City of Hope Names New CEO

Ninety years ago, Jewish trade unionists erected two tents on barren land in Duarte, creating a refuge for tuberculosis patients denied treatment because of anti-Semitism.

The makeshift sanatorium, funded by countless small donations, evolved into City of Hope National Medical Center, a world-famous research hospital and the nation’s third-largest cancer center. But recently, it has had financial troubles, including a $32-million operating deficit last year.

On Thursday, the hospital appointed a new chief executive, Dr. Michael A. Friedman. A scientist and former high-ranking drug research executive of Pharmacia Corp., Friedman, 59, deflected questions about the institution’s finances and talked in broad strokes about his plans to focus its cancer research. Friedman said he wants to leverage City of Hope’s expertise in bone marrow transplants, which involve the transfer of blood stem cells, to deepen its presence in stem cell biology.

“Every member of this staff, from the grounds men to the scientists, is dedicated and very serious about finding better treatments and easing pain,” he said.

Although the nonprofit hospital is a recognized leader in bone marrow transplants, its recent research has generated few breakthroughs. Its greatest achievement -- the discovery of synthetic insulin -- came 25 years ago.

Its 2002 operating deficit widened 12% from 2001. Last year, the hospital won a $500-million court judgment in a royalty dispute over two dozen biotech drugs made using City of Hope technology. But an appeal by adversary Genentech Inc. means it will be years before City of Hope learns whether it has access to the money.

Friedman is only the second outsider to lead City of Hope since its founding in 1913. His predecessors mostly came from the ranks of fund-raising volunteers and include a rabbi who once spent time in jail with Martin Luther King Jr. and a former shoe company executive who ran afoul of the Securities and Exchange Commission.

This time, the board of directors -- which has jealously guarded and frequently fought over City of Hope like a precious family jewel -- decided against tapping one of its own to head the institution with a $391-million annual budget and 2,500 employees. Chairman Jack R. Suzar, a Los Angeles investor, said the board realized it needed an executive with a background in science and medicine to fulfill an ambitious vision: discovery, development and commercialization of cancer drugs.

“We needed someone who could integrate science and medicine and bring treatments to the patients as soon as possible,” Suzar said.

The hospital depends on charity to cover its often staggering losses for patient care. A flood of donations, from million-dollar corporate gifts to proceeds from knitting marathons, has kept its cash position relatively secure.

Friedman has had a varied career. Before Pharmacia, he put in stints at the National Cancer Institute and later the Food and Drug Administration, rising to acting commissioner during the Clinton administration. He is a self-described pragmatist who can manage the conflicting agendas of industry and government.

City of Hope has never strayed far from its roots. In the cost-driven era of modern medicine, it says it has never sent a patient a demand for payment, though it has sued insurers to collect.

It stands out as an anomaly because it is a research center with no university affiliation. But it has a new FDA-approved drug factory where it produces experimental medications for otherwise untreatable diseases.

Last year, City of Hope, which has a 153-bed cancer hospital, received about $30 million in National Institutes of Health research grants, far behind the $168 million that went to Seattle rival Fred Hutchinson Cancer Research Center, the birthplace of bone marrow transplants.

“It is time for us to take the next big step,” Suzar said.