Cheaper Artemisinin to Fight Malaria

Bill Gates is one of the backers behind a semi-synthetic compound that could bring an inexpensive antimalaria drug to Africa and Asia

Gates' foundation has given millions to find a new way to produce the key chemical in the only effective treatment for curing malaria John Van Hasselt/Corbis

By Steve Hamm

This is an extended version of 'Creative Capitalism' vs. Malaria which was published in the January 26, 2009, issue of BusinessWeek.

When Bill Gates popularized the term "creative capitalism" at the World Economic Forum a year ago, he said the world's deepest problems could be solved only if corporations joined nonprofit organizations, governments, and philanthropists in the fight. "Diseases like malaria that kill over a million people a year get far less attention than drugs to help with baldness," the Microsoft (MSFT) billionaire told his audience in Davos, Switzerland.

One of the Bill & Melinda Gates Foundation's pet projects is now emerging as evidence that creative capitalism can work. The Artemisinin Project is an unconventional effort by Big Pharma's Sanofi-Aventis (SNY), biotech upstart Amyris Biotechnologies, a University of California researcher, and the first nonprofit drug developer in the U.S., the Institute for OneWorld Health, to take on malaria. "If this works, there will be a lot of people piling on," says Christopher Whitty, a professor of international health at London School of Hygiene & Tropical Medicine. "If not, people may well shy away from this kind of approach."

The goal is to get cheap drugs into the hands of poor people around the world who do not have access to health care. While pharmaceutical companies and nonprofits have worked together before toward this aim, this project is more ambitious. "This is part of a grand effort to link biotechnology, industry, and academia on product development," says Regina Rabinovich, head of the Gates Foundation's infectious disease group. "Without these kinds of partnerships, the pharmaceutical industry can't afford to make the investments in developing products for poor people."

Optimism Amid Crisis

Gates says this kind of collaboration is vital if the world is to make progress against some of its most intractable social problems. "While each sector can create some inroads on its own, collaboration and partnership between nonprofits, industry, government, and philanthropists is necessary for long-term sustainability and success," he says.

Gates, who remains the chairman of Microsoft, stopped working full time at the software giant so he could spend most of his time on the foundation. At the World Economic Forum's meeting this year, he plans to release the first in a series of annual letters—in the tradition of his friend, Berkshire Hathaway (BRKA) Chairman Warren Buffett. According to the foundation, Gates is expected to lay out in the letter his priorities and explain why he remains optimistic about the potential for social progress in spite of the world economic crisis.

The Artemisinin Project hasn't been slowed by economics. Artemisinin is a chemical found in a plant—sweet wormwood—that grows in temperate parts of Africa and Asia. It's used to help cure malaria, mostly as a component in artemisinin combination therapies, or ACTs, which are the only truly effective treatment today. Two problems exist. One is that volatile weather and market conditions result in unreliable supplies and wild price swings. The other is ACT costs $3 to $20 per patient, well beyond the reach of many victims.

Scarce Funding; Lucky Finding

Jay Keasling, a biology researcher at the University of California at Berkeley, came up with a potential supply solution in 2003: producing artemisinin semi-synthetically, using a process similar to what biotech companies employ to make drugs for everything from anemia to cancer. He and his associates coaxed genes from wormwood to produce a substance that was close to artemisinin. Then they tweaked the material via a chemical process.