Suit Shows Personal Earnings From Streptomycin by Its Jersey Developer
TRENTON – Dr. Selman A. Waksman, Rutgers microbiologist who isolated streptomycin, has made $350,000 personally on that discovery, it was revealed today in Superior Court here.
The disclosure was made by Russell E. Watson, attorney for Dr. Waksman and the Rutgers Research and Endowment Foundation, who are fighting a suit by a former Rutgers graduate student.
The student, Albert Schatz of Brooklyn, is now an assistant professor of biology at Brooklyn College. He had asked an accounting of royalties received from manufacture of the drug and also that Dr. Waksman be restrained from representing himself as the sole discoverer. Schatz's name appears with Waksman's on the U. S. patent for streptomycin, which is held by the Foundation.
Calls for Records
Today's disclosure occurred during hearing on a motion by Schatz's attorney, Jerome C. Eisenberg of Newark, that various agreements among Dr. Waksman, the Foundation, Schatz and the companies manufacturing the drug be turned over to Schatz for study. The motion was presented to Judge Jayne.
Watson agreed to turn over records and agreements to Schatz's counsel, with the provision that no records of agreements involving profits made by pharmaceutical companies manufacturing the drug be made available. Jayne said he would enter an order to that effect. Watson admitted that Dr. Waksman's profits from the drug's manufacture and sale were $350,000, but added that he had paid $180,000 income tax on the money and also had donated $30,000 of it to Rutgers.
"Dr. Waksman has been working on antibiotics for 11 years," Watson said, "and at that rate his annual take-home pay from streptomycin has been about $11,000."
Schatz has charged that while working under Waksman at Rutgers in 1943 he conducted experiments and research "in continuation of prior work done by him (Schatz)," which eventually led to the discovery of streptomycin.
That claim has been characterized by Watson as "utterly without merit." He said that the discovery, in which Schatz was admittedly concerned, was the result of years of work by Dr. Waksman and other graduate students in soil microbiology.
Watson had pointed out that the companies involved were in cornpetition with one another and that the foundation had a gentleman's agreement" with them that no records from which their profits might be deduced would be made public.
He argued, and Jayne agreed, that the charge of fraud and coercion, which Schatz has brought, be proved; and that profits to Waksman and the Foundation might then properly be considered.
Schatz also has accused Dr. Waksman of forcing him to sign over his patent rights on streptomycin to the Foundation under threat by Dr. Waksman that he would make it impossible for Schatz to find work in biology unless he signed. Waksman has denied that.
Watson said Dr. Waksman's profits on the drug came to him through the foundation, which holds the patent. Originally, he said, Waksman was paid 20 per cent of the royalties received by the foundation, but when sale of streptomycin skyrocketed, that amount was reduced to 10 per cent.
Watson also remarked that Merck & Co., Inc., of Rahway, under a 1940 agreement, once held exclusive rights to streptomycin, "but in the interest of humanity" agreed to let other reputable firms manufacture it.
Dr. Waksman now is in Europe attending an international scientific convention. The case is expected to go to trial in the Fall.