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CETUS CORPORATION The Cetus proposition came in over the transom. Had it not been for Cliff Goldsmith's often-expressed interest in a high technology; rapidly evolving field of industriali activity, I would probably not have given it a second thought. Howeve r, we did look. I went out the re with Dr. 0 Wakeham and one of his associates and I have become very enthusiastic about it, though there's no doubt there is a high degree of entrepreneurial risk. I can express my enthusiasm by contrasting this situation with some of the very high technology industrial situations we talked~ about last fall. While the Seven-Up acquisition diverted us from the industrial companies we were considering before I had' to take a final stand on them, I was concerned by the competitive factors. For example, I was not altogether happy about putting a billion dollars into a Gould and then facing the competition of the General Electric Company. It seems to me, based on the reactions of Dr. Wakeham and~ our other scientists, that we have the opportunity in Cetus to back a team which is as good as any in the world in~ their chosen area, and possibly the be st.

-L One of the founde rs is Dr. Donald A. Glase r, who won the 1960 Nobel prize in physics and presently holids dual professorships in physics and ~ molecular biology at the University of California at Berkeley. Cetus has a Board of'Scientific Advisors, each one of which, we understand, has a significant equity stake in Cetus and for most of them Cetus represents their exclusive industrial involvement. This: board includes: Dr. Joshua Lederberg, who won the 1958 Nobel prize in medicine for his discoveries elucidating the mechanisms of genetic change in bacteria. Professor Arnold Demain of MIT, a microbiologist and expert in industrial fermentation. Professor David A. Hopwood, the British pioneer and acknowledged world leader in antibotic-producing organisms. Profe ssor Stanley N. Cohen os Stanford, who is described by Cetus as a; renowned leader in the field he pioneered, recombinant DNA. ,

-3- Dr. Saran Narang, who togethe r with a co-worke r who is now a Cetus employee,' holds the patent on the chemical te chnique s currently utilize d to rr, ake synthetic genes. Professor Stanley Falkow of the University of Washington, who is described by Cetus as a recognized authority on the molecular biology of plasmids, infectious diseases, and the plasmid- mediated resistance to antibiotics. Professor Henry Rapoport, Professor of Chemistry at the Unive rsity of California at Be rkele y, who is widely known for his skills in organic chemistry and biochemistry with special! emphasis on natural products. Special mention should also be made of Dr. David H. Gelfand, the 34-year-old Director of Recombinant Molecular Research at Cetus. Dr. Gelfand and his colleagues constructed the first plasmid DNA cloning vehicle permitting the expression; of foreign DNA sequences. He has also been the first to amplify by mutation the number of plasmid DNA molecules in a cell.

It is worth noting, I think, that two large and sophisticated companies are already investors: in Cetus. We know that one of them, Standard' Oil of Indiana, made a careful investigation of Cetus; and Standard, as you know, would still prefe r to control Cetus but Cetus would like to remain independent. That is why we have this opportunity. - That"s about all I have to say. Frankly, I have used some scientific te rnns to you that I really don't und'e r stand. That is why we have Dr. Wakeham here today to answer questions and to make a statement, at this time, if he would like to.