Young Chemist Couple Parlayed Dye Sideline Into Big Business

The Hauglands cultivated their booming enterprise by anticipating the demand for new fluorescent probes It was 1975, and husband-and-wife chemists Dick and Rosaria Haugland were short on cash. Rosaria had taken time out from academic research in biochemistry to raise the couple's two children, and Dick regretted having no time for research in his first teaching job at Hamline University in St. Paul, Minn. As a way to make extra money and as an excuse to spend more time in the laboratory Dick Haugland began inventing new fluorescent dyes. He sold a few to his colleagues, who used the stains to label the proteins they were studying. Fifteen years later, that sideline is now a flourishing business. The Hauglands' company, Molecular C Probes Inc. in Eugene, Oreg., today sells more than 1,000 kinds of dyes to researchers and companies around the country: Last year it chalked up $4.5 million in sales, a figure that is growing by 40 percent annually. Achieving this success is a staff of 90, which includes 26 scientists with Ph.D.'s in organic chemistry, biochemistry, and cell biology. Initially, the Hauglands' shop of gourmet dyes filled a niche. No other company designed specialty probes tailored to the individual needs of the scientist. Indeed, few scientists even thought to use dyes, and those who did were forced to make their own or do without. Now, following a revolution in dye technology that began about five years ago, the number of dyes available has mushroomed. For each kind of research under the microscope there is a different fluorescent probe to choose from. And within the past couple of years, a few other small dye merchants have sprung up. But no one, say scientists, has come close to offering as broad a range of new dyes as Haugland does. "He is a national resource. Without him, cell and molecular research would be slowed down," says cytochemist Howard Shapiro, a flow cytometry consultant in West Newton, Mass. "If you know what you want in a fluorescent molecule, but you don't know how to make it, you go to Dick Haugland." The rise of Molecular Probes parallels the rapid growth in the fields of cell physiology and molecular biology, for which biological dyes are an important tool. Scientists use dyes for a variety of functions, from revealing the pH or ion concentration inside the cell to marking specific sites on the cell membrane or DNA molecule. Molecular Probes Inc. owes its success not just to the savvy business sense of its owner, but to an extraordinary turn of events in scientific research. When he formed the company 15 years ago, says president Dick Haugland, most biological markers were fluorescent antibodies that latched onto a few specific sites in the cell. By the early 1980s, however, the field of molecular probes began to explode. Scientists developed markers that could indicate the concentration of ions and the pH level in a cell. Suddenly cell and molecular biologists, biochemists, and anyone else interested in the physiology of the cell began paying attention to biological probes. Molecular Probes turned the corner in 1985 when the second wave of fluorescent indicators for ions appeared in the literature, says Haugland. The calcium indicators invented at the time by Roger Tsien [now at the University of California in San Diego] were the biggest development in the past 10 years and brought a lot of people into the field. All companies that do imaging now use calcium indicators. They are 20 to 25 percent of our business. The development of calcium indicators was soon followed by probes for other ions, including recent ones for potassium and magnesium. Also appearing were fluorescent DNA probes and dyes that measure membrane potential. The biggest challenge in making dyes, Haugland says, is to get them to be bright, specific, and photostable. Current work also focuses on developing multicolored dyes. Each of three or four constituents of a cell bathed in such a dye, for example, would fluoresce under the laser in a different color. With the aid of four National Institutes of Health small business innovation research grants, totaling $1.2 million, Molecular Probes is also developing new sensors for intracellular pH, plus brighter dyes to replace fluorescent probes developed in the 1960s and fluorescent enzyme substrates to follow genetic manipulation. --D.M. The firm's catalog of fluorescent probes is a reflection of that growth. Its first edition in 1975 listed five chemicals. The current handbook describes 1,200 different dyes 500 added since the 1985 issue. Eighty percent are obtainable only from his company, says Dick Haugland. But the success of the company, which was incorporated in 1978 and is owned jointly by Dick and Rosaria, is also the result of Dick's ambitious research in an area that a dozen years ago seemed hardly likely to expand. Fluorescent probes were hard to come by when Haugland was a Stanford University graduate student in organic chemistry during the late 1960s and, later, a postdoc at the University of California, San Francisco. The most common probes were for labeling antibodies, and biological dyes were rarely used outside the immunology lab. There wasn't enough demand to generate much interest from industry. "I was looking at protein chemistry and needed fluorescent dyes called reporter groups that would attach to specific sites on the muscle," he says. I couldn't just go to a company and get the dye. No scientist could. But no one complained. People didn't have access to dyes so they didn't do the experiments." Fortunately, Haugland had trained at Stanford under Hubert Stryer, one of the pioneers in the development of fluorescent probes. While still a postdoc, Haugland began making the dyes he needed and passing them on to his coworkers. At the same time, however, his academic career was stalled. Haugland wanted to do research into molecular: probes, Man area: that combined organic chemistry with cell physiology, but there was little work available. It was an obscure field dominated by a handful of well-respected scientists, and academic research positions in the discipline were hard to find So Haugland headed east to Hamline University to teach undergraduate chemistry. As the Haugland family grew, the dyes business seemed an obvious way to raise some extra cash. Borrowing lab space from the university, Dick and Rosaria began to develop new dyes that allowed biologists to understand more clearly the structure and interactions of proteins. They filled out invoices at their kitchen table and stored supplies in their garage. The first year they made $3,000--an impressive figure when one considers that Dick was earning $10,000 annually as a faculty member. Within the first year they were turning a profit, and it's been that way every since. It was clear scientists wanted chemical probes that opened a window into the workings of cells. Although other companies have entered the field in the past few years, they offer a much smaller and more specialized line of products. "Specifically, Dick is very astute," says Steve Smith, a neurobiologist at Stanford University. "His company is making new compounds for academics that otherwise wouldn't be available." Calling Molecular Probes "God's gift to people who use microscopes," Smith believes that the company's success comes from taking a "specialized niche and getting really good at it." Through Molecular Probes, Dick Haugland was one of the first to see the possibilities of fluorescence as a detection system, says Katharine Muirhead, an organic chemist at Zynaxis Cell Science Inc. in Malvern, Pa. She attributes the Hauglands' success to the company's ability to serve individual scientists. "He has the research organization where, if I have a problem, I know they will help me," she says. "He is tuned into what's going on in the scientific literature and dedicates himself to developing new probes. So if I want a probe that indicates a particular activity of a cell but I don 't have the time or the ability to synthesize it myself, I know Dick will do it. Or even if I don't have a specific probe in mind, he will probably have an idea for one." Haugland says he tries to produce i most new probes cited in the scientific literature as well as keep his ear open for useful developments. His colleagues joke about his perseverance. "Say you're a scientist who has just developed a sensitive probe for magnesium," says microbiologist Shapiro. "The next thing you know, Haugland's on the phone wanting details. Haugland, who now lives in a part of the U.S. where many people still dress in tie-dyed clothes and swear by anything "organic," jokes that he feels right at home producing organic dyes. Her moved in among "the hippies" outside of Eugene, building his laboratories on an old farm because he'd always wanted to live in the countryside. Founding a family research company has allowed him to devote most of his life to designing research projects. But the success of his company e has robbed him of some freedom. He works up to 15 tours a day writing grant proposals, consulting with scientists, and managing his staff. He has little time to enjoy the outdoors, though he tries to set aside a few hours each autumn to wander through nearby pastures collecting poisonous mushrooms for his dyes. Ironically, as president of the company, he no longer has time to do his own research. His next move, he vows, is to hire someone to manage production so that he can return to the laboratory.

Young Chemist Couple Parlayed Dye Sideline Into Big Business

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