The FDA approved Remicade for use in Crohn’s disease in August 1998, and for patients with rheumatoid arthritis in November of the following year. The very first quarterly royalty payment I received from NYU in the spring of 1999 was only slightly less than my annual professor’s salary. For the first time in my life I earned money for which we had no immediate need. Money, in fact, that already exceeded the small daydreams we had of taking taxis and eating out more often, or buying a few more clothes.
The royalty payments continued and showed a gradually rising tendency throughout 1999 and 2000. But would Remicade continue to be successful? At the time it was still far from clear. Could the drug sustain the health improvements shown in the short-term use for Crohn’s disease and rheumatoid arthritis? What would be the cumulative side effects if Remicade were to be used for months or years?
It was not unprecedented that a drug would be approved and the approval subsequently revoked because of issues that did not become apparent during the clinical trials. Centocor’s Centoxin was approved in Europe for the treatment of sepsis, but when the FDA had ruled that it did not produce a significant benefit, the European approval was withdrawn. A better-known example is Vioxx, an anti-inflammatory drug brought on the market with great fanfare in 2001 by the pharmaceutical giant Merck & Co., only to be “voluntarily withdrawn” by the manufacturer in 2004 because of an increased risk of heart attacks among the drug’s users. It was very possible that Remicade might meet a similar fate.
Toward the end of the year 2000 I was approached by representatives of Drug Royalty, Inc., a company based in Canada that earns its keep by purchasing rights to future royalty payments for pharmaceutical products in exchange for an up-front cash lump sum. Would I be interested in selling them a portion of my future royalty income I was entitled to by the 1984 licensing agreement between NYU and Centocor? Until Drug Royalty approached me I had no idea that future royalties could be bought and sold.
I thought about it. If Remicade did well in the future, I would lose money, but if Remicade did not do well in the marketplace, or worse, had to be withdrawn from the market because of side effects, I would at least retain the cash received from Drug Royalty. I viewed the transaction as a kind of insurance policy and decided to sell a small fraction of my future royalty entitlement. It was a complicated transaction. I needed approval from NYU and I needed business and legal advice, the latter provided by Peter Ludwig, the patent attorney and friend who had also helped to negotiate the original NYU-Centocor license agreement.
In retrospect, the deal has turned out to be the worst business transaction of my life. Drug Royalty has earned its money back many times over. But I don’t mind. In fact, I much prefer to have lost money than to have needed the “insurance” because the latter would have meant that Remicade did not become successful. How things have turned out was a better alternative for everyone involved.
At about the same time as I was negotiating with Drug Royalty about the sale of a portion of my future royalty stream, Marica and I were trying to solve the enviable problem of what to do with the additional moneys flowing each quarter into our bank account when I was paid royalties received by NYU from Johnson & Johnson for sales of Remicade. We used a small portion of the additional earnings to make our lives more comfortable, and to be more generous to our friends and family. But if the inflow of funds were to continue and perhaps even grow, we realized that, for the first time, we really needed to come up with some financial planning.
We were not interested in drastically changing our lifestyle. We did not need to own a second home. We liked the freedom of spending our weekends wherever we liked (usually in New York City enjoying the city’s many cultural offerings), to travel to different destinations, and not to feel pressured to go week after week to the same country house. Neither did we yearn for a private plane or a yacht. In fact, like numerous other New York City dwellers, we had decided many years ago to give up ownership of our car, and we continue living a carless life. Using public transportation or taxis in the city and renting cars for out of town excursions suits us fine.
Gradually the thought occurred to us that we could use the unexpected windfall for something that would benefit society. Start a foundation perhaps?
In our first planning session with Paul Roy, an attorney expert in the area, we spent more than an hour learning the basics about the logistics of starting private charitable foundations. When we told Paul that the funds we were considering using to establish the foundation would be derived from royalty payments, he told us that instead of funding the foundation with cash, we could donate a specific segment (legally termed “an undivided fractional interest”) of my future royalty stream. Paul warned that such a donation would be irreversible; once I made the commitment to assign to the foundation a certain percentage of the rights to my future royalty stream, that decision could never be changed again.
The option to donate to the foundation a fixed portion of my future royalty income, rather than making one or more donations of cash, appealed to us. We had no good idea what the royalty payments would amount to over the years. Some Wall Street analysts had published forecasts of anticipated Remicade sales, but their reliability was anybody’s guess. Gifting to the foundation a set percentage of the royalty income I was entitled to receive from NYU throughout the lifespan of the patents would make the guessing game unnecessary. If future Remicade sales did well, the foundation would benefit; if they did not do so well, the foundation would end up with less. We decided to donate a segment of the royalties.
One of the next steps was to set up the foundation and to choose its name. We were too self-conscious to use our own name, so instead the foundation was named after my mother: the Friderika Fischer Foundation, Inc., formed on December 1, 2000.
And what would be its major mission? The royalties were generated by the sales of a drug used for the treatment Crohn’s disease and rheumatoid arthritis, two chronic inflammatory autoimmune disorders, and more research was needed to develop a better understanding and additional treatments for these and related diseases. It seemed logical to direct the main activities of the newly established foundation toward the support of research in the same field. And so the bylaws stated that one of the main purposes of the foundation was to “engage in research pertaining to the development of treatments for chronic inflammatory autoimmune diseases.”
Now the foundation had a name, legal status as a corporation, and bylaws with a stated mission. Soon thereafter, the IRS officially approved its status as a tax-exempt charitable organization, a 501(c)(3).
I served as the president and treasurer and Marica as vice president and secretary. The official address of the foundation was our private residence, and a small built-in desk in the kitchen area alternated as foundation office space. According to the bylaws, Marica and I needed to appoint a board of directors, the governing body of the foundation. We invited three people. Bruce Cronstein, a physician and scientist colleague from NYU with expertise in rheumatoid arthritis and other chronic inflammatory diseases, and two of Marica’s former colleagues from the Metropolitan Museum, Jennifer Olshin and Rick Kinsel.
As planned, starting around 2001 and continuing for several years, the foundation dispensed money in support of two science projects, both conducted at NYU School of Medicine, that were broadly focusing on research in inflammation and possible avenues to treat inflammatory disorders. We also provided small grants to other science-related programs, including fellowships for young people attending meetings of the International Cytokine Society and funds in support of a scientific conference devoted to the TSG-6 protein, the molecule that was discovered in my lab.
Marica, Rick, and Jennifer argued that, in addition to providing funds to science-related projects, our foundation should consider supporting projects in the arts. Our first grant in the arts field, in 2002, went in support of the apprentice program at the Santa Fe Opera—a logical choice because Marica and I spent many summer vacations in Santa Fe, over the years we enjoyed seeing many interesting opera performances there, and the SFO apprentice program had had a long tradition of nurturing future top opera singers.
The Friderika Fischer Foundation was not our only philanthropic endeavor and, in financial terms, not even our largest one. As my royalty checks continued to increase, I made the decision to make a major gift to NYU School of Medicine. I felt strongly, and Marica concurred, that NYU deserved to be the major benefactor because NYU’s School of Medicine had the courage to offer me a faculty position when I arrived here as a penniless refugee. Over the years, NYU provided me with the freedom to develop my research program, offering the supportive environment I needed, never interfering with my choices of research topics or collaborators. In the pre-Remicade days I would often comment that if it weren’t for the fact that I needed my salary to survive, I would have gladly paid NYU two or three times the amount they were paying me—for the privilege of being able to do my job. Little did I know that one day I would be able to do that—and more.
By 2002 it was clear that Remicade was going to be a success. I consulted with Paul Roy, the attorney who helped us set up our foundation. What would be the best mechanism to make a major gift to NYU? Paul recommended that I again make an irrevocable gift of a portion of my future royalty income to NYU. I agreed.
A “Deed of Gift and Agreement” was signed by me and Dr. Robert Glickman, the dean of NYU School of Medicine at the time, a few days before the end of 2002. The donated royalty income was to be apportioned to four different programs: to establish an endowed chair in the Department of Microbiology, support research in the field of microbial pathogenesis, create endowed fellowships for graduate students and postdoctoral fellows in the Department of Microbiology, and to support research and recruitment to the Department of Otolaryngology.
Most of the support was designated to benefit the Department of Microbiology, my professional home since 1965. I was pleased that my longtime friend and colleague Claudio Basilico became the first Jan T. Vilcek Professor of Molecular Pathogenesis. Upon taking over the chairmanship of Microbiology in 1990, Claudio revitalized the department, hiring a score of younger faculty members. Though intimidating at times, especially to students not accustomed to his authoritative manners, Claudio became an effective and respected leader. He stepped down as chair in 2014.
I designated NYU’s Department of Otolaryngology as an additional beneficiary of the donated funds because Marica had been their longtime patient. A few years after our moving to New York, Marica developed Ménière’s disease, an inner-ear disorder that affects hearing and balance. During acute attacks of the disease Marica suffered from debilitating nausea and vertigo. When medications and several surgical interventions failed to help, she had to undergo “labyrinthectomy,” a surgery that destroys one of the two balance centers. An inevitable side effect of labyrinthectomy was the loss of hearing on the operated side. The surgery, though drastic, restored Marica’s ability to live a normal life and we are grateful to the Department of Otolaryngology and its former chairman Noel Cohen, who performed the surgery, for the care she had received.
When I donated a portion of my future royalty income to NYU in 2002, the ultimate value of the gift was, of course, not known. That the value of my donation exceeded the original expectations started to become clear about three years after the effective date of my donation. Dean Glickman called me to his office to tell me that we needed to amend the original 2002 agreement because the programs designated to benefit from the gift would soon become fully funded and there were no instructions specifying what to do with the additional royalties that were expected to accumulate for about twelve more years.
The signed amendment to the original agreement stipulated that once the full funding levels of the four programs were reached, NYU Medical School would use any additional income from my gift to “strengthen the basic sciences programs at the University’s School of Medicine.” The agreement went on to list specific examples of such uses.
This language reflected my strong belief—partly based on my own experience—that advances in medicine, including progress in the treatment of diseases, are most likely to emerge from advancements in basic science, rather than from so-called applied research. In the last decade it has become fashionable to promote “translational medicine”—the use of new scientific developments for the furtherance of advances in medical practice, with the idea that this trend will accelerate the transfer of knowledge “from bench to bedside.” In principle, I support these efforts, but it is important to keep in mind that without continued generous support of research in the basic sciences, there soon would be nothing left to “translate.”
The history of science has taught us that the path from basic discoveries to clinical applications is rarely linear. Already in 1921 Marie Curie had the following to say about her and her husband’s historic discovery: “We must not forget that when radium was discovered no one knew that it would prove useful in hospitals. The work was one of pure science. And this is a proof that scientific work must not be considered from the point of view of direct usefulness.”
Not so long ago, research into embryo development of fruit flies (Drosophila melanogaster) led to a strikingly new interpretation of the mechanism of immune responses to microbial invaders. Christiane Nüsslein-Volhard and her colleagues in Tübingen, Germany, discovered a gene they termed “Toll.” In drosophila this gene is important for the formation of the so-called dorsal-ventral axis during embryogenesis. Later it was discovered that receptors similar to Toll, the “Toll-like receptors,” play a central role in immunity against infections in higher organisms, including Homo sapiens. In the address delivered on her receiving the Nobel Prize in Physiology or Medicine, Nüsslein-Volhard said she had had no inkling that her research in drosophila would turn out to be important in medicine.
When, in the early 1980s, we witnessed the emergence of the AIDS epidemic, nothing at all was known about the cause of the illness. The name given to the condition, “acquired immunodeficiency syndrome,” reveals that at the time it was not even known that we were dealing with a transmissible infectious disease. People of my generation will remember that early on one of the leading theories was that AIDS is caused by a drug used by young gay men as a sexual stimulant. Credit for the relatively rapid elucidation of the viral etiology of AIDS—and for the fact that within a few years scientists were able to develop effective drugs that can control HIV infection—goes to information derived from earlier studies of a family of viruses called “retroviruses.” The goal of these earlier studies was to explain how retroviruses cause tumors in animals, for example chickens, but at the time it was not clear at all if these findings would have any relevance for human disease. HIV, the causative agent of AIDS, turned out to be a member of the retrovirus family. Without extensive information on retroviruses, acquired in the course of the earlier basic research, it would likely have taken many more years to elucidate the cause of AIDS and to develop effective treatments.
About a decade ago, in an effort to speed up the application of advances in medical research toward the development of new cures, the federal government initiated a number of programs that provide incentives to scientists to engage in translational research. NIH established a large number of Clinical and Translational Science Centers around the country and committed hundreds of millions of dollars to their support. Since the overall budget of the NIH and other agencies supporting medical research in the country has been stagnant in recent years—in fact going down in real dollars—the funds used for this initiative were taken from the pool of money originally earmarked for basic science research.
As a result, it is now often easier to obtain funding for a translational research project than for first-class basic research. New professional journals with the word “translational” on their mastheads are proliferating, along with new professional societies devoted to translational medicine. In fact, I was recently honored by one of these new societies, the Association for Clinical and Translational Science.
The development of Remicade was a prime example of translational science in action, accomplished at a time when the word “translational” had not yet become fashionable. Yet I believe that the balance has tipped far in the translational direction. As microbiologists Ferric C. Fang and Arturo Casadevall aptly put it in an editorial a few years ago:
It will be critical not to allow our impatience for translational applications to skew resources and researchers away from the open-ended exploration of the natural world that has provided the foundation for so many translational successes and remains as essential as ever.
By 2005, I was ready to make additional donations to NYU. By then Marica and I felt that giving another major chunk of my future income would not jeopardize our already very comfortable lifestyle. We went on to set up two trusts, of which NYU School of Medicine was the sole beneficiary. The trusts were funded with additional portions of my future royalty stream.
In August 2005, a front-page story in the New York Times about my gift bore the headline “Research Scientist Gives $105 Million to N.Y.U.” Dr. Glickman was quoted as saying: “It’s the largest gift in the history of the medical school, and I think the largest by any faculty member to any school anywhere.”
At the time I thought the $105 million estimate of the value of my gifts to NYU Medical Center may have been a trifle inflated, but in fact it once again turned out to be overly conservative. Royalty payments to NYU are still accruing, and are likely to continue accruing until the scheduled expiration of the last patents in 2018, so the final value of my gift is still not known. However, through the end of 2014 the combined value of my 2002 and 2005 gifts to NYU has already exceeded $120 million. The additional funds have been used to establish two more endowed professorships, one in microbiology and one in otolaryngology, the latter in Marica’s name. The rest of the funds from the 2005 gifts were designated for the renovation of laboratory spaces, hiring of new basic science faculty, and a score of other projects.
The endowed professorship I established in microbiology in 2005 was named after Albert B. Sabin, a graduate of NYU School of Medicine, an early pioneer of virus research and—together with Jonas Salk—a key scientist credited with the development of a vaccine against poliomyelitis. I had a deeply personal reason for honoring Albert Sabin’s memory because he played an important role in setting me on the path of my interferon research when I had met him in Bratislava in the late 1950s. Robert J. Schneider, my colleague in the Microbiology Department, has been named the first Albert B. Sabin Professor of Microbiology and Molecular Pathogenesis.
Susan B. Waltzman, professor and codirector of the Cochlear Implant Center at NYU, has become the first Marica F. Vilcek Professor of Otolaryngology. Her work has helped to restore hearing to hundreds of children and adults.
Since 2005, we have made several additional gifts to the medical center, now called NYU Langone Medical Center, in recognition of a landmark $200 million gift by Kenneth Langone, the chairman of the medical center’s board. (Ken Langone has kindly said that it was my gift that inspired his generosity.) One donation, made after consultation with our current dean and CEO, Dr. Robert Grossman, that has given Marica and me tremendous pleasure, is the endowment of merit scholarships for talented medical students who, without the scholarship, would either not be able to attend medical school at all or could not attend NYU School of Medicine. Ten students—all of whom we have befriended—have benefitted so far.
Another significant donation helped to refurbish a residence hall for NYU medical students. Upon making this pledge, Dean Grossman asked whether Marica and I would agree to have the residence building named after us. We thought about it and without much hesitation said yes.
Another organization that has benefitted in a significant way from our newly found philanthropy is the Metropolitan Museum of Art, Marica’s former professional home for thirty-two years. Our most significant support has been earmarked for the establishment of two endowed curatorships in MMA’s American Wing. Two outstanding women art historians have been chosen as Marica F. Vilcek Curators in American Art: Amelia Peck, whose expertise includes American textiles, furniture, and interiors, and Thayer Tolles, who specializes in American sculpture.
Our philanthropic gifts landed Marica and me in some unexpected company. The Chronicle of Philanthropy regularly publishes an annual list of the topmost American philanthropists of the year. The list for 2005—the year when I made the pledge to NYU, at the time estimated to be worth $105 million—was published jointly with the online Slate magazine. Marica and I were featured among the top fifteen most generous American philanthropists of the year. Most other donors on that list were billionaires whose names were—and are—readily recognizable by the public.
It is worth pointing out that in 2005 when we made the pledge our real net worth (not counting future royalty income) amounted to only a fraction of the $105 million. In effect we gave away money before it could even properly be ours. To date, we have given away an amount that is much greater than all of our personal assets combined. Marica and I shake our heads in disbelief at where our life’s journey has brought us.