Corrections or additions?
This article by Barbara Fox was prepared for the June 4, 2003 edition of U.S. 1 Newspaper. All rights reserved.
SARS in Princeton: Prevention & Possible Cures
Just when we might think the SARS news has dwindled,
this mysterious disease infects the headlines again. Not just one,
but two or three SARS stories are in the national news every day.
The World Health Organization reports more than 8,360 cases of SARS,
and though more than half of those patients have recovered, 764 people
worldwide had died of the disease as of May 31. On Monday, June 2,
eight new cases were reported in Asia (four each in Taiwan and Hong
Kong) and 5,200 people were finishing a 10-day quarantine in Toronto,
where the death toll is up to 32.
Most cases of Severe Acute Respiratory Syndrome (SARS) seem to be
reported by people who have had direct close contact with an infected
person, such as those sharing a household with a SARS patient and
those who work in hospitals. But a general and pervading anxiety remains.
A newly recognized coronavirus seems responsible for SARS. To defend
against it, one uses the same strategy as for any infection —
keep hands clean. Apparently SARS can be spread when an infected person
sneezes, coughs, or spits, and another person comes in contact with
the wet skin or object — then touches his own eyes, nose, and
mouth. According to the Center for Disease Control, SARS usually begins
with a fever over 100.4 degrees, plus headache, an overall feeling
of discomfort, and body aches. Some people also experience mild respiratory
symptoms, and within a week SARS patients may develop a dry cough
and have trouble breathing.
The anxiety of SARS is not going away, and until scientists figure
out the cause and how to deal with it, Severe Acute Respiratory Syndrome
— and its companion worry, biotech terrorism — could adversely
affect business expansion around the world. The Beijing desk of the
Wall Street Journal reports, for instance, that SARS forced Motorola
to shut its headquarters for a week, Matsushita to close a 5,600-worker
plant for at least 10 days, and Honda to delay its new model in China
for one or two months. "Many companies are discovering that low
cost doesn’t equal low risk," says the Journal.
SARS is not yet a big threat in the United States, where no one has
died of the disease. Of the four reported cases in New Jersey, just
one has been definitely identified as SARS. Pennsylvania has 16 cases,
with one proven case, and New York has 39 cases with 9 definites.
But experts who testified before Congress predicted that if global
authorities don’t tame this virus by September’s flu season, it could
run rampant in the United States and Europe. (The day-by-day update
of SARS cases is available at www.who.int/csr/sars/country/.
The Center for Disease Control has statistics and information at www.cdc.gov/ncidod/sars/).
Even though the disease may seem remote, companies in Princeton have
also been affected by SARS. Some are merely retreating, such as by
postponing trips. Others — including Derma Sciences, Medarex,
and i-Stat — are stepping into the breach to help.
Don Your Masks
Given lemons, Edward J. Quilty has been busy making
lemonade. His company, Derma Sciences at 214 Carnegie Center, recently
bought a Toronto-based manufacturer and distributor of medical products,
Dumex, and that subsidiary’s surgical masks are now a very hot item.
"Our suppliers have been told to make nothing but masks,"
says Quilty. "There is a great demand for masks, and we have been
discussing what orders will be late. Hand sanitizer — an alcohol
based product, Mysotrol — is another of our products in great
All of the Toronto subsidiary’s wound dressings, sponges, and masks
are made and packaged in China, source of the SARS problem, but when
they get to North America they are sterilized, using either a steam
sterilizer or radiation. "We have thought about building a steam
sterilizer in China, like the one in Toronto," says Quilty, "but
it would cost $700,000 to $800,000."
The Dumex brand currently enjoys 50 percent of the market share in
Canada, says Quilty. Since he bought the company at the end of last
year, Quilty has been making aggressive plans to enter the U.S. market.
"We’re just introducing in the U.S. now. The dollar is great.
We’re competitive," he says, noting that the Medical Center of
Princeton has bought his line of basic wound care. "They are in
the process of switching them out now."
Dermagran, for advanced wound care, is the company’s flagship product.
It was patented by Mary Clark, the founder of Derma Sciences, and
contains lanolin, zinc, and vitamins; it can be used for anything
from skin care to stage 2 ulcers.
In 1998 DermaSciences bought a Minnesota firm, Genetic Wound Care
Laboratories, which makes wound closure strips and adhesive devices
for holding catheters in place. It also bought a line of Sunshine
skin care products in St. Louis and opened an E-commerce site (www.ewoundcare.com).
Now it has wound and skin care products from gauze to advanced treatments,
burn dressings and dressings for diabetic ulcers, plus ointments and
shampoos and lotions for nursing homes. Including workers in Toronto,
Minnesota, St. Louis, and China, Derma Sciences has 153 employees,
and 12 of those are at the Carnegie Center.
DermaSciences is not Quilty’s first experience with surgical products.
A Yonkers native with an undergraduate degree from Southern Missouri
University and an MBA from Ohio University, Quilty worked at Baxter,
a large diversified health products company, and at an infusion therapy
company called McGaw before coming to Princeton to oversee the IPO
of Life Medical Sciences in 1992. Then he joined MedChem and brought
along a wound-care product called SureClosure from Life Medical, and
he promptly sold the company to CR Bard. Quilty then branched out
into Palatin Technologies (formerly Rhomed) and Derma Sciences. He
divested himself of Palatin in June, 2000.
Even though the company is trading only over the counter (DSCI), Quilty
says has big plans. "We bought companies worth $9 million, and
Derma Sciences is about $20 million now. We expect to be a $100 million
company in three or four years."
Suite 100, Princeton 08540. Edward J. Quilty, CEO. 609-514-4744; fax,
609-514-0502. Home page: www.dermasciences.com
Medarex Mice Make
Maybe the mice will help. Medarex, which uses genetically
engineered mice and other patented technology to develop antibody
treatments for cancer and other illnesses, has begun working on a
SARS treatment, trying to grow an antibody for the coronavirus that
has been found in patients with SARS. Medarex is splitting the costs,
the work, and all eventual revenues from the SARS treatment with a
research agency at the University of Massachusetts.
In April Medarex joined with Massachusetts Biologic Laboratories (MBL),
the only non-profit FDA-licensed manufacturer of vaccines and other
biologic products in the United States, to co-develop fully human
antibodies generated by Medarex’s UltiMAb technology to SARS. "We
wanted a partner that was expert in infectious diseases, and MBL had
both the expertise and the special facilities to deal with the virus,"
says Donald Drakeman, founder and CEO in a telephone interview.
"A collaborative effort using appropriate technologies and experience
will be necessary to successfully respond to this urgent public health
need," says Donna Ambrosino, MBL director and professor of pediatrics
at the University of Massachusetts Medical School. "MBL is well
suited to address the critical need for an effective SARS agent, as
we are experienced at developing and manufacturing monoclonal antibodies
for clinical use."
"Our contribution is not people but mice," says Drakeman.
"We will ship from 5 to 20 mice to MBL and they will create the
antibodies in our mice."
"To create an antibody, we immunize the mouse and the mouse’s
immune system creates the antibody. We take the antibody producing
cells and from those isolate the cell that makes the antibody we have
chosen as the best one. The antibody would be used as a treatment,"
It will take several months for MBL to identify an antibody to test
and study, says Drakeman. "Then it needs to go through preclinical
and animal testing, and the time before it gets to be used on people
will be measured in years."
The announcement of the MBL collaboration spiked a sharp increase
in trading volume of company stock on Nasdaq, and the price has risen
from $3 in March to around $6.75.
Founded in 1987, Medarex is based on State Road, has laboratories
in Annandale, and had revenues of $39.5 million last year. It uses
its genetically engineered mice to find and develop therapies for
life-threatening and debilitating diseases. With the UltiMAb Human
Antibody Development System, which has a unique combination of human
antibody technologies, Medarex is currently working on treatments
for cancer, inflammation, autoimmune, and infectious diseases.
In the area of anti-terror medicine, Medarex announced on May 28 that
it successfully completed pre-clinical studies of its fully human
antibody against anthrax. The antibody protected rabbits that were
exposed to lethal doses of anthrax spores by inhalation, and the unprotected
rabbits died within days of exposure. Inhalation anthrax is the most
lethal form of illness in humans caused by the Bacillus anthracis
bacterium. The study, done under an R&D agreement with Dartmouth Medical
School and the Maryland-based U.S. Army Medical Research Institute
of Infectious Diseases, was conducted at a separate, specially equipped
What about competition in the SARS endeavor? "I have not seen
any antibody companies talking about it," says Drakeman. "Obviously
any number of companies that work on viruses are hoping that something
in their freezers will work."
08540. Donald L. Drakeman, CEO. 609-430-2880; fax, 609-430-2850. Home
Before the outbreak of SARS, China was already i-Stat’s
fastest growing international market for hand-held point-of-care diagnostic
systems. Because of the SARS outbreak, i-Stat has increased its quarterly
manufacturing output by 40 percent, says CEO William P. Moffitt. With
115 workers on Windsor Center Drive, the company is filling an emergency
order for 395 portable clinical analyzers. These devices will help
monitor critical pulmonary function changes in ICU patients who may
be progressing to acute respiratory failure.
Founded in 1984 and traded on NASDAQ as STAT, the company used advanced
semiconductor manufacturing technology, established principles of
electrochemistry, and state-of-the-art computer electronics to develop
the world’s first hand-held automated blood analyzer capable of performing
a panel of commonly ordered blood tests in just two minutes.
Roughly the size of a portable phone, the analyzer uses disposable
test cartridges that perform the tests on two or three drops of blood
at the patient’s bedside. The 13 different cartridges perform between
one and eight different blood tests on the same sample. Frequent and
rapid blood gas analysis is critical in monitoring SARS patients in
pulmonary distress, many of whom need mechanical ventilation.
Each device costs about $5,000, and the single use disposable cartridges
that complete the system cost from $2.50 to $8, depending on the number
of tests that the cartridge can run. Generally the company ships about
1,000 of the devices per quarter, says Jeff Randall, the chief financial
officer, in a telephone interview. "So 350 additional systems
was a significant order."
If all the parts are available, assembling the devices requires several
weeks. The cartridges are made in Kanata, a suburb of Ottawa known
as the Silicon Valley of Canada, and are shipped to Windsor Center
Drive for worldwide distribution to hospitals. I-Stat has been doing
business in China for six years.
Major pharmaceutical firms, such as Bayer and Roche, offer bigger
units that are located further from the patient, perhaps at a nurses’
station. Randall cites the obvious bedside-use advantage and points
out that the larger units require more training than i-Stat’s. "Our
unit is quite easy to use and very intuitive — even easier than
a personal computer," says Randall. The only other company with
a hand-held bedside unit is Minneapolis-based Diametrix (DMED). Randall
says his device has the advantage of requiring less blood, which is
particularly important for neonatal intensive care where the patient
weighs only a couple of pounds.
Randall estimates his firm has delivered about 30,000 analyzers over
the last 10 years and last year worldwide sales of single cartridges
were $12.6 million, which amounted to 70 percent of revenues. He is
leery of claiming market share, but he does refer to an Economics
Associates study: "It seemed to indicate that in at least one
area, blood gas and electrolytes, that we had somewhat over 50 percent
market share, and our closest competitor had an eight percent market
share. We are generally perceived to be the leader in this particular
At the end of this year i-Stat will end the five-year distribution
arrangement it has had with Abbott Laboratories and launch its own
marketing and sales network. "We have been hiring salespeople,
mostly near where the hospitals are, and are hiring a few marketing
people," says Randall.
The company’s latest product — a test for Troponin I, a cardiac
marker to determine if someone has had a cardiac infarction or heart
attack — has completed clinical trials. "Soon we hope to submit
the 510k to the FDA application for permission to market it,"
says Randall. This test should be run and read within 30 minutes after
a patient with chest pain comes to an emergency room, according to
American College of Cardiologist guidelines. "Several other tests
would also be given, and the results combined, but the initial test
can be very helpful in letting the cardiologist know what should be
done right away."
"Overall, our system provides the clinicians with the answers
to their diagnostic questions in two or three minutes, compared to
40 to 60 minutes when similar tests are done in the central laboratory,"
says Randall. "Our challenge is to see point of care testing continue
to grow as opposed to central laboratory testing."
East Windsor 08520. William P. Moffitt, president and CEO. 609-443-9300;
fax, 609-443-9310. Home page: www.i-stat.com
Many business schools canceled trips planned for the
spring semester, not only to Asia because of SARS fears, but also
to other parts of the world because of the war in Iraq. The cancellations
were made more disappointing by the fact that the cost of the trips
is often factored into the annual tuition fee.
Drexel University, for instance, canceled its Executive MBA trip to
China. "We would have left on day that Iraq war began," says
George Tsetsekos, dean of Drexel’s LeBow College of Business. "Regardless
of the cost involved, and it was costly, we developed a local program
to complete the academic component of the trip and made the commitment
that next year we would have an intercultural experience. Next year
those students will be invited to join us on that experience."
Though Princeton University did not cancel its summer program in Japan,
it did scratch the one for China, reconfiguring the "Princeton
In Beijing" session so that it will take place on the Princeton
campus. Overall, Princeton University has a moratorium on University-sponsored
travel to China, Hong Kong, and Taiwan, based on advice from the Centers
for Disease Control and Prevention (CDC) and the World Health Organization.
Those who travel on their own — and those who expect guests from
those areas — are expected to get medical clearance.
In April Educational Testing Service temporarily suspended administrations
of the Test of English as a Foreign Language (TOEFL), the Test of
Spoken English (TSE), Test of Professional English (TOPE), Graduate
Record Examination (GRE), and Graduate Management Admission Test (GMAT)
in China, due to continuing health concerns related to SARS.
This suspension includes all paper-based and computer-based testing,
and it affects 47 paper-based testing sites at universities and institutes
across China. It also affects 14 computer-based testing centers operated
by Thomson Prometric for ETS. The postponement involves 30,000 TOEFL
test takers, 500 TSE test takers and 1,000 GMAT registrants scheduled
to test through July 31. August 23 is the next possible date for these
tests, but some of the computer-based testing could begin as early
as July 1.
"We want students to do their best on these important tests and
given the current concerns of Chinese university officials and the
Ministry of Education we felt it best to implement the request that
testing be delayed a few months," says John Yopp, VP of graduate
and professional education at ETS.
"The Chinese government has placed the highest priority on measures
to prevent the spread of SARS," says Zhang Jin, spokesperson of
the NEEA, Ministry of Education of the People’s Republic of China.
"We believe that the postponement of these tests is a necessary
measure to protect students, test center staff, and all people. We
appreciate the prompt cooperation and support from ETS."
"We did have a representative in Beijing, Susan Chyn, the business
developer for Asia in ETS international division," says Tom Ewing,
ETS spokesperson. "She came back to the states a month ago, and
though she was not quarantined, she took a couple of weeks off before
she came back to work." (See page 45.)
The most obvious effect of the SARS outbreak is the
curtailment of physical travel, says Andrew Gorman, chief business
development officer of CJ Pharma, the pharmaceutical division
of the largest food manufacture in Korea. He has a 10-person office
at Carnegie Center (www.cj.net, U.S. 1, December 4, 2002).
"We are relying more on our branch offices in areas such as Hong
Kong and Beijing to directly conduct business on our behalf. The opportunity
to identify one of CJ Pharma’s current products as a SARS therapy
has not been forgotten. And," says Gorman, "since we are in
the antiinfective and infectious disease arena, we are exploring the
possibility of identifying the treatment of SARS."
licensing deals, and the progress of least two deals has been dramatically
slowed by the SARS epidemic. One was a license for plant design, another
a project to help market something designed in China.
HTI has proprietary technology for manufacturing various products
for enhanced oil recovery. Owned by Utah-based Headwaters Inc., with
38 employees on New York Avenue, it does process and catalyst R&D,
process licensing, and pilot plant design and construction (U.S. 1,
October 16, 2001, www.htinj.com).
"Some deals we are not able to close, because people do have to
meet," says CEO Theo Lee. "We are delaying planned trips to
both Taiwan and China, and both of those places are affected by SARS."
One HTI employee left for Asia in April. "We knew SARS was going
on, but after the employee was there, then China opened up and told
the truth." That worker is holed up in Shanghai, which is fairly
safe, and is trying to do business by phone and fax.
"These are long term deals that could have a very big impact on
our business," says Lee. When will travel begin? When the World
Health Organization declares it safe, says Lee. "Even then people
will want to wait a little."
president of Argyle International, a Research Park-based company
with a factory in Hangzhou, China, that makes optical components for
fiberoptic communications (www.argyleoptics.com, U.S. 1, November
"Travel is restricted inside the country so if our workers want
to go home to see their family, they may have a problem. But we communicate
by E-mail and fax, and we have postponed any trips that we might have
Don McLane, founder of Drianna China USA, was
all prepared for this crisis. He has a 10-person office on Princess
Road (www.driannachina.com, U.S. 1, November 6, 2002) and owns two
factories in Qingdoa, China, the city that will play host to outdoor
events at the 2008 summer Olympics. His 2,000 workers there produce
$7 million worth of jewelry and accessories for discount stores. Formerly
he traveled to China once a month and stayed seven to ten days each
time, but now he sees his factories on a 42-inch screen instead.
"I positioned myself a year ago," says McLane, "Last year
we set up a video conferencing system with our factories, and we talk
to the factories every night. We have not had to be fumigated or quarantined."
Stymied for Now
The SARS epidemic was in full swing in March when Ralph
Olmo traveled to China with the president of a major United States-based
university. "We now know in retrospect that SARS hit last November,
and while we were there, they first started reporting it on BBC,"
Don’t ask Olmo which university president, because he can’t tell you
yet. Olmo represents the subsidiary of an Asian-based conglomerate,
Topeak, that exports American higher education to China.
Beijing Topeak Education Investment Management Co. Ltd. was founded
two years ago as a subsidiary of Beijing Topeak Group and dedicated
to the promotion of international education cooperation and exchange.
It is known as the sole distributor of ETS’ new English examination,
Test of Professional English (TOPE).
Beyond that, Topeak has a contract with the city of Beijing to develop
a university park in the south of Beijing. On a tract of six square
miles, the park will have satellite campuses from major Beijing-based
universities. It also hopes to attract at least one American university.
Just which will be the first American university is a big secret.
"We are working with the Chinese government to establish the standards
necessary to attract an independent American university," says
Olmo. "I am excited about this venture. It is a great honor to
contribute in a small way to an effort that could have such historical
significance. Bringing American education programs to China could
help to draw the nations and people closer together."
In addition Topeak is developing a campus in Beijing’s north sector
that will offer professional training — perhaps using corporate
models — plus a range of non-degree programs, to include continuing
education programs sponsored by American universities. Now that China
is a member of the World Trade Organization, the government is calling
for vocational training, particularly in the English language, and
this campus could be an important source.
Olmo went to California State at Long Beach, Class of 1972, and worked
as a CPA in California, and then as the chief auditor for state board
of regents in Utah. He followed T.H. Bell, the state commissioner
of higher education, when he became Reagan’s head of education, to
Washington. Olmo stayed to work for Bell’s successor, William Bennett.
He later helped transform Southern Virginia College into a four-year
coeducational institution, Southern Virginia University.
Topeak’s office at the Carnegie Center will facilitate its arrangement
with ETS. Colleagues from Beijing will spend U.S. time here. Olmo
still lives in Virginia.
Olmo reveals that on the trip in March the "major university president"
was scheduled to go to Hong Kong but cut his trip and went only to
Shanghai. "When we got on the plane to come home in March, no
one was wearing masks," says Olmo. "We received a card when
we arrived telling us that if we showed any symptoms over the next
seven days to take the card to our doctors."
"While we were there, people in China were not hearing anything
about it at all. After the cases in Beijing were reported, the fear
escalated, which led to a number of businesses being shut down,"
he says. At the height of the epidemic the Topeak headquarters in
Beijing were closed for a couple of weeks.
"SARS seems to be slowing things down, and to have an effect on
people even being interested in this great economic frontier. But
insightful people will want to put themselves in a position for the
time in the not too far distant future that this worry is behind us,
and they will have their people lined up and ready to go," says
Olmo. "I’ve got to believe that a year from now SARS will be a
08540. Ralph Olmo, co-CEO. 540-261-9540. Www.topeakedu.com.cn.
You’re in an Asia with a six-month assignment to develop
major new business for your company. You’ve been there just one month,
and you feel like you are doing good work but you realize you are
just getting started. Relationships are made slowly here.
Rumors of a new kind of flu have been floating around, but no one
seems to be too worried. A few people are wearing masks, but that’s
Then you get a call from your boss: Leave the country immediately.
What? But I’ve just begun!
That’s what happened to Susan Chyn, right, who is the business developer
in charge of international development for the Asia and Pacific markets
for Educational Testing Service. She was in Beijing in the midst of
the — as yet unannounced — SARS epidemic.
"At that time there were a couple of people wandering around with
masks, and Beijing was supposed to have only three to four cases,"
says Chyn. "Everyone was saying, take vitamin C and avoid crowds
and hospitals, and there wasn’t a lot of fear. I was tracking the
progress of the disease through E-mails that came through the U.S.
Citizens’ Service of the U.S. Embassy in Beijing, and I was receiving
E-mail from my friends saying, `Get out, get out.’ But on an emotional
level I wanted to keep working. In the first month of a six month
assignment I had set up a network. I knew if I left I wouldn’t be
able to continue that work."
"When I got my orders, my initial reaction was I didn’t want to
come back home. Maybe an hour later, myself and everyone else said,
`You’re crazy, go back.’"
She left Beijing to go to Japan on April 19, a day when no one was
flying into Beijing. "It was clear the U.S. media was spending
a lot of time on this, and the China media was not, at that time."
On April 20, says Chyn, the city government admitted culpability in
hiding the number of SARS cases and the real information began to
pour out. The announcement was pivotal for anyone in Beijing, she
says, because the people had never seen their top officials humiliated.
"The shock was scary and out of control."
Susan Chyn grew up in Indiana and majored in German literature and
Chinese at Indiana University, Class of 1974. She taught English in
Taiwan, where she met her future husband, James Chyn. He went to Tsinghua
University, Class of 1977, and has an MBA from New York University.
Currently he consults for real estate and logistics clients, and he
and his wife have two grown daughters.
Chyn left Beijing at about the same time his wife did, but he was
in that city the week of May 19, when the scare had died down. "You
wouldn’t know that the city had been affected," says James Chyn.
Nobody, including himself, was wearing masks on the street, though
he did wear one on the plane. "Life is becoming more and more
normal," he says. "You can’t be nervous for a long time no matter
how scary a disease is. Plus the numbers have come down."
Interviewed at a foreign student conference in Salt Lake City, Susan
Chyn says she is confident that China will recover from SARS, and
probably more efficiently than Taiwan or Toronto.
Compared to Taiwan, which she points out is democratic and has more
Western influences, China has better control structures to deal with
SARS. The Communist party infrastructure formerly used for political
surveillance can now be used for SARS inspections. Retired older women
have been mobilized to go door to door in their neighbors, checking
temperatures and enforcing quarantines. They are also handing out
"spit bags" to forestall expectorations on the street. And
she believes that the nation is so focused on hosting the Summer Olympics,
it will be willing to make any sacrifice.
"My sense is that Chinese are really not wanting to blow it. That
holding back the SARS numbers not only affected their credibility
but their traction on globalization. My instinct is that if they have
to find a cure for SARS, they will will this disease down.
They will use every network available to be sure than no one has the
disease. I would be shocked if the Chinese aren’t very proactive."
Says Susan Chyn: "I have been proud of the way the China has reacted
in the wake of harsh criticism. I get asked every five minutes, when
I will go back. I am very eager to go back."
— Barbara Fox
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