Interview with David Baltimore - Caltech Oral Histories

Baltimore-57
They made the only fraction collectors for chromatography in the world, and they were
handmade machines—I can see it. Then, in the early fifties, I think, he came across technology
that was developed by a guy in Cleveland, Leonard Skeggs, to measure the concentration of
analytes and enzymes and things in blood in an automated fashion. Skeggs had done this
because he was a physiologist and was tired of running samples by hand. He was interested in
rabbit physiology. I think it was mostly coronary things; you measured coronary enzymes and
whatever. He was tired of measuring them by hand and getting scattered data that were hard to
interpret; he wanted something really precise. So he realized that you could put reagents into a
system automatically by flowing them down a Teflon tube and separating the units of material by
air bubbles, because an air bubble would effectively clear everything in its path in a Teflon tube.
And that discovery—the discovery of the bubble—was what Jack licensed from Leonard Skeggs,
who remained his friend throughout his life; Leonard was on the original board of the Whitehead
Institute.
So Jack turned that into a business, and by the time I met him, which is in 1980, he had
built a business selling automated clinical-analysis equipment to the world. The Technicon
AutoAnalyzer was the instrument used in every clinical lab in the world, and they had gone into
computerization of it and really made it a multichannel big deal. These were selling for
hundreds of thousands of dollars. So Jack was a very rich man, because he had developed this
company, and when he took the company public, in 1970 or something, he suddenly found
himself a paper billionaire.
LIPPINCOTT: What do you mean by “paper”
BALTIMORE: Well, because he owned most of the stock in the company—but it was stock, so if
the stock went down, your wealth went down. But he had a lot of money. He hired a tax adviser
to advise him about this. The tax adviser said, “You have a huge problem. If you die, the estate
taxes will be so enormous that they will have to sell the company.” He said, “Wait a minute! I
want to leave the company to my kids.” And the tax man said, “No, you can’t do that.” There
was, however, a loophole, and the loophole had been opened by Howard Hughes and is the basis
of the Howard Hughes Medical Institute. Which was that if you started an institute of medical
research at a hospital, then you could have the institute own the company, control the company,