S.D. Firm and Liver Surgeon Locked in Fight

In the turbulent aftermath of the world’s first pig-to-human liver transplant, the surgeon, Dr. Leonard Makowka, is embroiled in a dispute with a San Diego biotechnology company that claims him as a vice president, along with exclusive rights to market any innovations emerging from Makowka’s pig liver research at Cedars-Sinai Medical Center.

Xenogenex Inc. announced its association with Makowka and Cedars-Sinai as it prepares for a $7-million to $10-million public offering of stock, capitalizing on the publicity stirred by Makowka’s efforts Oct. 11 to save a woman dying of liver failure.

The patient, 26-year-old Susan Fowler of Burbank, died 30 hours after the historic transplant as surgeons were preparing to replace the pig liver with a human donor organ.

Among Xenogenex’s assertions are that Makowka is vice president of the company’s research division--an assertion Makowka denied in an interview Wednesday.

He accused the company of trying to “ride our coattails” to advance its business interests.

Makowka and Cedars-Sinai officials, however, acknowledged the existence of a contract with Xenogenex in which the company--under former ownership and a different name--pledged to invest $500,000 in Cedars-Sinai’s multimillion-dollar transplant research program, which Makowka directs. In return, the company owns the rights to commercialize any patents arising from Makowka’s work on genetically improved pig organs for transplant, and on a type of liver dialysis machine that uses pig cells to cleanse the blood and metabolize toxins.

Under the contract, a copy of which was obtained by The Times, Cedars-Sinai would share in any profits that resulted from those patents.

The disclosures come as debate intensifies among bioethicists about the use of animal organs in humans, and possible conflicts of interest among medical centers seeking preeminence in the burgeoning field of transplant medicine.

At the center of their concerns is the possibility that potential profits from biomedical advances could outweigh humanitarian considerations in deciding whether to proceed with an experimental procedure such as the pig liver transplant.

“The expectation about medicine is that your motivation is to help others, not make money,” said Arthur Caplan, director of the Center for Biomedical Ethics at the University of Minnesota. He described the relationship between Cedars-Sinai and Makowka with Xenogenex as “deeply troubling.”

Caplan added, however, that it is not unusual. The involvement of profit-oriented investors in biomedical research has become commonplace at universities and medical centers in the face of diminishing government research money.

“Issues arising from conflict of interest problems are popping up like mushrooms all over the country,” Caplan said. “Cedars-Sinai and Dr. Makowka are hardly alone in having people question (these) . . . fiscal interests.”

Makowka rejected all suggestions that the contractual relationship, and potential profits from his research, influenced him in the Fowler case.

“What we did with Susan Fowler had absolutely nothing to do with any outside relationship,” Makowka said. “That Saturday night we felt we would do anything in our means to give her the best chance” for a human liver transplant.

The contract with Xenogenex was not disclosed publicly by Cedars-Sinai at the time of the transplant, nor was Fowler’s family informed. Hospital officials said the relationship played no role in the medical decision to undertake the pig liver transplant.

They drew a sharp distinction between the pig liver used in Fowler and the genetically altered strain being developed with Xenogenex’s money. Producing such a genetically altered pig, if it is possible, is at least five years away, hospital spokesman Ronald Wise said. Theoretically, it would produce organs whose functions more closely resemble human livers, hearts, lungs and kidneys.

“This was not a genetically altered pig liver,” Dr. James R. Klinenberg, Cedars-Sinai’s senior vice president for research, said of last week’s transplant. “This was a garden variety pig,” and totally outside the business relationship with Xenogenex.

Nevertheless, the hospital was caught unawares when Xenogenex began issuing press releases within days of Fowler’s death, touting the company’s association with the landmark pig liver transplant.

The company’s actions prompted Cedars-Sinai lawyers to scramble to review the contract language, searching for a means to curtail the company’s public statements. “We are reassessing our relationship with this company,” Wise said late Wednesday.

The contract prohibits the company from using Cedars-Sinai’s name in self-promotions, although Makowka is not similarly protected. Xenogenex, nevertheless, was able to clearly link itself to the medical center, even though it did not use Cedars-Sinai’s name.

In a statement dated Oct. 15, the company listed Makowka as its “vice president of medical research,” and identified him as leader of “the medical team which recently performed the world’s first xenograft of a pig liver into a human.” Xenogenex, the statement continued, had also “signed a contract to fund a project in xenogenetic (cross-species) transplant research with a major West Coast medical center in Los Angeles, California, with which Dr. Makowka is associated.”

Asked about the releases, Xenogenex’s president, Edward F. Myers, said he was fulfilling his “obligation to keep our shareholders informed,” and to provide relevant information to potential investors.

Myers stuck to his assertion that Makowka is his vice president for research. “That’s what we said in the press release and that is true.” But he was unable to supply any documentary evidence of Makowka’s appointment and acceptance of the position.

Myers also declined to identify other officers or investors in the company.

Added to the confusing swirl of charges and denials is the fact that as late as Tuesday, key hospital officials said they had no idea who Myers is, and were unaware of the company’s new ownership.

Klinenberg, the hospital’s senior vice president for research, said the contract was with a small philanthropic entity formed by two grateful Cedars-Sinai transplant patients who wanted to contribute to the research effort that had given them a second chance at life.

“We looked upon this as a grant,” Klinenberg said. “To my knowledge--and I sign these (contracts)--we didn’t agree to do anything except continue our good research.”

At the time, the company’s name was Ascot Close Research Institute Ltd., formed July 30, 1991, according to documents filed with the Securities and Exchange Commission.

On Sept. 11, 1991, the company signed the research contract with Cedars-Sinai. Nine days later, the founders of Ascot Close sold the company to EXTEN Industries Inc. of San Diego, a merchant banking and venture capital concern of which Myers is chairman. EXTEN’s stock closed Wednesday at 41 cents a share, up 3 cents, in light trading on the Philadelphia Stock Exchange.

Ascot’s owners received 1 million common shares and 750 preferred shares of EXTEN stock for their company, whose most valuable asset is the contract with Cedars-Sinai and Makowka’s research group.

Even as Cedars-Sinai lawyers were drafting what hospital officials described as a strong warning to Xenogenex and its parent company, EXTEN, to refrain from unauthorized public statements, hospital officials repeated that the relationship and contract had no influence on the decision to give Fowler a pig’s liver.

Dr. M. Michael Shabot, chairman of the federally mandated hospital committee that supervises human experimentation--the Institutional Review Board--said he knew nothing of the research contract with Xenogenex when he approved the historic procedure. The full board did not have time to meet in Fowler’s case, he said, because her condition was deteriorating so rapidly.

Instead, Shabot said he authorized Makowka to go ahead with the pig liver transplant in a telephone conference at 1:30 a.m. Sunday. The surgery began at 4 a.m.