SAN DIEGO — Federal auditors are investigating allegations that four scientists at UC San Diego with close ties to two private biotechnology firms may have mishandled federal research grants valued at hundreds of thousands of dollars each.
University officials said Wednesday that auditors from the National Institutes of Health are in La Jolla looking into five NIH grants made to top scientists at the University of California, San Diego's Cancer Center and Burn Center and two San Diego firms, Idec Inc. and Clonetics.
NIH officials declined to list the nature or sources of the allegations against the scientists, who include prominent cancer researchers Dr. Ivor Royston and Dr. Mark Green.
"The only thing the NIH is saying is that they are here to perform a preliminary review," said Miles Bowler, the university's audit director. ". . . But in terms of what they wanted to look at, what relationships, if conflict is involved, that sort of thing--they didn't really bring that up. They just said that (those researchers and companies) was of interest."
Bowler said the university is cooperating with the NIH inquiry and that there has been no university investigation into the allegations.
The grants under scrutiny include a $143,869 grant to Royston to develop monoclonal antibodies for cancer detection and treatment, and two grants to Green, valued at $142,743 and $429,000, for cancer and leukemia research, NIH and university officials said.
Also under investigation are two grants to Dr. John Hansbrough, director of the San Diego County Burn Center at UC San Diego Medical Center, for research involving trauma and burn patients. Those grants are valued at $442,600 and $384,596, an NIH official said.
The fourth researcher named by the auditors is Steven Boyce, an assistant adjunct professor of surgery at the university School of Medicine who works with Hansbrough, Bowler said.
Bowler said the auditors also named Idec and Clonetics.
Idec, which was co-founded in September, 1986, by Royston and others and employs Green as a clinical adviser, is developing monoclonal antibodies to treat cancers and disorders of the immune system, according to its president, William Rastetter.
Clonetics, co-founded by Boyce in March, 1984, is developing synthetic skin for burn patients. Its president, Michael Luecke, declined to comment on an article in the San Diego Union on Wednesday that Boyce and Hansbrough recently stepped down from the board of directors.
"We're squeaky clean and I'm very happy to collaborate with anyone in verifying that," said Rastetter. He said the firm had "received no funds from the university or university-administered NIH grants."
"Somebody called the NIH with allegations which are totally false," said Royston, who runs the clinical immunology program at the Cancer Center. "I'm incensed about it. It's . . . harassment."
Royston, who is also co-founder of Hybritech Inc., the largest biotechnology firm in San Diego, said he is "very experienced" in the area of conflict of interest and "I try to do everything above board."
According to Rastetter, Royston has received federal funding for human trials of a type of cancer treatment called anti-idiotype antibodies. Rastetter said Idec fabricates the antibodies and supplies them free of charge to the university for Royston's study.
Rastetter said the NIH and other agencies are fully aware of the arrangement. He said the university's conflict of interest committee was also fully apprised of the relationship between Royston and Idec.
Green released a statement through the university stating that he was "unaware of any improprieties relative to my grants" and intended to cooperate in the probe. Hansbrough could not be reached Wednesday for comment.
Howard Hyatt, director of the division of management, survey and review at NIH in Washington, said his office completed about 15 similar investigations in 1986. On average, he said his auditors substantiate allegations of misuse of grants in half of all cases.
Penalties for misuse of NIH grants range from forcing researchers to refund grant money to barring the researchers from consideration for future NIH grants, Hyatt said.
NIH is a branch of the U.S. Department of Health and Human Services.
Frank Cver, assistant vice chancellor for financial services at the university, said he could recall only one other instance in the last decade that NIH auditors had come to the La Jolla campus to investigate charges leveled against researchers.
In another University of California case, UCLA officials revealed in July that a prominent professor was the subject of an investigation by the state auditor general's office into the transfer of the rights to a potentially profitable procedure developed at the university to the professor himself for manufacture.
The audit concluded that Prof. Paul Terasaki, a pioneer in tissue typing for organ transplantation, had violated the university's conflict-of-interest rules and misused more than $500,000 in public funds. The investigation resulted in Terasaki's outside firm paying $500,000 to UCLA for the rights and title to the procedure.