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Firm's Claims to Pig Liver Transplant Spark Fight : Biotechnology: Company planning stock offer says it has rights to market innovations. Debate centers on possible conflicts of interest among medical centers, doctors who have business deals.

October 22, 1992|IRENE WIELAWSKI | TIMES STAFF WRITER

The contract prohibits the company from using Cedars-Sinai's name in self-promotions, although Makowka is not similarly protected. Xenogenex, nevertheless, was able to clearly link itself to the medical center, even though it did not use Cedars-Sinai's name. In a statement dated Oct. 15, the company listed Makowka as its "vice president of medical research," and identified him as leader of "the medical team which recently performed the world's first xenograft of a pig liver into a human." Xenogenex, the statement continued, had also "signed a contract to fund a project in xenogenetic (cross-species) transplant research with a major West Coast medical center in Los Angeles, California, with which Dr. Makowka is associated."

Asked about the releases, Xenogenex's president, Edward F. Myers, said he was fulfilling his "obligation to keep our shareholders informed," and to provide relevant information to potential investors.

Myers stuck to his assertion that Makowka is his vice president for research. "That's what we said in the press release and that is true." But he was unable to supply any documentary evidence of Makowka's appointment and acceptance of the position.

Myers also declined to identify other officers or investors in the company.

"It is a private company talking about becoming public," he said. "My attorney has said you must be very careful about this."

Added to the confusing swirl of charges and denials is the fact that as late as Tuesday, key hospital officials said they had no idea who Myers is, and were unaware of the company's new ownership.

Klinenberg, the hospital's senior vice president for research, said the contract was with a small philanthropic entity formed by two grateful Cedars-Sinai transplant patients who wanted to contribute to the research effort that had given them a second chance at life.

"We looked upon this as a grant," Klinenberg said. "To my knowledge--and I sign these (contracts)--we didn't agree to do anything except continue our good research."

At the time, the company's name was Ascot Close Research Institute Ltd., formed July 30, 1991, according to documents filed with the Securities and Exchange Commission.

On Sept. 11, 1991, the company signed the research contract with Cedars-Sinai. Nine days later, the founders of Ascot Close sold the company to EXTEN Industries Inc. of San Diego, a merchant banking and venture capital concern of which Myers is chairman. EXTEN's stock closed Wednesday at 41 cents a share, up 3 cents, in light trading on the Philadelphia Stock Exchange.

Ascot's owners received 1 million common shares and 750 preferred shares of EXTEN stock for their company, whose most valuable asset is the contract with Cedars-Sinai and Makowka's research group.

Even as Cedars-Sinai lawyers were drafting what hospital officials described as a strong warning to Xenogenex and its parent company, EXTEN, to refrain from unauthorized public statements, hospital officials repeated that the relationship and contract had no influence on the decision to give Fowler a pig's liver.

Dr. M. Michael Shabot, chairman of the federally mandated hospital committee that supervises human experimentation--the Institutional Review Board--said he knew nothing of the research contract with Xenogenex when he approved the historic procedure. The full board did not have time to meet in Fowler's case, he said, because her condition was deteriorating so rapidly.

Instead, Shabot said he authorized Makowka to go ahead with the pig liver transplant in a telephone conference at 1:30 a.m. Sunday. The surgery began at 4 a.m.

Makowka said he is upset by the controversy over Xenogenex and its potentially damaging effect on public confidence in Cedars-Sinai's transplant program.

The pig liver, he said, was Fowler's best chance and it almost worked.

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