Once Collegial, Research Schools Now Mean Business

Arizona State Strips Professor Of Empire as Funding Ebbs; Lawsuit Claims Retaliation
(May 4, 2006- By Bernard Wysocki, Jr. | From The Wall Street Journal)

TEMPE, Ariz. -- For most of his 41 years at Arizona State University, George Robert Pettit enjoyed the near autonomy of a prominent academic scientist.

Dr. Pettit founded the university’s Cancer Research Institute in 1975 and ran it for 30 years, largely funded with royalty income on his 62 U.S. patents and money he raised from gifts and grants. A professor of chemistry, he specialized in the synthesis of naturally occurring substances that might be the basis of anticancer drugs.

Today, Dr. Pettit’s empire is no more. In an unusually bitter campus war, Arizona State’s new administration abruptly dismantled most of the cancer center on Jan. 27, eliminating the jobs of 30 of about 40 scientists and other personnel. Dr. Pettit, 76 years old, remains a tenured professor but with almost no funding or authority.

"I can’t even spend a dime for a test tube," says Dr. Pettit, who has sued the Arizona Board of Regents and top university officials in U.S. District Court in Phoenix, seeking reinstatement and unspecified damages. University officials have denied all charges and are fighting the suit.

Dr. Pettit’s battle with his employer spotlights a broader change under way in academia, as many universities start to treat their professors more like employees of a business. Once, academic researchers had broad latitude to pursue the subjects that interested them, with light oversight and scant pressure to produce things with direct application in the marketplace.

Now, universities are increasingly demanding accountability, and refusing to coddle scholars who don’t pull their weight in the competition to secure grant money. As Dr. Pettit’s research field fell out of favor, he failed to get a renewal of a five-year grant from the National Institutes of Health, a vital source of his funding -- and later his bosses blocked his efforts to refile the proposal.

He became embroiled in an escalating conflict with his new bosses over, among other things, alleged safety violations and his alleged lack of cooperation with colleagues and business-oriented affiliates of the school. The school also said he failed to go through proper channels in filing a scientific-misconduct claim against a fellow professor.

The spat at Arizona State represents "the rise of the corporate university," says Gary Krahenbuhl, the former dean of the college of arts and sciences who for years was Dr. Pettit’s immediate boss. "In the corporate model, anyone who is not a ’team player’ in the eyes of the president is punished." Dr. Krahenbuhl took a retirement package shortly after a new president, Michael Crow, arrived in 2002.

In an interview, Dr. Crow says that Arizona State "isn’t a corporation" and that very few faculty members or administrators are unhappy with his leadership.

Such disputes are likely to become more common in academia, especially at schools that put a premium on research with the potential for licensing revenue and outside funding. In one high-profile case, Duke University has engaged in a protracted legal battle with former faculty member and physicist John Madey over Duke’s use for federally funded research of a laser patented by Dr. Madey.

Many schools are in the midst of building booms. They aim to finance their growth partly by pushing scientists to report their findings in detail and to generate patents, contracts with industry and federal grants. One example is the University of Pittsburgh, which has mounted an aggressive effort to join the top ranks of NIH grant recipients, reaching No. 9 in fiscal 2004 with $360.6 million in awards. Last fall, Pitt scientists began moving into a new $205 million biomedical tower, whose operations and staffing are expected to be partly financed by NIH grants.

Under Pressure

The pressure from the top comes at a time when federal grants from NIH are getting harder to obtain. Applications are way up, but funding, after doubling between 1998 and 2003, has flattened.

"This is driving a lot of people literally to distraction, this coming up with funds to continue your survivability," says Donald Stein, a former dean at Rutgers and Emory universities and currently a professor of medicine at Emory, who edited a 2004 book on the commercialization of research universities.

At the National Cancer Institute, Dr. Pettit’s longtime source of funding, officials say that the success rate of applications has plummeted, from more than 20% during the years of the doubling to 16% in 2005 and just 11% this year.

By all accounts, Arizona State is on the forefront of the trend toward a new-style university. Dr. Crow calls ASU an "enterprise" with ambitious fund-raising goals, the launching of 11 new schools, plans for a downtown campus in Phoenix and stepped-up recruitment of faculty stars. Dr. Pettit "was a big fish in a small pond," says Dr. Crow, blaming some of the conflict on a "cultural" change at the school. "When he came here, it wasn’t a research institution, but a very good regional state college. Now he’s a smaller fish in a bigger pond."

Founded in 1885 as a teachers college, Arizona State became a university in 1958 and began offering doctoral degrees in the 1960s. When Dr. Pettit arrived in 1965 from the University of Maine, it was a sleepy place and he was a well-connected research scientist and a consultant to NIH. He wrote books, published extensively in scholarly journals, and sat on various boards and panels.

Dr. Pettit’s research took him on treks to southern Mexico, Alaska and the Yukon, sleeping in tents while looking for plant specimens. He was searching for organisms that seemed vulnerable but were rarely attacked, figuring they had some "chemical protection" that might be valuable as anticancer compounds.

Dr. Crow arrived with a mission to shake up the school. In his previous job as executive vice provost at Columbia University, Dr. Crow had taken the lead in creating the Columbia Earth Institute, a federation of eight research centers, including ones focused on space, environmental research and climate prediction. He also helped pioneer the school’s effort in online education. He led Columbia into the top ranks of universities by royalty income, bringing in more than $100 million a year.

At Arizona, Dr. Crow moved quickly to launch a Biodesign Institute in 2003. He filled it with genomics, nanotechnology and other cutting-edge research programs. The second of a series of four planned buildings opened a few months ago, with special state funding of $78.5 million. The institute, according to its December 2005 business plan, is supposed to be "self-sustaining" financially within five years.

The institute exemplifies the new type of university, where tenure still matters but professors gain and lose prestige based on their success at winning outside funding. Every laboratory bench in the 138,000 square feet of lab space is on wheels in wide-open rooms. If a researcher’s grant money evaporates, or another gets a funding windfall, the institute can shrink or expand any of the labs quickly. The overall benchmark for holding onto space is $225 per square foot, per year, in outside funding.

"It is the new world order," says George Poste, director of the Biodesign Institute since its founding in 2003, and previously chief science and technology officer at the forerunner of drug giant GlaxoSmithKline PLC.

For years, Dr. Pettit played the game successfully. He won grants from the National Cancer Institute and attracted money for an endowed chair that provided hundreds of thousands of dollars a year to his research. He took over an abandoned lab of the U.S. Forestry Service and spearheaded an $8 million fund-raising effort to construct a large adjacent building, which opened in 2000, and today houses 28,000 unique "natural product" specimens.

The popularity of the field has waxed and waned over the years and none of his compounds have resulted in drugs that have reached the market. A compound Dr. Pettit’s team derived from the African bush willow was developed by Oxigene Inc. of Waltham, Mass. It is now in clinical trials to treat lung cancer and ovarian cancer, in some instances in combination with chemotherapy.

Some of Dr. Pettit’s current troubles with the university stem from a 2004 complaint he filed against a colleague. In his lawsuit, Dr. Pettit said he objected to patent-related filings made by a professor of life sciences at ASU, with whom he had collaborated in developing a potential anticancer drug. He alleged that the colleague made the filings "without adequate and in part flawed experimental evidence."

Dale Danneman, an outside lawyer brought in by ASU, investigated the matter. Mr. Danneman, an intellectual-property expert and a partner at a Phoenix law firm, examined 3,000 pages of exhibits and attached 69 documents to his report, according to both Dr. Pettit and the university. The investigation concluded that Dr. Pettit’s allegations were unsubstantiated. The university also found that Dr. Pettit had broken ASU rules by mentioning the charges to state and other officials, bypassing the university chain of command.

Says Dr. Crow, "You really can’t let that slide." Dr. Pettit was put on leave from running the cancer institute, but he remained a tenured professor. In August 2005, Dr. Pettit filed suit, initially in Arizona state court, claiming that the university was harassing him, retaliating for his "whistleblower" allegations against the colleague. ASU denies that.

The dispute placed Dr. Pettit, who had always reported directly to the dean of arts and sciences, under a new boss: Dr. Poste, the head of the Biodesign Institute.

Suddenly, Dr. Pettit was forced to justify his work, which had long been a top moneymaker for the university. Shortly after he became Dr. Pettit’s boss in early 2005, Dr. Poste says he convened a panel of outside experts. He says he wanted to find out "What are they doing [at Dr. Pettit’s labs]? Are there jewels in his portfolio?"

Dr. Pettit spoke for six hours, but some of the experts left unsatisfied with the answers. Dr. Pettit says he was wary of the outside panel because it included Dr. Poste’s "business friends." One had worked in "natural products" before they had begun to fall out of favor with big pharmaceutical companies.

Meantime, Dr. Pettit’s initial application to renew his NIH grant was rejected. It had provided about $500,000 a year for the previous five years, roughly a third of his $1.5 million annual budget. Just at the point Dr. Pettit was going to file a revised application, his disputes with the university crested, and the university froze his grant applications.

Dr. Pettit also ran into problems with the Arizona Technology Enterprises, or AZTE, an affiliate set up by Dr. Crow to turbocharge the university’s patent-licensing program. In 2004, Dr. Pettit’s patents bought in about $1.1 million in royalties, accounting for 72% of AZTE’s total licensing revenue. This year, says Peter Slate, chief executive of AZTE, Dr. Pettit’s work will account for less than a third of AZTE’s $3 million in total licensing fees.

The university says Dr. Pettit isn’t cooperating with the new licensing officials. In a Sept. 29, 2005, letter, Provost Milton Glick wrote that Dr. Pettit had "failed to cooperate with representatives of AZTE" about a potential agreement to license one of his compounds and canceled several meetings with Dr. Poste to discuss it.

Hundreds of Alleged Violations

Dr. Pettit denies that he failed to cooperate or canceled meetings. Around this time, ASU began a safety evaluation of the laboratories of the cancer institute, now called the cancer research center. The examiners found 501 violations, including evidence that some labs were unlocked and unattended while chemical reactions were in progress. Dr. Pettit disputed most of the findings.

In the September letter, citing the AZTE meetings and the alleged safety violations, the provost froze Dr. Pettit’s budget account and various grant applications. He resubmitted his NIH application to the university, as required, but that was frozen as well, so it wasn’t forwarded to NIH. The safety issues were cleared up Jan. 15, Dr. Poste says, although the other "personnel" issues have kept the freeze on grants in place.

With NIH funding running out and the cancer center low on cash, Dr. Pettit was called in to a meeting Jan. 26 with Dr. Poste. "They said I had overdrawn my accounts, and that everybody would be terminated the next day," Dr. Pettit says. The next morning, Dr. Poste announced the elimination of the 30 jobs.

As a tenured professor, Dr. Pettit kept his salary of about $100,000 and his office, its blackboard filled with neatly drawn chalk diagrams of chemical compounds. His research has suffered, he says "because I’ve had to deal with all these devastating attacks."

He wants to "reconstitute" his old cancer center at Arizona State, and hopes that his lawsuit will be successful and will help him do that. On the other hand, he is contemplating an alternative: another philanthropic fund-raising drive, to rebuild his operation outside the university walls.

Write to Bernard Wysocki Jr. at bernie.wysocki@wsj.com

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