2 Women in Business & Industry Summer 20022 Women in Business & Industry Summer 2002

Photos by Alan Decker

3 Women in Business & Industry Summer 20023 Women in Business & Industry Summer 2002

With a swanky New York accent that exudes apersonable charm, Dr. Gail Naughton makesscience easy to understand. What she has

accomplished is far from simple, or even ordinary, as hernickname in media so accurately recognizes her as “Ms.Edison,” and leading industry experts hail her a scientificpioneer of the 21st century. Her discoveries in tissueengineering wield the potency of a regenerative life force,and have changed the lives of many who suffer from tissueloss or end-stage organ failure.

This inventor extraordinaire has always maintainedaspirations to improve the condition of humanity. Whileresearching at a New York university, Naughton discoveredhow to bioengineer a temporary human-based skin

substitute, which can repair the damaged tissues of aburn victim, or save a diabetic from the common threat

of skin ulcers, and amputation. Her products,TransCyte™ and Dermagraft® are currently on

the market with an FDA approval, and successstories result every day because of herinventions.

To reach this pinnacle of success,Naughton faced several hurdles outsideof the laboratory when she discoveredthe difficulties of turning her miracleinvention into a marketable product.When Naughton made her scientificbreakthrough in the mid 1980’s,tissue engineering was a virtuallyunheard of field. Naughton recalls,“there was no grant suppor twhatsoever from the federalgovernment. To conduct furtherresearch I had no choice but togo forward at a very early stageand raise public funds to startmy own company.” Naughtonwas forced to become amarketing strategist and pitchher discovery. With persuasivefinesse she convinced thenaysayers that she couldpatent the technology, get anFDA approval, and put a seriesof products out on the market.

Naughton would becomesuccessful and Advanced

Tissue Sciences would make a name for itself, but sheencountered a few unexpected obstacles along thisunchartered course. Black Tuesday of October 1987happened, and Advanced Tissue Sciences was going to gopublic in November of 1987. The economic downturn leftseveral companies out in the cold, so according to Naughton“we were very lucky to be one of the companies to go publicin June of 1988.”

Being a scientist without a business background posedeven more hurdles. Naughton exclaims, “When I started thiscompany, I had no idea how difficult it would be.” She sworeto herself as a graduate student that she would never enterindustry, yet she found herself making a huge leap frombehind the laboratory microscope to the macro-structure ofa start-up company. Naughton reveals, “We went from havingno management infrastructure to assembling a scientificadvisory board, retaining key scientific managers, andlearning all of the minutiae of the SEC in order to haveshareholders and to be a public company.”

Advanced Tissue Sciences went “from science fiction toscience fact as patents were issued and products movedinto the market,” says Naughton. Her unyielding dedicationhas earned her 70 patents, and proved wrong all the skepticswho thought her ideas were too risky.

Spreading Her Networking Wings

One of Naughton’s immediate undertakings wasdeveloping a network of biotechnology comrades.“Fortunately in biotechnology there are a number of nationalorganizations that are very welcoming, including Bio, basedout of Washington, and BIOCOM.” Through these networkingorganizations she attended seminars, panel discussions, andmonthly meetings to instruct her in the new science ofbecoming a biotech leader.

Under the guidance of Eli Lilly, an entrepreneur whoacquired Hybritech, the first public biotech company in SanDiego, Gail decided to move offices from New York to SanDiego. Fourteen years ago the city was a technologicalincubator showing promise. With trade associations providinga solid networking base and nearby universities producingnascent biotechies, Naughton realized the area would be agreat place for her company to thrive. Now San Diego is thethird largest biotechnology center in the nation, and has thefourth highest concentration of biotechnology jobs, accordingto the San Diego Association of Governments.

continued on next page >>>

4 Women in Business & Industry Summer 2002

The key individual to advise Naughton through the dailyoperations of her business was Arthur J. Benvenuto, currentChairman and CEO of Advanced Tissue Sciences. Naughtongraciously praises Benvenuto for acting as her “strongmentoring force,” and for being one of the few businessexecutives who didn’t perceive her as a mere scientist,incapable of conducting business. She says, “One of the thingsI found when we were going public is that so many of the legaland business folks would brush me aside and tell me to stayin the lab, even though I was founder of the company.”Naughton recalls how Benvenuto kept her involved and activein every single decision. She says, “He threw me into a lot ofnew situations knowing that I could handle them, and he wasthere to guide me but not to dictate, and that was extremelyhelpful.”

Unfortunately, according toNaughton, “Traditional science doesnot train its students into thepracticalities of business andmanagement.” During the growth ofher company she realized a need forthe San Diego community to produce“high powered scientists whounderstand how to manage people–scientists who can see beyond thephysical science and evaluateprojects based on the ROI (Return onInvestment) and other businessstrategies that will propel theirproducts into the market.”

From Medical Entrepreneur tothe Dean of a Business School

As the new Dean of SDSU’sCollege of Business Administration,Naughton is utilizing her position toinitiate a joint PhD/MBA program. Sheis hoping to crossbreed the fields ofmedicine and business, and generatefuture leaders for San Diego’s biotechand pharmaceutical sectors.Naughton predicts that these studentswill be “a group of leaders in highdemand because they will serve a growing niche of theeconomy.” Her goal is for SDSU’s business program to expand,as it “becomes increasingly popular throughout this country,and globally.”

Recently, the same business community who helpedfacilitate Advanced Tissue Sciences collaborated onNaughton’s appointment as dean. All those early days offaithfully networking provided Naughton with a coalition ofsupport. She says, “The business community was veryinstrumental in nominating me for the job, getting me

interviews, and convincing me to accept the position.” Shefeels reassured knowing that so many key business leadersare behind her, ensuring her success and the success of theschool. “The vast support from my community will make thejob easier,” she says.

Triumphs and Failures

Like every great inventor, Naughton has experienced thedistinct disappointment of failure. Trial and error may eventuallyproduce the correct answer, but even accomplished scholarsneed to be spurred on through disheartening setbacks. WhileNaughton was working in her first job as an assistant professorof research in the Department of Dermatology at NYU Medical

Center, she made an incrediblediscovery. With the modesty of ayoung schoolgirl she claims, “Thediscovery was part luck and part justworking in the right field.”

It was a very exciting time forNaughton. She was relatively youngand had recently obtained herdoctorate. She recalls, “I had given anumber of presentations to keep myresearch moving forward, but when Iwrote to a very large publication aboutmy discovery I subsequently receiveda letter from the reviewer, with a quotesaying, “this ar ticle would be adisservice to dermatology.”” With aflushed face and letter in hand she feltabsolutely crushed. She says, “I wentfrom breathing ether and beingexhilarated about my findings, tohearing from someone with anauthoritative opinion that I’m adisservice to my field.” In retrospectNaughton can laugh about theincident, but she remembers, “For afew moments I really believed thatafter all my dedication and hard work,I would end up teaching kindergartenor nursery school.”

The mentor who counseled Naughton through her first majordisappointment was Jean-Claude Bystryn, a professor at NYU.From his teaching and his example he reinforced the truth, ”Ifyou believe in something, it doesn’t matter what anyone elsesays.” At the time, Dr. Bystryn was working on a melanomavaccine, which many people claimed would never work.Naughton says, “He demonstrated to me through his actionsthat he was dedicated to his patients, and determined tocontinue his research. He believed in his heart it was the rightthing to do.”

IPO's 2000 Inventor of the Year award winnerDr. Gail K. Naughton, of Advanced TissueSciences, answers questions about herinvention during a press conference at theNational Press Club in Washington, DC.

>>>continued from previous page

continued on next page >>>

5 Women in Business & Industry Summer 2002

Feeling compelled by his example, Naughton pushed harder.About a month later Dr. Bystryn walked into her office and laidan envelope on the desk. It was an acceptance letter from aneven better medical journal regarding the exact same researchand article she had previously sent in. She recalls Dr. Bystryn’swords. He said, “Just learn from this. If your competitor gets toreview your work they won’t have a vested interest to see youget ahead of them.” Gaining knowledge and experience fromthis crucial life lesson, and from an influential mentor,Naughton’s growth from a self-doubting novice into a confidentscientist was underway.

Realizing Success

At the turn of this century, Gail Naughton gave acongressional testimony,imploring the government toallocate more funds forwomen and minorities intechnology. She impressedupon her listeners that“training and support can’tstart too early,” and urged heraudience “not to let one mindgo untapped.” As a youngwoman, with a peakedinterest in the sciences, shesays, “My successesscientifically were not due tospecial programs in schools,scholarships for women inscience, or a privileged formaleducation. I am a scientisttoday because I had the greatfortune to be raised by myparents who believed that Icould achieve anything I setmy mind to.” Yet so manystudents with the talent tobecome future scientists orengineers do not have thefamilial and mentoringsupport she was fortunateenough to have.

It is undeniably true thatGail is gifted, but her examplemakes the strong argumentthat if her talent had been neglected, if her parents hadn’ttreated her the same as her brother, or if she had chosen amore “traditional woman’s role” over science, then what wouldhave happened to a little boy like Dominic?

To treat a child with second or third degree burns normallyrequires two week hospital stays, numbing pain with morphine,and going through the excruciating process of cleaning woundsthree times a day.

Dominique was two years old when he was treated at OhioState University Medical Center. Allured by the beeping noiseof the microwave, Dominic jumped up on the counter, openedthe microwave door and spilled boiling coffee all over his neckand chest. He was rushed to the hospital, but standardtreatments could not keep him out of pain. After 24 hours thehead of the burn unit called Gail at Advanced Tissue Sciencesand asked if her TransCyte™ was ready for public use. Dominicwould be the first patient to have TransCyte™ applied to hisburns. Gail recalls, “we had just gotten verbal approval fromthe FDA so we immediately shipped the product out. Within30 minutes of applying TransCyte™ little Dominic was runningup and down the hallways of the hospital.”

At the time, Gail was slightly hesitant to use her product onDominic because “In clinicaltrials you rarely use yourproduct on children, unless it’sa pediatric product,” she says.“We didn’t have a lot ofexperience with children, butwe knew it was safe for peoplein general.” TransCyte™seemed to work wonders, sothe attending physician sentDominic home the very sameday. Five days later he wassupposed to come in for acheckup, but he missed hisscheduled appointment. “It isa devastating truth,” Gaildeclares, “that so many of thechildren in burn units are childabuse victims. So Dominic’sphysician began to think hisburns were the result of anabusive situation. She calledthe police, sent them to thehouse and had Dominic andhis mother escorted to thehospital. When the doctor tookDominic’s sweater off, theyoung mother grew verynervous. She had put scotchtape all over Dominic’s chestand body, including over theTransCyte™ product. Whathappened is the product

began falling off because he healed so quickly, but that’s whatit is meant to do. So the mother was too afraid to come back inbecause she thought she had done something wrong, andjust kept trying to put him back together with scotch tape. Nowwe call him our scotch tape boy.”

In her words, “The Dominics of the world wouldn’t bereceiving the benefits of tissue engineering if I couldn’t have

Thinking back to her girlhood she says, “I always rememberwanting to be involved in science somehow–I just loved thesubject.”

continued on next page >>>

6 Women in Business & Industry Summer 2002

pursued my goal to become a scientist. Burn treatments areonly the beginning. Advanced Tissue Sciences is dedicatedto developing a variety of tissue and organ products to ensurethat, in the future, no one will die while waiting for atransplant.”

Working in a Man’s World

As a female scientist in a male-dominated field, Gail hasoften stood on the outside of the “old boys network,” but hasworked her way through the doorway and right onto centerstage. What mental strategies does she use? She says, “I’vefound that interpersonal relationships are the key for me. Atfirst I tried to act like a man. But I realized that I couldn’t gointo a situation speaking or acting like a man because that’snot me–that’s not Gail Naughton. I’m compassionate andcaring and that’s how I relate to people. So buildinginterpersonal skills is what works best for me.”

She also claims that what gave her an edge amongst malecompetitors, cohorts and even co-workers, was being thepioneer of biotechnology. She stresses that “If someone hadcome up with this idea 10 years ago, and I had just made acontribution, then I wouldn’t have received as muchrecognition and attention. Because I am a leader in the field,and possess strong verbal and communication skills thatallow me to be persuasive in my speech, people were forcedto listen.”

Refusing to lose any ground, Gail stays on top of thebusiness game by staying aware and informed. A voraciousreader, Gail’s latest favorite book is Jim Collins’, Good toGreat: Why Some Companies Make the Leap...and OthersDon’t. A highly recommended read, considering AdvancedTissue Sciences not only made the leap to success with itsTransCyte and Dermagraft products, but also is breakingbiotechnology barriers by continuing to produce life-enhancing treatments.

Reflecting on Collins’ innovative work, Gail believes, “Thisis a phenomenal time for us to be in business and aphenomenal time for me to be the dean of a business school.Over the last decade there have been countless examplesof fortune five hundred companies who lost their leadershipedge, or who are no longer around. And other companieswho were just a twinkle in someone’s eye and now aremultibillion dollar companies all because the rightentrepreneur, with the right vision, put the right piecestogether to become successful and stay successful.” “Frommy perspective,” she says, “the book has helped keep myhead in the business world and make sure that AdvancedTissue Sciences is always one of the great companies.”

From a business school point of view she believes the sameprinciples apply. Gail says, “I want to make sure that ourcoursework and our internship programs keep the studentsfocused on the changing market environment. It is necessarythat the students develop strategic thinking, not just businessplanning, but strategic planning done on a regular basis toreinvent each company.”

The Fuel to Her Fire

Naughton is creator extraordinaire, and has alwaysmaintained aspirations to improve the condition of humanity.To know that her technology will eventually aid people globallymakes her feel “phenomenal.” She says, “It is what fueledme to go through many sleepless nights and rarely takingvacations, just working regardless of how awful the hurdlesseemed to be.”

“The rewards are constant,” Naughton says, “there’snothing like the hugs from parents of young children as theytry to put into words how my invention changed their child’slife, or the emotional thanks we receive from diabetic patientswho were able to avoid an amputation and are looking forwardto taking long walks with their loved ones again. That neverever gets stale.”

>>>continued from previous page