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Rocket Man
BUSINESSPERSON OF THE YEAR
New Haven native Jonathan Rothberg started CuraGen in his basement. Today it's worth $1.6 billion, thank you very much
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Business New Haven
1/24/2000
By: Michael C. Bingham
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It really has nothing to do with the money.
On the other hand, when your stock price skyrockets from 5 to 130 in a little more than half a year, that's pretty hard to ignore.
But Jonathan Rothberg tries his best. “I want to be proud some day that something we did at CuraGen got a child out of a hospital,” says the co-founder, chairman, president and CEO of the New Haven-based CuraGen Corp., a genomics company involved in the discovery and development of therapeutic and agricultural products.
So there. Still, it's hard to overlook the fact that a company which in the last 12 months has generated about $12.6 million in sales, $18 million in losses - and a $1.68 billion market capitalization.
To say that Wall Street is infatuated with CuraGen is to risk understatement. Last June, its stock was mired at 5. But the announcement of new strategic drug-development
collaborations with Abgenix and Biogen, as well as earlier partnerships with pharmaceutical giants such as Glaxo Wellcome, Hoffman-La Roche and Roche Vitamins, have buttressed investor confidence.
On January 12, the company announced two patents covering human protein interactions implicated in the division and proliferation of cancer cells. Following that announcement at the Hambrecht & Quist Health Care Conference in San Francisco, CuraGen's stock price went through the roof, reaching $130 on January 14.
What would a cancer “cure” be worth? No one really knows. But if anyone is on target to expose the genetic underpinnings of such complex diseases, it is the researchers at the nine-year-old CuraGen, whose 36-year-old maximum leader is Business New Haven's Businessperson of the Year.
It's really not about the money, says native New Havener Rothberg. “We started this company to make a difference.”
One wonders who among the Wall Street savants who have sent CuraGen into the financial stratosphere really understands exactly what its 300 employees in New Haven, Branford and Alachua, Fla. do.
That's fine, Jonathan Rothberg, Ph.D. will lay it all out for you.
“In genomics, there is no new physics,” he explains. “There is no new math. It is conceptually simple.”
Bear with him.
“CuraGen was founded, and funded, to make tools. These tools are designed to take the information from your genome, and turn it into products. And these products are…drugs.
“They are proteins, replacing the proteins in your body. They are human antibodies. And they are small molecules, no different from aspirin.”
So what is new? “What's new is how they're developed. They are developed with a basic understanding of what makes each of us individuals. The history of the pharmaceutical industry is based on new understandings leading to cures,” says Rothberg.
“The first was as simple as germ theory: the recognition that foreign invaders - things you couldn't see - caused disease. That recognition allowed organic chemists to make poisons against those germs, which gave us the pharmaceutical industry.”
“About 20 years ago there was a second revolution, based on recombinant DNA technology out of Stanford, and Genentech applying it to replace things that were missing in your body, these proteins that make up the physical part of you. DNA goes to RNA goes to protein, and protein is what determines everything from conception to death.
“The next breakthrough is the one CuraGen is involved in. That is a simple understanding that the majority of suffering that you see in people who are ill doesn't come from germs, and it's not because they're missing a protein, like insulin. It's the combination of what you're born with - which is the word 'genetic' - as well as the interaction with the environment.
“This is what creates the diseases we see every day: metabolic disorders like late-onset diabetes, all the cancers, autoimmune disorders, where your immune systems goes awry - like arthritis - and central nervous system disorders, like schizophrenia and depression [which account for] a huge percentage of health-care costs.
“All of these disorders [are caused by] the interaction of your genes with the environment. We now know it's the readout of the genome - genes going on and off - that determines the state of your well-being.
“It is a new conceptual breakthrough that allows us to attack these disorders at the root - for the first time in history.”
And in building tools to leverage this genome, CuraGen hopes to make history.
Jonathan Rothberg tries to keep a level head amid the madness surrounding him. After all, he really is a former teenage computer geek who started CuraGen in his basement.
And CuraGen is as much about computers as it is about genomics.
Rothberg likes to remind listeners that his company was formed “at the intersection of two revolutions: information technology and biotechnology.”
Rothberg notes that his two role models - Bill Gates and Intel founder Andy Grove - when asked what they would do if they were starting a company today, said it would be something involving both information technology and biology. “So we're at the right place at the right time,” he says.
“We made a company that was different from all others - where computers would be as important as biology. Only then can you attack these complex diseases.”
Why is that? “The reason we need all these computers and tools and automation is that if you want to understand complex disorders like cancer, you have to know all your genes,” he explains. “Then you have to understand which genes are 'on,' then you have to understand how those genes work, if they do. And then you have to understand how one person is different from another at birth. We all have 100,000 genes, but we have different versions of each of those genes.”
Today, CuraGen has the largest database of proprietary information on gene variations within humans. The plan for the company and its pharmaceutical partners is to use this information to create drug compounds that can attack complex disorders such as cancer or late-onset diabetes at their most fundamental level. Rothberg calls it “personalized” medicine.
The implications boggle the mind. If the last quarter of the 20th century was shaped by the computer revolution, many believe the entire 21st century will be marked by the triumph of technology and medicine over human frailty.
“The genes, gene variations, drug targets and the drugs we develop at genomics companies will be the basis of medicine for [the 21st] century,” says Rothberg. “Because in this century we have to conquer these complex genetic disorders, like cancer. And the basis for that is going to be understanding our genes.”
Of Wall Street's mad dash to own a piece of CuraGen, Rothberg will say only that, “People are realizing that the whole world is changing. That the basis of disease is these complex disorders.” And the likelihood that CuraGen will be first to map the genetic underpinnings of these disorders - and help to craft the drugs that will attack them at the most fundamental level - is driving the company's singular success.
But is a $1.6 billion valuation really sustainable for a company with 1999 revenues of only $10 million, and a balance sheet riddled with red ink from operations?
“It is sustainable because this industry is sustainable,” replies Rothberg. “The genes you get are real, and tangible. The drugs you get are real.”
Rothberg identifies four companies he believes will lead the way in genomics research and drug development into the new century: “Millennium [the company, not the 1,000-year period], Human Genome Sciences, Celera” and, of course, CuraGen.
The rest, Rothberg asserts, will fall by the wayside. “Those [companies] that don't have the critical mass, that don't have the deals now, will disappear,” he says. “We have the critical mass, we have the money in the bank, we have the sustainability, we have eight of the best partners in the world.
“ Just like Bill Gates was at the right time for software, Intel was at the right time for microprocessors, we are at the right time for genomics.”
And certainly the right place for Jonathan Rothberg. “I thank my lucky stars,” he says.
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