Richard Scheller

Richard Scheller

Trustee, Caltech

By David Zierler, Director of the Caltech Heritage Project

April 17, 24, May 4, 16, 25, June 12, 2023

DAVID ZIERLER: This is David Zierler, Director of the Caltech Heritage Project. It's Monday, April 17th, 2023. I am delighted to be here with Dr. Richard H. Scheller. Richard, it is great to be with you. Thank you so much for joining me today.

DR. RICHARD SCHELLER: My pleasure. Thank you!

ZIERLER: To start, would you please tell me your title and affiliation here at Caltech? Then we'll move on to all of your other affiliations and partnerships.

SCHELLER: My current affiliation is as a Trustee.

ZIERLER: In your service on the Caltech Board of Trustees, what kinds of committees have you been involved in? What kind of research are you following on campus?

SCHELLER: I think a couple of the highlights of my trusteeship were that I led a review of the Division of Biological Sciences and Biomedical Engineering, during my first five-year term. Phil Sharp from MIT—Nobel Prize winning scientist—and I co-chaired the review of that department. Last year, I led a review of the Chemistry and Chemical Engineering Department. Both of these projects produced reports that were presented to the president and to the trustees around issues in the departments, and recommendations for proceeding into the future. I think it's a terrific thing, actually, that Caltech has a scientist trustee that can do this. There are usually co-chairs of these committees that are usually one trustee and one outside scientist. In my case, you get a trustee and a scientist [laughs] wrapped up into one. I think there's some advantage to that. There are of course other trustees that are on the committee, in addition to myself, that are most often I think, essentially always, not scientists.

ZIERLER: A question I've been very much looking forward to asking you in historical perspective—in your vantage point of what is happening on campus now, and looking back to your own experiences as a graduate student, how much more entrepreneurial is Caltech than when you were a student here? How much more involved are students and professors in business ventures, in startups, and things like that?

SCHELLER: Oh, much, much more involved, than what I would call back in the day. Although that's really from a biology perspective, much more involved. I think that physics, engineering, perhaps even chemistry, had a much earlier history in the private sector than biology. Biology in the private sector was really started while I was a graduate student at Caltech, with the founding of Genentech. Biologists were much more involved in pure discovery science versus applied science, which was happening, of course, over the decades, in engineering, as I said, and physics, with the inventions of the transistor and so many other things that revolutionized the lives that we live nowadays. So, it was a relatively new thing, and met with some skepticism, both for biologists to be involved in the private sector—both would it really result in anything important, number one, and number two, was it the right thing to do. Was it the right thing for Caltech to do, given that Caltech is so much a basic science institution? Should Caltech be involved in that kind of thing? Was that really consistent with the Caltech mission? That is even discussed a little bit, although not much anymore [laughs], today.

ZIERLER: How much of your response is superimposed upon the maturation of biotechnology over the course of your career? In other words, when you were a graduate student, was biotechnology a viable field? Was it something that one could even go into, at that point?

SCHELLER: Well, no, there wasn't such a thing. What happened—as I was a beginning student, recombinant DNA was just becoming widely utilized in the practice of experimental molecular biology. It had been invented, so to speak, but it had become a technology that pretty much anybody could use if they wanted to. So many people had basic science questions that they thought could be unraveled with the use of recombinant DNA that you had many, many laboratories at Caltech—Norman Davidson, Eric Davidson, Lee Hood, Tom Maniatis was there at the time, James Bonner—the list just went on and on of laboratories that were beginning to use this new technology of recombinant DNA to ask the fundamental questions about biology that they were interested in. At that time, two people—Herb Boyer at UCSF, and Bob Swanson, who was a business person—got together and came up with the idea of using modern molecular biology, recombinant DNA techniques, and so on, to make therapeutic proteins—insulin, growth hormone, somatostatin—in microorganisms, to make human proteins in other cells, and to harvest those proteins for therapeutic use. That idea had just come about, back in the day, in the second half of the 1970s. That gave rise to the formation of Genentech, and gave rise to the birth of biotechnology. There was no biotechnology [laughs], to speak of. That's a bit of an overstatement, but I think a pretty good generalization. There was no biotechnology before that, so there was nothing to—there was no biotechnology career to go into [laughs] before that.

ZIERLER: To clarify, the launch of Genentech and the value of recombinant DNA, does the origin story there really have to do with bringing drugs to market, or was there first a basic science element that needed to mature, itself, before we could think about clinical applications and translational research?

SCHELLER: Sure, of course. There was also the basic science behind it that needed to be realistic. The invention of recombinant DNA, the understanding of enzymes that would cut the DNA in very specific ways with the ability to more rapidly determine the nucleotide sequence of DNA, with the understanding of expression of genes in bacteria, so that if one wanted to make the human protein, you needed to just not throw the gene into bacteria; you needed to throw it in—"throw it in" in quotes—in a very specific way, behind the regulatory elements that would make the messenger RNA, in order to make the protein. There was a whole set of evolving technologies that came together to make the idea of expressing and making and harvesting a human protein for therapeutic purposes possible.

ZIERLER: What about some of your other scientific affiliations? What other boards of directors do you serve on?

SCHELLER: I serve on the boards of a number of other companies. I have a list. I should have gotten out the list. There's so many I forget them. I think I can probably remember most of them. I'm on the board of directors of currently three publicly traded companies—23andMe—23andMe is a very interesting company with 14 million genotyped people and three and a half billion phenotypic data points. I got involved with 23andMe after leaving Genentech Roche, in order to use that database to try and find drug targets, and then to develop drugs. That was an interesting story. When the press release went out that I was retiring from Genentech, I got a call from Ann Wojcicki, who is the CEO of 23andMe, probably about ten minutes after the release hit the wire, saying, "Shouldn't we start a therapeutic group at 23andMe?" I said, "Yeah, I think we should. That would be a good idea." So, we got together. She grew up on the Stanford campus; I currently live on the Stanford campus. We got together, and she came in, and I said, "Can I get you something?" She said, "How about a glass of tea?" I said, "Sure." So I put some water on, and before the water was boiling, we decided to start a therapeutic group at 23andMe.

ZIERLER: What was so compelling to you and why was that so important?

SCHELLER: It just makes so much sense. The way modern human genetics works, one of the ways is called genome-wide association studies. In those studies, you say, "Do you have a particular condition?" Let's say psoriasis. "Yes." Then you look for particular variants in the human genome that are either enriched or depleted in people with psoriasis in a statistically significant way. When you find those variants, those variants then must have something to do with the disease. Otherwise, they would be present at the same level as in people without the disease! So, it's a way of finding variants which can often be then associated with specific genes that are involved in a particular condition. Then, with a lot of other thought and work, you can decide whether modulating the expression of that gene in various ways could be useful in treating the disease. This is by far the largest human genetic database in the world, so that was the compelling vision there. We currently have two projects that are in the Phase 2 stage of clinical testing, one in collaboration with the big pharma company, GSK, and one on our own. We don't know whether there are going to be drugs yet, and that's a complicated story in its own right. But that remains to be seen.

ZIERLER: That's 23andMe. What about some other boards of directors?

SCHELLER: Another one that is very interesting is a company called Alector. Alector is basically using the same kinds of ideas, human genetics, to approach issues of dementia, both frontotemporal dementia and Alzheimer's disease. I can go into as much detail on the science as you want, but that's—

ZIERLER: Please, please.

SCHELLER: —that will take a long time. But we'll give it a shot here. A certain percent of people with frontotemporal dementia have mutations in a particular gene called sortilin. This is a condition that is called haploinsufficient, so the people make half the amount of the gene product as other people. Folks that make half the amount of sortilin have a very high probability of having frontotemporal dementia later in their life. Alector has engineered a therapeutic antibody—I won't go into the details of how it works, but—that brings the levels of sortilin, the mutated gene, back up to normal. We hope that by restoring the levels of this protein to normal, that we will either prevent the disease or at least slow the rate of cognitive decline in people that have the disease. Alector also works on Alzheimer's disease. Again, if you look at the human genetics, you see that a lot of the genes are related to what people currently work on—APP, the Alzheimer precursor protein, and Abeta, the component of plaques that are the characteristic of Alzheimer's disease. But a lot of the other genes are variants in what could be called the immune system of the brain, a set of cells called microglia, and Alector has the hypothesis that inactive microglia can result in effective removal of Abeta, or other toxic proteins, and we have a way of activating inactive microglia, and are currently testing whether the activation of what, believe it or not, we sometimes call exhausted [laughs] microglia, will help with the disease. It's a very different approach than targeting Abeta, which is mostly what has been done by other companies, and what I'm sure you've heard about if you read anything about this disease. That's Alector.

I'm chairman of the board of a company called DICE, and there, it's also very interesting. They're a set of therapeutics that are proteins, which are antibodies, that decrease the levels of proteins that rise to a high level in various diseases. Like psoriasis, for example, there are a set of proteins called cytokines, one of which is called IL—interleukin-17—that goes to a very high level. If you make an antibody, a therapeutic protein that binds the cytokine, that cytokine can't work. That has been shown to be a very effective treatment for psoriasis. For example, the drug COSENTYX, which is advertised on TV and so on, is an antibody against IL-17. The problem—it's not really a problem, but let's call it an issue—with those kinds of therapeutics is that they have to be either infused, or at least injected. You have to go in, you have to sit in a chair, you have a needle put in your arm, and the antibody is infused. Or, at a minimum, you have to inject yourself, or go into a doctor's office and be injected with the antibody. That's relatively inconvenient. If it is going to help very dramatically with your disease, you do it. But DICE has found a way to make a pill, basically, that reduces the efficacy of IL-17, which would be once, or maybe morning and evening, just a simple pill that you swallow that gives the same effect and is much more convenient and has other aspects that are medically positive that are associated with it, that I won't go into. I think that's really terrific, and the chemistry is advanced enough these days so that one can make pills against drug targets that were previously not really thought to be amenable to that kind of approach, that were only approached through antibody therapeutics.

I'm on the board of a couple of private companies. I don't think we need to go through them all. I am also the chairman of R&D of a company called BridgeBio, which has a number of interesting projects as well, in heart failure, in short stature. I also work with some investment groups. Part of Alphabet is a group that invests in new companies. That's called GV. It used to stand for Google Ventures; they just call it GV now. Seems like it still stands for Google Ventures to me, but—we start new companies. People have ideas, they send us their ideas, they make presentations, and we decide whether we want to give them money, essentially, for part ownership of the company. We start a new company. I also work with another venture capital group called The Column Group. GV is largely in Boston and New York; The Column Group is in San Francisco. And a new very exciting project with the largest investment group in the world, called BlackRock. They have I think $0.5 trillion dollars under management. I didn't even know there was that much money! [laughs] That's a lot. We're obviously a tiny, tiny, tiny, tiny, tiny, tiny—that's ten more tinies—part of that.

I should also go back; this is a little bit out of order. With the boards that I'm on, I'm often not an independent board member. I'll explain what that means. People used to ask me—I was the science representative on the board—people used to ask me, "How is the science going?" I'd say, "Pff, well, I think it's going fine." But I'm here six hours, four times a year, at the board meetings, so how do I really know how the science is going? I think it's okay. Then with a lot of the companies, we decided that I would work more closely with the scientists, up to one day a week, going over the science projects, making recommendations, helping with the clinical development projects and so on, and I'd get compensated for that. If you make more than $120,000 a year from the company, you're not considered "independent," quote-unquote. So, I do that with a lot of the companies where I'm on the board. That, I really enjoy, because I am down in the weeds, looking at data, interacting—not daily, but weekly—with the scientists, as well as being on the board of directors and helping with the strategic considerations of the board. I think my real value to companies that I work with of course is with the science. Whereas other people have expertise in finance, or governance, or audit, or various things, my expertise is of course working with the scientists. That's what I really enjoy doing.

ZIERLER: You have such a wide-angle view of biotechnology, bringing drugs to market. Have you developed—I don't know what the right term is—a sixth sense where you know early when to recognize, "This is a winner," or where you might see hype early in the process, or is it really you just don't know until the process is complete?

SCHELLER: You really don't know until it's complete, but it's interesting that you use that word—sixth sense—because I sometimes use that. Did you find that from someone?

ZIERLER: No.

SCHELLER: You do get an instinctual feeling around things that are—I wouldn't say that are going to work, but I would say that are more likely to work, than others. Most younger people don't have that, and many people never develop that. But, some people that I know and respect and hopefully they would include me in this group, do develop that, where you just get a feeling, if you will. I don't even know where it comes from, which is why I sometimes say it's like a sixth sense. It comes from your gut. I mean, of course it comes from your brain, but you don't know where in your brain it comes from. You don't have an "A, B, C, D" thought process that you go through. You just get a feeling, like "This one is a winner." I'm not always correct on that, but I think I'm more correct than the average person in biotechnology. That's something that you learn over decades of being a basic scientist, and then a drug developer scientist. As I said, some people never get it. A few do. And the few that do I think can be really valuable to companies, because while you won't always be correct, you don't have to be always correct; you just have to be more correct than the next person. [laughs]

ZIERLER: As biotechnology has matured over the course of your career, have the success rates, have the batting averages improved accordingly?

SCHELLER: Not really. No, and the batting averages are low, which, depending on what stage you're at, there's a certain probability that things will work, and hopefully as a project goes through research, development, early development, mid and late development, the probability should be going up that you're going to eventually have a drug, as you accumulate more information. But early on, the probability is quite low, for an average project, probably less than 10%. That's why drugs are so expensive to develop. Because for every one that works, if nine don't work, you have to burden the cost of the one that worked with the cost that was spent on the nine that didn't work. You don't do the work for free [laughs], for the ones that don't work. Those also cost money. Then you find out somewhere along the line that they don't work. Hopefully you find out early, so you can stop, but sometimes you don't find until you've gone all the way to very large, human clinical trials—can be hundreds of millions of dollars—and then have a failure. So, it's not that any one project is so expensive, although they're not cheap; it's the fact that you burden the one that worked with the nine that didn't work that makes the overall cost of doing drug discovery research and development so expensive.

ZIERLER: This 10%, this stubborn—remaining at this relatively low success rate—when you look at all of the advances in technology and science over the last 30 years, maybe it's a little counterintuitive to think that that success rate has not gone up. Is that simply a function of the lowest-hanging fruit, the solvable problems, have already been achieved, and that the targets now are just simply more and more difficult?

SCHELLER: I think that's a big part of it. We knew if we could make insulin in bacteria, and that it was similar to human insulin, that it would, quote, "work," because we already knew that if we purified insulin from sheep or pigs or wherever it used to come from [laughs], that that worked. The same with growth hormone. There, the challenge was technical. Could we actually do that? But if we did it, we knew it would work. With a lot of the projects that we work on today, there's a hypothesis that if we modulate the drug this way or that way, it will work, but that doesn't always turn out to be the case, in which case there's something wrong with your understanding of biology. I would say, though, that there's about a twofold increase in the probability of a drug working if you have human genetic data that supports your hypothesis. That twofold might not sound like a lot, but if something costs $2 billion, and then you have human genetic data supporting your hypothesis and it only costs $1 billion, that's a big difference! [laughs] So, I think human genetics is having an impact on what we call the probability of technical success.

Also, we've raised the bar in certain diseases. We can come back to psoriasis as an example. There are a lot of very effective treatments for psoriasis, so in order to get a new drug for psoriasis, you have to add some kind of benefit that isn't already there. Otherwise, how are you really helping? What is tending to be done more and more nowadays, and really cancer is leading the way here, is that diseases, large classes of diseases, don't really in general have a single molecular underpinning. Perhaps one of the best examples there is breast cancer. You say you have breast cancer; well, nowadays, that's not enough. Do you have breast cancer that has the HER-2 gene amplified? That's HER-2+ breast cancer. Do you have breast cancer that's estrogen receptor- and progesterone receptor-positive? ER/PR-positive breast cancer, it is called. Or, do you have breast cancer that's called triple negative? It's basically that you don't have any of those things. You don't have, number one, amplified HER-2, or estrogen- or progesterone-positive breast cancer, so ER-2, PR-3—triple negative breast cancer. These three types of breast cancer are treated totally differently, and the treatment for one wouldn't be expected to work at all in the treatment for the other. So, a lot of progress in medicine is subsetting big classes of disease into smaller classes that have a particular molecular underpinning that we understand and can attempt to develop therapeutics, but those therapeutics would only work on that subtype of the disease and wouldn't necessarily be expected to work on other subtypes of the disease. I'd say that's probably the case for all of the big diseases.

ZIERLER: A question in the news now all the time—artificial intelligence—what's the sense of its current and future impact in biotechnology?

SCHELLER: That's an interesting question. I'm not an expert in artificial intelligence or machine learning. I think that the potential is huge, but as is often the case, the current utility is overhyped. That's not a particular criticism of people who do that kind of work. I think we always get a little bit ahead of ourselves. I think sequencing the human genome was an amazing, amazing step forward for life science and biomedical research. However, we got a little bit ahead of ourselves in how fast the discoveries, the medicines, would come, after we sequenced the human genome, such that there became a period where certain people—I think they were mostly non-scientists, but anyway—certain people were saying that sequencing the human genome didn't really help at all. That's absolutely not the case. It just takes a long time to figure out biology and to make a medicine, versus version 10.6 of your iPhone. Again, that's not a criticism—I love my iPhone; that's not a criticism. It's just a different timescale in making progress. So, I think the potential is huge, and the potential is there, however the current utilities are somewhat limited. How do you do biology? You don't just ask your computer to tell you what the next drug is. It just doesn't work that way. [laughs]

ZIERLER: With or without AI, you mentioned advances in psoriasis, for example. As you survey all of the illnesses that biotechnology is focused on, where are you most bullish? Where do you see greatest potential for breakthrough? And what illnesses do you feel like we're really still in the dark ages, in terms of coming up with solutions?

SCHELLER: I don't know about most bullish, but I think I'm most concerned, I guess we should say, about neurological disorders. I was—I guess one would say I was; some people would say I still am, but I'm not sure that's the case—a neuroscientist, when I was on the faculty at Stanford for 19 years. I just see tremendous need there, both in developmental issues like autism, in late-stage-in-life issues, like we talked about frontotemporal dementia or Alzheimer's disease, in psychiatric disorders. But these are very, very tough issues, and it's not surprising that they're tough. The brain is clearly the most complicated, intricate organ in our body, and therefore it's the most difficult to understand. Therefore when something goes wrong, it's the most difficult to figure out what to try and do, to help with the condition. None of that is particularly I would say surprising, but progress for a lot of these disease has been slow and difficult. As the population ages, it's going to be more and more of an issue—cost to families, cost to society. And as I said, progress is slow. We're spending a lot of money, and we're going to need to spend a lot more [laughs], and hopefully we'll make breakthroughs, but it's difficult.

We've made big advances with cancer, particularly. I think immunotherapy approaches to cancer are giving—in a somewhat limited number of people, but some—long-range durable responses. I hate to use the "c" word—cures—but in some cases, in some diseases, cures. We understand so much about cancer now. It's a genetic disease. There are mutations that give rise to uncontrolled growth. There's a lot of work going on there that I'm optimistic about. Immunological disorders, as I said, there are a lot of treatments now for rheumatoid arthritis, psoriasis, Crohn's, IBD, other immune issues, that are very effective therapies, such that you're refining things from an injection to a pill, with targets that we know work. And on and on. It's a vast field. [laughs] I could go down a list of hundreds of conditions, but I'm not sure that's the way we want to spend the rest of our time.

ZIERLER: Do you have an affiliation still with UC San Francisco?

SCHELLER: Yes, I'm an Adjunct Professor of Biochemistry and Biophysics.

ZIERLER: Is that a way to stay current with the literature, to interact with students, to teach, if that's something that you want to do?

SCHELLER: Well, not that much. I don't have a lot of time to go to seminars there and so on. A lot of the companies that I work with have their own seminar programs, and I attend more of those seminars than at UCSF.

ZIERLER: What's the value for you, of being an adjunct there?

SCHELLER: Just a way to stay in touch with colleagues, some. And it's the funniest story—I guess this is one you could tell—Peter Walter, after I moved to Genentech, he was chairman of the Department, he phoned me and said, would I like to be an adjunct professor? I said, "Well, sure." I sent him a CV. He put together a file, in the typical way academics do. I think he got a dozen letters of recommendation. That took eight months to accumulate. He put together a big file that then goes to the administration of the UC System, the statewide UC System, and to the trustees. I'm at Genentech, and it's like a year and a half later—I kind of lost track of it, frankly. I was busy. I didn't think of it that much. Then one day Peter called me—I think this was in like June or July—and he said, "Well, sorry that it took so long, but I finally have your approval. Congratulations. I'm going to read this to you. ‘Congratulations on being appointed an adjunct professor of biochemistry and biophysics, with no salary, and no benefits, retroactive to January 1st.'"

ZIERLER: [laughs] A great honor!

SCHELLER: I thought, "Okay!" [laughs] So, yeah, it's fun. [laughs]

ZIERLER: Now let's focus on the kinds of science that you have worked on in your career. From graduate school at Stanford, throughout biotech, what is the umbrella discipline—biology, chemistry, neuroscience—what is the umbrella discipline that at the most broad level encapsulates all of the things that you work on?

SCHELLER: Molecular and cell biology. The things that I worked on as a graduate student, postdoc, and at Stanford, were using molecular biology and cell biology, biochemistry, to try and understand the detailed biochemical mechanisms of particular processes. That's extremely important in drug discovery as well, because once you understand a detailed mechanism of some kind, that's the basis—that has to be—there has to be a biochemical basis of something that's going wrong, and if you want to do drug discovery in a logical, mechanism-based way, you can't really understand what to do unless you understand how it works normally and what's going wrong when something is not functioning properly that gives rise to a disease. I think that's the underpinning of what I have tried to do in my career—to understand, at Caltech, how an egg and a sperm develop into an organism; at Columbia, how the nervous system generates particular behaviors; at Stanford, the biochemical processes that result in the release of neurotransmitter from a nerve terminal; and then in biotech, the biochemical processes in a wide variety of physiological conditions, and what goes wrong with that process, as I said, to give rise to disease. I think that's it. In my career, it has been a number of different problems, but the approach, as I said, of understanding at a very chemical level, biochemical level, the mechanistic underpinning of a physiological process.

ZIERLER: Is that to say in graduate school and your postdoc that you always had translational or clinical applied interests, even if you were operating in a basic science environment?

SCHELLER: No. [laughs] I had no translational interest with those problems, really. It was always in the back of your mind. As I said, I served on committees for the National Institutes of Health. But the argument was pretty simple and wasn't particularly deep—that, look, if you want to understand the diseases of the brain, you need to understand how the brain works, so you can figure out what went wrong. That was about the level of detail that I thought about it, frankly. It was really when I went to Genentech—the second time I went to Genentech—that I thought about really taking everything that I've learned and applying it to therapeutic issues.

ZIERLER: I wonder if you can compare the satisfaction of discovery in a basic science environment versus a translational environment.

SCHELLER: That's an interesting question. People have asked me about that. I guess one way to put it would be that I wouldn't do it differently [laughs], and that to really discover a fundamental process in the way the brain works, and the biochemical mechanism there, to have that kind of aha moment, it was incredibly cool, interesting, working really closely with a relatively small number of students. Versus to make a medicine, and to do a clinical trial, where you give a thousand people the drug, you give a thousand people the placebo, and then your end point is to see if people lived longer. To have it turn out to be the case that they do live longer is also pretty rewarding. I think I said to somebody, when we unblinded a big clinical trial, it didn't really matter which way it went; we usually cried. We either just spent sometimes hundreds of millions of dollars and it didn't work—that's a reason to cry—or we spent hundreds of millions of dollars and we saw that people lived longer when they took our treatment. That's also a reason to cry! [laughs] Things did work, time to time, at Genentech, and we did make a number of medicines, and that's also very rewarding. So, I have been lucky in my life, I think, to be able to do both.

ZIERLER: You mentioned living longer. What about changing perspectives on wellness? What have been some of the impacts from biotechnology not just on living longer but living better?

SCHELLER: We talk about that a lot, but, you know—lose weight, don't smoke, and exercise—it's the same for every disease! [laughs] I think if you do that, you're going to help yourself. Wellness is not something I think—I try and incorporate into my own life, I try and watch my weight and exercise, I've never smoked, et cetera—but, I haven't thought a lot about it in terms of what I work on in my career. I think that there are probably too many people on Earth, but I do believe that once somebody is here, we should take the best care of people as possible, and people that have afflictions deserve to have therapies that can help them live a better and longer life. As I've said, that is really what I have focused on, and that really fits more with my biochemical approach to biology, in that, as I said, if someone has a disease, something is going wrong somewhere, and if you can figure out the detailed mechanism—genetic, biochemical, molecular mechanism—you can think about how you might fix it and give the person a better life.

ZIERLER: In your career, either in an academic setting or in a biotechnology setting, what have been some of the real game-changers, both in terms of instrumentation and computation, for your work?

SCHELLER: Going back, I think two of the big instrumentation changes happened at Caltech—and it's quite remarkable, actually—in both determining the amino acid sequence of a protein and determining the DNA sequence. The work that came from Lee Hood, and the machine shops and engineers at Caltech, really took the fundamental processes of determining DNA and protein sequences, and industrialized them, and turned them into a machine that anybody could have in their laboratory to ask any question that they wanted about a protein sequence or a DNA sequence. I think those two things were incredibly important. Both won Nobel Prizes. None of the fundamental technologies were necessarily invented at Caltech, but what Caltech—what Lee and the engineers did—was make this a process that could be widely utilized. Without making it widely utilized, it never would have achieved the potential that it deserved, in a way, I guess could be a word. Of course, computing power, what we do now with human genetics, what we do with computing the conformation of proteins, so many of the things that we do would have taken years of crunching a machine to do, that now are done in a minute or a few seconds or what have you. That, of course, has affected every aspect of our lives, not just biology but certainly biology and molecular biology is no exception.

ZIERLER: If you take a really broad look at human biology, disease, drug development, what is the best possible role, in an idealized sense, that academia, business, and government play in addressing all of these challenges?

SCHELLER: I think that it is a collaboration. I think that if you look back at the kinds of things we talked about—recombinant DNA, we mentioned briefly monoclonal antibodies, various chemical reactions and processes, various discoveries of how aspects of biochemical mechanisms work—that's probably mostly best done in academia, funded by the government, where there is less pressure to make a medicine and more focus on understanding basic science. Then, as that basic science becomes understood, it becomes the job—at least in the world we know today—it becomes the job of industry to invest in that basic science and to turn that into a technology, a machine, a medicine, and that's done through private enterprise and private investment, often initiated by a university scientist, or maybe not. Maybe somebody read the work of the university scientist and said, "Hey, that's pretty cool. I think we could use that to do this." The patent system is important, so that the universities can benefit from the fundamental discoveries, the universities themselves and the faculty. That I think works reasonably well. So, that's the way it works! And I think it works quite well, actually. There are complaints, that medicines or maybe an MRI, a colonoscopy, or what have you, are too expensive. I think that's probably the case that they're too expensive. But look, somebody risked their own money when most of the time things don't work, in order to make an investment into a particular technology, and that is done with the expectation that if it works, there will be handsome returns on that. That's the way capitalism in the Western world works. I'd be perfectly fine if the government wanted to make all the investments into making medicines and then they were given away. That would be fine with me. It's just that Roche alone spends $12 billion or $13 billion a year on R&D. The whole NIH budget is $40 billion. Roche is just one company. There are hundreds of companies. If people want to change it such that governments fund all this work and then you give medicines away, that's fine with me. But in the end, until that happens, we have a different system. [laughs] And I think the system works reasonably well.

ZIERLER: Is part of that because profit motives really drive innovation in a way that government-funded research might not?

SCHELLER: I think government-funded work at universities, like research institutes, like Caltech, drives amazing innovation. That's where all the fundamental discoveries come from. But then if it's $2 billion, on the average, to make a medicine, what would the NIH do? Fund 20 projects to make medicines, and that would be their whole budget; there wouldn't be anything left. At a certain stage, sure, profit comes into play, and the only way that there can be enough money to get that work done is through private investment. Like I said, unless people want to make the NIH budget $400 billion instead of $40 billion, which I don't see happening anytime soon! [laughs] But $400 billion—I don't know the number, but that's probably a reasonable number for the amount of investment from private sources of drug discovery, technology discovery, et cetera, that is put in worldwide. As I've said a few times, that's just the way it works. I think we do need better mechanisms for making sure that people have access to expensive medicines, but I also think the idea that people in the United States are dying all over the place because they can't get medicines is not the case. [laughs]

ZIERLER: Last question for today—do you have opportunities currently to work in a mentorship capacity? Can you interact either with students, graduate students, or early career scientists? If so, what window is that giving you into where things are headed?

SCHELLER: Sure. In my work with the various companies and the science that is going on at those companies, I work with a lot of people, for better or for worse, most of whom are younger than me, many of whom are just out of their postdocs, for example. I work with a lot of people like that, so I think I mentor all sorts of folks. I get satisfaction from that, on the one hand. On the other hand, the way I've designed what I do now, I don't have any direct reports. I'm living the dream. [laughs] You can imagine at Genentech, we had an HR issue—with the 2,000—we had some issue every day. Most of them didn't rise to my level, thank god, or I would have lasted about a week there.

ZIERLER: [laughs]

SCHELLER: But, some did. Some serious problems did. That's life, but it's not what I was—it's not what anybody is interested in, obviously. You just have to deal with it. I feel as though I had a productive career, mentoring lots of folks, and managing people, having people that reported to me—my students, my postdocs, my team at Genentech, my team at 23andMe, et cetera. But at this time in my life, I'm happy not to be directly managing anybody, and to be more of an advisor.

ZIERLER: By living the dream, you mean simply everything you're involved in now is what's interesting to you, what's important to you?

SCHELLER: Yeah, it's what's interesting, and it's what's important. And if there's an HR issue, it's not my problem to fix it, number one. Also, at 5:00, I'm done. I actually have meetings and dinners in the evenings and so on, but you know what I mean. I say what I think, I help where I can, but I generally don't lie awake at night worrying about these companies, which I did when I was in charge. I think when you're 69 years old, maybe you've deserved the opportunity to sleep at night, not to lie awake worrying about issues with the company that you're working for, the basic research that you're doing. I guess that means I'm a little more detached from the companies, but that's fine with me, at this stage, because I feel as though I've been there, done that, on the ground, being the manager, being the principal investigator, being the person responsible for the pipeline, for the budget, for everything. That can result in pressure, because you want to do well. You want the people to do well. Taking one step back from that and still being involved in the science, but not having the stress and the pressure, is what I call livin' the dream! [laughs]

ZIERLER: On that note, this has been an excellent overview conversation. In our next conversation, we will go all the way back to the beginning, trace your family background. We'll take the story from there.

[End of Recording]

ZIERLER: This is David Zierler, Director of the Caltech Heritage Project. It is Monday, April 24th, 2023. It is great to be back with Dr. Richard Scheller. Richard, once again, great to be with you. Thank you so much for joining.

SCHELLER: Pleasure!

ZIERLER: In our first conversation, we took a great tour of your approach to science, and biotechnology. Today let's go all the way back and establish first your family background. How many generations back can you go where you had a relationship? Parents, grandparents, great grandparents? Who did you know in your family history?

SCHELLER: I knew my great grandparents, on both sides, but particularly on my mother's side, as they were a bit younger. My great grandparents on my father's side, I have seen pictures of myself with them, so I know that I've met them, but I don't really remember that much about them. My great grandparents on my mother's side were actually farmers in Wisconsin. They were from Poland. My mother's maiden name is Smaglik [?]. My father's side, obviously Scheller, and they were from Germany. We always referred to my great grandparents as—when I saw them, they would be in the city or suburbs where I grew up, around Milwaukee—and that my great grandparents were visiting "from the farm." They were potato and dairy farmers in Wisconsin. Growing potatoes in Wisconsin is a tough thing, because there are a lot of rocks. [laughs] I remember that I had a gift from them, my great grandparents, from the farm, which was a rock, actually, that looked just like a potato! [laughs]

ZIERLER: [laughs]

SCHELLER: Until you tried to cut into it, and then it was pretty clear—it was a rock, not a potato! I would meet them at family gatherings, which was a long time ago now, and that's pretty much all I remember of them, is that they would come to the city, Milwaukee and the suburbs, from "the farm," quote/unquote. I never visited the farm, personally.

ZIERLER: Was it your grandparents that established professional careers? Were they the ones who left the farm?

SCHELLER: Yes. My grandfather on my mother's side was a bus driver, a city—Milwaukee County—bus driver. I remember a couple of things. There were issues about being a bus driver back then, because there were race issues, and that was, when I was young, a time when it was expected that certain folks, non-white folks, didn't sit wherever they wanted to sit, that they sat in the back of the bus. My grandfather certainly, as I remember, didn't really think that that was something that should be done, but other people who rode the bus might have thought that that should be done, and there could be conflict on the bus if that didn't happen, and he was the only one there to—he was in charge of the bus. He had to resolve these things, which weren't so easy or so comfortable. It wasn't always just getting people from A to B safely, and so on. If I was taking the bus—I was probably too young to take the bus on my own during this time, but if I was there with my mother and we got on the bus, he would let us get on for free. [laughs] Which was very hush-hush. It was probably 25 cents or 10 cents or whatever to get on the bus, but we didn't have to pay. [laughs] My grandfather on my father's side was a plant manager. He was one of the founders of a company in Milwaukee that made lock washers. You're so young; do you even know what a lock washer is?

ZIERLER: I don't, I have to admit.

SCHELLER: That's so funny. When you have a screw and a nut, sometimes you'd put in this little piece of metal that's kind of offset a bit, such that when you tightened it, the metal would be stressed, and that would help make sure that the nut didn't come off of the screw. You could have little tiny ones, or for like building buildings and so on, you'd have great big ones, and so on. He was a founder and a manager of this manufacturing company. As far as I remember, my grandmothers on both sides were maintaining the family and the household and so on.

ZIERLER: Where did your parents meet?

SCHELLER: My parents [laughs] met at a—I think my mother was working behind the counter at a—it was a combination of what drugstores used to be, where certainly there was a pharmacy, but they sold lots of stuff, kind of like a Walgreen's might do today. Back in the day, they also often had a soda fountain, where they would make malted milk, or I don't remember if they served food, but they had a fountain, as well. My mother worked at the fountain, and my father came into the store, and that's where they met. They grew up about four blocks from each other.

ZIERLER: Wow.

SCHELLER: They didn't know each other when they were younger. My father was a few years, not a lot, older. He served in the Navy during World War II and was on a hospital ship in the Pacific.

ZIERLER: Did he ever talk about his service? Did you ever get him to open up?

SCHELLER: Yeah, he was very proud of having been in the Navy. I think that was something that he looked back on as sort of an adventurous time, and I'm sure it was, on the Pacific, during that—are you kidding me? So, yeah, he did talk about it some.

ZIERLER: Was religion important on either side of your family?

SCHELLER: Yes. My mother's family was Catholic, and my father's family was Lutheran. My grandparents certainly went to church. I was raised as a Catholic. I went through First Communion and Confirmation, things like that, but I was never personally—I went to public schools, but then also Sunday school, to learn religious things [laughs], I guess, but I was never religious myself, really.

ZIERLER: What career did your father pursue after the military?

SCHELLER: He was initially a social worker, so he worked for Milwaukee County, and he was in charge of individual cases of people who were often not wealthy and needed placement or help to move forward with their lives. Then I guess one would say that he rose through the ranks and became a hospital and institution director or manager. Milwaukee County, for example, had a set of institutions, including a county hospital where people could go who didn't have access to other hospitals, they had a psychiatric institution, they had at the time a tuberculosis institution, all on a large grounds. He became director of that institution. So, I would say a hospital or public medical institution manager was his eventual job starting from his social work background.

ZIERLER: What about your mom? Did she work outside the home?

SCHELLER: She did not. When I went to college—and we should talk about my sister, some. That's somewhat tragic, but it was a long time ago.

ZIERLER: Sure.

SCHELLER: When we left home, she went to college—she did not have a college education before that—and she got her degree in art, and became a practicing artist. I was quite proud of her to go back to school and get a degree. I don't remember—she must have been at least in her late thirties or forties. I still have a few paintings on the wall around the house from her. She loved that. Now, my sister was a very tragic—is a very tragic—story. She has passed away now. She ran away—I guess that's certainly what we called it at the time—from home in junior high school, which is—how old are you when you're in junior high school? She wasn't even driving yet. She was gone for years. She came back. She was a heroin addict when she came back. She eventually ended up being arrested for armed robbery. She drove the getaway car, but the rules are—so she actually didn't hold a gun or a knife or anything, but if you play that role in the incident, you're kind of equally guilty, so she ended up serving time in the women's prison in Wisconsin. I remember going to visit her there. This is all pretty hard to understand, because I always wanted to be a scientist, and we'll come back to that. She eventually was released from prison. She was writing someone in the men's prison, and he was released, and they ended up—I think they got married. They did have a daughter. He was eventually killed in a drug deal, and she contracted hepatitis C, which they didn't even know there was such a virus at the time. They just were discovering that there was a virus called hepatitis C, which was spread by IV drug use. Eventually, she succumbed to hepatitis C, because it ravaged her liver, so she passed away. It is so interesting that today, there's a once-a-day pill that you take for 60 days, and you're cured of hepatitis C, but that medicine was not available at the time, so she died of hepatitis C. So, her life was extremely painful for our family, obviously, being a heroin addict, in prison, and then husband being killed in a drug deal, dying of hepatitis C, et cetera. It was painful for me, but even so much more painful, I think, for my parents.

ZIERLER: It was just the two of you, you and your sister?

SCHELLER: Just the two of us.

ZIERLER: Who was older?

SCHELLER: I was four years older. The thing that I mentioned, I always wanted to be a scientist, almost as far back as I can remember. When I was growing up, I had a microscope. I had a chemistry set. I had a laboratory in our basement of our house. In the Midwest, they have basements. I had a periodic table of the elements hanging in my bedroom. I mean, I was a nerd from the get-go! I liked biology, and I liked chemistry. Even in early stages, like junior high school—"What do you want to do when you grow up?"—"I want to be a biochemist." [laughs] I may have gone through like a one-year phase when I played bass guitar when I wanted to be a rock star, but I mean, other than that [laughs] I never wanted to do anything except to be a biochemist.

ZIERLER: We'll come back to that. I wonder if you've ever thought about—there's no easy answer to the question, but—how you and your sister, coming from the same family, same parents, could have such different trajectories. How do you make sense of that?

SCHELLER: That's what I was getting at. I don't know. She'd see this periodic table of elements hanging in my bedroom and would ask, "What's that?" I said, "Well, those are the different atoms." "What's an atom?" I mean, she just had no idea. She was not stupid. She was very smart. She liked to read, probably read more as a child than I did. But—I just don't know, how one person could always, as far back as they can remember, want to be a scientist, and the other person, an armed robber, drug addict, who died because of a virus contracted because she was shooting up so much. I don't know. Same parents. Treated the same, obviously. They loved both of us. There was no difference in the way we were treated or anything. It's just—yeah.

ZIERLER: What were your exposures? How did you even know to want a microscope and a periodic table from such a young age?

SCHELLER: I'm not sure. I think the public school system in the suburbs of Milwaukee, there were a lot of really, really good teachers there. There were early kinds of things that we did. I remember putting a candle in a pan of water, and then putting a glass over the candle, and the candle would burn oxygen for a little while, and then the water would go up in the glass and take the place of the oxygen, and it would do that at some percent. What percent of oxygen is the air? Twenty percent, ten percent? Something like that. It would go up a certain percent, and you could measure that, and that would be the amount of oxygen that there was in the air. That was pretty cool. Then I had things like batteries. I'm going back, being younger. I know I had reptiles. I liked snakes and turtles and frogs [laughs], and I liked batteries. Just things like—before you could even—I mean, starting in maybe ninth grade, you could take a science class actually, but even before that—as I said, batteries, and reptiles, and just [laughs] things, that fascinated me. But then I had some very, very good teachers growing up in the suburbs of Milwaukee. The things that you learned. I don't even remember anymore—when do you take chemistry? Like tenth grade?

ZIERLER: Yeah.

SCHELLER: I learned about atoms, and I learned about electrons, and why hydrogen would form H2, because the s orbital could accommodate two electrons, and one came from each atom. And then water was oxygen and two hydrogens. The teachers were really, really, very good. Amazing people. I thought, "Well, that's all really, really cool." [laughs] So I had a notion of being a scientist when I was younger, but I think that I had very good high school teachers, and the kind of thing you could learn about—the Lewis dot structure of an atom, and how that made molecules. I knew that in high school, how you made molecules from atoms. That's amazing! That was a long time ago. The teachers were really, really good. Physics was interesting; a little harder for me than chemistry. Biology wasn't really so interesting. It was fine to dissect the frog or whatever, but chemistry was the thing that I thought was incredibly cool. I think I really owe a lot to those high school teachers, and how good they were, how amazingly good they were, that some kid off the street, so to speak, could go there and take a year of chemistry and come out knowing about atoms and molecules. It was really great. I owe a lot to those teachers, to the country that gave me those opportunities to learn. But it was the suburbs. My parents weren't wealthy, but this was not an inner-city school either. This was a public, suburban school, where I think in general they had a lot of opportunities that maybe other kids didn't have.

ZIERLER: What did you do during the summers in high school? Did you work? Did you go to camp? Did you do any research?

SCHELLER: I worked in a shoe store when I was growing up. You know the whole thing—people come in, measure their foot, "try these shoes on," walk around, "do you like it?" Also in the back, stocking shoes, as new ones would come in. Finding where they go in the inventory. In college, I worked in research labs, but not really during high school. So, I worked.

ZIERLER: When it was time to think about college, what were you considering? What was available to you?

SCHELLER: Here's the thing. I loved science, but in high school I was an okay but not a great student. I got a lot of criticism for that. People said, "What do you want to do?" I said, "Well, I'm going to be a biochemist." They said, "But, how can you be a biochemist? You do well in science but you don't do that well in anything else. You have a fake ID and you drink beer." I never have done hard drugs like my sister. I smoked my share of marijuana at the time, as did—well, not every—I think more people probably smoke marijuana now than then, but plenty of people smoked marijuana then. So I was kind of an average student, and they said, "Well, yeah, but you're not that good a student. You're never going to be a biochemist." But I knew that the University of Wisconsin in Madison was one of the great biochemistry schools, in the country, actually, going way back, when it was actually called Agricultural Chemistry. And I knew that I didn't need very good grades to get in there; I needed kind of okay grades to get in there. Because I was from Wisconsin, and if you were from Wisconsin, you pretty much had an in there, because—just because. Those were the rules. I guess people felt that I grew up and my parents paid taxes to pay for the university. I wouldn't have gotten into Harvard or Yale. There would be no way. But I knew that if I could get into Wisconsin in Madison, that I would then begin to be serious, and if I did well there, then I could pretty much go wherever I wanted to. People looked at me like, "Where is this kid coming from? This is a fantasy. People just don't change like that." They said, "That's not the way it's going to work." I said, "No, I'm going to have to work so hard that I'm going to have fun now. But then when that time comes, that's it." I was told, "No way. That's just not the way it works." I was an arrogant little jerk. I said, "We'll see."

ZIERLER: You did!

SCHELLER: Then I went there and I had to work. So I became absolutely obsessed.

ZIERLER: What year did you start?

SCHELLER: I'd have to look at my CV. We can find that number. 1970? Born in 1953, and I started when I was 17, so, yeah.

ZIERLER: Was the antiwar movement still going on, on campus?

SCHELLER: Yeah. We can get to that. But when I went, I became obsessed. I went to class, came home, I ate dinner in the dorm, and went to the library and studied, came home and went to sleep, and did the same thing the next day. Saturday, I got up and I went to the library and studied all day and then went home to sleep. Sunday, the same thing. I became obsessed with catching up, if you will, in math and physics, and chemistry. I did well in my science classes, but didn't get As in everything. I did in college, but not in high school. The antiwar movement was definitely still going on. It was one or two years after—you're too young to remember that there was a bomb set off there.

ZIERLER: I knew about that, though. Were you around when that happened?

SCHELLER: No, that was one or two years before I started. The Army Math Research Center was blown up, and a couple of students and postdocs were killed, actually. At the time that I was there, there were still protests, and I was, coming home from the library some nights, tear-gassed. They would throw teargas canisters into the first floor of the dormitory, so that people would actually stay in their rooms and not come out and join the mayhem. I didn't believe in the Vietnam War, but I didn't have time, then. I was on a mission to get almost all A's in college so that I could become a scientist. But, yes, that was a time when there was active police interactions, teargas, billy clubs, things being trashed, et cetera. As I said, I didn't believe in the Vietnam War, but I needed to become a biochemist, so I didn't really have time to go out and get my head clubbed or teargassed any more than I would just walking home from the library. [laughs]

ZIERLER: Biochemistry at UW Madison is its own department?

SCHELLER: It is, and that's a little bit of a funny story. I wanted to be a biochemist, and you can be a biochemist and either be in what was called Letters and Sciences, or you could also be in the Ag School, the Agriculture School. I thought, "Well, the Department is in the Agriculture School; I'm a biochemistry major, so I'm in the Agriculture School. Whatever; I'm a biochemistry major." But that was a little bit funny, because then I was being recruited to join a fraternity. I never joined a fraternity at all, but I was being recruited to join a fraternity that was in the Agriculture School, and pretty much most of the guys were majoring in things like dairy science, or—that's really it, since this was Wisconsin. There's really a lot of cows. That's really the one that comes to mind. Most of them grew up on farms and were going to be in the farming industry. When you're recruited to a [laughs] fraternity, you come over and you have dinner with folks, and "What's your major?" "Well, I'm in dairy sciences. What's your major?" "Biochemistry." I didn't really fit in there. [laughs] I could have joined lots of fraternities; that really wasn't my thing anyway. But I'll always remember being at dinner with a bunch of guys that, because it was the Ag School, were going to be future farmers, basically. Which was terrific. That's in my background. That's all great. It's just not where my head was at [laughs], so to speak!

ZIERLER: Did you have to deal with the draft yourself? Was going to Vietnam a concern of yours?

SCHELLER: Oh, I did. I did. I think I was—maybe the first year of the lottery. Remember, there was a draft, but the draft wasn't really fair, because if you were in college, you could get a deferment. People said, "Well, that's not fair. These rich kids go to college, so they don't have to go serve our country? So, what we're going to do is have a draft." Then it didn't matter what you were doing. We started with number one, and we took as many people as we needed, and then we stopped when we didn't need any more people. I remember the day of the lottery, and I went off to class, the lottery took place, and I didn't know what my number was. I was in classes and things. I came home, and my roommate had put a note on the door of our dorm saying, "You're number 348." Which meant that unless there was a catastrophic world war, there was no way I was going to be drafted, because that was like 12 days left to the end of the year, so they'd have to draft 347 birthdays before me, and they usually got to around 100 or something, so I was hundreds away from being drafted. But, there was someone on the floor of our dorm who was number one. He quit school the next day, he partied for a couple of weeks, and he got drafted, and probably—I don't know; he wasn't a close friend of mine—but probably went to Vietnam. I don't know. That was a very nerve-wracking day, but I guess since I didn't want to join the service, I guess I would say that I was lucky.

ZIERLER: Why biochemistry? Was that your way of splitting the difference between biology and chemistry?

SCHELLER: Yeah. That's a way of saying, very early on, you have snakes and frogs, and then you have a microscope, and you have pond water, and you see single-celled organisms, or you look at blood, or you look at a feather, or you look at stuff. But knowing that all of that really comes from somewhere. It's made somehow. Living things don't just appear. The idea that it's all really just chemistry, so wouldn't it be cool to understand living things—by then I was thinking more like things in the microscope, like not a whole snake or something—living things, in terms of the chemical reactions? Which is what I ended up doing. I was never a very good advisor at Stanford, when I was a professor, I think because of this kind of history. I always knew what I wanted to do. My wife was a great advisor. When students would come in and say, "Well, I don't know what I want to do," I was lost as to what to say. I didn't have very many advisees, because I kind of felt like, well—I was into other things at the time. I suppose I could have become better at it, but it wasn't really what I was interested in. I kind of felt like, "Well, how can I figure out what you want to do? You've got to figure that out. And once you know what you want to do, if you want to be a biochemist, I can help you with that. But I can't help you figure out what you want to do. How can I do that?" Because I never really had to do it for myself. I just always knew. I feel kind of lucky for that, because a lot of people end up searching and finding their way. That's all cool, but I think a lot of people end up searching and maybe never finding their way, and that can't be all that much fun.

ZIERLER: What kind of laboratory experiences were formative for you, as an undergraduate?

SCHELLER: I stayed in Madison during the summers, and I worked in laboratories, and I also did a thesis project working in laboratories in Madison. I also think, by the way, the classes there were very good. The teachers were outstanding. Really, really great teachers. And the ability to have lab experiences—just walk into a professor's office off the street and say, "I'm interested in this or that." If they didn't have a space, they'd help me find something. For my honors thesis, I worked as a structural biologist doing x-ray crystallography. I'm not sure it's my first paper, but it's the first work that I did that resulted in a paper. It might have been published after I was at Caltech for a year or two, but it was a crystal structure. I worked on that with a graduate student at the time. Yes, absolutely terrific. Welcomed into real, laboratory, real-deal research. Great teachers. Again, what a great university experience. I owe a lot to University of Wisconsin-Madison. But I did what I said I was going to do, too. I worked hard. I was obsessed. I had a few friends but not that many. I didn't go out much. [laughs] I just—worked.

ZIERLER: Were there any professors you became close with at Madison?

SCHELLER: A few people where I worked in their labs, but I never really became that close. I would see them during the day when I was there, but we weren't particularly friendly in terms of anything other than the science that I was doing. But, they were nice guys. They always took their time with me, and were friendly. They were very influential in my life. My undergraduate advisor was kind of a grumpy guy. I liked him. His name was John Garver. Maybe as a sophomore, I came in and I said, "I think maybe I want to switch to physics from biochemistry." He looked at me, and he said, "Don't do that. You're not smart enough."

ZIERLER: Wow.

SCHELLER: And, you know, he was right. I mean, in a sense, he was right. I knew what he meant. He didn't mean that I was stupid. But I was not one of those people who just knows math. You don't even need to go to the class, and you just take the final, and you just do it, and you get an A+. Those were the people that should be physicists. Those were the people that were probably going to do unbelievably well as a physicist. I'm not sure he was 100% right, because I was pretty motivated, but I did not have—you have to work hard in all aspects of science, but I think you can be almost born a genius in math, which is what a lot of physics is, and that was the kind of physics I was thinking about. Could be experimental, but would have to be a theoretical basis to it, whether it was quantum mechanics, or gravity, or black holes, or whatever. That's all heavily mathematical. I was okay. I got an A or probably a few A's in calculus or whatever, but I was not a genius in math, for sure.

I don't think there is such a thing as a genius in biology. It just isn't—I've known an incredible number of really smart people, the smartest people in the world in biology. I wouldn't say they're geniuses. I would say Feynman was a genius. And it's because biology—the universe made up some rules that govern physics. Biology happened randomly. You have an organism, it changes during evolution by having mutations, and the mutation, given the environment that you're in, is either good or bad, so it's selected or not. But the mutation itself is random. Why are we here and who do we look like the way we look, versus an elephant? It's just because of the random walk of DNA mutating, and then testing out, did this work, versus did that work? So there aren't the same kind of rules as there are in physics. Biology, in order to figure out how it works, you just have to do experiments, and experiments, and experiments, whereas in theoretical physics, you can predict what a particle might be, because of the fundamental rules around it, around the physical principles. That's just not the way biology is. So, I think it's a very different kind of science, biology, versus physics. Don't get me wrong; all of biology is basically physics, but you're never going to understand an elephant in terms of its quarks. That's just not a goal. I mean, maybe someday, but I'm not sure that will even ever be a goal, if you know what I mean. So, he was right in giving me that advice. I think I turned out being a much better biochemist than I would have, being a physicist. [laughs]

ZIERLER: When you say you were so driven to do well in biochemistry as an undergraduate, what did that mean for you in terms of the end result? Would that be most options for graduate school? How far afield were you thinking in your drive as a college student?

SCHELLER: I wanted to go to a good graduate school. I knew I had to do really well. By the time you get to graduate school, they don't really care what you did in high school that much. I mentioned that I was into crystallography for my senior thesis. I read a short book, sort of directed at the undergrad level, by Richard Dickerson, who was a Caltech professor at the time. He came and gave a seminar in the Biochemistry Department at the University of Wisconsin in Madison, and I decided pretty early on that I wanted to go to Caltech to be a graduate student, and to do structural work. I knew I needed to do really well in order to get into Caltech; otherwise I could just forget it! It was partially that I—I mean, you can't make yourself work that hard—well, at least I couldn't make myself work that hard if I didn't enjoy it, but also, I had a goal in mind, which was to do well enough to get into Caltech!

ZIERLER: How did you learn about Caltech? How did it loom in your mind as an undergraduate?

SCHELLER: Through that book. It was Dickerson and Geis. Irving Geis was an illustrator, and he drew ball-and-stick models of proteins. My work was on a small molecule, a tiny little molecule, and its structure. But proteins now were being—the three-dimensional structure of proteins were being worked out. Dickerson worked on that as a postdoc, before he came to Caltech, with Perutz in Cambridge, before he came to Caltech to be a professor. The thought that you could then understand the structure of a protein like hemoglobin, myoglobin, then you could understand, again in terms of chemistry, how the protein worked, seemed to me to be getting at the basis of what I was interested in as a kid, looking in the microscope at a single-celled organism. What's the chemistry that's going on there? So that book by Dickerson, who was a professor at Caltech, and Geis, and the structure of DNA, which was done previously, but led me to think that a lot of understanding, the kind of biochemistry that I wanted to understand in order to understand how life worked in terms of chemistry, had to do with structure. Dickerson was a famous Caltech professor. As I said, he gave a seminar at the University of Wisconsin-Madison. That's when I decided that I wanted to go to Caltech. I must admit that in the back of my mind, the allure of California, having lived my whole life in Wisconsin, was a little bit of like the promised land, in some way. Mysterious. The beach. Big Sur. All these kinds of things that you'd sort of heard of, but you never really experienced. Fantasized about the beach on the Pacific Ocean, not the beach on Lake Michigan. [laughs]

ZIERLER: [laughs] Besides Dickerson, what other names might you have been exposed to as an undergraduate? Like Linus Pauling, Max Delbrück—did you hear about all the other professors at Caltech who were doing some important work?

SCHELLER: Yes. I knew a lot about Linus Pauling, because the nature of the chemical bond was a big thing for me, as well. Delbrück, I don't think I had ever come across, that I remember, although my office at Caltech was across from his office when I was a graduate student. But that was later. Everyone who was interested in any kind of science had heard of Linus Pauling. Probably also Feynman. Those were probably the Caltech names that I had—I was still an undergrad—those were the Caltech names that I knew about.

ZIERLER: Was it Caltech or bust, or did you apply to a variety of programs?

SCHELLER: No, it was pretty much Caltech or bust.

ZIERLER: Wow.

SCHELLER: I applied to Wisconsin. But when I wanted to go to Caltech, I wrote to Dickerson, and I told him about my interests. I think we even met, maybe at a scientific meeting or something, before. But I wrote to Dickerson with my specific interests. So, I was pretty fixated on Caltech and structural biology in general, and a particular individual professor that I even wanted to work with, before I got there. Although it turned out I didn't do my thesis with Dickerson [laughs].

ZIERLER: Yeah, we'll get to that.

SCHELLER: He was very helpful and very gracious and very interested. I don't think that there were that many undergrads that were writing specific professors saying, "Here's what I've done. I'm working in a crystallography lab. I'd really like to come to Caltech and work with you." Most people just went somewhere and looked around, and then figured out what to do.

ZIERLER: This would have been 1974 when you arrive in Pasadena?

SCHELLER: If you say so! [laughs] We can check. [laughs]

ZIERLER: What were your early impressions of campus?

SCHELLER: I went the summer before classes started in order to begin to work with Dickerson. I took my father's duffle bag from the Navy, so it's like this big around, and this tall, and I put everything I had in there [laughs], and I got on an airplane, and I flew to Caltech! [laughs] Got there, and—it was the promised land. It was warm, sunny. Went to the beach. [laughs] During that summer, I also went to Big Sur, because I wanted to go to Big Sur, and I went a couple days camping there. So, camping for a few days. Then I had no way to get back to L.A. I hitchhiked from Big Sur down—back home—which the people in the laboratory. I just didn't know any other way to get there! [laughs]

ZIERLER: [laughs]

SCHELLER: So, worked there for the summer. Then when the rest of the class came, we started classes, and it was great.

ZIERLER: You started initially in Dickerson's lab.

SCHELLER: Yeah. Although the first year, you're really kind of rotating, supposed to be rotating, but I worked in his lab.

ZIERLER: What was the focus of Dickerson's lab at that point?

SCHELLER: He—we—were trying to—this all gets a little historic, actually. We were trying to make a protein that bound to DNA, a lac repressor protein, and to try and understand, again at the atomic structural level, how the protein knew to bind to this particular DNA sequence and nowhere else. We kind of knew in general it had to have some parts to the protein that would recognize the ATGCs in the DNA, and that would recognize that sequence and not others, but we didn't know the atomic details of how that worked. So, fine, you could purify the protein, but it was difficult at the time to make the piece of DNA that you wanted to put together with the protein so you could see how the protein recognized the DNA. Dickerson was working on this with a scientist from the City of Hope named Art Riggs. Riggs knew about a scientist in Canada who had come up with a new and faster way to make DNA, the specific sequence, called Keiichi Itakura. So Riggs said to Dickerson, "Let's bring Itakura to Caltech. We'll synthesize the DNA chemically, and then we'll purify from bacteria the protein. We'll put the two together, and we'll do the crystal structure, and learn something." So, Itakura came to Caltech, and he—he 99%, and me 1%—set up the laboratory to do the DNA synthesis. We worked on that. But then, Riggs was—so then Swanson and Boyer, back up in the Bay Area, started Genentech. So, okay, they started Genentech; "What are we going to do, actually?" They thought, "Let's do a proof of concept study, and let's make a small human peptide in bacteria. That would prove that we could make insulin, and we could make growth hormone, and we could, you know, live happily ever after." So they said, "Okay." But then, "How are we going to do that?" The easiest thing, because the protein was small, was to synthesize the DNA that encoded the protein, and to put it in a regulatory system called the lac operon, so the protein would be made in the right way. Riggs was an expert in the lac operon, and Boyer knew that Itakura had moved to Caltech and he knew how to synthesize DNA. So, Swanson and Boyer contacted Riggs at the City of Hope, and Itakura, who was at Caltech at the time, and said, "Let's do this project together to show that we can make human proteins in bacteria." That was Genentech's first project. I worked a tiny bit on that, compared to these guys. I was still taking classes and trying to pass Caltech chemistry graduate classes, and quantum mechanics and so on. Took a little effort [laughs]. Itakura moved full-time to the City of Hope, and that project then was successful, which was really the founding project of Genentech, the rest of which—I don't have to tell you, since it's what you do—is history! [laughs] That's how actually Genentech started. Did you know that?

ZIERLER: I did not know that part.

SCHELLER: It's pretty interesting, huh?

ZIERLER: It is very interesting.

SCHELLER: Yeah. I then decided [laughs] this was just engineering, and engineering was—fine—but I didn't want to be an engineer. So, you made somatostatin in bacteria. You could make insulin. You could make growth hormone. You could probably help a bunch of people, and you could probably make a bunch of money. That's not what I was interested in. I wanted to discover new things and make new basic science discoveries, not growth hormone in bacteria, which was far from trivial. I don't know why in the world I was thinking that way, but that's—so then I—how much time do you have? I don't know how interesting this is, but—

ZIERLER: This is very interesting.

SCHELLER: Anyway, I had made three pieces of DNA that encoded restriction enzymes. Did we talk about this last time?

ZIERLER: A little bit, but now we're getting into it, in the chronology.

SCHELLER: In order to clone a piece of DNA, you would cut with an enzyme that would break open the DNA, but then in order to put a new piece of DNA in, it had to recognize the ends of the DNA where you had cut it. It turned out that maybe the piece of DNA you wanted to put in didn't have those ends that it would recognize. So, I made pieces of DNA that you could put on the end of the piece of DNA that you wanted to clone, so that it would recognize the ends where you cut the DNA with what was called the restriction enzyme. So I made those, and those were 310 base pairs of DNA, and I showed they could be cut by the enzyme. As I think I maybe mentioned before, that was a Science paper to do that. Nowadays, those things, nobody makes them, you just buy them, and they're all readily available, but at the time, to even synthesize those and show they were cut by DNA was something. They were eventually—sent out aliquots of them. They were used all over the world to clone growth hormone and insulin and all sorts of different things. At the same time, there was a professor in Biology that studied certain sequences of DNA, and I thought that to clone those, we could isolate them, we could put these pieces of DNA on the end, so that they could be easily inserted into what we called the cloning vector, and then we could clone them and study them, and try and figure out what they did. That was Eric Davidson, and that was a basic science project that would lead to hopefully understanding something new about how biology works. So, I decided Genentech was just an engineering problem, and I would go work on this for my PhD, which I did, and it was very interesting. We published lots of papers, and that was all perfectly fine.

ZIERLER: Tell me about Davidson. What was he like?

SCHELLER: He was a bit of a contrarian on a lot of things, but he also taught me a lot. One of the things I think that he taught me that I've benefited from for the rest of my life was how to read a scientific paper and to try and figure out whether what was being said was true. He ran a class in his office of about, I don't know, five or eight graduate students—it was like a two-hour class—we would take a paper and sometimes spend three weeks on it, so six hours, and just read, "Here's what they say. Here's what they did. And here's what they conclude from what they did. Is that true?" I had never really thought about that part before. You'd read a paper, and you'd kind of go, "Oh, okay." Never really thought, like, "Is it true?" There, you have to go see, well, how did they do it? If they did it this way, could it mean something else, other than what they conclude? Or could it have meant three things, and they just picked their favorite thing? Or, was it fully substantiated, that what they said, what they concluded, that what they said is true is true? You'd find out, by really looking at that level of detail, that a lot of times, the stuff wasn't necessarily true! [laughs] And that they had made a mistake. They had put in a bias that led to a conclusion that was something that they thought already anyway, so they didn't consider other things. On and on and on. I think that has helped—I would say that I learned that there, for the first time, and that that helped me tremendously in the future, in reading other papers, and deciding what I believed was the case from the paper, but also helped me with my own—years later—scientific research, where when I did an experiment, or when one of my students did an experiment, I could ask, "How did they do it? Were there other possible conclusions? Did we do the right control experiment?" Maybe it could mean these three things, so we needed to do another experiment to determine which of the three things it actually was. Just helping me think, critically, about how to do this complicated stuff that's biology, which is messy, just messy, complicated. You don't know what the answer is. There isn't a theory behind it, really. Getting the correct, hopefully more often than that, the correct conclusions. I think that's the thing that I remember most about what he taught me that stuck with me as a scientist, that helped me the most, to keep my understanding of science and the kind of science that I did in my own lab, and so on, on the right track, and to be critical enough of myself, as well as everyone else who is a scientist—that's what we do—to lead, hopefully more often than not, to the right conclusion. That's what I remember the most about what he taught me. I had just never thought that way before.

ZIERLER: These were conversations in his office. Was he there in the lab with you?

SCHELLER: No, no, this was a formal graduate student class, taught at Caltech, in Biology, that was like eight students. One student would be in charge of presenting the paper, but then we would discuss it. He was in the class, and the eight of us would discuss it, and he would lead the discussion towards the kinds of questions that I was talking about. Does it really substantiate the conclusion? Is the conclusion right? All these things. He was teaching all of us—I was just in the class—about that way of critical thinking. In the lab, no, he was not in the lab at the time. We were the experimentalists out in the lab. It was all an extension of that class, in a way. When we would go over data with him, he'd be putting that same critical eye towards the data that we were generating ourselves, and would discuss it, in kind of a critical way. He was a little bit difficult to get along with at times. He has passed away now, unfortunately. He was difficult. I learned very early on how to get along with him. When you'd bring in data and you'd do this, he'd kind of suggest, "Well, what you should do next is that." I actually didn't like being told what to do, but if you argued with him, it never turned out well. You would just be butting heads. So I learned very early on, in contrast to some other people in the lab, not to argue. I would just say, "Fine." Then I'd leave. Then I'd do what I wanted. And just so I came back with something interesting, it didn't really matter whether I did exactly what he wanted or not. [laughs] So it was interesting, and we got along extremely well.

ZIERLER: What would you say were the primary conclusions or contributions of your thesis research?

SCHELLER: We studied a particular region of DNA that didn't code for genes. We were trying to understand what that part of the genome does. I'm not sure that question is even answered today.

ZIERLER: Wow.

SCHELLER: We found that part of the genome was sometimes made into RNA. We had some theories about what it did. I'm not sure any of those theories were actually correct. I did publish two papers in Science, four papers in Cell, three papers in the Journal of Molecular Biology, and one paper in another journal; I forget which one. If you looked at the history of students in Biology, that's got to be pretty much up near the top in terms of the number of papers and the importance of the journals. So, it was an amazingly productive time in terms of publishing, which then led to me getting a good postdoc, and then getting a job at Stanford. So, it was a great time.

ZIERLER: Who was on your thesis committee besides Davidson?

SCHELLER: Norman Davidson was actually the chairman of my thesis committee, because one of the great things about Caltech—it's perfectly fine to work in any department, but I was technically a Chemistry graduate student. So, they didn't care—I could work in Biology, but I did have to have a member of the Chemistry faculty as chair of my committee if I was going to get a degree in Chemistry. Which is the graduate program that I was in, and I fulfilled all the requirements of all the courses and all that kind of stuff, in Chemistry. I didn't want to switch to Biology, and then have all this other stuff I needed to do. That's one of the great things about Caltech; nobody really cared. It was all very accommodating. But you did need to have a Chemistry faculty as part of the committee if you were going to get a degree in Chemistry! [laughs]

ZIERLER: [laughs]

SCHELLER: Some kind of stipulation! [laughs] Who else? I don't really remember who else. [laughs]

ZIERLER: Finally, you've already alluded to it, but last question for today, during your graduate experience, what did you take away from what Caltech taught you? How to be a collaborator, how to be a scientist, how to determine what's important, what's real, in science?

SCHELLER: People generally like me. I'm a fairly nice guy. I'm quite opinionated, but I know how and when to offend people, or not. So, I worked with people fine. It taught be how to be a scientist! When you're an undergraduate, you learn—stuff. You've got to have a certain amount of knowledge in order to become a scientist. You've got to know chemistry. You've got to know, as much as anybody knows, what atoms and molecules are. You have to know about DNA and proteins, and metabolism. You have to know about genetics. You have to know about—so you learn all that as an undergrad, and that's fine. You just can't walk in off the street and become a graduate student, so that's good. But that's not how to be or how to do science. I had a little taste of that in the labs that I worked in as an undergrad, but not really. So, how to do science, and how to think critically, as we just went through, is what I learned as a graduate student at Caltech. I suppose I learned some more facts along the way, but the facts I learned along the way at Caltech were like new discoveries that were just made last week, and then I learned about it. Because I knew—not all, but for the most part, I knew all the stuff in books, because that, I learned as an undergrad. But, that's different than doing, learning how to do science. That's again where I say there's no such thing as a genius in biology. If you're a genius in math, you just know how to do math. You've got to learn how to do biology, because it's tricky, and it's confusing, and it's messy.

ZIERLER: In the way that you were so driven to go to Caltech as the be all and end all, was that still your feeling, having gone through the program? Was it the program that you imagined that it would be, as an undergraduate?

SCHELLER: Well, look, there's other good schools, for god's sakes. I was a professor at a pretty good school for 19 years. Stanford is not a bad place. Neither are all the other elite universities. Neither is the University of Wisconsin. So, I think I could have done well at other places. But, are you kidding me?! Did I think I was going to go to Caltech and start Genentech? And then publish ten papers? [laughs]

ZIERLER: [laughs]

SCHELLER: I would have been out of my mind to think that! Nobody even—Genentech? It's like, "What the hell is that?" Nobody even thought about stuff like that. And I went there, and I helped do that. Are you kidding me? So I don't know what I expected, but I'm pretty sure whatever happened there was not what I expected! [laughs]

ZIERLER: That's great.

SCHELLER: But, it was good. [laughs]

ZIERLER: On that note, Richard, we'll pick up next time, options for postdoc, and we'll see where the story goes from there.

SCHELLER: All right, cool!

ZIERLER: Sounds good.

[End of Recording]

ZIERLER: This is David Zierler, Director of the Caltech Heritage Project. It is Thursday, May 4th, 2023. It is great to be back with Dr. Richard Scheller. Richard, once again, it is great to be with you. Thanks again for joining me.

SCHELLER: Pleasure.

ZIERLER: Today what we're going to do is, in the narrative, we're going to pick up right at the point when you wrap up at Caltech and you're thinking about postdocs. But before we get there, there's this amazing story of how you appear on the front page of The Los Angeles Times. Let me hear the story. I want to hear how this happened.

SCHELLER: It is interesting that I forgot that—

ZIERLER: [laughs]

SCHELLER: —because it certainly was an incredible, I would say, week in my life. We did talk about Genentech and the role actually that Caltech had in starting Genentech, and the role that I played in that. I don't know if we talked about the fact that I received some stock in the company, and then decided not to stay with the company, so I gave half of the stock back and I kept half, because I did work on it for some period of time, but not as long as they thought. So I thought I hadn't really earned the whole thing, but maybe I had earned like half of it, so, fine. Then I kind of forgot about Genentech until some years later when the company did an initial public offering. By then, I think the stock had split some incredible number of times, like hundreds to one, and the day of the public offering, the stock that I had was worth over a million dollars. And, there I was, in the basement of Church or whatever it was, a graduate student [laughs], from the Midwest [laughs], and a millionaire.

ZIERLER: [laughs]

SCHELLER: It turned out that in Lee Hood's lab, next to Eric Davidson's lab, a very nice postdoc—Katherine [?]; I forget her last name—but her husband was the western regional editor for The Wall Street Journal. We knew each other. We were in the labs next to each other. Everybody knew everybody at some kind of level. You'd see each other using the centrifuge or whatever. She told her husband about this, and The Wall Street Journal published just a little few sentences about, "Caltech graduate student becomes millionaire." That was the day after the IPO. But then, the L.A. Times picked up on that, so they sent a reporter and a camera crew down to Caltech, and they interviewed me, and took my picture, with the Caltech t-shirt and the double helix, that I guess is on my Wikipedia page that, as I said, I have no idea who put that Wikipedia page together; I had nothing to do with it, but it's there, and it's largely accurate. So, she interviewed me, did the interview, they took some pictures. Then the next day, comes out, it's on the front page [laughs], big—it's the front page story.

ZIERLER: You knew you'd be in the paper, but you didn't know you'd be on the front page.

SCHELLER: Yeah. I didn't even really know if they were going to publish the story. I talked to her for an hour or whatever, went back to work. I certainly didn't know that it would be on the front page. But it was. And then, it was picked up by probably a thousand newspapers around the world, and magazines, and the whole thing. It was all quite funny, because she was not a scientist, so she interviewed me, and I was workin, and she said, "So what are you doing?" I tried to say in simple terms what I was doing, so I said, "I'm doing electrophoresis of DNA molecules." And if I remember correctly, she writes in the story that—"And I interviewed Scheller in the lab, working on electrophonesis molecules," which—electrophonesis isn't even a word, you know? [laughs]

ZIERLER: [laughs]

SCHELLER: That's what she—she taped the whole thing, so that's I guess what—I guess what she heard. But that resulted in quite a thing, because then I started getting phone calls. I received phone calls from several, for example, women, who said, "Remember, two weeks ago, we met at a party." And like, I didn't go to parties, you know?

ZIERLER: [laughs]

SCHELLER: [laughs] I guess that was a nice try to hook a millionaire, but I said, "I don't think so, because, like, I don't go to parties." [laughs] She was like, "Well, all right, this probably isn't worth it anyway. Who the hell doesn't go to parties?" [laughs] You know?

ZIERLER: [laughs]

SCHELLER: [laughs] And people who wanted to borrow money, people who wanted interviews, people who wanted—and they even—I can laugh at it now; it wasn't actually all that funny, then—they started actually phoning me in Eric Davidson's office, and he would come out and get me and say, "There's a call for you on my phone in my office."[laughs]

ZIERLER: [laughs] Not okay.

SCHELLER: I said, "Oh, shit," you know? [laughs] "Sorry about that." [laughs]

ZIERLER: [laughs]

SCHELLER: I think he was happy for me, kind of laughing also, but after a few phone calls in his office, I don't think he was thinking that it was so funny anymore. But [laughs] anyway.

ZIERLER: Were you a paper millionaire? Did you ever cash out any of the stocks?

SCHELLER: Sure!

ZIERLER: I mean, at the time. Did you cash out at the time?

SCHELLER: No. I think that day, we couldn't sell. We had a period where we needed to wait. I forget what it was—30 days or something—by the SEC rules. It might have been 90 days. I think it's at least 90 days now, maybe even six months. I don't really remember. So I couldn't do it that day, but by the time I could sell, it was still worth a lot. So, yeah, I sold a bunch of it, and I had like a lot of money, that I didn't even—and the kind of funny thing about that is, I didn't even do anything except go to the lab. I didn't even have anything to do with the money. I didn't have a phone. I didn't have a car. I didn't have a television. I didn't— [laughs]. It was fine. What I did do was eventually when I came to Stanford to become a professor, I actually had the money to buy, or at least put a very significant down payment on, a house, which I certainly wouldn't have had otherwise, because I was paid as a graduate student and then a postdoc, and that's barely enough to survive, so I wouldn't have had enough money to try and buy a house. So, it was nice. I'm actually, as you're seeing me, in that house that I bought, with that money—

ZIERLER: Wow!

SCHELLER: —as we speak. It has been renovated three or four times, but it's the same house. So, that turned out to be nice. I could buy a house on the Stanford campus as an assistant professor and have a nice place to live.

ZIERLER: I want to go back to something you said earlier about not even knowing that biotechnology was a field that you could go into. Did that perception change, given your instant riches?

SCHELLER: Yeah, I think that biotechnology, at the time, was quite a bit different than chemistry and physics, where the chemists and physicists were entrepreneurs and they started companies and there were things like the transistor, and all sorts of things, also which has a lot to do with Caltech and Gordon Moore and so on, where it was more commonplace to have industrial applications of the science. At the time, in biology, there really weren't industrial applications, so to speak. So, yeah, there just was no such thing. I mean, there were drug companies, and they did hire biologists, but that was mostly chemistry, small molecules that were drugs. It wasn't biologics that were drugs, which is what Genentech started making, and that moved it into the realm of molecular biology. So that didn't really exist much before Genentech. Then it took some time, actually. I think a lot of biologists looked down on the idea of biotechnology as something that wasn't pure science. And, that was the reason that I didn't actually stay with Genentech, actually. I never looked down on it. It was kind of a gift to me. I thought it was great, actually. [laughs] But now has become very widely accepted, and a lot of faculty members, probably even most faculty members around the world, have some connection to some biotech company or another, just as part of normal living [laughs], or normal career. Yeah, so that was [laughs]—I look back and smile at that. That was a pretty wild couple of days, and quite a bit of fun. And, yeah, ended up being the money that bought me the house that I'm in right now, which I've been in for 40 years. [laughs]

ZIERLER: What postdocs were you considering, and did you think about moving straight into a faculty position?

SCHELLER: No. I think in biology, you do a postdoc, so I don't think that I would have been competitive for a faculty position. I think that it's less required in chemistry, and perhaps physics, but biology it was pretty much absolutely required that you do a postdoc. I had liked Richard Axel, who was a professor at Columbia, still a close friend of mine, and I decided to do a postdoc there, and moved to New York.

ZIERLER: Where did you meet Axel?

SCHELLER: I met him at Caltech, actually. He came and gave seminars. He was also offered a faculty position at Caltech, which he did not accept. He's basically a New Yorker, and he came to visit. They offered him a job. He walked around Pasadena at night and basically thought to himself, "I can't live here," and went back to New York. [laughs]

ZIERLER: [laughs] Sleepy town.

SCHELLER: Yeah.

ZIERLER: What was Axel working on, at that point?

SCHELLER: We haven't talked about this! Oh, this is another fascinating story. He was working on all sorts of different things, but when I got there, he said, "Well, I've been sitting next to this guy on a university committee named Eric Kandel." And he was joking, but he said, "He works on a fish." It was actually a mollusk, not a fish, but it sounded funnier, I guess, to say a fish. He said, "We've been thinking maybe we could do some work together, so why don't you go meet him?" I set up a time, I went across the street at Columbia, and I met Eric Kandel. He had heard about all the ways that molecular biology was revolutionizing the field of life sciences and thought, wouldn't it be great if he and Axel collaborated on something. They were professors at the time—they didn't work in the lab—so they needed somebody to actually do the something. So the something was me. I exaggerate the story a little bit. We decided that would be my postdoc project, but we didn't know what the actual project was. I thought to myself, "Oh, this is really great. What have I gotten myself into here?" Eric Kandel was formally trained as a psychiatrist, and I'm not sure that he knew, at the time, the modern definition of a gene and DNA. Then Axel thought that Kandel worked on a fish. I thought to myself, "This is not looking particularly good here. One guy doesn't know what DNA is, and then the other guy thinks that what I'm going to work on is a fish, when it's actually a snail." So, "Oh, boy."

Then we had to come up with a project. I thought, "Well, I'll make a recombinant DNA library from the DNA of the aplysia"—which is the snail that Kandel worked on—"and then in the meantime, I'll try to figure out if there's something I can do with it. I can't just sit here all day thinking, what should I do? I'll do some experiments while I'm thinking about, ‘What should I do?'" When we dissected an animal in order to get the sperm—because you wanted to make the DNA library from the germ line of the animal, so you'd collect the sperm—there was another person who was interested in some other parts of the nervous system of the animal, and he was dissecting some cells. I said, "What are those cells you're dissecting?" They turned out to be called the bag cells, just like a paper bag. I said, "Okay. What do they do, these cells?" He said, "They mediate a particular behavior that the animal goes through when it's laying eggs." I said, "How do they do that?" He said, "They secrete these chemical messengers, and they're peptides." He said, "They're really, really abundant in these cells, and they know the sequence of one of the peptides." I said, "Oh, okay. That's all I need." I thought, abundance, that's great, because that would be easy to clone the gene. You know the sequence, so when I sequence the gene, if I had the right one, I would know it was the right one, because it would have the amino acid sequence. I thought, "How cool would that be, to clone a gene that governs the behavior?" Like, wow, I know it governs like how tall you are, and that you have fingers and toes and stuff like that, but governing behavior, that's pretty interesting.

So, I decided that that would be the project. It was relatively straightforward to clone that gene, which I did, and that was a Cell paper. It turned out to be a gene family, so that was another Cell paper. [laughs] Then we studied a little bit about how those cells develop, and that was a Science article. So, in the process of about a year and a half, I published two Cell papers and a Science paper. Then I could get a job! [laughs] And, I started the collaboration between Kandel and Axel, and Kandel, as you may or may not know, went on to win the Nobel Prize. And Axel also went on to win the Nobel Prize, [laughs] a different Nobel Prize, but both in neuroscience. And, great! Good for them! All good. And I got a job at—well, so they wanted me to stay at Columbia and become a professor there, but I didn't—well, there were two things. I didn't think that would be particularly good for me. I'd sort of still be overshadowed by the two people that I worked with. They were very generous, and very kind, and very, very helpful for me, and I'm sure they would be supportive and all of that, but it's still better to go off on your own, number one. Number two, I'm from the Midwest, and I didn't actually like New York that much. Axel liked it when you walked outside and you were just like tense, because it was so intense. I walked outside and I was nervous. [laughs] It just wasn't for me. I was fortunate enough with their very strong support to get a job as an assistant professor at Stanford, and that's the job that I accepted, and I'm still sitting here on the campus today, as we speak. [laughs]

ZIERLER: Thinking about that transition from graduate school to the postdoc, what was the continuation of your thesis research and what was really new during your time at Columbia?

SCHELLER: I didn't work on neuroscience at all. It was a very, very special time for me with Eric Kandel, actually. I didn't know the currents that generated the action potential, and he didn't know what DNA was, so we spent a lot of time in his office, one on one, where he taught me about neurobiology, and I taught him about DNA and recombinant DNA and all those things that I had used for my thesis work at Caltech, but to study the organization of the genome in a sort of general sense, not neurobiology. The techniques of molecular biology were revolutionizing every field of biology, but we were some of the first people to apply that to questions of cellular neurobiology. The techniques were the same, but the questions about how the nervous system worked were things that—again, even as I left Caltech to go to Columbia, I didn't even know that that's what I would be working on. It just kind of turned out that way.

ZIERLER: What were the steepest learning curves for you, entering somewhat of a new field, at Columbia?

SCHELLER: The nice thing about molecular biology is that it puts so many different questions in life science—it reduces them to questions of cells and molecules. In that sense, all fields are pretty similar. Sure, how the liver works is different than how the brain works, but it's all just DNA making proteins that do liver things [laughs] versus DNA making proteins that do neuron things. That was the big revolution of being able to clone DNA and study things via molecules in a much easier way by using recombinant DNA. The questions were totally different, but it wasn't as though it was so different. All cells work in similar ways, by signaling and protein-protein interactions and things like that. I think it was a relatively smooth transition in that respect, once I learned a few basics of how neurons work and what they do.

ZIERLER: Did you keep tabs on Genentech and what biotech was doing during your time Columbia?

SCHELLER: Yeah. I think I still had stock. I didn't sell it all, early on, so it was going up and down and I was selling. I think I gave Richard Axel's first son ten shares or something like that when he was born, which Axel gave to him when he was 18, which was then—it wasn't worth a huge fortune, but it was worth a small fortune [laughs]. Yeah, I followed the company. Not that I was necessarily so interested in what they were doing, as much as I followed [laughs] the price of the stock.

ZIERLER: What faculty positions were you considering?

SCHELLER: I had an offer, I think, from MIT, Columbia, Stanford, and I think Harvard. Once I got the offer from Stanford, I pretty much stopped looking, because I wanted to go back to California, and I really wanted to be on the faculty at Stanford. So, when I got that position, since that was my number one choice, didn't really make sense to bother to look all that much more. What was the point? [laughs]

ZIERLER: Besides California, why Stanford? Why were you so interested in joining the faculty there?

SCHELLER: It was a very renowned institution, and during the time that I was at Caltech, it was a very active place where faculty from all institutions all over the world would come and give seminars, and I was very impressed with a number of the faculty from Stanford. Plus, it was California, which I liked. There wasn't really too much thought beyond that. It was a place I was pretty sure I could do good science there. It's warm. It's sunny. No snow. [laughs] Grew up in Wisconsin; I was not into shoveling any more snow. I had been there, done that. So, yeah, what's not to like about Stanford? [laughs]

ZIERLER: What was the game plan for setting up the lab and the kind of research you wanted to do out of the gate?

SCHELLER: That was so funny. Since this was sort of arranged by Axel and Kandel and people at Stanford, I don't even think I had a formal job offer. They said, "Yeah, sure you can be a professor. Come to Stanford." So, I did the same thing. I put my clothes in the same duffel bag that we talked about, put my clothes in there, and I moved to the West Coast. I showed up one day at Stanford, and I went into the chairman's office, a man named Bob Schimke, and he said, "Oh! You're here! Great! Did we ever send you your offer letter?" I said, "I don't really think so." He opened a drawer and shuffled around, and he said, "Oh, yeah, I guess we didn't. Well, yeah, here it is." I thought, "Well, thank god, at least I have a job!" [laughs]

ZIERLER: [laughs]

SCHELLER: That was quite, I would say, casual, compared to the way people do it now, where they negotiate every dime of their salary, and they negotiate every square inch of their startup space. I didn't have any of that. I had no idea. But, there I was. [laughs] He said, "All right, well, hmm, I guess we have to find a lab for you to work in." I wrote a grant, and it all worked out fine, but it really was very different than, as near as I can tell, the way people do things nowadays.

ZIERLER: Even before you got to Stanford, did you have well-formed ideas of what your lab would need, what instrumentation, what research questions you wanted to answer?

SCHELLER: Yeah. I knew what we needed, because they were the kinds of things that I used when I did work. I needed a centrifuge, needed glassware, needed that stuff. What we would do—really at first—one of the great things about working on this snail, aplysia, and one of the reasons that Eric Kandel worked on it, is that you can identify particular nerve cells from one individual animal to the next, and the nerve cells had names, and they had known, in some cases, functions. If you went into your brain and found a cell, and then you wanted to go into my brain and find the same cell, it's not even clear there is such a thing as the same cells. I mean, there are same brain regions, but you wouldn't say, "This cell is the one where you remember your mother. Now I'm going to go find that cell in Richard." You can't do that. It doesn't work that way. There are, what, 1011 cells in your brain and my brain. In the snail, there were—I don't remember—maybe a couple thousand cells. They were also polyploid, so some of them were very large, so you could even see them, a single cell, with the naked eye. What I decided to do at first was to go to the individual cells and clone the genes that encoded the chemical messengers, the neuropeptides, from the different individual cells. So we would have cell dissection parties. I had to get a fish and game permit, so we would go collect the animals, and then we would dissect them. Then under the microscope, people would pull out individual cells, and say they have an R2, an L15, an xyz, and we'd put a hundred individually identified cells in a tube, and then could clone the genes from those identifiable cells. That's what we did at first. It was a lot of fun. I had great students. Published lots of papers. Everything was fine. [laughs]

ZIERLER: Was neuropeptides really cutting-edge research at this point? Had people been studying neuropeptides for a long time?

SCHELLER: Yeah, they were studying the peptides, but not the genes that encoded the peptides, so that was sort of the new part. Then the ability to directly relate the genes that encoded the peptides to their function in the nervous system, which is of course to control behavior. The shtick was "genes to behavior" which was a pretty sexy thing at the time that I got a lot of credit for, which is why I think Stanford bought into that idea as being kind of novel. That may be why I got the job here, I guess. It was very interesting.

ZIERLER: Did you become more interested in translational stuff during the early years of your faculty appointment, or that came later?

SCHELLER: No, not at all until I moved to Genentech, really. Just doing basic science. Well, I guess that's not quite true. My grants came from the National Institutes of Mental Health, and I was interested, again, in behavior, and in the most general sense, what happened when the brain didn't function properly and people had behavioral issues, which could otherwise be called mental illness. When I wrote my grant, I said, of course the brain malfunctions in psychiatric disorders, but we can never really understand that unless we understand how the brain works in the first place, so that's what I do. Then once we understand how the brain works in the first place, we can figure out what goes wrong when someone has a mental illness. But that was sort of obvious, and I didn't really think about it much deeper than that—that you needed to justify working on a snail to society, so that's how I did it. I still believe that, and I still believe in that approach, and that that is the case. That's what basic research is, and that is proven, over and over, to be incredibly important in helping with various illnesses.

ZIERLER: The size of your research group, did you have more or less the same numbers of graduate students over the years?

SCHELLER: The first nine years I was in the Biology Department, biological sciences, and then I was lucky enough to get a Hughes position. At the time, Hughes was structured in a way where they built space, and they owned the space, and in order for them to give you the money, you had to physically have your laboratory in their space. So I moved into the Medical School, where the Hughes Institute at Stanford was. They paid for a floor or a number of labs in a building. I moved into that space. Then, in addition to my grants, I had the support from the Howard Hughes Medical Institute, and that allowed me to increase the size of my lab and have more equipment and things like that, because Hughes gave me the money to do that.

ZIERLER: Was that considered an honor, to be involved with Hughes? Did it free up research funds elsewhere?

SCHELLER: Oh, yeah. But then I actually stopped working on neuropeptides. I started a project with someone called Jack McMahon, in the Medical School, and he worked on a very interesting observation. If you cut a nerve in your brain, it doesn't grow back, but peripherally, if you cut a nerve that innervates one of your muscles, to move your muscle, that nerve will grow back, and it will form a synapse at the same place as the original synapse. The question he worked on was, how does it know to form the synapse at the same place? Like, it must have left something behind that can be recognized and then tell the new nerve as it grows in that that's the spot. He identified that molecule, but the gene for the molecule wasn't identified, so we decided to find the gene for that molecule, which we did.

He worked on another really interesting animal, an electric ray. These animals, like a stingray, they have wings, and they use the electric organ in those wings both as a defensive reflex—like if a surfer steps on them, the surfer gets a shock, or a swimmer, or what have you—or they also use them to stun their prey, so they would kind of wrap these wings around a fish or something, and give a discharge and stun the prey, and then eat them, basically. [laughs] But this discharge required a big electric signal. There was a group of neurons at the base of the brain of the electric rays that all had the same function, which was to generate this signal to discharge the neurotransmitter that impinged on the muscle that gave rise to this electrical discharge. We dissected that area of the brain and made recombinant DNA libraries in order to clone the gene for agrin, which we eventually did, and published a bunch of papers on that, and it was a nice set of work. But when I looked at those neurons, I thought, "Hmm. That's where all the proteins are being made that give rise to the molecules that make the synapse work." The synapse is the connection between neurons, so when an electrical impulse travels down the nerve and enters the synapse, it causes channels to open up, calcium comes into the nerve terminal, and then the neurotransmitter which is contained in vesicles fuses with the plasma membrane to release the neurotransmitter. In the case of muscle, that's acetylcholine. That molecule that is released then binds the muscle and it causes the muscle to contract. That's how you move your muscles, but that's also the case that there's 1014 or so synapses in your head, and that's also how you think, but that's a little more complicated than moving a muscle.

I thought, well, the other thing we could do with this library that we made to look for agrin was to understand how the molecules in the synapse work. I knew that someone at UCSF named Reg Kelly had purified these vesicles from the fish, the torpedo—it's a bony fish—but the ray—had purified the vesicles that contain the neurotransmitter. I thought, these vesicles must have something to do with the mechanism of how the fusion takes place to release the neurotransmitter. As I said, he just took those vesicles, shot them into a rabbit, and the rabbit made antibodies against the proteins of the vesicle. I thought, if we could characterize the proteins of the vesicle, since that's the critical organelle in releasing neurotransmitter, those proteins must have something to do with releasing neurotransmitter, because that's what the organelle does. Then maybe we could figure out how that neurotransmitter release takes place. To make a long story short, he gave me an aliquot of that antibody that he made, and we used that antibody to indeed purify proteins—sorry, clone genes encoding proteins, that were specific for the synaptic vesicles. That's where these proteins were. They weren't pretty much anywhere else. We then went on to study them. We, and a few other people, figured out the mechanism whereby the action potential comes into the nerve terminal and causes the neurotransmitter to be released, and we figured out how that works in terms of molecules. It's just proteins interacting with each other, the way everything has an underlying molecular mechanism. That's what I became most famous for in my scientific career. Because understanding that was a big deal. [laughs]

ZIERLER: Chronologically, when did the collaboration begin? Was this the early 1990s?

SCHELLER: Must have been, or even before that. I'd have to look at my CV and find some of the first papers, and it must have been a year or two before that.

ZIERLER: Did you have an idea that the research would be regarded so highly, that it would become so significant, at the beginning?

SCHELLER: No. We had sort of done what we could do with the neuropeptides, and aplysia, and the behavior, and so on. I needed something else to work on, and it just seemed like a—it was just a very classic problem. Everybody knew that the transmitter was in the vesicles, and that they fused and released the neurotransmitter. When calcium came into the terminal, that was the trigger, and that was the fundamental process of how synapses work, and how synapses work is how the nervous system works. But we knew zero, nothing, about the molecular basis of how that worked. I just thought it would be a cool thing to understand, and that the way to get your foot in the door was to understand the proteins that were associated with this critical organelle in the process. Someone else had purified the organelle and made the antibody, so I could then, again, use molecular biology, to understand those proteins and to work out their molecular and cell biology of their function. That's in all the textbooks now.

ZIERLER: Was it more of a eureka moment, or was this more gradual, the discovery?

SCHELLER: I think there were a lot of eureka moments, but there was one—when we found a bunch of proteins, some of which were on the plasma membrane, and some of which were on the vesicle. We knew the vesicle snuggled up to the plasma membrane, and then as calcium came in, this membranes became one, which is how then the neurotransmitter came out. That's called membrane fusion. We knew that these proteins that we were studying made a complex, and that some were on the target membrane and some were on the vesicle membrane. We knew they formed a complex. The biggest eureka moment, for me, was actually that the formation of that complex of three proteins was the actual biochemical event that drove the membrane fusion and the neurotransmitter release. We knew the complex was forming, but we didn't know what it did. Then we were doing experiments, and every time the complex formed, the neurotransmitter came out. Then it sort of dawned on us that the formation of the complex was driving the membrane fusion and the release of the neurotransmitter. I remember that day a lot, thinking, "Holy cow, that's it. When the complex forms, it's driving the fusion of the membranes, and the neurotransmitter release. Huh. That's how it works."

ZIERLER: Walk me through that. It's so important that it requires more detail. How did you figure it out?

SCHELLER: We had the proteins on the vesicle which we characterized by recombinant DNA. Then we wanted to know, all right, do these proteins interact with other proteins? Because when proteins interact with each other, they're doing something. So, we made antibodies to now the specific proteins that are on the vesicles, and we used those antibodies to pull out of an extract of cells, an extract of brain, the protein on the vesicle, and we said, "What comes along with it?" One of those proteins that came along with it, we characterized, and we said, "Where is that?" And that wasn't on the vesicle; it was on the target membrane. So we said, "Holy cow! One's on the vesicle, the other is on the target membrane, so that's the way these two membranes are interacting with each other." Then as we went through and further understood it, we realized that as these two proteins interact with each other, they're reorganizing the membrane such that they fuse with each other and release the neurotransmitter. We could never separate the formation of the complex from the neurotransmitter release. We thought at first that that's just how the vesicle knew where it was supposed to go, because they bound each other. But then as we looked harder and harder—as I said, every time this complex formed, we could measure the neurotransmitter being released. The harder we tried and tried and tried to separate this formation of the complex from the neurotransmitter release, and we could never separate them. That then, along with some structure studies on how the shape of the complex was and so on, that then told us that if you can't separate them [laughs] then it must be that the formation of the complex is itself driving the transmitter release. Does that make sense?

ZIERLER: It does. Yes.

SCHELLER: That did come as an aha—that was a moment that I thought that, which I wasn't thinking that way before. That was pretty interesting. I think if I've ever had an aha moment of significance, that was the most—well, you have several, but you have little aha moments and bigger aha moments; that was my biggest aha moment.

ZIERLER: Were there graduate students who were doing some heavy lifting to help you get there?

SCHELLER: Oh, yeah, graduate students and postdocs, both. At Stanford, I had grad students and postdocs in my lab. There was one particular set of experiments where we were forming this complex and trying to understand the significance of the formation of the complex, and as I said, where we finally just couldn't—everything we did, when you formed the complex, the transmitter came out; that must mean that the formation of the complex itself is driving the neurotransmitter release. That was in a Cell paper that was done largely by one graduate student.

ZIERLER: Because always such significant discovery allows new questions to be asked that weren't possible before, what were some of those questions that you could now pursue?

SCHELLER: Then the interesting question was, okay, so that happens; now this complex is formed. And it was extremely stable, this complex. It was proteins that weren't covalently linked to each other, but you had to get to like 98 degrees before this complex would fall apart, almost boiling. We thought, "Well, that's cool, but what happens then?" You don't just have like one thought in your life and you're finished. [laughs] This stuff, they had to be used again. But you had this incredibly stable complex. How do these proteins then come apart so they can do this again? That is done by a different set of proteins that binds the complex and dissociates it. We worked on figuring that part out. Then once you had the idea that the complex forms, the neurotransmitter is released, and some proteins come along and dissociate the complex so they can go do that again—we had sort of figured out the cycle of how the complex formation and disassociation works, and how they did that over and over and over again—just like I said, not just having one thought and then you're finished. [laughs] Which would be a little disappointing. [laughs]

ZIERLER: Do you know if you were in a race at all with other labs? Was there any issue of multiple independent discovery with this?

SCHELLER: Oh, yeah. There were three other people who worked on this, and they won the Nobel Prize. I won the Lasker Award with one of them. The two of us won the Lasker Award. The other two won the Lasker Award. Then of the four of us, three of them won the Nobel Prize and I didn't. Which is fine. By the time the Nobel Prize was awarded, I had moved on to Genentech and had been working there probably for ten years. I won a lot of other prizes. I guess the only sad thing about that is, the only prize that my mother ever heard of was the Nobel Prize, so that was a little disappointing. But for me personally, I was into other things by the time that happened. I can't say that I wasn't disappointed, but I would say I was probably over it in 36 hours. [laughs]

ZIERLER: Even though you weren't thinking about translational research until, as you mentioned, you actually joined Genentech, are you aware of the value of this discovery? Does this reverberate beyond fundamental research?

SCHELLER: In a way, not really. It's so, so fundamental that you just can't really tinker with it. All the peripheral proteins that regulate this process, many of them have been found through human genetic studies to be involved in various neurological or psychiatric disorders. But this real core fundamental process, if you screw it up at all, your neurons don't work and you're dead. So [laughs] I would say yes, although the process that I described, that core fundamental process, is not really heavily mutated, for example, in genetic diseases of the brain. But as I said, this core process is kind of like the car engine. Without the engine, you don't have much of a car, but you do need brakes, and wheels, and a windshield, and a steering wheel and all that. All of those other processes that regulate this core process, those can be a bit off, and when those are a bit off, you do have a variety, depending on which one is a bit off, of, as I said, neurological or psychiatric diseases, and those are being studied now.

ZIERLER: As a technological achievement, how precisely you were able to measure these processes, were there new instruments, new microscopes, new computers that came online that made this possible? Could the research have been done 30 years earlier?

SCHELLER: No, but the electrophysiology, for example, that's how it was known that calcium was involved, and that vesicles were involved, and that neurotransmitters, acetylcholine, and that was done by putting an electrode in a cell, and that was all worked out a long time ago. Those were some of the kinds of techniques that we and others used. But the big deal was genetics, both in yeast and in mice, but also just the ability to dissect the synapse one protein at a time, and then to manipulate those proteins, which was all done with molecular biology. Again, recombinant DNA, protein expression, all the techniques of molecular biology were what made it possible to pick this all apart in that exquisite detail. The physiological techniques were there. That was the big question. You knew you could put an electrode in a cell and stimulate it, and put an electrode in another cell and measure that the transmitter was released. That had been done for 50 years. It just was a mystery in terms of the biochemistry, the precise molecular biology and biochemistry, how that worked. That was molecular biology and recombinant DNA technologies that made all that possible.

ZIERLER: Again, even though it wasn't your purview, did you recognize at the time that these would be discoveries that would be relevant to human neurological disorders?

SCHELLER: Yeah, although I have to say, while at Stanford, that wasn't really what I was interested in. I just wanted to know how it worked. [laughs] It was almost like, well, sure, what I wrote in my—the National Institutes of Mental Health paid for all this work—did what I said I was going to do. We're going to figure out how the brain worked, so we could figure out what happened when it wasn't working right. But while I wrote that in the grant, that wasn't really what I spent my time thinking about. [laughs] Before I moved to Genentech, I thought, "I don't work on that kind of thing. That's for other people in the Medical School to figure out." That all changed, when I moved to Genentech! [laughs]

ZIERLER: That will be the last theme for our talk today, Richard. Was it sudden? Did you start to think about maybe next opportunities? Did you get a phone call out of the blue one day?

SCHELLER: We had figured out what I just talked about, became a member of the National Academy, became pretty well known for that. It was like, "All right, now what do I do?" [laughs]

ZIERLER: That's a tough act to follow.

SCHELLER: That is going to be difficult to follow. But I'm only—however old I was, late forties, mid-forties. "I can't retire. I don't have enough money, and what would I do when I woke up?" I thought, "You'd better figure this out." [laughs] My wife, who is still a Stanford professor, and I looked at some other jobs. We thought, "Should we move to Boston?" We got job offers there, but thought—it's not like Stanford was the problem. We could move to Boston and it would be kind of exhilarating for a while, and then—we'd be in Boston! [laughs]

ZIERLER: And you still don't know what problem you'd take on next.

SCHELLER: It's cold in the winter! And I still don't know what I would do there. I'd meet different people, so something would probably happen, but I don't know what. A friend of mine said to me, "If you're going to move, you should probably do something really different. Otherwise, you have everything you need here. You're a Hughes investigator. You have tenure. Stanford could never fire you." Hughes can fire you. "They can't ever fire you. You have everything you want. You could move to Boston, and it could be worse. Especially since you don't have an problems here!" [laughs] I kind of took that to heart and thought, okay, well, I don't need to—I mean, we were doing things in the lab, but they didn't strike me as having any chance of ever becoming anywhere near as exciting as what we had just done. I mean, "done," it sounds like you just like one day did it; I mean, it took more than a decade, or it took 15 years, but anyway.

A genetics professor who had previously worked at Genentech heard that I was looking around, and he introduced me to Art Levinson, who was the CEO of Genentech, with the idea that maybe I would be interested in a head of Research job at Genentech. I went and met him, and met a few other people, and thought, "Well, this certainly fulfills the ‘it would be really different' criteria." [laughs] Because I don't know anything about how to make a medicine. I don't know anything about business. They largely work on cancer; I don't know anything about cancer. Well "anything"—I mean, I certainly—"anything" is almost true, but I knew a few things about business and cancer, and so on. So, it fit the "it would be different" criteria 100%. But then I thought, "Am I really going to do this? What if I don't like it? They can actually fire me, unlike at Stanford." But I decided I wanted to do something different, and it would certainly be different. I had worked for a long time by then to become a good scientist, and how different could it be? You just keep doing good science, and you can learn all the rest of it. It's just—stuff. Cancer cell and neuron; it's all cells and molecules. So, for some crazy reason, I gave up my tenured position and moved to Genentech! [laughs]

ZIERLER: I wonder, Richard, the late 1990s, the early 2000s, the dot-com years are in full swing. Stanford is really at the center of that. The decision for a celebrated Stanford professor to leave for industry, did that feel more normalized at that time than it otherwise might have?

SCHELLER: Yeah, more normalized than when I was a graduate student, but I think a lot of people were really surprised. I mean, here he is at the top of his career, and now, he's just—he has what like—all the students who wanted to be professors—he has it all, and now he just leaves? To go work for some company? I mean, what the hell? [laughs] And it wasn't just some company; Genentech was a known entity by then, and a scientific powerhouse in its own right. I don't think I could have, or would have, gone to work at Pfizer or Merck or Novartis, the big pharmas as we call them. I think the culture there, the scientific culture there, would have just been too different from what I was used to.

ZIERLER: You saw Genentech really as having its academic roots intact?

SCHELLER: They had a postdoc program, where the postdocs come and they just do basic science and they publish papers. Very, very rigorous science. Active debate. I had looked at jobs at Merck, for example. And it just seemed—it seemed different, and it seemed close enough to the kind of scientific rigor and thinking that I worked on, although working in different areas, that I felt comfortable there. There were a few thousand people at Genentech, but at a Pfizer, there were 100,000 people. That was just too much. [laughs]

ZIERLER: On that spectrum, where would you put Amgen?

SCHELLER: Amgen at the same time was I would say at a similar place as Genentech, but with less emphasis, I would say, on having basic science going on next to the drug discovery. Genentech funded the basic science with the thought that we might discover something, it's just good for the culture, and that overall, it's just good to have it in the mix, and that the company will be better off for it, even though we don't really expect that a drug would come out of it. Although, it might, and if an idea did come to the forefront, we'd be there to capitalize on it. From time to time, that did happen.

ZIERLER: What was the process like winding down the lab, and specifically graduate students who were midstream?

SCHELLER: Most were either finishing or just started. People that just started, I said, "Sorry, but you should just go find another lab to work in." Some postdocs moved with me. Some either postdocs or students maybe had less than a year's worth of work, so they stayed and finished. I technically took a leave of absence for two years. After one year, I said, "I'm not coming back, so I'll release my FTE so you can hire my replacement." Which they couldn't do until I formally resigned.

ZIERLER: Obviously that means you liked how things were working out, in year one.

SCHELLER: Yeah. Well, there was some adjusting [laughs]. "Some"—there was plenty of adjusting.

ZIERLER: On that point, that's a perfect place we'll pick up for next time, when you actually start at Genentech.

SCHELLER: Oh, yeah, well, there are some stories there!

ZIERLER: Can't wait!

[End of Recording]

ZIERLER: This is David Zierler, Director of the Caltech Heritage Project. It is Tuesday, May 16th, 2023. I am delighted to be back once again with Dr. Richard Scheller. Richard, once again, great to be with you. Thanks again for joining.

SCHELLER: Pleasure! Nice to see you! I feel like I'm getting to know you a bit, a few hours in.

ZIERLER: That's a beautiful thing. We're going to pick up in the narrative right where we left off, a momentous decision in your career trajectory when you left the faculty at Stanford to join Genentech. To set the stage, you've alluded to this, but to wrap it up into a larger answer, your roots with Genentech really go all the way back to your graduate study at Caltech. Had you remained connected to Genentech, to some of your future colleagues, all throughout graduate school, postdoc, and your faculty appointment? Were you generally aware of the goings-on at Genentech before you decided to join?

SCHELLER: That's one of the really interesting parts of this story, because the answer is no. [laughs] And, if you had asked me ten years before I decided to join, or if you had told me, "In ten years, you're going to be head of Research at Genentech," I would have said, "You're out of your mind. Why in the world would I do that? I was there years ago. Stanford is a beautiful thing. [laughs] We're doing great research. And I have absolutely no interest in that. So where would you come up with such a crazy idea?" But I think that's just an incredibly interesting example of how things change in people's lives. As we discussed, ten years later, after that hypothetical question, we had solved the mystery of how neurotransmitter release works, and I felt like it was time to do something else. So I was searching, if you will, for that "something else," and the "something else" turned out to be—and I think we talked about this—if I was going to do something else and leave Stanford, it should be something really different. Otherwise, why in the world would I leave the second-best university in the world after Caltech [laughs] and go somewhere else? I was a Hughes Investigator, National Academy member, on and on. Why would I give that up? Except to do something that was essentially impossible to do at Stanford. That was a big part of the thought process.

Making medicines is essentially impossible to do at a university. Some people get pretty far, but it's way too expensive to do by NIH grants or being a Howard Hughes Investigator. You could do the early stages of the research, but then by the time you get to the later stages, even before you enter man [?], it starts costing ten million [?] a year, a billion a year. Then, as you do more sophisticated trials of does the drug work, the sky is the limit. It can be hundreds of millions a year. The only way to get that kind of money is through private investment. That's just not an academic kind of budget. It just isn't. [laughs] As I said, I think I told you that the year I left Genentech, my budget was $1.6 billion. Since I'm a trustee, I guess I could look it up, but you could also probably look it up—that might be the whole budget of Caltech. So, one person in their lab would never have such a thing. So, it's possible to do things that you can't do in an academic lab, and I thought, "Okay, let's try that!" [laughs] Part of the motivation was to learn different things. Part of the motivation was to try and help people, by making medicines that would extend or improve people's lives. Part of the motivation, I suppose, was money, personal money, although I didn't think that much about it. Turned out I got a sign-on bonus when I started at Genentech, so I bought a new car. I had probably an over-ten-year-old Volkswagen or something, and I bought a BMW. Not the most fancy one, but it was definitely a nicer car than I had before. Even part of that motivation, though, was now I had to drive to work, versus living on the campus and just walking to work. The car that I had, it probably wasn't even safe to drive to work! [laughs] But I had the money to buy a new car, because there's more personal money involved as well.

ZIERLER: Richard, as you were explaining in our initial discussion where we were reviewing the overall history of biotechnology, a really important comment you made—at the beginning of your career, not only as you explained were you not interested in going into biotechnology; you didn't even know biotechnology was a thing to go into. Now to fast-forward to 2001, I wonder if you can contextualize your decision to join Genentech relative to where biotechnology was at that point. Was it still more of a promise, or did you see real opportunity that things were happening, drugs could be brought to market, all of the fundamental discovery in the lab really could be translated to helping save lives?

SCHELLER: That was a fact, then, whereas, as we discussed, earlier it was a promise. Genentech had marketed products that were helping people—growth hormone for people with mutations in that gene that have short stature; cancer medicines, in particular Herceptin, for monoclonal antibody therapies. What was particularly exciting to me, and why I thought I could make a contribution, is that the design of medicines had become much more rational and used the techniques of molecular biology that I knew about, and to a small extent, which I think we talked about, I helped invent those technologies, during my early years at Caltech as a student. So, one could understand the molecular basis of the disease and then try and make a medicine based on that understanding of the cell and molecular biology of the disease and what, if you will, went wrong.

The other thing that was becoming particularly exciting is that there was an understanding that [laughs] diseases, something like breast cancer, had different types of breast cancer. Sure, it was all a tumor in the breast, but that there were different kinds of things that could go wrong, if you will, to cause the cells to divide out of control and to be a tumor. If you made a medicine to treat one kind of breast cancer, it should only be used on the folks that had that kind of breast cancer, because it plain and simply just wouldn't work if you had a different kind of breast cancer. That was really pioneered, in a lot of ways, by Genentech. And, the science at Genentech was excellent. The number of Science papers and Nature papers and Cell papers rivaled many universities. So I was switching the field of science, if you will, but I wasn't giving up anything in terms of the quality of science and the rigor of science that I was going to do, which was really important to me. I think we might have talked about before, I don't think I could have gone to any other company, other than Genentech, because of that strong belief in fundamental science. The postdoc program that Genentech still has to this day, where postdocs come from all over the world and do postdoctoral research the same as they would do at Caltech. So it was—and I don't know as much about Genentech today; I haven't worked there for more than six years—but I think to a certain extent still is, a very special place, in industry.

Having said all that, it was a transition. [laughs] I had maybe 20 people in my lab at Stanford, and now I had hundreds of people working with me, I think it's probably fair to say for me. Obviously they didn't all report to me, but they reported to people who reported to me. And there were a lot of differences. It's much more hierarchical in industry. I determined basically whether those people could work at Genentech, I determined their salary, their bonus, their stock, whether they got promoted. I was in charge of a lot of aspects of people's lives. Whereas if you were a postdoc in my lab at Stanford, you came and you worked and you published a paper, and hopefully went off and got a good job. It just felt and was much more hierarchical, which I wasn't used to.

ZIERLER: Do you have a sense who at Genentech was driving your recruitment? Was it an individual? Did you feel like it was company-wide?

SCHELLER: It was the CEO, Art Levinson, who I think by now is a legendary, I would call it, chief executive officer in the biotech industry.

ZIERLER: Without giving any private details of your conversations, was there something that he conveyed that was particularly compelling to you?

SCHELLER: Just the kinds of things that I just said. "We really value science. Our mission is to help patients. Along with that can come personal gains. But you're going to need to work really hard. And if you're doing it for personal gain alone, you shouldn't do it. [laughs]" Number one, it's not guaranteed, because it's all in stock, and stock can go up, or stock can go down. So it's not guaranteed. Second of all, it's not fun. Do something where you're going to enjoy your job, for goodness sakes. Life is too short.

ZIERLER: Your position, was it created for you, or did you succeed someone in this role?

SCHELLER: My initial position was head of Research, and I succeeded a person who was retiring.

ZIERLER: If you could walk me through, if you remember, your first few days on the job, what sticks out in your memory?

SCHELLER: I met people, and particularly the people who were now going to report directly to me. They were nice, but because of the hierarchical nature of things, I think they were somewhat suspicious. "Who is this guy? What's he going to do here? What's it going to be like working for him?" Nobody was rude, but you know, a little standoffish, maybe, a little unclear about—they just didn't know me very well, and all of a sudden, I could fire them, I could give them a lot of money, I could do whatever I wanted, basically, with their life. You were expected to be an active manager, so if somebody was not doing well, you were expected to fire them. Whereas at Stanford, if somebody wasn't doing well, you tried to help, but you kind of just more or less let them drift along. I don't even know if you could fire somebody at Stanford—it's so complicated—whereas in industry, that's just the way it goes.

Then I also met my colleagues on the Executive Committee, so the head of Legal, the head of Manufacturing, the head of Development, the chief financial officer. That group of however many it was, six or seven people, comprised the Executive Committee of Genentech, and we all reported to the CEO, and that group ran the company. I knew nothing about drug development, the FDA. I knew nothing about business, for goodness sakes. I just got a paycheck from Stanford and hopefully didn't overspend it by too much and paid my mortgage and all that kind of stuff. But business? I knew nothing about business. In that sense, though, it was what I wanted, which was a very steep learning curve again, whereas I had felt that my learning curve had plateaued a bit at Stanford. During my career, had a very steep slope, leveled off, went to Genentech, and that slope certainly picked up again, maybe even at a faster rate than ever in my life! [laughs] Yeah, it was interesting. I must have told you this story. It's particularly relevant to my first few days at Genentech. I'll tell it again because it fits here. I was having a discussion in his office with the CEO, and he said to me, "You should meet the head of HR." I said, "Okay. What does HR stand for?"

ZIERLER: [laughs]

SCHELLER: Twenty years at Stanford as a professor; I had absolutely no concept of what HR stood for.

ZIERLER: [laughs]

SCHELLER: He said, "Human Resources." I said, "Okay. What do they do?"

ZIERLER: [laughs]

SCHELLER: I think he got a little nervous at that point. [laughs] I said, "They help hire people?" Human resources—it felt to me like maybe that's—and he said, "Well, yeah, that's one of the things that they do." [laughs] That's sort of how naïve I was in terms of managing a large group of people working in an industry setting. At least he just didn't turn around and say, "We might have made a mistake here. This probably isn't going to work out." [laughs] I never asked him about it. I should ask him, actually, if he even remembers that conversation, which I'm sure he does, and what he really thought about [laughs]—what was going through his mind, when we had that conversation. Next time I talk to him, maybe I'll bring that up. So, people tested me, as to what kind of a person was I. The way Genentech operated then, I put in a lot of changes. They just did research, and if something interesting that could be turned into a medicine floated up to the surface, then somebody who was interested in translational things might work on it. I don't think the scientists would have minded if what I wanted to do was just continue doing basic science, and they could continue doing basic science, and nobody really had any goals. If, from time to time, an idea for a medicine came up, that was okay. If it didn't come up, that was also okay. But I didn't go there to do that. If I wanted to do that, I could have just stayed at Stanford. I wanted to try and make medicines. So, I did, I believe, instigate a much more informed and rigorous process around, what are our drug discovery projects? What stage are they at? How do we move them forward? How many are there? And collect up all that information and make sure that people had drug discovery projects.

I think they were used to operating a lot more—they could still operate independently, but I wanted to know what they were doing. I didn't want to necessarily micromanage what they were doing, but I felt like I had an obligation to the company to try to move a number of potential medicines forward, and if I didn't know what they were doing, how could I know that we had a chance to do that? [laughs] So it went from kind of a free running, flowing, place to a much more organized place, in terms of the drug discovery pipeline. I had to learn how to do that, which I learned from some other scientists and the way they ran their drug discovery programs. Then I had to figure out a way to keep it creative, to keep the science high, level of science high, but also to have a pipeline of drug discovery projects. Sometimes what happens when you give somebody a goal, like, "Come up with a drug discovery project by the end of the year," they'll come up with one, in order to meet the goal, but will it be a good one, or will it be just to meet the goal? Overall, with "Research should come up with ten drug discovery projects by the end of the year," what tends to happen is you meet the goal, but the quality goes down. I think that was a big problem in the larger pharmaceutical companies for sure, and I needed to try and figure out a way to on the one hand have those kinds of goals, but on the other hand, not lower our standards. I don't know if I did that or not; you'd have to talk to other people. But that was sort of the dilemma, is sort of not to succumb to the same issues that other companies had fallen into, but at the same time, to have things a little more organized than they were, so that we had projects moving forward, so that the company could be successful, not just everyone doing their thing, not randomly but almost randomly.

Also, for the first time I received some criticism. The Executive Committee—I may have mentioned this to you as well—it was something in companies to receive feedback. I didn't get a lot of feedback at Stanford. Once you're a professor, they can't fire you. [laughs] You just kind of do your thing. There's no higher level position that you can obtain. You can't be like super-professor or something; it's just "professor." So there's no point in—if somebody gave you feedback, you'd say, "What the hell are you doing?" [laughs] "I run my lab. I'm doing fine. It's none of your business." [laughs] So, I learned about what a 360 feedback is. The whole Executive Committee did that, even the CEO. They sent out questions—this was maybe six months into the job—to my peers on the Executive Committee. They sent out questions to people that reported to me in Research, people that were even lower-level people that didn't report to me, maybe didn't even really know me that much, and asked a bunch of questions. Then you got a report back. That's the first time I had ever had anything like that. And there was some stuff in there, that I thought was—a little harsh. Then I went over it with my boss, the CEO, and he said, "Yeah, you need to take this really seriously on the one hand. On the other hand, they say all the same stuff about me. There's only so much you can do." I said, "Okay, but how do I—like, what the hell?" [laughs] He said, "Well, I think you should, in your next meeting of the leadership of Research, I think you should go over the feedback, and discuss it." I thought, "Well, hmm, okay." I didn't quite know how to break the ice on this kind of thing, so I went in and I said, "So, we're going to discuss my 360 feedback. There are some comments that I'm arrogant, I'm aloof, I'm judgmental, dismissive." I said, "You know, it's funny—my parents used to say that. My wife says that. My colleagues at Stanford said that." That was probably a lie, although my wife and parents probably did say that. "And now, you say that. And I just can't understand how you're all wrong in the same way."

ZIERLER: [laughs]

SCHELLER: [laughs]

ZIERLER: That's great. That's great.

SCHELLER: And that kind of broke the ice, and I think kind of from that moment on, it was like, I was okay. [laughs] I don't really even remember the rest of the discussion. Every scientist didn't really take the 360s particularly seriously. Most of them probably had the same feedback that I got, and just kind of said, "Okay, fine, are we done with this for like a couple of years now so I can go back to work?" As I said, I don't really remember the rest of the discussion, but we kind of broke the ice there, and went on, and we did well. We made a lot of medicines that helped people.

ZIERLER: Richard, I want to ask about drug discovery in the context of intellectual property. There's fundamental research that's happening at Genentech. How do you stay in the correct lane to make sure that what is being discovered at Genentech stays as a Genentech profitable drug? On the flip side of that, how do you maintain discoveries that happen outside of Genentech and then those partners are properly compensated for those discoveries?

SCHELLER: We ran Research by largely a committee called the Research Review Committee. We called it the RRC. I was the executive sponsor of the RRC, and then my leadership team basically were the scientists at the RRC. We spent six hours a week in the RRC, and people, scientists, would come and present their projects and what they're doing in their lab. By that time, Genentech was a modest size company, and there was a large legal group and intellectual property group who would attend the RRC meetings. These people didn't report to me; they report to the head of Legal, and they were intellectual property lawyers, basically, who were there, in the meeting. We were interested in protecting our discoveries. I don't think I ever took one, because it's somewhat obvious in the long run, but they presented lectures and helped people, the scientists, try and understand what intellectual property is, what a patent is, when you need to file them, is it different in the United States and Europe, and China for goodness sakes, and the rest of the world, et cetera. So, we had interactions with the legal group both in terms of protecting our intellectual property on the one hand, and also making sure that what we were doing, that we had what we would have called, and I guess they still call, freedom to operate. That someone else didn't have a patent such that we would make a medicine and someone else would own it.

It was the job of the scientists who led projects to interact with their legal colleagues, and they were very specifically divided up into certain departments, or certain types of science, and everybody knew who their Legal representative was, and it was the job of the scientists, with their Legal colleagues, to make sure that they were both protecting their discoveries by filing patents, and understood the overall patent landscape around the area that they were working in so that they had freedom to operate. That's how an established biotech company works. At a university, it's not quite that organized. If a professor discovered something and they took it to the patent folks at the university, they could get feedback, and was it something that the university wanted to patent, and did they want to invest the money and so on. Or, they could not; they could just publish the paper, and then if the patent people happened to see the paper, they might have had a year after that to file some intellectual property. But the professor didn't even really have to take it to the patent folks if they weren't interested or whatever. A lot of people were interested because they could have stood to benefit personally if they made a discovery that ended up being a patent that someday made money. Stanford had one third to the inventors, one third to the department, and one third to the university, so an individual faculty member stood to potentially benefit if their patent turned out to be a big thing. Like Cohen and Boyer, who patented recombinant DNA; they did well [laughs] with that patent. Very few, of course, rose to that level, but people still did well, and could do well.

ZIERLER: Were there any projects that you inherited midstream when you joined?

SCHELLER: I'm sure there were. By the time I left 15 years later, we had so many hundreds of projects, I can't even probably remember most of them. I remember those that turned out to be medicines, but some of the projects didn't, and there were so many of them. I could probably write down a dozen, but there were probably a thousand. [laughs] So, a bit much. I'm not smart enough to remember all thousand.

ZIERLER: What about among the ones that you innovated? What was most important at a strategic level focusing on particular kinds of ailments or particular technologies that would lead to the highest likelihood of bringing a drug to market?

SCHELLER: I was more or less in charge of determining the strategy at a higher level. It was quite interesting; one of the first things I did after coming to Genentech was to finish a process that had already started, which was to stop working in neuroscience, which was a little bit funny, because I was a neuroscientist. But at the time, and to a certain extent even today, it's such a difficult field that I didn't feel, in spite of the kinds of discoveries that I had made, that there was enough progress into the molecular mechanism of disease in neuroscience versus, for example, cancer, that it was as productive an area for us to go into. Whereas in oncology, people were discovering almost every week a specific gene that was mutated that gave rise to cancer. Now that, you could think about, and that, you could try and do something. Whereas Alzheimer's disease, schizophrenia—devastating diseases, but—Parkinson's—perhaps not the right time for a successful but still modest size drug discovery company, Genentech, to go into. So I determined things sort of at that level. That would mean, then, we would hire people interested in cancer research. It was then more or less their job to come up with a specific project and then bring that to the Research Review Committee, and we would try and be supportive, but we were more supportive of some projects than other others, I think would be a way to put it, and could channel resources accordingly. I didn't necessarily want to say, "Don't work on that. That's not actually that good an idea."

Although people probably could read between the lines and understand that that was the case. But I wanted people to come up with their own ideas and be innovative, and I didn't want to totally discourage them by saying, like, "That's a dumb idea. Come up with something else." You had to walk a fine—well, I felt—you had to walk a fine line there. Whereas I think a lot of other drug companies might have said, "No, we don't sanction you working on that. You should go do something else, and you can't work on that." I thought, that's not the kind of scientist I'm trying to hire, and I don't want to deflate their energy by being so dictatorial. I think that helped a lot in keeping people engaged and innovative. So, oncology was one of the areas. Immunology was another area, where I think the understanding of immunological disorders—psoriasis, rheumatoid arthritis, inflammatory bowel disease, things like that, where your immune system attacks your own body—that was becoming well understood at a molecular level. Aspects of infectious disease. Although not vaccines; we decided not to do vaccines. But if you had an infection, could you take some kind of medicine to fix it. Really oncology and immunology became the major areas that we focused on. Again, that was terrific for me, because frankly I didn't know anything about oncology and immunology [laughs] so that was part of this increasing slope of learning that I went through to then try and get—and fortunately, I surrounded myself with people who knew about those areas.

ZIERLER: Let's stay on that for a second. You mentioned there was a decision not to go into vaccines. Why?

SCHELLER: The company still had a fairly small number of drugs that they were selling, but they were successful in other areas. The model of Genentech, they were really the first company—I suppose you could call this good or bad—to charge, if you will, over $50,000—well, one of the first companies—over $50,000—maybe even nowadays went up to even more; like $100,000—a year, for a course of therapy. The idea was that this is expensive to do, it's expensive to make, but you're going to live longer if you take this medicine. We were able to make that a practice that insurance companies went along with, if you will. So, once you had a medicine, the margin was huge. It might have cost a couple thousand dollars to make the physical substance of the medicine, but $50,000 was the cost for the treatment for a year. That was of course in part because all of the costs that had to be recovered was not in making the physical substance of the medicine; it was recovering the cost of the research and development, the previous ten years that we put in to make the medicine, to discover, to come up with the idea, to discover the medicine, to put it through the clinical trials. In terms of a business model, it was a very high margin once you had the medicine. Making a vaccine can be just as hard, but it might cost 10 bucks to make the vaccine, and you might charge 30 bucks to give it to somebody. So it was a very different kind of business in terms of the profit margins.

Genentech was criticized for that, with some of the medicines that they made early on. Although I guess some of the criticism was okay, some of it was unfounded. 60 Minutes wanted to do a story on somebody that died because they couldn't afford the expensive Genentech cancer medicine, and they ended up not doing the story because they couldn't find anybody. We had a number of programs that are somewhat complicated, and it's not worth it for us to go into—you can't just give pharmacies money in order to sell your medicines; that's not legal. But you could help people with payments in other ways, and then when it came down to it, if there was somebody who just couldn't afford the medicine and couldn't get it any other way, Genentech would just give them the medicine, for free. But it was a changing world, then, in terms of taking a pill which might have cost thousands of dollars a year, but not $50,000 a year. It was a changing time in terms of drug pricing, and the model for profitability was in favor of medicines versus vaccines.

ZIERLER: The decision not to get into vaccines, does this mean that Genentech was less of a player than it might otherwise have been with COVID and all of the research development that went into that vaccine?

SCHELLER: Yeah. Genentech and Roche did not have a COVID vaccine. Roche is also a diagnostic company, and they did very well in terms of very quickly making a COVID diagnostic. There was also one of the existing Genentech-Roche medicines called—I forget the name—it's anti-IL-6—that potentially treated the immune effects of a COVID infection, that was eventually approved for some folks that had COVID. But I would say overall Genentech was not a big player in COVID.

ZIERLER: Tell me about learning how the FDA operated and the regulatory landscape.

SCHELLER: Again, at that time, Genentech had a regulatory group, so there are people whose job it is to professionally, as a medicine is moving through the various stages of becoming an approved product, it was their job to be the experts at interacting with the FDA and understanding the rules, the processes, et cetera. I had a group of people like that to work with, and basically just learned by doing, and watching, as things moved through the pipeline. At that stage, I was strictly in charge of research, so when something moved into clinical development, I handed it to another group. I later became in charge of research through proof of concept in humans, where I did manage a group that had human clinical trials. Just to give you—the magnitude of things is like amazing. This also included aspects of manufacturing, which also has to be done in a very regulated way, to make sure the drug substance is pure, and you're not going to hurt anyone. But I think when I left Genentech, I think there were a thousand people in regulatory. So [laughs] a big deal, and not a small aspect of making and marketing medicines.

ZIERLER: Did you need to have an appreciation of what ultimately the FDA would be likely to approve when you were thinking about the kinds of drugs that Genentech should be working on?

SCHELLER: Yes, depending on what stage it was at. If it was an idea, it had to be an idea that treated something where there was a need. You might say certain types of cancer are more or less cured, so you wouldn't want to work on that; there isn't a need. Just so there was what we called an unmet need, early on, the scientists would just say, "Does this idea have any legs? Can I really get something or understand something or do something that really looks like this dream can come true?" Then if it looks like that might be the case, then we would begin to interact and get advice from clinical and/or regulatory people, and we would come up with a target product profile—we called it a TPP—and that would say, "The medicine needs to be a once-a-day injection" or a once-a-month infusion, or a once-a-day pill, otherwise people aren't going to take it. And it needs to help—let's say it's psoriasis—it needs to reduce the size of the lesion by 75% in 80% of the people. And it needs to have a further list of properties that would make it both acceptable to the FDA, if in fact in the long run it met all of these—if we could check all of those boxes—and that it would also be a commercially viable product, that you could charge this amount and doctors would prescribe it and people would take it. You can get it approved, and if nobody uses it for some reason, that's not particularly good use of time, either. So, yeah, we came up with a target product profile, and then we attempted to shape the medicine in a way that we hoped would meet that profile, as it moved through clinical development.

In a lot of ways, you never really knew until the end, because if you wanted to reduce the size of the psoriasis by 70% in 80% of the people, you needed to do the study to see whether that was the case. If it didn't, well, then, you did the best you could, but you guessed—guessed—your hypothesis was wrong. So, no, there was a lot about thought, but not so much really early. Because a lot of the early ideas, as I said, you just needed to make sure there was some need, but a lot of those projects didn't progress, because the early idea was too hard, or it was wrong, or something, so you didn't want to spend too much time, too early. Because in a large fraction of those instances, it didn't work out anyway, so it would have in a sense been a waste of time to think too hard about it until it was further along. Does that make sense?

ZIERLER: Yeah. Richard, there are so many milestones from an idea in the laboratory to delivery to market. What are they? When you think about all of the different steps that are required to get to actually helping people in a clinical environment, what are the most important milestones for you along the way, to get there?

SCHELLER: You need to have an idea. Okay, fine. Then you make some entity. By the time you're making an entity, you have this target product profile, and you need to get some idea that what you have does what you want it to do, but it's a long way from going into a human, yet. So, you usually experiment in animals. Nowadays, and even then, the animal that was used is a mouse. You could, for example, grow a tumor in a mouse and then treat the mouse with your agent and see if you shrunk the tumor. If you did, that was encouraging. This is grossly oversimplified but makes the point. If you did, that was good, and you moved forward, and if you didn't, well, then the chance that you would do that in a human, shrink the tumor, was pretty small, so you'd say, "This isn't looking so good. I either need to change something or I need to stop." [laughs]

Once you get some kind of indication that the medicine might have the desired effect on the disease, whatever it is, you have to be very, very careful that the medicine is safe, so you do toxicology studies. You give the medicine to at least one, usually two, mammalian species, sometimes non-human primates, like cynomolgus monkeys, and you dose the monkeys, starting at a low dose and then increasing, and you basically see what happens. That goes all the way towards treating the monkeys for some period of time, and then having a pathologist basically dissect the animal, look at all of the tissues, and to the best of their knowledge, see that they're okay, along with of course observing the animal. Is the animal eating? Does their behavior seem normal? What if their hair falls out, or something, or they get a rash? So, doing a toxicology study.

Once you have a package where you believe the drug could work, and then most importantly you believe based as best you can on the toxicology studies that when you actually give something to a human, it will be safe—I mean, that's a big deal; first of all, do no harm, right?—then you deliver this information to the FDA. Well, and that you can manufacture the medicine. You have to be able to of course make it in some kind of way, and you have to be able to make it, or at least eventually make it, in fairly large amounts. It's one thing to just make a little bit and treat a mouse. It's another thing if someday you're going to treat a million people a year, you might need to make metric tons of the medicine. You have to have some idea that that's going to be possible, otherwise why would you do it, if you can't make it? Then you take all of that to the FDA and you ask them—or the European agencies, or the Canadian agencies—and sometimes it's better and easier to do in Canada, or Europe, or the U.S., based on various details—and you say, "Can I give this to people?" Then you have a discussion with them, and then hopefully they say, "Okay, you can. But what we want you to do"—this is pretty much always the case—"is to start by giving them just a tiny, tiny amount, and then to increase the amount that you give to the humans." Sometimes these are healthy volunteers, or sometimes these are actual patients. You increase the amount slowly, and you make sure, essentially, that nothing bad happens. Hopefully you get, then, to a level of the medicine that you think might be effective in helping with the disease, whatever it may have been. Because the original amount that you started with was such a small amount that it wouldn't work, but you wanted to make sure that nothing bad happened to the person.

If you eventually—and we call that dose escalation—when you do a single, it's called a SAD, a single ascending dose—one bit of the medicine, and a little higher amount, higher amount, higher amount—if that works out, then you do a multiple ascending dose, where you treat the people several times with the medicine, and then go to a higher dose, a higher dose, higher dose. That's usually done in what's called Phase 1, and usually the goal of Phase 1 is to make sure that you can safely get to a dose of the medicine that you think will work in people with the disease. If it's something like cancer, or something easy to observe like a skin disease where you can just look at it. Sometimes you can get a hint in Phase 1 that the drug is actually working, although you don't really treat enough people, because you're not sure how safe it is, so you don't really want to treat too many people before you're sure that it's safe—you can maybe get a little bit of a hint that it's working, but the main goal is to make sure that you can give it at a level that you think should work, and that it's safe. If you can do that, then—and this is all greatly oversimplified, but I think hopefully you get the idea—I'm sure you know this already; you've talked to people like Ray [?] and so on—but anyway, you go to Phase 2, where you're actually going to treat people with the disease, and people without the disease will get a placebo, usually, and you're going to then get an idea of whether that target product profile that you made years ago actually looks like it might be true, and that the tumor shrinks, the skin lesion decreases, the pain in your joints goes away, or what have you.

If that looks good—and those are sometimes done on somewhere between dozens and hundreds of people—then if that looks good, then you go to the final stage, where you treat a thousand people with the drug, and a thousand people without the drug, and you hopefully see something dramatic, which then is statistically—and this is done double-blinded. These are some of the most rigorous experiments being done in science today, and I'm not sure—people really kind of look down on the drug industry as not being rigorous, but it's much more rigorous than the way most biologists do experiments in the lab. These are double-blinded, so people don't know who's getting the drug versus the placebo. The patients don't know. Even the physicians don't know. You get a vial, and you don't know. The physician gets a vial, and they don't know if it's drug in there, or if it's water in there. Very few graduate students do an experiment that way. Not that they're dishonest, but they usually know if they're giving the mouse the real thing, or not the real thing. They shouldn't, but often the way experiments are done.

Then if that all works out, then you take it to the FDA and you say, "Look, here it is. It's safe. It helped with the disease. Can I have permission to market this medicine?" Then at the same time, the commercial folks are getting involved, and they're doing research with physicians around, "If this costs this much money, would you prescribe it?" Or, "If it cost that much money, would you prescribe it?" "At what cost would you not prescribe it anymore because you think it's not worth it, it's too expensive?" That kind of depends on what the medicine is, and if you're going to not die of cancer, a little hard to know what the price is where you would think it's not worth it. Anyway, they do that kind of research and begin to figure out how they're going to sell it. You also have to show the kinds of materials that you're going to show to doctors. You have to show that to the FDA, and they make sure that you're not lying, basically. They give you a label which says the medicine can be used for this disease. They put in that label the things that the doctor should look for as potential side effects. Then you can't sell it, you can't go to a doctor's office and try and sell it, for something that isn't in the label. That's not allowed, because you haven't done the clinical trial to show that it really works in that disease.

If you want to sell it for something other than what it's approved for, you have to do the trial in that disease and show that it works, and that can get very tricky, and companies get in trouble for sometimes doing that when they shouldn't. Genentech got into a situation where one of their medicines, there were several academic publications that showed that it worked in a particular disease that Genentech had not done the clinical trial. So it was being heavily used. Genentech wasn't saying, "You should use it for this," but doctors knew, and it was being heavily used in a disease where Genentech hadn't yet done the clinical trial. The FDA said, "We want you to do the clinical trial." But it became essentially impossible to do the clinical trial because all the doctors knew that it worked in that disease. So they were using it for the disease [??] enroll—give somebody a placebo, when they knew they had a drug that worked in that disease. So we got in a little bit of a bind, and the government tried to sue Genentech for that, and the government actually lost the case, because we weren't saying to use it in that disease; it's just that physicians knew that it worked. So at conferences and things, they presented data that it worked, and they talked to each other, and it just got ahead of the regulatory process. That can be a little complicated.

Nowadays—remember I said the diseases are all subdivided into different—like different types of breast cancer. So it can often be the case that at the same time you're developing a drug, you're developing the diagnostic test to find the people that you should treat. This is a little bit complicated, because to market a diagnostic test is a different division of the FDA, but you have to go through essentially the same process to get the diagnostic approved, separately, or along with, the medicine. You can't just have some lab test that you cook up at Genentech and you test everybody, and then you treat these and not those. It has to be good manufacturing processes. You have to do the clinical trial where you take the people, you do the test, you find that they're the right people to treat, then once you know the right people, you take half of them and give them the drug, and half of them you give the placebo. So it's a parallel development of the diagnostic test, which needs to receive, as I said, from a different part of the FDA, regulatory approval. Because you sell the test. It's usually a tiny cost compared to the drug, but you do market the test. And if you test people, you want to make sure you get it right. If you test people, and if you say, "Oh, you don't have this type of disease, so we can't treat you" and you get that wrong, and it's cancer, they might die, because the diagnostic missed it and didn't get it right. So, developing a diagnostic in parallel with the drug is an interesting [laughs] process, because they have to be in sync with each other, as they're going through the development. If one gets ahead of the other, then you can have an approved drug but not an approved diagnostic; then you don't know who to treat until the diagnostic gets approved, and then you can figure out who to treat. Coordinating that is a very interesting process.

Then, manufacturing. The FDA will often come and inspect the plants that are manufacturing the drug substance. They'll physically send people from the FDA there to make sure you're following all of the rigorous procedures such that the drug substance that comes out—when you're going from making a gram to making metric tons, it's a big deal, and sometimes, once you make a metric ton, it doesn't come out exactly the same as when you made a gram. That's not allowed. It has to come out the same as the substance that you used to do the clinical trial. So there's a whole aspect of regulating the manufacturing process, putting it in the bottle [laughs], putting it in the box, what's on the box, what's written on the box. That all has to be approved by the FDA. So it is a big, big deal. That's part of why making a drug nowadays, I guess the average cost—I can't even believe it—but is supposedly something like $2 billion. Most of that comes from the fact that you do all that stuff, and you get ready, and then you unblind the Phase 3, and it doesn't work. So you spent all that money, and you get nothing for it. If one out of four—depending on what stage you're at, but one out of four, one out of ten from the very earliest stages—works, you have to burden the cost of the one that works with the money that you physically spent on all of those that didn't work. You don't get those for free! [laughs] You had to do the work. It just didn't turn out the way you thought. That's the biggest part of the two billion, is burdened by the failures. But, even for the one that did work, you didn't do all that work for free, either. It's expensive, as you can imagine, to do all of this, and takes ten years, hundreds of people, and it's a process, as you said.

ZIERLER: Last question for today. Of course you can't remember all of the thousands of projects at any given time, but what stands out in your memory as the first great success at Genentech that happened under your watch?

SCHELLER: We made what we call an armed antibody. We had an antibody that recognized the protein on the surface of a tumor, and we put a toxic substance on the antibody, and the antibody, then when we put it in humans, the antibody went to the tumor, and then went inside the tumor, and released the toxic substance and killed the tumor. That was much better than just giving the toxic substance systemically, because the toxic stuff, it kills good cells and tumor cells, so if you just gave it systemically, it would be all over your body, doing bad things. But if it was on the antibody, the antibody brought it directly to the tumor cell such that the toxic substance only killed the tumor cell, not your normal cells. A very interesting story about how we got to the final structure of the drug, which is that we were having trouble—the toxic substance was falling off of the antibody, once we gave it to humans, and that was causing these toxicities that we talked about.

We did an experiment in a mouse where we put the toxic substance on the antibody in such a way that we thought it could never come off the antibody, and we thought that probably—well, it was a control experiment, and we thought that shouldn't work, but we did it anyway, as a control, and we found out that it worked the same as all the other fancy ways that we were hooking up the toxic substance to the antibody; it just was—I forget the number—10 times or 50 times more safe. So, what we called the therapeutic window was dramatically expanded. The therapeutic window is the dose at which you use [?], versus the dose where you get something bad happening, a toxicity—it's the difference between those. So, for all the other ways we were trying, it was like almost no difference, but with this control experiment, we were surprised to see that the therapeutic index was huge. So we said, "Let's make that the drug." [laughs] So, all of the best laid plans—and, it did turn out to be a drug, which was, still is, marketed, and helped people with cancer, breast cancer, very dramatically. But it goes to show how hard drug discovery can be when you're trying your best, it's not really working, and then you try something that on purpose you thought shouldn't work, but then that turns out to be the drug. [laughs] Multiple billion dollars a year later, I'm glad we did that control experiment! [laughs]

ZIERLER: To clarify, in the way that you emphasized in your answer, you focused exclusively on measuring success by its therapeutic value. Is that to say that—obviously Genentech is a for-profit company—the therapeutic viability leads to profits? That profits are merely a symbol of a drug's success?

SCHELLER: Yeah! We more or less talked about how many patients can you help, and how much can you help patients. You didn't even need to talk about money, because if you helped a lot of people, a lot, the money part just followed. You could say, "How much money am I going to make from this?" but why not just say, "How many people am I going to help with this?" Because they're essentially the same. That's the way I always thought about it.

ZIERLER: It's a great counter to the cynicism that you hear sometimes about the greed of biotechnology, that it's only about the money. You're really flipping that assumption on its head.

SCHELLER: Yeah. Well, yeah. I mean, it certainly is somewhat about the money, or we wouldn't be—look, if the federal government or somebody wants to pay for making all those medicines, and then give it away, that's fine with me, but that's just not the way any society, much less the American society, works. [laughs] A lot of the money—it's pretty constant—it's usually plus or minus 20% of the sales goes back into R&D. A lot of the rest of the profit is used to pay for the sales force, the manufacturing, all the other parts of the company. The profit margins are high, but I would say that the drug companies are not the largest companies in the world. Apple makes a lot more money than Roche. Not to say that Roche isn't a nicely profitable company, but it's not out of line with other kinds of businesses that make money. It just has to do with—you don't need—although I'm not sure that's the case these days—you don't need an iPhone to live. [laughs]

ZIERLER: Even though it feels like it sometimes.

SCHELLER: I don't know how I would live without mine, but you don't need an iPhone to live, whereas you sometimes need the medicines that Roche makes in order to live. That makes it different.

ZIERLER: On that note, Richard, so much more to discuss for next time. I want you to think about the role of high-powered computing and the Human Genome Project and the impact that that had on Genentech. We'll talk about the merger, of course, with Roche. And then the topic, of course, that brings us together—when you decided to join the board at Caltech. So much to cover in our next conversation.

[End of Recording]

ZIERLER: This is David Zierler, Director of the Caltech Heritage Project. It is Thursday, May 25th, 2023. It is great to be back once again with Dr. Richard Scheller. Richard, as always, great to be with you. Thanks again for joining.

SCHELLER: Yeah, fun! This has been a nice project. Up to this point!

ZIERLER: Terrific. [laughs]

SCHELLER: Let's see. [laughs]

ZIERLER: We'll see. We'll see. Richard, I want to pick up on something that has a thematic and a chronological element, and that is where you saw the role of computation in biology and drug delivery in that transition period. Maybe if you can compare where computation was being embraced at Stanford, and what that looked at vis a vis when you joined Genentech.

SCHELLER: There was always computation, particularly in structural biology, to determine the three-dimensional structure of molecules and then to understand how a drug might fit into a binding pocket on that molecule, to analyze DNA homologies. So, there was always a role for computation, doing calculations that would take a human being a long time to do, and a computer can do in a couple of seconds. But I'm not sure that's what you're asking about. I wonder if you're asking about artificial intelligence and machine learning, which is the big new deal.

ZIERLER: I want to get to that, but several years ago, maybe even before AI and machine learning became so important in biology, I'm thinking more from fundamental research at Stanford versus fundamental research at Genentech where obviously there is a business component, was Genentech farther along than Stanford in terms of embracing the latest software, the most powerful computers? Was there parity? What did that look like, from your impressions?

SCHELLER: I think there was parity in the way that people used computation, at the time. Yeah, it was really interesting back in the day—meaning 40 years ago—people were just beginning to have enough data that they would compare one part of the genome to another—it was before the whole genome was sequenced—or one protein to another, and find that the proteins are actually related, more distantly related, than one would just easily see by looking at them. If you're 90% similar, you see the sequence as almost the same, but, if you're 20% similar, 25% similar, that's still very significant and suggests a common ancestor but one wouldn't necessarily just notice that. That protein homology, as I said, and computational aspects of structure, that was all pretty widely used and recognized at the time by biologists, and universities, Genentech, Stanford, pretty much similarly, I would say.

ZIERLER: Maybe this is a generational question, but were you always an early adopter to computational technologies? Did you really on graduate students to keep you up to speed?

SCHELLER: Oh, yes, I relied on graduate students. I'm not particularly computer or computationally endowed, so to speak [laughs]. Students were much more facile at that kind of thing than I was. I knew what one could do with it, but could I actually do it? No. But that's no different than a lot of modern techniques since I left the lab. Could I do them? No. Similar things at the bench that I have never done—I knew what they could do, I just didn't know exactly how to do it myself. [laughs]

ZIERLER: [laughs] If you were a graduate student today, or if you give advice at all to graduate students, do they need to be basically computer scientists as much as biologists, at this point in time?

SCHELLER: No, because I think what many companies try to do is to have computational groups, and to make the data accessible to bench research scientists in a simple way that they can routinely use the data. So, putting a readily accessible interface onto databases, so that people can readily use them. That's the job of the computational group, to make it easier for the biologists to access the data, and, if you run into a particularly difficult problem, to collaborate with a computer science expert. I think the more facile you are in computation, the better off you are, but I don't think it means that you have to be an expert in computer science in order to be a biologist. You have to know how and when to interact with a professional computer scientist to get your question answered, but you don't necessarily need to know how to do all of the nitty gritty yourself.

ZIERLER: You got ahead of me in the previous answer about machine learning and AI, but just to bring ourselves back to when you joined Genentech in 2001, at Genentech, at Stanford, broadly in biology, was anybody at that point thinking about AI? Was that even a thing to think about?

SCHELLER: Not that I ever came across.

ZIERLER: When does that happen? What's the transition point for biology's embrace of AI, as you saw it?

SCHELLER: You assume there is an embrace of AI in biology.

ZIERLER: [laughs] Okay!

SCHELLER: I think that biology itself, how cells work, is not a particularly good thing for AI to try and understand. It just isn't. The reason is the way biology works, which is random mutation followed by selection of those random mutations such that there is a solution that cells, organisms, have come up with, but it's not necessarily a unique solution, and it's not a solution that at least—and look, I'm not an expert—but it's not a solution that's particularly easy to teach a machine. Because often, it may not even be the best solution; it just turns out to be a random one that worked. Then the next problem that you have, the next biochemical mechanism that you have, is going to be another solution that's partially random, depending on what mutations happened, how it was selected, and so on. When you say "biology," I'm not sure that AI and machine learning are particularly good at doing biology. I think AI and machine learning are good at doing certain aspects of structural biology. You look at all the protein structures in the world, and then you look at an amino acid sequence, and you say, "This is similar to that one, therefore the three-dimensional structure is likely similar." That, AI and machine learning is really good at. But you can look at all that is known about cell biology in the world, and if you want to predict the next thing in cell biology, I don't think AI is so good at that! [laughs] If you want to look at chemical structures and you want a suggestion for the next molecule that you might make, AI and machine learning are getting better at that. I'm not saying there's no use in biology; there's a use. But it's not necessarily, as far as I understand things, understanding the biology itself. It's understanding pieces of chemistry, structure, other things, that go into understanding the biology, and that can help you understand the biology, that AI is good for. That doesn't mean that we won't get there, but I don't think, at least from what I see, I don't think we're there yet.

ZIERLER: What about the explosion of data in biology? Maybe you want to challenge the premise of this question as well, but when biology went from a relatively low data scientific field to enormous amounts of data that it had to deal with. Because my understanding was, that's at least one place where AI can help, as they say, separate the signals from the noise.

SCHELLER: Yeah, and I agree with that. If you look at what was known when I was at Caltech, I can't even believe how much more we know now, and no human knows all that. No human knows the DNA sequence of the thousands of organisms where the genome sequence is now known, so you have to process that through computation. A human could do it; it would just take a million years.

ZIERLER: [laughs]

SCHELLER: It takes a computer a couple seconds. That's absolutely the case, looking through that. And then looking through all the -omic, I would call it, data—RNA-Seq, proteomic data, just huge amounts of measurements that are made on cells, and looking through that to try and find patterns that make sense is really only done by computers these days, because as you said, there's so much information.

ZIERLER: If we could make this more concrete, this line of inquiry, if you can think about either a particular drug or just a mode of process at Genentech, either for AI and probably not, according to your perspective, but generally computation, what has computation made possible in terms of drug delivery, and what has it really made simply more efficient, that could otherwise be done but on a much longer and more difficult time scale?

SCHELLER: I think for example the understanding—we haven't gotten into the genome yet, but—

ZIERLER: Next topic, yes.

SCHELLER: —you and I differ by about four million bases, of the 3 times 109, and we have different susceptibilities to disease, quite likely, and associating those variations with phenotypes is best done through human genetics, which requires a significant amount of computation to get there. There are those kinds of examples. There's lots of things where the amount of data and the way you analyze the data is made possible by computation, because to do it manually, so to speak, is just too labor intensive and would just take too long. I think that's probably the same with the way computers affect every aspect of science, medicine, history, literature, [laughs] everything—everything in life. The ability to drive my Tesla. I don't even need to look at the road. I do, but I don't need to, because it's all right in front of me on a screen. There's just no denying that. That has been one of the great revolutions of the last 50 years.

ZIERLER: Now let's get to what has been a subtext so far, the Human Genome Project. Just to set the stage, in the 1990s, some of the early discussions that led to the Human Genome Project, were you a part of that?

SCHELLER: Was I a part of it? Not really. I was a scientist, but I was not a genomic scientist. I was not involved in the Project. I was a cell biologist. I certainly used molecular and cell biology to do science, I certainly used that at Genentech to make medicines, but other than peripherally, in discussing with other scientists and so on, I was not involved in the Project.

ZIERLER: But you were witness to it. You were watching what was going on.

SCHELLER: Sure, absolutely. And I was in favor of it. A lot of people weren't, and they were afraid of Big Science coming in and taking over biology, rather than individual investigator sponsored R01 grants where somebody had a hypothesis, they proposed this hypothesis, they got a grant to see whether that was true, they worked with their students and postdocs, and after five years, that grant ran out and they wrote another one. This was billions of dollars, some of which I think was probably coming from that type of funding. So, coming at the expense of that type of funding. It was billions of dollars. Biology just wasn't used to billion-dollar projects. So, I thought it was a good thing to do. I was sympathetic to the cause of the scientists, the individual scientists in the lab, trying to fund their laboratory. But I think in retrospect, there's just absolutely no denying that it was a terrific thing.

And now, so many of those R01 scientists—the R01 is the individual grant to a scientist with a lab of however many people—use the human genome and use the information from the human genome to help with their science in a way that has revolutionized how people think. I think that is the same with drug discovery. I do think, though, that people were expecting—and I think as I look back, this has always been the case, no matter what new technological breakthrough there has been—people were expecting that it would translate into new medicines much more quickly than it actually has. As I said, I think that often happens, I see how people who don't actually understand how to make a medicine could think that. Probably ten years after the human genome was sequenced, people were disillusioned in a way. "Was it worth it? Where are all the new medicines that we were promised? Where's this? Where's that?" It just takes longer than that! [laughs] It takes longer than that to translate the breakthroughs into therapies. If I look back over 40 years, I think what we've learned about biology has greatly exceeded what I ever thought we would have learned. But the ability to take that and translate it into new really effective therapies has progressed more slowly than I thought it would have.

ZIERLER: Wow.

SCHELLER: Not that it hasn't progressed; it has, but more slowly than I thought. We understand so much about a cell, and it's still so hard to make a medicine.

ZIERLER: Wow. That's worth unpacking. Those are both very powerful observations. To start with the fundamental side, what sticks out in your mind in terms of being really surprised at what we understand now, relative to 40 years ago?

SCHELLER: Like the kind of thing that I worked on, as a basic scientist—understanding the molecular mechanism, the biochemistry, of how neurotransmitter is released. So, understanding that in terms of molecules, little molecular machines, and the way they interact, and the way they do what they do—my work is just one example of the kinds of cell biological processes that we now understand in terms of precise, biochemical mechanism. We're really at a stage where we can begin to think about a cell as a little bag of chemical reactions, and that we understand those chemical reaction! [laughs] Which is an amazing thing. When I was a graduate student, we were just beginning to try and understand those chemical reactions. Now, we don't understand them all by any stretch of the imagination, but we understand a whole lot of them. We always believed—I mean, knew, in a way—that a cell was a little bag of chemical reactions. As a physical scientist, what else could it be? [laughs] There wasn't any doubt that that was the case. It's just that we didn't understand much about it. Whereas we do now. I would have thought that once we understood that, it would be easier than it has been to intervene with those chemical reactions to modify them, to change them, to alter them, to fix them if they're broken, in a sense, broken meaning the whole organism has a disease of some kind because those chemical reactions aren't going quite the way one would want them to go if you didn't have the disease! [laughs] That part has been harder. Does that make sense?

ZIERLER: Yeah. In the model of Socrates, where the more we know, the more we know we don't know, is this mode of understanding these processes that you just explained to me, have they opened up new questions? Is that sort of the frontier as you see it now?

SCHELLER: They've opened up new questions, and I think that also drug discovery opens up new questions. I always felt that obviously when we made a potential therapeutic and we did the clinical trial, and we gave it to a thousand people, we gave a placebo to a thousand people, we wanted it to work, obviously, because we would help people. But it was almost more interesting when it didn't work, because then, we had something wrong. [laughs] Otherwise it would have worked. [laughs] More often than not, it doesn't work, which means we have something that we don't quite understand. I think you make a good point. While I said two minutes ago that we understand so much about the biochemistry of cells, there are aspects that we still don't appreciate, and interestingly they are sometimes revealed by clinical trials, because that's really the ultimate test of whether we really understand something. If you can rationally design a medicine to alter that biochemistry in a way to bring it back towards more of an equilibrium that doesn't result in disease, you got it right, which means you understood it. But as I said, probably more often than not, that's not what happens, so you're missing something.

ZIERLER: The second aspect of that observation about being surprised at the difficulty in translating some of this basic understanding now into clinical applications, therapeutics, things like that, what's an example of where you pinned your hopes on some basic science breakthrough and then being disappointed that it hasn't led to anything, either yet, or maybe as you fear, never?

SCHELLER: As I said, "hasn't led to anything" isn't quite the case, but let's take cancer as a great example. We know now, based on cancer genomics, that in certain diseases, certain types of cancer, there are mutations. In melanoma, 60% of melanoma results in a mutation at one position. A valine at position 600 in a protein called RAF, is mutated, such that the RAF molecule is extremely active resulting in the cells dividing in an uncontrolled way. Fine. Make a chemical that inhibits the activity of RAF. So, we did that. And, it works—for a period of time, it works. You can be riddled with tumors—I mean, horrible—there are these 600E mutants, in RAF—you take the drug, they go away, you're on vacation, you're happy again, gaining weight, everything is looking good. But almost certainly, within a year, the cancer comes back. So, they develop resistance. Then people said, "Well, we know about the biochemical pathway. Downstream of RAF is a molecule called MEK, so we'll make an inhibitor of MEK, and we'll give the RAF and the MEK inhibitor." So, fine, we do that. And you know, I say, "Fine, we do that"—I mean, that took eight years! [laughs] It's not like you just "do that." Anyway, let's say, "Fine, we do that." Then you give a RAF and a MEK inhibitor. Then, for the most part, you're fine for maybe two years or three years, but the cancer comes back. And then, you're a little bit stuck, because it comes back via many different ways, and we don't know what those ways are.

At least we don't know what most of them are. So it becomes difficult to think about what's the next medicine you would make to turn that three years into ten years, or the three years into six years. You resort then back to what you used 20 years ago, which is just chemo, which is nasty, and can help but doesn't really help all that much. So now, people use immunotherapy and other kinds of things. But I would say that generally, we had greater expectations that when we understood the mutations that were giving rise to cancer, that if we hit those mutations, so to speak, we would have a greater effect, a longer-lasting effect, on the disease than the way it turned out. So, was that progress? Yes. But was it at least to me a little surprising that it didn't work better than it actually works? Yes. I hope that's a good example that illustrates that both yes, there was progress, but no, we don't cure the cancer by doing this, which I think naively in retrospect [laughs] some of us were hoping that we'd get much closer to the c-word—"cure"—than we actually got.

ZIERLER: Is that to say that, when President Biden talks about a cancer moonshot, or in the grand sweep of history the goal is to cure cancer, are we far enough along where you think that's really not the right way to approach this, or that's unfairly getting people's hopes up?

SCHELLER: I think it might unfairly be getting people's hopes up. I think there's enough money for cancer research. That's fine, he can call it a moonshot; I mean, there's billions and billions of dollars by the NIH. There's billions and billions by drug companies. I think there's probably enough money to do the good ideas. Fine, I suppose some more won't hurt, but yeah, I think it gets people's hopes up. Even the most recent amazing results in cancer therapies, which is immunotherapy, which is cancer cells are so smart that they turn off your body's immune response to the tumor. The tumor, under some circumstances, is seen as a foreign entity, and your immune system kills the cells that are the cancer cells. But when they get to a certain stage, they are able to turn off the immune system in order to allow themselves to grow, if you will. In studies over the last ten years, we've been able to figure out how to turn off the suppression of the immune system. It's kind of a double negative, but that's kind of the way it works. If you turn off the suppression, that allows the immune system to attack the tumor cell. That has been extremely beneficial, but in general, there's a durable effect, let's say on the average—it depends on which cancer you're talking about, and which drug, and which patient—in I'd say 25% of the patients.

The great thing is, often those responses are durable, meaning that people can pretty much be cured. You may remember back to the melanoma case, Jimmy Carter had melanoma. He had tumors all over his brain, all over his body. He did the immunotherapy treatment, and lived for many, many years. He's still alive. He's probably going to die from something other than the cancer, because he's in his nineties. I mean, we should be so lucky! That has been great, but it works in 25% of the cases. In the last five years, people have done an amazing number of studies to try and extend that, to try and combine things with the immunotherapy so that it would work in more people, and that has been a huge failure. People have spent billions of dollars trying to get it from 25% response to maybe 50% or 75% response. People had a lot of good ideas, but they didn't work. It was a big step up, big advance. Five years after that, billions of investment; we're still at that level. We'll pick it up again, somehow, someday. If I knew how, I or somebody would be doing it, but I don't know how. We're trying things, but I don't know whether they're going to work or not.

ZIERLER: You centered your response around cancer. What about neurodegenerative diseases like Alzheimer's and Parkinson's? Is it the same kind of story about dashed hopes about where the research could take us, or do you see a different narrative there?

SCHELLER: No, I think it's worse, there. There, again, there's a little different example, in a way. I think we know pretty clearly what causes Alzheimer's disease. It's the production of Abeta that gives rise to plaque in the brain. People somehow suggest that this is still a theory. In my mind, and I think in the minds of a lot of people, it's not a theory. If you make more of it, you get the disease sooner. If you make less of it, you get the disease later. It's all genetic studies in humans. That, to me, essentially constitutes proof. People thought, "Well, then let's get rid of the plaque, and we should help with the disease." Now, probably after having that model for 20 years, there are two examples, one from Biogen and one from Eli Lilly, where in fact, that appears to be the case, and that if you treat with these monoclonal antibodies, they get into the brain and they bind to the plaque and they dissolve it, and they flush it, if you will, out of the system. The data is that your cognitive decline, if you're on the drug, after a year and a half, is slowed by one third. So you have essentially, on the drug, the decline of only one year, at one and a half years. That's progress, but they will be extremely expensive. I think if I had Alzheimer's, I would probably take the drug, but there are side effects. We probably don't want to get into detailed discussion, but there are side effects that can cause bleeding in the brain, so they're not perfect drugs, and they don't have miraculous effects on decline in cognition. We've got our foot in the door, but after all the money and all the time, I think that's kind of disappointing, the progress that we've made.

Now, scientists are terrific, because you can't go to sleep unless you think you have some other idea about what to do, and there are things downstream. So the thought is you have Abeta at first, and then that results in a molecule called Tau that aggregates and forms tangles, and that the Abeta causes the tau to come into play, and that at the time we're treating, the Abeta has already done its dastardly deed, so it's not dependent so much on a-beta anymore; it's dependent on Tau. So, now we're attacking tau in various way—we, the field—are attacking tau in various ways, and so on. But, it has been very, very tough, and is probably—well, I think already is, and will be for sure, in the next decades, the biggest public health problem the Western world, as we live longer. It's devastating, Alzheimer's. Other forms of dementia are devastating, because you don't die right away like if you have a heart attack or you have very serious cancer. You can live for a long, long time, and it's very expensive to take care of folks. With the Alzheimer's patients that I've seen, it doesn't look like the people are having a particularly terrific quality of life. So, we'll keep trying! But I think it's perfectly reasonable to say it has been disappointing.

ZIERLER: Let's see if we can close that on this thread, on less of such a gloomy note.

SCHELLER: Yeah! I'm sorry about that!

ZIERLER: No, listen, it is what it is, as they say.

SCHELLER: Yeah, but that's why I've said, I think we understand what causes the disease, but we haven't been able to fix it. That comes back to my original statement about it being more difficult to translate this deep understanding into effective therapies. And, yeah, I agree, let's move on to [laughs] something more uplifting! [laughs]

ZIERLER: On that basis, is there any specific drug discovery, any basic science discovery, any therapy, that goes against this overall narrative, where there have been some happy surprises?

SCHELLER: Sure. I think immunological disorders in general, things like rheumatoid arthritis, things like psoriasis, I think there are very effective life-changing medicines that have been developed that work extremely well. I talked about one example in cancer; there are other examples in cancer where the medicines work better than the way I described. So, yes, there are grand slam wins all around, but they're harder to come by than one would have thought.

ZIERLER: Let's now move to the corporate side of things. When you joined Genentech, was the business model of acquiring other companies already in discussion, or were you part of those early discussions?

SCHELLER: Oh, no, drug companies had bought other companies for a long, long time. GSK is Glaxo and Smith Kline, two companies that merged. Pfizer has bought dozens of companies. No, I think drug companies, and other companies—software companies—there have been corporate mergers, buyouts, for a long time. I think that the difference today is that a lot of the large pharmaceutical companies rely less on their own internal research and more on acquiring promising research or promising therapeutics from biotech companies, and that very few biotech companies end up being Genentechs. I mean, Genentech isn't even a Genentech; Genentech was bought by Roche! It's fully owned by Roche. It's a little different now, because it operates with its own brand name, and it operates somewhat independently, but let's face it; the profits of Genentech are sent to Basel [laughs] which is where Roche is. That I think is a big change. Before, when I was at Caltech, there weren't biotech companies, so obviously pharmas weren't buying biotech companies because there weren't any.

Now, there are thousands, and the minute somebody has something good, meaning either a very promising drug or a drug that has been through clinical trials and is ready to be approved, someone will do a net present value calculation, offer to buy out the biotech for billions of dollars, and many times—I would say most of the time—the investors in the biotech company, and the scientists in the biotech company, are willing to take those offers of billions of dollars for their company. Then the molecule moves into a big pharmaceutical company where their job is really commercialization. They already have a sales force in 80 different countries around the world. For a little biotech in south San Francisco to set up a sales force in 80 countries, thousands of people—maybe the whole company has like 200 people in it—that's a massive, massive undertaking that the big pharmaceutical companies are good at, because that's what they do. I think that has been a very fundamental change in the way drugs are made, and drugs are discovered, from, as I said, however many years ago it was that I was at Caltech. [laughs]

ZIERLER: Prior to the big acquisition of Genentech by Roche in 2009, what was Roche's relationship with Genentech? How involved was it operationally?

SCHELLER: It's a complicated thing. Roche bought Genentech originally—when was the original, the first time Roche bought Genentech? You can look that up.

ZIERLER: It was as early as 1990, I think, when they started with their majority stake.

SCHELLER: Roche is very clever financially. They bought the company, they took it private, then they floated 49% of the company. They sold shares, and Genentech operated more or less independently and traded on the New York Stock Exchange. The thing about that is, while Roche owned a majority of Genentech, 51%, when you're trading every day on an exchange, the minority shareholders have huge rights. You really need to make decisions in the best interest of the minority shareholders. Otherwise, why would they buy your stock. If you're just going to make decisions that are good for Roche that aren't good for me, a minority shareholder, it wouldn't work. Genentech operated that way for a long time, and they were operating that way when I came to Genentech. The company had their own P&L, traded every day on the New York Stock Exchange. You could see it go up and down, all that kind of stuff. [laughs] Then Roche bought the remaining 49% of Genentech—I don't know what to say; it's like again—so that they owned 100%. And they're going to keep it that way, now. When they did that, they still though wanted Genentech to operate, quote, "independently," but it was very different, because there were no minority shareholders, so Roche really, really had 100% control of the company, then. I stayed for five years after that, because we put together plans on managing Roche and Genentech in five-year chunks of time. I stayed for five years after that, and then retired. That's the little bit complicated history, but financially for Roche, it was [??].

ZIERLER: Did you support the acquisition? Would anybody have cared one way or another of your opinion?

SCHELLER: No, I don't think people would have cared. The decision needed to be made in the best interest of the 49% shareholders. They were the people that were going to get paid by Roche however much they would pay for those shares. They already owned the 51% so they didn't need to buy that part. There was quite a prolonged negotiation around the price that would be paid—I don't even remember, we can look it up, how long it was—more than six months. But, no. I was on the Executive Committee of Genentech. We had a fiduciary duty to do things in the best interest of the shareholders. So if the stock was trading at x, and Roche was willing to pay x plus something, we had a duty to say yes, if the something was enough [laughs] to make it a good deal, if you will, for the shareholders.

ZIERLER: The backdrop here, of course, is the financial crisis of 2008, 2009. Did that play a role in the decision-making for how this went down with Roche?

SCHELLER: Not much, really. I think that's the interesting thing about—not so much biotech, because lots of biotechs don't have revenue—but it's the interesting thing about the pharmaceutical industry. It doesn't really matter what interest rates are; people still get sick. Some would say that even more people get sick. So, it's not totally immune, but—you might put off buying a new car, but you don't put off getting medicine, if you have cancer. So it's less dependent on macroeconomic forces, in a way.

ZIERLER: Did the acquisition change your day to day at all? Did it change how Genentech felt as a company?

SCHELLER: Well, it changed my day to day a lot. I became a member of the Roche Executive Committee. Roche actually, [laughs] with Swissair, put in a direct flight from San Francisco to Zurich. Roche guaranteed Swissair that they would break even on that flight. Then any customers that they had above what Roche guaranteed would be profit, so there was absolutely nothing for Swissair to lose, only to gain. There was so much back and forth between Basel and south San Francisco that, as I said, Roche put in a direct flight, commercial flight. I mean [laughs], it's an amazing thing, actually! Swissair did very well, because lots of other people that didn't work for Genentech or Roche also used that flight, so, good for Swissair. But, no, I had a lot of meetings in—maybe five at least—meetings a year in Switzerland.

We would have Executive Committee meetings that would start at 2:00 a.m. San Francisco time, so I'd get up at 1:00, which for me meant that I probably hardly went to sleep, and drive in to south San Francisco to do—I guess it was before the pandemic, but they were essentially like Zoom calls. I didn't go every month or every two weeks to Switzerland. Then we would go until 1:00 or 2:00 in the afternoon, and that was 9:00 or 10:00 in Switzerland, so they were tired. I was tired when we started. I mean, did my life change? Yeah, it changed. I just went home after that, and it took me probably a day or two to even recover. Traveling to Switzerland, I got to go first class, so it wasn't so painful. I would stop in Paris on the way back and exercise my hobby of collecting African art. So I don't mean to say that it was—I didn't like those 2:00 or 3:00 a.m. start times for meetings, but the going to Europe was more or less fun. [laughs]

ZIERLER: Were there different cultural approaches, either at the corporate level or the biotech level, after Roche acquired Genentech?

SCHELLER: Yeah, and I think they never—and maybe even to this day—don't understand the cultural differences. I'm not sure I even understand them, either. The former chairman of the board said to me, "I want you to keep your culture. I want you to just keep doing what you're doing. If somebody comes in, in a t-shirt and shorts, with no shoes on, with a cat on a leash, keep doing that."

ZIERLER: [laughs]

SCHELLER: I thought, "Wow, is that what they think we do?" [laughs]

ZIERLER: [laughs] A bunch of hippies in northern California; of course!

SCHELLER: Yeah! And somehow—and what he was saying is—and I think that was probably 51% a joke, but [laughs] only 51%—he was saying, "Whatever it is you're doing, keep doing it, and we don't want to interfere with that."

ZIERLER: It's a vote of confidence, if nothing else.

SCHELLER: Well, because Genentech was very successful, and most of Roche's largest selling drugs came from Genentech. They knew that, and they wanted more of those, so it's like, "Congratulations. Keep it up."

ZIERLER: Did you have more money to spend as a result of the acquisition?

SCHELLER: Yeah. My job also changed. I had previously been running Research and when we had a molecule that was ready to move into clinical development, I handed it off to the Genentech development group. In discussions that took place after the buyout, we changed the model, and I then ran Research through proof of concept, which is usually a Phase 2 clinical trial. So I took on the early stages of clinical development in the group that I managed, which I didn't do when Genentech was independent, or more independent. That was interesting for me. I liked that transition. I had to pay more attention and learn more about those early stages of clinical development. There were some good things about doing it that way, because then once we had a drug that we thought worked, I would give it to the late-stage group at Roche, who would do the clinical trials in those 80 different countries we were talking about, and work with the commercial people, and get the drug licensed, and all those kinds of things. Obviously that's absolutely critical. Otherwise the drug never gets to patients. But I wasn't interested in understanding the complexities of the drug regulatory environment in Ecuador. That just [laughs] wasn't interesting to me. I was interested more in the science, the clinical science. Did the drug work? Once we thought it worked, then they had thousands of people to figure out how to get the drug licensed in Japan, in Brazil, in Europe, and so on. As I just said, I didn't want to do that. So, it was terrific.

ZIERLER: You mentioned a five-year plan from the point of the acquisition. What was that plan? What did that mean for you?

SCHELLER: We set out a series of goals around how many molecules we thought we could move into the late stage clinical group at that time, what the budget would be at the Roche level, what the earnings would be. Just a general business plan for a complicated organization that operated in all these different countries all around the world, had a diagnostics division, a drug division, et cetera. So it was a business plan, of which Genentech Research and Early Development, which I ran, was a part of that broader plan that all rolled up into a P&L, a profit and loss, for Roche.

ZIERLER: Just so I understand, did Genentech really internationalize as a result of the acquisition? How much of an international presence did Genentech have prior to 2009?

SCHELLER: That's an interesting question. Genentech had marketed drugs, so had a sales force and so on, in North America. Roche had the option to license Genentech drugs as they were approved in the rest of the world, paying to Genentech a royalty. Which was all a little funny, because I mean, they paid it to Genentech, and then Genentech gave 50% of it back to Roche [laughs] because they owned 51%. But, that was fine. Genentech never had a marketing team outside of North America. Roche did that. Roche, for the last 80 years, has done that, and had that all in place, and so on. Some of the drugs that Genentech made, Roche didn't opt into, and then Genentech had the opportunity to license that drug to anyone else who wanted it under any terms that Genentech could negotiate. It's that Roche had the first right of refusal. So, yes, Genentech had its own P&L, it traded on the New York Stock Exchange, but they did not market pharmaceuticals outside of North America. Someone else did, usually Roche, and they received a royalty.

ZIERLER: Thinking about biotech on the global stage and going back to something interesting you said earlier about big science and small science—at the dawn of the Human Genome Project, you mentioned there were many scientists who protested, didn't like the idea of big science. In retrospect, what aspects of that protest were just resistance to change, and what have proven to be legitimate scientific misgivings about how big biotech, how big biology could get, and how big it should get?

SCHELLER: The genome was being done twice, right? It was being done once by biotech, and people didn't care that much about that, because it wasn't coming from the NIH. And, it was being done another time, and they finished about the same time, by the NIH. That money people were worried was coming from money that could be spent, what they felt was better, elsewhere, usually by giving it to them, not the Genome Project. [laughs] Which is all fair —I mean, they had reasons—but there was some self-indulgence in that as well. [laughs] I don't think that anybody would say now that having the genome sequence was a waste of money. I think it has revolutionized so much of the way we do things that I don't know anybody that today would say that that the one or two or however many billions of dollars it was, was a waste of money, today.

ZIERLER: In those five years that you were at Genentech after the acquisition, what was better? What was improved, as a result, for you, for Genentech?

SCHELLER: I think a lot of people would say that it was too bad, that Genentech was better off functioning independently. I don't want to take a stand on that. I think it functioned okay, under Roche. I was running things, so I hope it didn't function poorly! But I think there are people who wistfully think, "Boy, those were the good old days, when we weren't fully owned by Roche." Because there are changes that are made, and they come from Switzerland. The person with the t-shirt and the cat on the leash without any shoes on was a little less comfortable with some of those changes than they might have been if they were changes made by Genentech. They might not have been the same changes, and the cat on the leash person might have felt a little more comfortable.

ZIERLER: If you don't want to take a stand, just if it's possible to be specific, did Genentech accomplish things that simply wouldn't have been possible without the resources that Roche made available? Then to flip that around, were they stymied—again to go back to that cultural difference—was Genentech stymied in some of the things it wanted to do but might not have been able to?

SCHELLER: Afterwards, no, Genentech received very generous budgets to continue to do R&D. But the way companies operate is the budget for R&D is more or less set around 20%, plus or minus, of revenue. So, if you sold $50 billion, there would be $10 billion for R&D. Some companies are actually somewhat less—16%—and some are probably 22%. But Roche set it around, if I remember correctly, 19%, 20%. So, there was a lot of money for research and development, and during those five years, I think the Genentech Research and Early Development group moved 11 molecules into Phase 3 testing, and several of those turned out to be multibillion-dollar drugs. I think Roche would say that they were happy with that investment.

ZIERLER: For the last part of our talk today, we'll focus on when you decided to step down from Genentech. When you established that five-year plan in 2009, did you have it in your mind that this would be your last five years at Genentech, or you were openminded at that point?

SCHELLER: I didn't think that it would necessarily be my last five years, but it was time to do something else, and I wanted to do something that was scientifically different from the science that I had done before. We talked about the genome, and I said that I was not—I'm still not, although I know a lot more than I used to—I was not a human geneticist. I was not a genome scientist. I thought, though, that it would be interesting to learn about that. That's why I went to 23andMe, because they have the largest human genetic database in the world, and it was becoming—it had already become—a well thought-out way of finding drug targets—to use human genetics, and to say—I think we went through the way it works, but—if you and I differ by four million base pairs, and I have a disease and you don't, and certain genes are more abundantly expressed in me than you, and it's that way with lots of people with the disease, so that it's not just random, then perhaps that gene has something to do with the disease. Therefore, coming back to what we were talking about before in terms of biochemical mechanism, you could look at that gene, see what it does, question it to whether it wasn't doing that in quite the right way, and then, could you fix it. But the whole idea came from the genetics, which was all dependent on it knowing the genome sequence, and dependent, then, on doing genetics, which I had never done in my life. So it was fun to go do something different, scientifically.

ZIERLER: This is now a recurring theme in your career, wanting to do something different, as going from Stanford to Genentech, and from Genentech to 23andMe. How would you compare that desire, the doing something different, at these two different decision points in your career?

SCHELLER: I think, as you said, it's quite similar. I've had three jobs in my life, so it's not like I've moved—and I'm old now, 69—so three jobs is not a lot, I would say. So it's not like I couldn't hold down a job or something. [laughs]

ZIERLER: [laughs]

SCHELLER: But I think change is—I was going to say I think change is good; I'm going to modify that to say that for me, change was good, after 19 years at Stanford, after 14, 15 years at Genentech. I still work with 23andMe, as a board member and an advisor, not as a full-time employee. But I was there, I would say, towards the end of my operational career, for four years. I didn't plan on having another full-time job after that. I don't know whether you call that retirement or not, because I work 40 hours a week, just not in an operational role; in an advisory role, which is I think appropriate for this stage of my career.

ZIERLER: I wonder if you can compare the experiences of shutting down a lab where you're the faculty leader and how the lab sort of ends with you, versus leaving a corporate position where obviously your role needs to be filled by someone else.

SCHELLER: That's interesting. Well, one of the major things that you work on in a company, if in my opinion the company is being run properly, is this situation where that would happen, and that you have what we would call ready-now successors there, in case one decides to retire, in case one gets taken out on the freeway [laughs], in case one gets sick. A company needs to move on. So things like succession planning is something that one does in a company that you don't do in your lab, as you said. My lab at Stanford, I left, and that was the end of it. They hired a new professor eventually to be in the space, but it's not like someone in my lab took my place and ran it. It ended. A company doesn't end. A company like Roche may go on forever. If you're doing your I would say corporate duty, you plan for things like that. So, part of my job was working with the people that reported to me to get them in a position where they could take over, and that transition would be fairly smooth, which I think is more or less what happened. But as I said, very different from—no professor at Caltech has a succession plan for their lab.

ZIERLER: [laughs] Exactly. Last question for today—have you kept up with Genentech? Have you followed recent developments? And has it followed a trajectory more or less what you would have expected, had you stayed?

SCHELLER: I haven't really kept up with the R&D there. I've kept up with I would say half a dozen, maybe ten, people that I was particularly close friends with. I know those people, I interact with them regularly, sometimes scientifically, sometimes socially. But the details of what projects they work on, how many are doing this and that and so on, I haven't really kept up with those details.

ZIERLER: In our next talk, we'll pick up 23andMe, of course Caltech Board of Trustees, and I think we'll be able to take the story right up to the present.

[End of Recording]

ZIERLER: This is David Zierler, Director of the Caltech Heritage Project. It is Monday, June 12th, 2023. It is great to be back, once again, with Dr. Richard Scheller. Richard, as always, it is great to be with you. Thanks again for joining.

SCHELLER: Of course! [laughs] I'm feeling like I'm getting to know you! [laughs]

ZIERLER: There you go! I love it! Richard, I want to start—it's an in interesting thing—just a question on the timing. In 2013, you win the Lasker Award; in 2014, you're named a Distinguished Alumnus of Caltech; and earlier you join the National Academy of Science. The question as it relates to the Lasker, and perhaps as that relates also to being a DAA, Caltech's version of an honorary PhD—

SCHELLER: I had one already from Caltech! [laughs]

ZIERLER:- —exactly—is the long tail of recognition of the research. Why so long, for the Lasker people to recognize the significance of what you had done?

SCHELLER: Well, I don't know; you should ask them! Terrible mistake on their part! [laughs] No, seriously, it's often the case that that level, which I guess I would say is a very high level, of recognition, takes a long time, I guess partially to be sure that the work stands the test of time and that it's correct, and partially—there's a lot of important discoveries, and there's usually sort of a waiting list, a line of people that are being talked about for these different awards, and they kind of go through them, and this person gets it, and onto the next. So it's a combination of standing the test of time—and certainly there's also a lot of politics involved. "Is this major discovery more important than that major discovery?" It depends. Whose student were you? Is someone on the committee? Is this your field or their field? Did I piss someone off on the committee, someday, either on purpose or not on purpose? [laughs] People are human, after all, so there's a number of factors that come into play.

ZIERLER: As you talk about standing the test of time, for example in theory, in a discipline such as physics, we need there to be experimental validation of the theory before it's awarded major awards. What does that mean in biology? Is there an experimental validation that needs to happen where clinicians, where researchers are looking about your ideas as they relate to molecular machinery and going, "Yeah, this really does make sense, it really does work"?

SCHELLER: Biology is an experimental science, as I think we've talked about, perhaps before. Compared to physics, very little biology of the important discoveries are predicted. They're discovered through experimentation. But all experiments require an interpretation. They don't interpret themselves, and they often could have multiple interpretations. In the field that I worked in, the first model that we had, for example, of neurotransmitter release—and I outlined this in the paper that I wrote on the Lasker Award—turned out to be incorrect. We thought that the formation of the SNARE complex was involved in docking the vesicle, and that then somehow ATP hydrolysis drove the vesicle fusion, to oversimplify. It turned out that that was a little bit backwards, even. The formation of the SNARE complex itself drives the membrane fusion, and the result is the complex and ATP hydrolysis dissociates the complex so that the proteins can function again and drive another round of fusion. That's what turned out to be correct. As you do more and more experiments, as you can't come up with any other conclusion other than that one, you eventually think, "I've tried to show it's wrong in so many ways, but I just can't show that it's wrong. Maybe it's actually right!" [laughs] We and others tried to show that that hypothesis was wrong, but couldn't and didn't, in the end. You then begin to accept the idea that maybe you're on the right track. That takes some years to be sure, if you will, that that's the case.

ZIERLER: During your years at Genentech, were you able to follow the literature? Were you able to see where your discoveries in molecular machinery went?

SCHELLER: Sure. Yeah. I was involved. My personal research time was involved in trying to make medicines, so I shifted away from that, but I could certainly follow the literature, and did that pretty avidly, I would say.

ZIERLER: What were some of the advances over those 15 or 20 years after you took a different career turn?

SCHELLER: Some of the advances—?

ZIERLER: In molecular machinery. What discoveries built on what you had done?

SCHELLER: The basic machinery of the membrane fusion was understood, and understood at a pretty detailed molecular level. What wasn't as clearly understood is how, when an action potential travels down the nerve and gets to the nerve terminal, channels open up that allow calcium to come in, and that is the trigger of the vesicle release. So the calcium regulation of the vesicle release during neurotransmitter, or during synaptic transmission, was worked out in more detail. We contributed a little bit to that, in the earlier days, but what we really contributed to was the basic machinery. But then how this machinery was regulated was being further worked out.

ZIERLER: The Lasker Award doesn't quite have the name recognition of a Nobel Prize, but for people who do know, it is a very big deal, a great, prestigious honor. I wonder if you can tell me what it was like when you received the news.

SCHELLER: It was very exciting. I was not supposed to, but I did know that I was being considered. These kinds of things have a way of getting around. That doesn't mean though, of course, that it happens, until you get the phone call from the head of the scientific review committee. So, yeah, it was—nice. As I said, I acted more surprised than I was; let's put it that way.

ZIERLER: Was there an opportunity to deliver a scientific lecture or a retrospective?

SCHELLER: There was an acceptance speech. It is done at a luncheon in New York. I sat next to Bill Gates, who received a public recognition award, so that was an interesting experience.

ZIERLER: Did you get to schmooze with him?

SCHELLER: Yeah, we had lunch together! [laughs] He was recognized for his Foundation work, particularly—you may have heard of his work in human health in third world countries, that he and his wife at the time were particularly interested in.

ZIERLER: Let's move onto 2015. Just to clarify—we talked a little bit about this in our very first discussion—did you join 23andMe knowing you would leave Genentech and this would be your next venture, or you really weren't sure what was going to happen next after Genentech?

SCHELLER: No, I retired from Genentech and was not sure what would happen next.

ZIERLER: Were you thinking consulting? Did you think going back to a faculty position? What were your options at that point?

SCHELLER: I think I could have had a lot of options. I was not thinking of going back into academia. The idea of writing grants and things didn't seem that appealing to me, setting up an academic lab. I thought I would probably do something at another biotech company. I wasn't sure exactly what. The main thing, by that time, was that it was interesting to me and something new and different that I would learn from, kind of in the way when I left academia and I went to Genentech, and we talked about my learning curve increasing its slope very dramatically—again, I wanted to do something that would be like that, and that meant maybe a different scientific discipline. I was quite interested in human genetics, because it was becoming increasingly useful in drug discovery, but also, that was not my background. My background was more of a molecular and cellular biologist, not a geneticist. So the idea of learning about human genetics was attractive to me.

ZIERLER: Had you heard of 23andMe? Was it already making an impact in the field?

SCHELLER: Oh, yeah. I had heard—everyone had heard of 23andMe. As a matter of fact—I think maybe I mentioned this; I guess maybe not—we had a fund at Genentech where we made investments in small startup companies, and we made those investments not to make money, although we almost always did [laughs], sort of in spite of ourselves. We did it in order to keep up with the science that was going on in those companies, just so we didn't miss something. Maybe that company would be an acquisition candidate for a larger company like Genentech, or maybe we would do a collaboration with the company. The investment, as I said, was not to make money, but to kind of keep up with the companies. I ran that group, and we, Genentech, made a $1 million investment in the Series A of 23andMe.

ZIERLER: What does Series A mean?

SCHELLER: Just the initial money that they raised as they were just getting started. And that was—you can look up when 23andMe was founded; I don't remember off the top of my head—but whenever they were founded, that's when it was. So, 15, 20 years ago, is when they were founded. Again, as I say, I don't remember, was it 2000, or 1990-something.

ZIERLER: When 23andMe—as you said, everybody had heard of it—when it had gained that level of prominence, where does the Human Genome Project factor in? What did the Human Genome Project make possible for companies like 23andMe?

SCHELLER: You couldn't do 23andMe without the Human Genome Project, because what 23andMe does is measure differences between all of us, in our DNA. There are three billion letters in our DNA code, and you and I differ from each other by about four million differences. I think we may have talked about this a little bit at least before. Those four million differences are why we look different from each other, why we think differently from each other, why we have different susceptibilities to diseases, and so on. I differ by only half of that from my father, which is why I look more like my father than I look like you. Those differences could only be worked out by knowing the human genome sequence in the first place, and then looking at many human genome sequences, and seeing how those sequences compare to each other. What 23andMe does is measure those differences, but those differences needed to be understood and worked out and associated with diseases, or associated with eye color, or hair color, or skin color, or what have you. That was done through the human genome and the work that was done after that, before 23andMe was founded. If we didn't know that, there would have been nothing for 23andMe to measure. Those were the things that human geneticists had understood in the intervening time.

ZIERLER: Of all of the things that you could have done around 2014, 2015, why was 23andMe so compelling to you?

SCHELLER: Because the genetics was new and different to me scientifically. I subsequently found out that also culturally, 23andMe was quite different [laughs] which is something that I enjoyed learning about, but not something that I necessarily 100% anticipated.

ZIERLER: Meaning that startup culture was large and in charge there, at least relative—

SCHELLER: My first day at 23andMe, I was shown that this will be my desk, which was in a sea of other desks.

ZIERLER: [laughs]

SCHELLER: At Genentech, I had my own office. I had my own conference room. I had my own library. The entrance to my suite of library-conference room-office, there was a—

ZIERLER: [laughs]

SCHELLER: —an administrative assistant. Actually Susan [?] was that person for the later years that I was at Genentech. You know Susan [?] by now.

ZIERLER: Yes.

SCHELLER: She was in a reception area. And that was all around me. At 23andMe, I had a desk, in a sea of other desks. So I thought, "Oh, my." Well, I thought two things. First I thought, "Oh my god, what have I done?" Then second of all I thought, "Well, this will probably be good for me." [laughs]

ZIERLER: How closely involved was 23andMe with therapeutics before you joined, or was that really the point of you joining, for you to build that up?

SCHELLER: 23andMe had done some collaborations with drug companies, for the drug companies to use the database to make discoveries around their own therapeutic programs, but 23andMe had no internal drug discovery program. The idea was that we were giving away, if you will, most of the value of the database to other companies, and that the way to really capture that value was to do the drug discovery internally. That was my role, to set that up.

ZIERLER: Thinking about steep learning curves, what could you take with you from your experience at Genentech? What was transferrable? What was a whole new ballgame in thinking about drug discovery, drug delivery?

SCHELLER: I obviously didn't and couldn't take any of the projects. That was never the idea, anyway. Here I was by myself. I left 2,000 people behind. I didn't want to compete with them. Wouldn't have been ethical, and I wouldn't have had a chance of winning anyway. [laughs] But I took the knowledge of how to make medicines with me. You can't give that up. You can't just like turn your brain off. Of course, Genentech was fine with me taking that with me. That's the main thing that I took. I knew by then, because we had done it, all of the steps involved in making a medicine, which I think we've talked about before, which is something that I knew nothing about—almost nothing about, essentially nothing about—when I was at Stanford. I learned that by doing at Genentech. That's what I took with me, and that's what 23andMe needed, because there was no one at 23andMe that knew anything, really, about making medicines. The CEO of 23andMe said that I was essentially the CEO of therapeutics, and that I would build it, because no one else at 23andMe knew much about making medicines. They provided a consumer report on your health and ancestry, but no one at 23andMe had ever done themselves drug discovery.

ZIERLER: I assume this means there's an imperative for you to do a lot of hiring.

SCHELLER: I did. I don't remember exactly the number of people when I left, but it was around 100, plus or minus, all of which were hired.

ZIERLER: What kinds of scientific expertise were you looking for? It's a niche company. You have a very specific mandate. Who are the best scientists for you in this role?

SCHELLER: Good scientists [laughs] was the most important thing. One of the first scientists that we hired was a woman named Louise Scharf. She had just finished a postdoc at Caltech with Pamela Bjorkman and published some very important papers. She decided that she wanted to go into industry instead of academia. So, it's people that are that—she didn't know anything about drug discovery, but that didn't matter so much to me. She was obviously incredibly smart, had done really interesting work as a grad student, and really important work with Pamela. We wanted to hire junior people that were interested in making medicines. They didn't necessarily have to know anything about how to make a medicine. We could help them learn that. But they had to be incredibly talented. Then of course we wanted more senior people that also had expertise in drug discovery. I couldn't be the only one that knew how to make a medicine and teach everybody everything! So we hired people like that, as well, people from Genentech, people from other biotech companies, people from pharmaceutical companies, that found the 23andMe approach interesting and compelling.

ZIERLER: The consumer reports aspect of the company, was this proprietary data that gave you an edge, so to speak, in the kinds of drugs that you could discover and deliver?

SCHELLER: Yes. When a person sends in their sample to 23andMe, you spit in a tube, and the saliva contains cells that have your DNA. If you buy a kit, it is mailed to you, you spit in the tube, you register online, and then you send the tube back, and the DNA is analyzed. But one of the things that we ask about is whether your data can be used for scientific research and drug discovery. Over 80%—I think it's around 85%, but let's just say over 80%—of the people consent that, yes, that's okay. It's that data, then, the analysis of the DNA, that's the first part. The second part is, we send out questionnaires, and the questionnaires are really quite complex in their own way. Actually a person at 23andMe had—I don't think she works there anymore, and I can't remember her name, but she had a PhD from Caltech in survey methodology.

I didn't even know there was such a thing as a PhD in survey methodology, much less that you could get one of those from Caltech! But apparently that's the case. [laughs] We would ask questions like, "Have you ever been diagnosed by a physician with psoriasis?" If they said "yes" then we said, "Okay, this person has psoriasis. Is there something unique about their DNA compared to people that don't have psoriasis?" But you can see in just the way the question was asked, it wasn't, "Do you have psoriasis?" or "Have you ever had psoriasis?" Because you might think that you had it, but a lot of times, you might be wrong, which is why the question was asked, "Have you ever been diagnosed by a physician with psoriasis?" That's a trivial example of the kind of thing in survey methodology that gets you a more accurate answer than saying "Do you have it?" or "Have you ever had it?" or whatever. We asked thousands of questions like that.

That's one of the cool things about 23andMe nowadays, is that we have—I think it's over three billion phenotypic data points—answers to things, to various phenotypic questions. And the power of the database is really amazing. First of all, before we get into that—a lot of people wondered, is this self-reported data accurate? So we did a number of studies comparing—let's just stick with psoriasis, the psoriasis folks—with academic studies where people have come in to a doctor's office, they have been diagnosed with psoriasis, have taken a DNA sample, and analyzed it, versus people saying "Yes, a doctor, a physician, diagnosed me with psoriasis." We compared the data, and we showed that they're very, very similar to each other, in essence sort of proving that the self-reported questioning kind of data was as valid as being part of an academic study where everybody was seen individually and diagnosed with a particular disease. So, it's extremely powerful. We ask a question, "Are you a morning person, or are you an evening person?" Some of the genes that come up are those that are involved in circadian rhythms. Again coming back to Caltech, one of the genes that comes up is a per gene, which stands for periodicity, which is the sleep-wake cycle, which was actually initially discovered by Seymour Benzer at Caltech. But it's so amazing; we don't even define what a morning person or an evening person is! You define it for yourself! We don't say like "morning person means you get up at 5:30 or earlier." You just say, "Yeah, I'm a morning person," and it goes right to the circadian rhythm genes. So the kinds of things that we see in the database are really quite remarkable. I'm still—every time I tell that story of the morning person, I'm surprised by it, that it's so powerful.

ZIERLER: Did 23andMe's unique approach guide you toward a particular class of disease to focus on, or a particular kind of drug to develop?

SCHELLER: It did. The database is only good for certain types of approaches to cancer, for example, because cancer is a—well, it is a genetic disease. Cancer comes from somatic mutations. By that I mean, for example, UV light shines on your skin and mutates the DNA, and if it's the right mutation, you can have basal cell carcinoma or much worse, melanoma. You're not born with those mutations, so those kinds of mutations, you generally don't see, because of the way we collect the DNA. In order to see the mutations that make a tumor, you have to collect DNA from the tumor. Which has been done now, and is really interesting, but that's a totally different topic. [laughs] We don't do that. That's an example of things that it might not be as good for. It's very interestingly, we think, good for understanding the immune system and how the immune system might be regulated to help with cancer, but not for some other aspects of cancer. It also might not be very good for something like Alzheimer's disease. If you're pretty far along with Alzheimer's disease—and I don't want to make light of this; it's a terrible disease—but, you might not even remember that you are part of 23andMe, and answering the questions might be really difficult. So, yeah, the self-reported aspect, and the way we collect the DNA, does to a certain extent restrict the types of diseases that we are best at approaching. But there were plenty of things to work on.

ZIERLER: Negatively defined, what would be an example, based on 23andMe's approach, of a disease or an ailment that really wouldn't work in this context?

SCHELLER: As I said, a lot of types of cancer. As I said, cancer is caused by somatic mutations, mutations that take place, in general, after you're an adult. Mutation in your liver. Mutation of your skin, to get melanoma. Mutation in a breast, to get breast cancer. To find those mutations, you need the DNA from the tumor, and we're collecting saliva, so we don't see those mutations.

ZIERLER: Did that ever compel 23andMe to change its model, to get more involved beyond saliva self-submissions?

SCHELLER: No, not really. So much of it is a consumer aspect of the process. And other people were doing that. People were collecting DNA from tumors and sequencing them, and finding those mutations, so that's all well-known now, and it was just a different approach.

ZIERLER: Because everything is self-reported, does that mean that all of the concerns about human subjects and privacy issues, is that really not relevant for how 23andMe conducts its operations?

SCHELLER: No, no, no, when you sign up for 23andMe, as I said, you read through what 23andMe does, and that you're going to get your analysis back, and you have to agree to that. Otherwise, we say, "Just don't do this." In addition to that, we ask if your data can be used for research. Some people say no, because they want to keep it private. But as I said, most people, the vast majority of people, say, "Sure, use my data." It's anonymized, so we don't know anyone's name, but we do know their genetic data. So there are a series of consents that you go through if you want to participate in 23andMe.

ZIERLER: If the data is anonymous, and 23andMe comes across information that is concerning, can they do anything? Can they be proactive?

SCHELLER: Well, 23andMe knows who's who. We write a report, and we send it back to the individual. It's just that as a researcher using the data to try and understand drug targets for a particular disease, I don't know anybody's name. Someone at 23andMe knows your name, because we send the data back to you. It's just that we don't tell anyone else, or even people in 23andMe, like me, your name.

ZIERLER: Now that I understand, in the report, if 23andMe does detect something concerning, will it flag that for the participant?

SCHELLER: No, basically.

ZIERLER: What's the consideration there?

SCHELLER: In order to tell someone about something, we have to have FDA approval that we can do that. Initially, 23andMe was sending back all sorts of things, and the FDA said, "No, we don't want you to do that. Stop doing it." This was just before I joined, actually, or somewhat before I joined. This is all extremely interesting, because this was the first time anybody was doing this kind of thing, so it was really quite—have to give Anne a lot of credit. It was very pioneering. The FDA said, "Look, we want you to be able to show that your measurements are accurate." So we had to show that the way we measured things was accurate, so they gave us a number of things that we had to do to show that our measurement was real, in a sense. We had to show that. That was pretty straightforward. We knew the DNA arrays and the ways we measured things worked, and we just compared it to the actual DNA sequence and showed that, oh, we measured that in some of these people, this A is a G. And we did the DNA sequence, and we showed that, yes, we predict very accurately that the A is a G. Fine. It took some work, and had to do all the sequencing; it was a real pain in the butt, but it was fairly straightforward.

The thing that was much more interesting is that we had to show that an average person understood the report. So, what the heck is that? That's like, okay, if you have a BRCA mutation, you have some percent—I don't remember again off the top of my head what it is—like a 75% chance that by the time you're 60, you're going to have breast cancer. It's not 100%, so you might or you might not. Also ovarian cancer. So, it was extremely interesting. We had to write a report, we had to give it to a bunch of people, and then the people had to take a test afterwards, and they had to score a certain percent—I don't know exactly what it is; let's just say for example they had to get like 90% of the questions right. If they did, then we could submit to the FDA that the measurement that we make is accurate, and the report that we give to people, people understand, and then they would consider this and tell us that it was okay to provide this information to people.

ZIERLER: The message is, "You have the BRCA gene, but we're not going to tell you to go get yourself checked out"? That's where you draw the line?

SCHELLER: No, no, no. We recommend that you consult a physician, or we recommend that you consult a genetic counselor. "Here's a list of genetic counselors." No, we recommend that they further look into this. But the individual can either take our advice or not. That's all up to them. When we got the BRCA test approved, we told thousands of people that they have the mutation that didn't know. I mean, that's really quite a thing. Then just think about it—we told thousands of people, and then what if the person that we told has kids? Do the kids have it? Some people don't have kids, but everybody has a mother and a father. What if—it's almost certainly the case mother and father didn't know, either. Otherwise the participant probably would have known. So the thousands of people that we told were just the tip of the iceberg. This affected thousands of more people beyond those thousands of people, because this is a gene that you inherited from someone, and then you potentially passed on to someone, and the chance of getting breast cancer is pretty high. I think at a minimum for me personally I would want to be monitored more carefully than I would have otherwise.

Some people, many people in fact, decide to have prophylactic surgery, which is obviously a big deal. So, no, 23andMe affects a lot of people's lives. Also, measure variants that can tell people their chance of having Alzheimer's disease. That's particularly interesting, because, what do you do about it? When I was at Genentech, I had next to my office complex a [laughs] scientist and we were both in working on Sunday. I used to give away a genome sequence at a town hall in order to get people to come to the town hall. I'd put everyone's name in a bowl and I'd pull out a name. It was a complete genome sequence; it was probably $2,000 back then. I said to this person, "Did you put your name in?" You could put your name in if you wanted your genome sequenced. We didn't make people do it, obviously. "Did you put your name in?" He said, "No, no, no, no. I didn't do it." This was a very senior, important scientist. I said, "Why not?" He said, "I don't want to know about all these things, where there's nothing you can do about it, like Alzheimer's disease. Like, what if I'm going to get it? What am I going to do?" I said, "Well, you could stop coming to work on Sunday!"

ZIERLER: [laughs]

SCHELLER: That of course was way beyond anything that he could ever consider. He'd rather be at work than anywhere else. But, you get the point. There are things that you can do. They may not be preventing the disease, but you can think about your life accordingly.

ZIERLER: Let me ask, Richard, a very personal question—if you would want to know something like that.

SCHELLER: Yeah, I know, and my wife knows. I wasn't particularly interested in knowing, but I was pretty sure I was okay because my parents lived well into their eighties and were cognitively fine. In the best way, that has really kind of told me that they didn't have a real high probability of having Alzheimer's disease. If you're something called a ApoE4 homozygote, the chance that you have it in your sixties is pretty high.

ZIERLER: A few years in, at 23andMe, what would you count as some of your early successes in building up therapeutics there?

SCHELLER: We now have two projects that are in Phase 2, so that's the second stage of clinical testing. One is with a collaboration with a company called GSK, a big drug company, and the other is on our own. We came up with a therapeutic hypothesis from the genetic data. We made a potential medicine. We tested it in animals. We got approval to start testing in humans. We have shown that the molecule is safe in humans. We're now testing whether it is efficacious. That was the goal, and we have—still a long way to go. There's still probably a 25% chance that this will be a marketed medicine, because we haven't shown that it's effective. But that's the process that you go through. So we did what we set out to do, which is to get ideas about targets, make a medicine, and start testing them in humans!

ZIERLER: This means, of course, that you joined 23andMe on the basis that the time scale for bringing these therapies to market would obviously be much longer than however many years you would want or be able to serve at 23andMe.

SCHELLER: Yes, I had decided that I wanted to serve probably for about four years, and that would be enough time to get things going, and then I hopefully would still be alive after that [laughs], but that I would then transition to a role where I didn't have—well, how should I put it—transition to a non-operational role. Which I did.

ZIERLER: Because of course 23andMe is so tech-focused, we talked previously about AI, and you're not yet convinced of its long-lasting utility. Does anybody at 23andMe talk about AI? Is that a frontier for possibility at a company like 23andMe?

SCHELLER: Yeah, sure. It depends on your definition of AI. There are ways of looking at the genome that many people would consider artificial intelligence, the mathematics behind artificial intelligence. It's just that it's sort of "baby AI" compared to what I think you mean when you say AI.

ZIERLER: The state of the art today, AI is not yet useful? It's not finding signals in the noise that help us get from identifying a disease, to developing a group, to effectively treat it? We're a long ways off, is what you're saying?

SCHELLER: It is, but as I said—and I'm not an expert in AI, as you know—it's less sophisticated AI than I think people are excited about nowadays. But if you have to use AI to find the signal, it's a little subtle, and we don't want subtle signals; we want big signals that make a big difference. That's kind of where I wonder, with analyzing the genome, if AI finds these little subtle things that you couldn't find any other way, is that perturbation going to be major enough to really affect human health in a dramatic way? Or is it just going to kind of be a little tiny tweak that makes a little difference? It might make a difference in an evolutionary sense, if you have this little advantage or disadvantage over five million years and you might be selected for or against, but is it going to be powerful enough that when you do that tweak, the disease gets better? The big differences, we can see other ways. We don't need AI to see the big differences. That's where I kind of wonder. Now, AI can be used in other ways to make chemical structures, to predict three-dimensional structures, to help make antibodies. So it's being used in other ways. So, we'll see.

ZIERLER: This is a very important point you're making if I understand correctly. So it's not like the cure to pancreatic cancer is lurking somewhere deep in the data, and AI will find it. That's not the way we should frame our homes.

SCHELLER: Well, that's my perspective. I think it's probably the case that people that do AI think differently. [laughs] As a biologist, as a molecular biologist, we know the genes that are mutated in pancreatic cancer. Those are the things that are causing the problem. We didn't need AI to find that. We just sequenced the DNA from the tumor, and looked to see what's different, and boom, it's in a signaling transduction downstream from growth factor genes, so that the cells grow out of control. Bingo! I don't know that AI played any role in that.

ZIERLER: In 2019, when you transitioned to the Board of Directors and off of, as you called it, the operational side, given that you came there to build the program, did you have a hand in naming your successor, or having an idea of where the program should go next?

SCHELLER: Yes, sure, I helped find my successor, and I've helped continue to recruit people since then. I also work with the company. So what I do—I think we may have touched on this; I don't remember—I work with the company a day a week, and I'm on the board of directors. A number of the companies where I'm on the board of directors, I also work with the scientists, going over data, giving advice on how to proceed, how to think about it, whether to do the program or not, turn left here instead of right there, that kind of thing. But as I said, I have no reports, and my role is as an advisor, so the people can either do what I say, or not do what I say, and that's up to them. When I was in charge, it was pretty hard for them to not do what I said if I felt strongly about it. I let people make their own decisions in general, but if I felt strongly about something, it was probably the easiest path was for them to do what I said. Whereas now, that's not the case, and that kind of allows me, at 5:00, I'm done. I don't lie awake as much all night worrying about the projects. I sleep much better. They make the decisions and they can take my advice or not take my advice, based on whether they think I'm right or not, and that's fine with me. I've been able to step back to that kind of role—I'm 69 years old—and just accept—more than accept; enjoy—that kind of role. I want them to succeed just as much but I don't feel the same kind of pressure.

ZIERLER: That pressure, the sleepless nights, did you worry more about Genentech or 23andMe or about the same, and it just tells us more about who you are?

SCHELLER: No, I worried at Stanford, I worried at Genentech, and I worried at 23andMe, and I even worry now, but not as much. [laughs]

ZIERLER: Just so I have the chronology right, when you shift to the board of directors in 2019, are you already involved, are you serving on the board of directors, are you working with a slate of companies— BridgeBio Pharma, DICE Molecules, ORIC, Rafael, Alector, Maze—or does that all happen after 2019?

SCHELLER: No, I was on a couple of other boards beforehand, but when I shifted from having a full-time position at 23andMe, I joined a variety of other boards, because I had more time.

ZIERLER: There's a lot of them. Which are the ones that are significant enough to discuss? Where have you done important advisory work? Where are those companies that are really important to you personally?

SCHELLER: They're all important. I would say DICE, BridgeBio, Alector, 23andMe. I was on the board of a company called ORIC for a long time. That set of companies. They all do different things. One's cancer. Alector works on neurological diseases, BridgeBio on cardiovascular, and the second largest form of growth retardation after mutations in growth hormone. So, a variety of different diseases and different molecular causes of the disease, a variety of modalities—small molecule pills, or antibody injections. That's what I do today.

ZIERLER: For all of those companies, you serve in more or less a similar role, as an advisor?

SCHELLER: Some, I'm on the board and an advisor, where I'm compensated to spend a day a week, or two days a week, what have you, with the company. Others I'm just on the board, but I'm probably—I'm the scientist that's on the board. DICE, I don't have a role with the company called DICE as a compensated scientific advisor, but I'm chairman of the board, which brings other responsibilities. So, it's a whole variety of things. It's a little complicated, sorry. And that's what Susan does every day, is try and figure out what I'm supposed to be doing every day.

ZIERLER: As you survey all of these companies—time is so valuable, and it's these companies and not others. What's exciting to you? What's happening at these companies at a general level that makes you just really excited about the possibilities?

SCHELLER: Well, the science is what's exciting. Alector works on dementia—big, big problem. One type of dementia called frontotemporal dementia—a subset of patients with frontotemporal dementia have the disease because one of the two copies of a gene called progranulin is mutated, so you have one copy of the gene that doesn't function and one copy that does. The result of that is that you make half the amount of protein. If that's the case, there's a very high probability—it's called penetrance—that you'll have frontotemporal dementia in your sixties, let's say. The medicine that we've made takes the amount of protein that's there and increases it to the level that you would have if you had two functioning genes. We're hoping that that will be effective in treating the dementia. Again, it's a genetic disease so it's quite interesting. There have been a couple now of recent successes with Alzheimer's disease, however they're just initial successes. They slow the disease by about a third, so they're not at all a cure. Your cognitive abilities decline a certain amount after a year and a half, and if you take the medicine, after a year and a half, you're only at the level of decline of a year, about 30% slowing of the disease. That's good, but again, the genetics of people with Alzheimer's disease suggest a number of other pathways that weren't being investigated in humans that might be involved in the disease, so we're looking at those and are actually treating Alzheimer's disease patients now with a medicine based on those hypotheses, to see if it's an effective therapy.

One of the companies I mentioned, DICE, there's a very effective treatment for psoriasis but it needs to be injected. It's an antibody, so we need to inject it subcutaneously or in a vein, or what have you. What DICE has done is to make a medicine that goes after the same target, but it's a pill, so it's much easier to take. A lot of people don't take the medicine because they have to come in, and they don't have a center nearby. We think that if you could just get a prescription pill at a drug store and take it every day, that the medicine would be much more widely used. That's another example. We could take the rest of the week going through the rest of the science, but I think maybe we should move on!

ZIERLER: There's a lot. That's the topline observation—there's a lot of interesting and important things happening right now.

SCHELLER: Yep!

ZIERLER: Because you have such a wide-angle view of these things, the regulatory framework, does it really matter what class of drugs or ailments you're focused on? In other words, can we look at the regulatory framework of cancer drugs or neurodegenerative drugs or diabetes and get a sense, really, of what's more streamlined, what takes a long time, or does it really not work by classes of ailment?

SCHELLER: It depends to a certain extent on the ailment, but, no, I think you have that right. I think the major thing is how well does the drug work. If you have cancer or you have Alzheimer's, if it works incredibly well, you don't really care so much what the modality is. It's nicer if it's convenient, but if it isn't, it's not going to stop you from taking it. Otherwise you'll die of cancer! So, its efficacy is the major driver.

ZIERLER: When COVID hit in 2020, you being so centrally involved in the biotech world, what was that like for you? What was that like across the board in biotechnology?

SCHELLER: I knew that we'd get vaccines pretty quickly, but the way we got the vaccines I think was a surprise to most people. I wasn't sure, and I think most scientists weren't sure, that the mRNA vaccines would work, at all, much less how well they worked. And how, of course, fast they were able to be developed. If you're a molecular biologist you understand why it was fast. You sequence the virus, you see the protein that's on the surface, and you know the sequence of the protein, so you can just synthesize the mRNA, and then you just inject it. So, it was clear to people like me why it was fast. The question was, would it work? Because there hadn't been a vaccine like that, ever before. As I said, I was, and I think most people were, surprised at how well it worked. Having had five immunizations up to this point, I haven't had COVID yet, or if I did, I didn't even know it. I suspect I might have had it—there were times I felt like I had a little cold or something—but if I wasn't going to be doing much for a few days, I didn't even test myself. My wife tests all the time because she's still teaching, at Stanford, and Stanford required it, as did Caltech, that people test, particularly if they're interacting with the community. So, it was a tremendous thing. It was great. Really terrific.

ZIERLER: To clarify, when you said you were confident that there would be a vaccine but you weren't sure if it would be a mRNA vaccine, what other classes of vaccine could have been pursued against COVID?

SCHELLER: Most other vaccines are the spike protein itself. So, a protein, so then you have to make the protein, and that's a much longer process than just synthesizing the mRNA. Other vaccines are viruses themselves that have been attenuated, weakened in some way, so that if you get an injection of the virus, it can't reproduce but your immune system sees it and you make an immune response. Those are the classic ways of making a vaccine, and I was relatively confident that that would work and that would happen. But that would have taken much longer than the mRNA vaccines.

ZIERLER: Why is that?

SCHELLER: Just because of the process of the way you have to make what's injected. We had COVID, but we didn't have a weakened COVID that wouldn't infect you, so we would have to figure out how to make a weakened one, and then figure out how to mass produce that weakened virus, and then tested it and all that kind of stuff. Whereas with the mRNA vaccine, you knew the amino acid sequence of the protein, and from the genetic code—and that was just done by sequencing the genome of the virus, which happened really quickly, happened like in a month—then you knew the amino acid sequence of the surface protein, and then from the genetic code, you knew how to synthesize an mRNA, so you just chemically synthesized it. There was no manufacturing in living organisms of any kind; it's just a chemical process. Then when you had the mRNA, you just injected it into people! [laughs] I don't want to make it sound trivial, but—so I would say the manufacturing process was a lot simpler.

ZIERLER: Of all the companies that you've been involved in, from diagnostics or vaccines or therapies, were any of these companies involved in COVID research and mitigation?

SCHELLER: Well, Roche Genentech—well, okay, take a step back—so there was another way to help with COVID once you had it, or if you wanted to prevent it, and that was to make an antibody against this protein. So, people made antibodies. Then you could just be injected with the antibody itself, so that would then bind the virus and attenuate it. You could do that either prophylactically, but the antibody doesn't hang around forever, so you'd have to be injected pretty frequently with the antibody, versus your own cells making the antibody. The good thing about that is, if you got infected, you could be injected with the antibody, and that would attenuate an already-infected person. You didn't really want to do that with the mRNA vaccine, because the mRNA vaccine had to go into your cells, it had to make the protein, the viral protein, then your immune system needed to response to the viral protein, and that would take like six weeks or so. Whereas if you just inject with an antibody against COVID, that took effect right away. I think that's what Trump was injected with when he had COVID.

That was done by a bunch of different companies, including Regeneron, but the company Regeneron didn't have enough manufacturing capacity to make the antibody, so Genentech and Roche teamed up with Regeneron to produce the antibody. Because they have such a large manufacturing capacity for biologics all over the world, they had the capacity to do it. That approach now isn't used very much anymore, because everyone in Europe and the United States is vaccinated by now. At least, anybody who would take an injection of any kind is vaccinated. If you wouldn't be vaccinated, you probably wouldn't do this either, so there just isn't any use for it anymore; we all have antibodies floating around us now from the mRNA vaccines. So, now that approach is already obsolete, because of the vaccines. A little bit complicated; sorry about that.

ZIERLER: No, that's great. Having spent a life in science in so many different areas, when all of the vaccine skepticism and denialism came out, and all of the political misinformation in this country, were you prepared for that? Were you thrown at the levels of vitriol and misinformation?

SCHELLER: Was I prepared for it? Well, yeah, I guess having been around now for so many years, there isn't that much that surprises me anymore, so I wasn't totally surprised, in a way. But also, I don't know what to do about stuff like that. The clinical trials that were done with the mRNA vaccines and the subsequent monitoring of people who had been vaccinated are very rigorous scientific experiments. To get those vaccines approved, they gave thousands of people the vaccine, and they gave thousands of people an injection of water, essentially—it probably wasn't water, but whatever it was, it wasn't the vaccine—and they looked to see who got the disease and who died. You didn't know which one you were getting injected with, until the end, so it was a very, very rigorous experiment. They showed that people who got the vaccine had no disease, less severe disease, and died less. Was there a possibility that there was some extremely rare side effect that could even be fairly severe? I suppose. But the benefit so outweighed the risk, and that's what the clinical trials showed. I just don't consider it my role to get involved in that kind of thing. Because I can't relate to it.

ZIERLER: Given the massive impact of COVID, what has been the response long-term to the biotech industry? Are they more focused now on vaccines, on virology, on coronavirus preparation?

SCHELLER: Vaccines are very different than medicines. The government paid for everybody to be vaccinated, but what did they pay for a dose of COVID vaccine? Twenty bucks or something? It probably cost—I don't know what it cost—a couple of bucks to make, so maybe they made 15, 18 bucks. A cancer medicine can cost $75,000 a year, and probably cost, let's say $10,000, but it's probably less, to make, so they made $65,000, not 15 bucks. So, it's a very different—the thing about the mRNA vaccines is you needed—first of all, everyone in the world needed to be immunized, so 15 bucks times everyone in the world is still a lot of money. But with like a tetanus vaccine, if you need to be immunized every ten years, it's not a huge business, compared to some other medicines. So, yeah, sure, vaccines—that's just something that's very beneficial to mankind. It's good that biotechs do it. But unless it's something like COVID, it's generally not going to be a huge blockbuster kind of medicine, because of the profit margin. That's just the nature of things. So, I wouldn't say that the mRNA vaccines have totally changed everyone's outlook on biotech [laughs]. I think people that were trying to make other kinds of medicines are still trying to make other kinds of medicines. Maybe a few companies started that will make mRNA vaccines, but no, the major thing is that it did work, and it has saved countless lives. I pretty much had it right—I told some of my friends, mostly my art collecting friends, that when COVID hit, I thought there would be 20 million people who died, and billions of people infected. I don't know what the numbers are, but I'm not so sure that that's so far off.

ZIERLER: I want to round out this excellent series of conversations by bringing it back, of course, to Caltech. We already discussed the unique circumstances of how you joined the Board of Directors, and we can deal with that in due time. What have been some of the most important committees and service work that you've done in the eight or so years that you have been on the board at Caltech? What has been most interesting and important to you?

SCHELLER: I think the two most important things were that I co-chaired a review of the Biology—now it's Biology and Biomedical Engineering, I think—Division—outside review, and more recently—I guess it was the end of last year—a similar review of Chemistry and Chemical Engineering. The president likes to have an outside group of scientists come in, spend two days with the Division, hear from the chair, the faculty, the postdocs, the graduate students, the students, anyone else who wants to talk to the committee—undergrads, everybody—and then the committee writes a report that's a recommendation to the president and the provost about how the Division is doing, recommends things that the Division could do better, comments on what the Division is doing well, the leadership of the Division, and pretty much anything else, somewhat based on the questions and issues that the president and the provost ask the committee to consider, but also sort of anything that comes up. The committee writes a report, goes over it with the president and the provost, and then also, since I was chair of both committees, presents the report to the trustees. We did that recently. I presented the report, and then the chair of the Division presented, after me, his response to the report.

I think Caltech feels actually kind of lucky—there were other trustees that were on the committee, as well as visiting scientists from other universities, people from all over the country. I don't think there was anybody from outside the country. There could have been; I just don't think there were. The committee is made up of trustees and, in the case of the Chemistry Department, other biochemists, physical chemists, organic chemists, chemists you-name-it, from other universities. That's the composition of the committee. I was the trustee representative, but also a scientist, which I think is pretty helpful. [laughs] The other trustees are absolutely terrific, friends of mine by now, but they weren't scientists, so they don't—I have a PhD in Chemistry from Caltech; they don't. They might even have a PhD, I don't know, but probably if they do, it's probably in something like economics. I think having a trustee that's also a scientist is advantageous in assembling the report, in presenting the report to the trustees, and kind of figuring out, is this a big deal or is this not a big deal, and then talking to the chair of the division about it in a scientifically informed way. I think those are my two biggest contributions.

ZIERLER: Given this unique vantage point, without going into any of the nitty gritty, what are some of the big takeaways for you, for what you've learned from these reports?

SCHELLER: They're both excellent divisions, but I think one of the things that we always grapple with at Caltech is the size of the institution. I think that was a little less critical in Chemistry, although I think in biological aspects of chemistry, it was still very critical. Compared to a place like Stanford, the Division of Biology and Biomedical Engineering, I don't know, let's say there are 40 faculty. At Stanford, there's probably 500 faculty that work in the area of biology in some sense. Because there's also the Medical School, which has hundreds of faculty. It's a constant issue about how to be most effective with an extremely talented, renowned set of faculty, but a smaller number than a lot of places, which means you have to pick and choose the areas that you work on, and you can't work on everything. I think Stanford works on almost everything. [laughs] So it's very different.

ZIERLER: But this has always been Caltech's way. This is the perennial question.

SCHELLER: Yes, it always has, but as the fields have expanded, it has become a larger issue. When I was a graduate student, the field of molecular biology, everyone knew everyone. Now, molecular biology is used in every field, and it's so vast. It's a thousand times more people than when I was a graduate student. As the fields have grown, Caltech has needed to be more and more selective of the areas that they focus on. So I would say it's a more challenging issue now than in the past.

ZIERLER: Is it challenging in terms of faculty recruitment, in terms of attracting the best graduate students, all of the above?

SCHELLER: It can be, yeah. It can be. I think Caltech makes up for that, in part, by treating people extremely well, setting them up with the resources that they need, and selecting for people that can make use of what Caltech has to offer. And it might not be the place for everybody. None of that is bad, but it is a challenge.

ZIERLER: To wrap up, I'd like to ask one last question, looking to the future. What haven't you done that you want to do? What else is there for you to achieve? Either in an advisory role, a scientific role, or whatever else that you find important.

SCHELLER: Oh, my. Well, the one thing that I would really like to continue to be involved in is looking for cures, or treatments, I should say—forget a cure, in my lifetime anyway—of neurological disorders, particularly neurodegeneration. Yes, I work in that area, but no, I don't think that we've really achieved anything near what I would call big breakthroughs that we're looking for. If there was one thing that I'd like to be involved in, I think that would be it.

ZIERLER: When you say in your lifetime, that does suggest there is a hope—it might be a very long horizon—but that cures do exist. We're not chasing a non-existent entity here. Those cures are out there for us to discover?

SCHELLER: During the times when I get discouraged, people remind me, something's happening in the brain. It's not mysterious. Well, it is mysterious, but it is a physical, cellular process, and that therefore it has to be possible for us to understand it well enough to make a difference, even if we don't today. So I would say "yes" to your statement. [laughs]

ZIERLER: And you'll get there. You see yourself as helping to get there, ultimately.

SCHELLER: Whether we'll get there or not, I really don't know. It may happen that we make these big breakthroughs in my lifetime, or it may be 50 years from now.

ZIERLER: But either way, it's what motivating you.

SCHELLER: We'll never get there if you don't try! [laughs]

ZIERLER: That's right, that's right. Words to live by! [laughs] Richard, I want to thank you for spending all this time with me. It has been a phenomenal series of conversations, so rich in history and perspective. It has been great. Thank you so much.

SCHELLER: It has been my pleasure.

[END]