From Russia, with Labs

Courtesy of Patrick Russo, ISTC  BIOTECH THAW: The Institute of Bioorganic Chemistry, Puschino branch, an ISTC-promoted laboratory located 100 km south of Moscow. The Moscow-based International Science and Technology Center (ISTC) coordinates Russian research collaborations with Western organizations and promotes commercialization of Russian discoveries and technologies. This accurate but colorless description hides what gives ISTC far more import: its role as risk manager tasked with pr

Tom Hollon
Dec 14, 2003
Courtesy of Patrick Russo, ISTC
 BIOTECH THAW: The Institute of Bioorganic Chemistry, Puschino branch, an ISTC-promoted laboratory located 100 km south of Moscow.

The Moscow-based International Science and Technology Center (ISTC) coordinates Russian research collaborations with Western organizations and promotes commercialization of Russian discoveries and technologies. This accurate but colorless description hides what gives ISTC far more import: its role as risk manager tasked with preventing proliferation of weapons of mass destruction.

Among science institutions, ISTC is a kind of best-kept secret. With a staff of around 170 (Russians plus a few westerners) ISTC caters to an A-list clientele, including the US Department of Defense, Department of Energy, and Department of Agriculture (USDA), and multinational companies such as Boeing, General Atomic, BASF, Bayer, and Samsung.

By dint of its no-nonsense R&D project oversight, ISTC has become a gateway to the expertise of thousands of scientists in more than 700 institutes in Russia and six other former Soviet republics. And not by accident, ISTC keeps those scientists employed. The US, EU, and Japanese governments finance ISTC essentially to keep unemployed former Soviet scientists from accepting job offers in places like Libya and North Korea. Thanks to foreign patronage, ISTC has managed more than 1,800 peacetime research projects and encouraged 52,000 former weapons researchers to stay home.

THE SUSPICIOUS PAYMASTER The ISTC "has been the pioneer in redirecting scientists in the former Soviet Union," says Tom Owens, CEO of the US Civilian Research and Development Foundation (CRDF), a private, nonprofit foundation with a similar mission on a much smaller budget. "I believe they are succeeding," says Owens, whose own Arlington-based organization, commissioned by Congress in 1995, manages scientific collaborations between former Soviet Union researchers and US weapons scientists.

Amy Smithson, senior fellow at the Center for Strategic and International Studies in Washington, DC, also approves of ISTC's progress. The organization is "definitely making a contribution in tackling a very difficult proliferation problem," she adds. Endorsements do not banish worries, however, that the legacy of Soviet communism still makes Russian business risky business. Biotechnology is the best funded of ISTC-supported sciences, consuming $180 million (US) or one-third of the $540 million funneled through the ISTC since 1994. Nevertheless, "a lot of pharma companies are afraid to do business in Russia," says Patrick Russo, an American molecular biologist who works for ISTC. "It's a hard sell."

The pharmaceutical company executives' fears of work in Russia are warranted, Russo says. As it prepares to join the European Union, Russia is still recovering from a drawn out conflict in Chechnya. And while its gross domestic product is growing at a rapid 6% per year according to the US Central Intelligence Agency, Russia is still dependent on exports of cheap natural commodities, such as oil, gas, and timber, rather than intellectual products or manufactured goods that attract a stronger world price. The government has yet to build trust in its institutions; corruption, political intervention in the justice system, and a weak banking system are only some of the many problems that discourage investment.1

"You have to be extremely persistent" to succeed in business, Russo adds. Nevertheless, he asserts that pharmaceutical companies will eventually take advantage of opportunities he hears of daily in his Moscow office.

To attract pharmaceutical and biotechnology executives, the ISTC will sell not only the prowess of Russian science, but also its bargain-basement price: An ISTC scientist in Moscow earns $500 to $700 per month. (This is well above the typical Muscovite salary, an important factor in keeping scientists from emigrating.) Moreover, ISTC will sell itself by explaining how it mitigates some of the risks western companies and institutions face in contracting Russian researchers. The success of ISTC demands explanation in a country where outsiders are still suspect, money has mysterious ways of disappearing, and bureaucracy is bewildering. Few Russians use checks, and credit cards are virtually unknown outside Moscow and St. Petersburg.

So, to illustrate how ISTC minimizes risks, Russo describes how ISTC researchers get paid. Russo manages roughly 30 projects for the USDA. "We have USDA scientists [who] try to match their skills to our scientists," he adds. "They develop projects in collaboration, which, with the help of scientific review from abroad, are approved on the basis of scientific merit." Then, every three months, it's payday. "Our researchers send us technical reports, which we check before we pay them," Russo adds. "If a partner is involved like the USDA, they tell us if they're happy with the reports. If there are any complications, we straighten those out before anybody gets paid." Only then does the ISTC wire money directly into researchers' bank accounts.

It would be far simpler to just turn the money over to the institutes where the researchers work, but ISTC does not trust them. "The old style of Soviet redistribution sometimes occurs," Russo relates, "where the institute will take the monies for a particular project and redistribute it to benefit the institute." ISTC will not tolerate that. Institutes receive overhead payments only at the end of projects, never at the beginning.

NEXT TIME, PUBLIC RELATIONS In the Soviet era, Smithson says, scientists and R&D managers "were unfamiliar with concepts such as intellectual property, good manufacturing practice, animal care standards, and standard Western approaches to business. That is no longer the case. A huge transformation is well underway." But ISTC still has much to learn. Last year, for instance, when ISTC sent its first delegation to a convention of the Biotechnology Industry Organization (BIO), delegates discovered the convention's exhibit section and realized that ISTC needed a trade booth. This year, ISTC exhibited its first trade booth at BIO 2003, held in June in Washington, DC, but they were disappointed that few in the press seemed to notice. Lesson for next year: Hire a public relations firm.

Courtesy of ISTC
 GAINFULLY EMPLOYED: Technicians in an environmental lab in Stepnogorsk, Kazakhstan (top) and in a Puschino, Russia, lab (middle) work on a variety of projects. US Senator Richard Lugar (center, bottom) confers with scientists in Puschino.

To commercialize Russian science, ISTC relies on marketing managers such as Irina Roslova, who "screens projects to identify the ones that have some potential to bring technology to market." One such project is an HIV vaccine developed by Amir Zakievich Maksyutov at the Russian State Research Center of Virology and Biotechnology, a Siberian institution better known in Russia as Vector. Vector once specialized in viral bioweapons, most ominously, smallpox. Maksyutov's vaccine is designed to counter rapid HIV mutation by generating antibodies against conserved antigenic regions of a wide range of HIV variants. The US Department of State and the Department of Health and Human Services will assist with US and international patent applications and preclinical testing. ISTC hopes eventually to enlist a pharmaceutical partner for vaccine development.

ISTC was founded with little anticipation that former Soviet bioweapons makers would be needed for biodefense. But that is what has happened, driven by heightened worry about Al Qaeda's interest in microbes for terror. In the wake of Sept. 11, 2001, the congressional emergency-response appropriations for fiscal year 2002 included $30 million for an ISTC BioIndustry Initiative. The US State Department channels the money to ISTC, "certainly with the specter of bioterrorism in the backs of our minds," says Andrew A. Hood of the department's Office of Proliferation Threat Reduction. The initiative will help convert former biological-weapons production plants to civilian activities and accelerate Russian antibiotic and vaccine discovery collaborations with American scientists. The programs will not involve smallpox or anthrax, for which ISTC projects already exist, Hood says, but "will hopefully come up with some vaccines that we can market here in the states."

Like ISTC's new visiting scientist program for Americans, its new Web site (www.istc.ru), and the recent technology-transfer training program that CRDF started for managers from Russian universities, the BioIndustry Initiative shows Russian science integrating, step by step, with the West. Russians have far to go, Smithson says. "[But] it is unfair to say they are no longer ready to do business with the West," she says. "Hopefully sooner rather than later, Western industry will wake up and start tapping that reservoir for peaceful purposes and their own benefit."

It will be interesting to see what profitable biotech deals ISTC can hammer out for Russia. Successful negotiations will require business acumen, of course, which ISTC may gain with experience. But most important, ISTC will rely on a quality indigenous to Russia: patience. "If there is one thing that living in Russia teaches," Russo says, "it's patience."

Tom Hollon (thollon@starpower.net) is a freelancer writer in Rockville, Md.

1. "Russia," The World Fact Book, US Central Intelligence Agency, Aug. 1, 2003, available online at www.cia.gov/cia/publications/factbook/geos/rs.html

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