ofdti . peesran ;' hard work in conventional microbial genetics. "7 Economics.'" The ultimate commercial application of this technology will ="require a great deal of developmental work after most of the intellectual -~ excitement has gone. By way of illustration, I believe that the demon- stration of the production of human insulin in E. Coli in a test"tube will occur sooner than many think but that it will be many years and many mil- lions of dollars more before we see a production plant which utilizes a

.. < _ _. . . • ~ ~ ..... . . that compliance with the NIH guidelines constitutes publication, which act of -Ii~7publication precludes ever receiving`patent protection. As a separate subject, is deemed to be in the public interest to grant accelerated treatment to ~a~patent'applications so that whatever secrets are contained in these applirations ~~could be made~public asYquickly as possible, that's fine. But we,do not agree ~;withs ofccltdttsiidt tot :,any ue aeerae paen procesng as annucemeno anyne.o "cs'eun s omply with any regulationor guidlines. I'll repeat - sch compliacehould be the subject of legzslation, and we support the Interagency Committee's sug- x..}~/~~.. l1y^ • a#. estions ir , 7~~ti4u!liSq~~?~5~;t x ~? 2!"'"6 J`..+.[ 0,,.We have other.views on patents in,this.field, generally,`which are summarized in ' 1k:. .. ~t,,a_letter to Dr. Fredrickson, Director of NIH, dated September,28, 1976, and submitted here for inclusion in the printed hearl = nq record I don't wish to take up the subcommittee's time reciting again the litany of benefits and risks attendant on work.in this field. The December 1976 Supple- ~ta.'~mental Report II prepared for this committee deals fully with these issues._,_,I ~would like to make several brief points, however, and hereby submit for;inclu- sion in the printed record the recent article from the February 18, 1977f;issue :of Science, by Professor Stanley N. Cohen of Stanford University, entitled 11 " f~r Recombinant DNA: Fact and Fiction }Wh~. I ~ +4-i~1j~a;-~ cT i S';.~.rF5,`ZiFr.7 ~3T.,j r31iA a T w y7?,bw'i :t 1'1tAr,{t e $s ~~~". ~ ,,M brief points are. yY . r . .,. . -- y .,.- t,44 .. S1 ~~.'.t: S'.^...f+.i:.JYrr;3 .4,,1. -3 r , The assessment of unknown risks compared to unknown benefits cannot be made -. ' tby debate - methodologies must be developed to evaluate both experimentally. ~ n~,The categorization of risks and the absolute prohibition of certain experi- '~~tdthitf bilildhiltit ll mens an'e assgnmen ooogca an'PYsca conanmeneves :: .-:;;A,,-deemed appropriate to various kinds of experiments are wise. Let's be sure, ~sr. rhowever, to regard the process as one of genuine feedback. The guidelines .:.are today's perception of where prudence lies. Many experiments should be designed, and the results of these experiments should be used, to consider e.changes in the guidelines, in either direction, as the facts dictate. •Who ,t,.is to make the determinations, and with what balanced input remains to be ,established. Hopefully the Secretary of HEW will have an appropriate basis for such determinations down the road.:sOur views regarding some occupa- fi~:~~+~.~ tional health and safety considerations are included in correspondence with John F. Finklea, Director of the National Institute for Occupational ~~ 4 i? . JSafety and Health, attached herewith for the printed record z. e :r:,~ r!.?.~ ~'.'~s< ;C~- t~~;'Let's not mix apples and oranges Let's not rush recklessly 'ahead, but et's not, on the other hand, fail to move forward because of a fear that ~' -y.we are opening a Pandora's box, or that no real need exists and that this ~,t;~,work is not worthy of a high priority in this society. We have confidence Qsit;aj.;:;that this society can handle its alternatives and deal with its responsi- .:.y.y.:.,:xbilities as they arise. Moving genes from one bacterium to another is no more related to diabolical genetic manipulation of human beings than is the ~ breeding of cattle or corn. Let's by all means prohibit the diabolical, or ftJ .i:.~r anything that leads to it, but let's not make recombinant DNA research, or ~: u.~ci_U.S. industry, a whipping boy for social problems that have nothing to do lc:. :with this very important question of science policy, which this subcommit- ; ~tee is very properly examining here today. +.e... as.'.~.. ~~~C1.t ry.~.~~i~ ... .~ .~.• ,. ...1.. { y.`-' d i ..C x~...... ~t~ . . S. .~.s Y 's•..a . ... . . . ' .. :~ ..~-'.. ,.~:r..1 :~..~~~' "."...._~• ...~.,...._.... i..~..~ a ~3+. n.. . . 4 ... ..:'+'...i . .. . . ~.:-~: -~