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Presentation to Operating Comsnittee R. J. Reynolds Industries, Inc. by Dr. Frederick Seitz August 8, 1979 I would like to begin the presentation with a brief discussion of the fac~ors affecting the,support of biomedical research in our country at the present time and with this give the reasons why it is reasonable, from a shareholder viewpoint, for a corporation to support such research on a highly selective basis with appropriate interdisciplinary groups in not-for-profit institutions. In the case of R. J. Reynolds it seems most reasonable that such support be directed toward increasing our understanding of a few of the most prevalent degenerative diseases about which there is controversy and lack of fundamental knowledge at the present_time. Such programs should be tied to biomedical education where feasible. Needless to say, one can hope that the acquisition of such knowledge will shed light on means for preventing, treating and, if possible, curing such diseases. The very rapid advances in medical science that have taken place in the industrial countries during this century leave us with little doubt that the well-being of humanity is intimately associated with those advances. Part of the gains have come from increased under- standing which has displaced much ancient folklore, part has come from our ability to prevent disease and part from the advances in therapy. It was my great good fortune to spend ten years as the head of an institution which has been one of the leaders in biomedical research in our own country during this century. As you know it is now called The Rockefeller University but was once called The Rockefeller Insti- tute for Medical Research. It is not only responsible for many major contributions to modern medical science but has played a critical role in the evolution of the modern American medical school. In fact, it was so successful in stimulating biomedical research throughout our country that there are now a number of excellent research centers, most of which are associated with medical schools. Until about 1950 almost all medical research with the possible exception of that important*for military needs was supported by private funds - either endowment or grants - or by state funds in some of the state supported medical schools.

-7- at all times or if there are more subtle side effects. We are now looking into the possibility of supporting a program of fundamental research into diabetes at the University of Pennsylvania. 6. Arthritis is another common-degenerative disease. It may occur- --in a somewhat oscillatory and merely annoying rheumatic form or in its worst case may cauge major inflamation of the joints. It -now seems fairly clear that arthritis is a consequence of a break- down in the immune system which protects us from foreign agents such as invading bacteria. In effect, the imcnune system begins to attack some of our own tissue as if it were foreign. Appar- ently the onset of arthritis does not have a great deal to do with the mode of life. While it is an important disease in the medical sense it probably does not merit inclusion in the special group to which R. J. Reynolds is devoting its attention unless a very special research opportunity comes to our attention. 7. There are many other forms of degenerative disease which, like arthritis, deserve a great deal of medical attention but are not of the type in which we feel inclined to take immediate interest. Included in this group are, for example, matters such as osteo- porosis in which the balance of uptake and loss of calcium by the bones is upset and the bones become very brittle. The technique for finding suitable programs is based on a variety of experience. As you can see some of our most valued programs were started as the result of studies carried out by the advisors to the consortium of tobacco companies nearly ten years ago. Others came to us through discussions with members of the medical profession stimulated in part by Mr. Stokes and Mr. Roemer as well as Mr. Edwin Jacob and Dr. Charles Sommers. Needless to say, your Advisory Committee regards this matter of search and review as a matter of major importance for the health of the future.

-2- About 1950 the National Institutes of Health in Bethesda, an organi- zation with a very long and varied history, obtained a new director, Dr. James A. Shannon, who was deeply interested in biomedical research as well as in its applications to medicine. He was instrumental in convincing Congress that it should make use of a long slumbering-item in its charter which would permit it to give grants to groups involved in biomedical research throughovt.the country or in special cases abroad.-yUp'to-that point the NIH was mainly involved in in-house research both within its institutes and within its research hospital and-.was also prepared to advise our government on matters of public health upon request. Shannon was so effective in dealing with Congress during the next fifteen years that the NIH grants program rose to nearly a billion dollars. This money was used both to provide new facilities and to stimulate biomedical research throughout the country. Toward the end of the 1960's those in government became so preoccupied with matters related to patient care that it began to turn its back on scientific research. Thus, by 1970 we entered into a period in which the federal -port of biomedical research began to decline. Moreover, the federal government began to establish ground rules which made it much more difficult to initiate distinctly new programs, not least those which involved imaginative new approaches to problems with the use of interdisciplinary groups. The 1970's saw only one significant exception to this policy of decline and restriction in connection with federal support. As you know, President Nixon succeeded in persuading Congress to launch a highly imaginative attack on the problem of cancer - a field of research which had received little attention up to that time. Starting in 1972 the National Cancer Institute received a special series of infusions of money which made it possible to expand the number of centers devoted to cancer research and to improve the facilities for treatment and patient care throughout the country. The new adminis- --*ion took little interest in this program so that it is now losing 6L:,"nd rapidly as far as the purchasing power of the funds provided is concerned. Moreover, the special emphasis previously given to basic research has also declined and become encumbered, as in other areas of medicine. I would like to emphasize that there is once again, as there was before 1950, great need for private funds which can be directed in a very selective way toward innovation in biomedical research in order to bring new ideas and techniques to the surface and to provide innovations an appropriate opportunity to mature. Other sources of funds will become available once distinctly new advances have been accepted. r

-6 Our most significant program on cardiovascular diseases with specific reference to high blood pressure is that carried out at the Harvard University Medical School under the joint supervision of Professor-A. C. Barger and Professor Edgar Haber. 4. LunL disorders. The lung is a very,complex organism. While its primary function is to remove oxygen from the air we breathe and permit it to diffuse into'the blood, it is both sensitive to and reacts with the state of other organs of the body. For example, ..-if heart action becomes weak as a result of the blocking of arteries of the heart or the destruction of heart tissue, the membrances in the lung wall may become moisture laden and block the normal diffusion of oxygen. Such blocking may also inhibit the migration of the defensive cells which inhabit the lung from diffusing from the blood stream into the lung cavity. Moreover, the lung being something in the nature of a filter may accumulate debris which can cause irritation or may prevent it from carrying out its primary function in an effective and efficient way. Wee have two quite exciting programs on lung research. That under Dr. Martin J. Cline at the University of California at Los Angeles was started by the consortium of tobacco companies. The other, at the University of California at San Diego under the leadership of Dr. Kenneth Moser, began to receive our support which will accelerate it substantially on July 1 of this year. 5. Adult Diabetes is one of the well-known degenerative diseases which, like most other such diseases, has a complex background. In most cases, as is well known, the disease is caused by the failure of the pancreas to produce insulin which is one of the very important hormones which regulates the way in which we utilize sugar. It is usually treated either by controlling the intake of sugar or by administering insulin in some form. In another form of the disease, the pancreas produces insulin but it fails to stimulate the way in which sugar is utilized. While diabetes is .nfluenced by genetics in many cases, its onset can also be affected by the mode of living. For example, obese individuals are much more susceptible to it than individuals who keep their weight under control. One of the as yet unexplained matters associated with adult diabetes is the fact that diabetics frequently display a faster onset of other degenerative diseases than normal individuals. It is not known whether this effect is related to the fact that diabetics never have complete control of their sugar metabolism

-S - other things we know that the oxygen in the air we breathe and which is essential for life plays a role in radiation-induced cancer. Generally speaking, research on the origins of cancer is made particularly complex by the fact that several important factors are involved in the vast majority of cases. .--As.-wes-noted in the material for the International Advisory Board Committee meeting last May, we have two very large and_compre- ...hensive programs related to cancer both of which have the requisite interdisciplinary character. The first is under the direction of Dr. Barry Pierce of the Medical School of the University of Colorado. The other has been supported by the consortium of tobacco companies at the Medical School of Washington University in St. Louis under the leadership of Dr. Paul E. Lacy. 2. Arteriosclerosis is another of the important degenerative diseases. In its most simple and prevalent form it is linked to the develop- ment of thickened areas in the blood vessels which obstruct blood flow and may induce blood clotting which can impede the flow of blood to the heart or lungs. Dr. Russell Ross and his colleagues are studying the origin of the changes which occur in the blood vessels. They believe that the primary causative factor is re- peated damage to a given area of the internal wall of the blood vessels. There are mechanisms for repairing such damage. Unfortunately the damaged areas may become the focus for the disposition of blood constituents such as cholesterol which build up and lead to a diseased state. Two of our programs on arteriosclerosis are supported at the Medical School of the University of Seattle under Dr. Russell Ross and the other here in Winston-Salem under the leadership of Dr. Thomas B. Clarkson who has developed a primate farm nearby for the study of stress-related diseases in primates with particular emphasis on arteriosclerosis. 3. HiRh Blood Pressure. There are other cardiovascular diseases among which high blood pressure is undoubtedly the most important. Blood pressure is controlled by the interaction of a complex set of hormones some of which originate in the kidney and others in the adrenal glands near the kidneys. While there have been great advances in the development of chemical agents to control high blood pressure in the past twenty years, there is still only the most primitive information concerning the factors which make high blood pressure so common in old age.

-4- 3. It will be recognized that distinctly new approaches to problems often require special physical facilities such as the refurbishing of existing space or the acquisition of new, often quite expen- sive equipment. Otherwise the support of building construction will be de-emphasized, preference being given to the support of interdisciplinary groups containing young investigators with fresh ideas. The laboratories which are now under the surveillance of the Advisory Committee are, in part, laboratories which came to the " attention of your Board before our Advisory Committee was esta- blished and in part laboratories whose programs were reviewed by our group in the last year or so prior to the beginning of funding. All except the older ones supported by the tobacco companies, or institutions in the Winston-Salem community such as Bowman Gray, fit into the pattern of the policies I have just described, although there are no major contradictions in these cases. Let me now describe some of the degenerative diseases including those which may be regarded to be most relevant to matters of corporate zterest. The following are six of the most significant common degenerative diseases. 1. Cancer. This takes many forms and is the result of the uncontrolled growth of cells which have previously been commited to specialized function but have begun to multiply indiscriminately. A cancer is said to be benign if this growth ceases, if not it is malignant. There are certain chemicals which can produce cancer with a very high probability, in some cases very rapidly. However, all evidence indicates that most cancer requires multiple effects whether mechanical, chemical, radiation, virus or whatever else. There also are genetic factors which enter into the disposition of the _ndividual. For example certain population groups are more sus- ceptible to skin cancer than others. Moreover, there is no doubt that we have significant built-in protective mechanisms against cancer which tend to lose their effectiveness with aging and which should be understood better. There is auch talk these days about the effects of the environment in causing cancer. This is often coupled with an attempt to lay much of the blame for cancer upon industrialization. While there ':- no doubt that certain industrial occupations carry special hazards, it seems quite fair to say that under the best circum- stances the natural environment is not carcinogen free. Among

-3- As you know, R. J. Reynolds has long been interested in aspects of basic research which have some bearing on the effects of tobacco use, partly as an issue in itself and partly to sift truth from fiction in an atmosphere where there are so many irrational attacks on the use of tobacco. I have visited some of the laboratories which have been supported for about a decade by R. J. Reynolds in cooperation with a group of'tobacco companies..and have found all working on relevant issues. I was particularly impressed with the work being carried out by.Dr.. Cline and his colleagues at the Medical School of the University of California at Los Angeles dealing with the defensive mechanisms within the lung and the group at The Medical School of Washington University in St. Louis under Dr. Paul E. Lacy studying the organisms in the body which help defend against cancer. Several years ago during my period as President.of The Rockefeller University, Mr. Sticht informed me of the Corporation's interest in supporting a somewhat broadened but still highly focused program dealing with innovative research in the degenerative diseases. As a result of those discussions the company has provided very valuable support for such work at the University. This has permitted us to institute several programs as well as make more effective use of existing facilities such as our new center devoted to the modelling of human pathology with the use of research animals. As mentioned in the pre- vious document, I have been working with your Board since that time through Mr. Stokes, Mr. Roemer and Mr. Bacon as head of a small advisory group consisting of Dr. Maclyn McCarty and Dr. James Shannon in addition to me. The main tasks and policies set before our group are the following: 1. To seek highly productive groups engaged in studies of relevant degenerative diseases which could benefit from a significant addition of private funds for a period of time of the order of five years. Particular emphasis will be placed upon cases where the additional funds will stimulate interdisciplinary activity under circumstances that would otherwise be well-nigh impossible under the present day pattern of federal support. 2. Since well-established groups are in a better position to obtain federal or institutional support, the commitments to individual interdisciplinary groups should be for a limited period of the order of five or six.years. Among other things this policy would prevent the freezing-in of the use of Reynold's funds by groups which no longer have unquestioned need for such special support.