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The three occupied a shabby laboratory with no air conditioning, a leaky roof and decrepit equipment in a building shared with the UH food-service operations. While such conditions would have appalled most top-level researchers, Yanagimachi and his team made the best of it and enjoyed their brief obscurity. (Yanagimachi has actually claimed the hothouse may have contributed to the unprecedented success of his team's experiments).

For two years they worked seven days a week, 12 to 15 hours a day. Slowly but surely they unlocked one of the major scientific puzzles of our time. After the initial cloning breakthrough, more discoveries continued to trickle out of the laboratory. Perry delved into transgenics. Whereas cloning involves replicating cells, transgenesis involves using cells and inserted strands of DNA to manipulate the genetic material of mammals. And everyone assumed that these technologies were quite valuable, perhaps worth millions upon millions some day should they prove useful in general terms to commercial biotech efforts.

During the first two years of their fellowships, Perry and Wakayama got nothing from the university. They received no health insurance or benefits, or any other assistance except use of the lab -- a dubious gift at best. Perry lived off a grant from the European Molecular Biology Organization. Wakayama lived off a similar grant from a Japanese science organization. "We were paid into our own bank accounts. We were not really in the university at all," relates Perry.

After their fellowships ran out in the fall of 1998, both were put on the UH payroll but neither was offered a tenured position -- a fact scientists found puzzling considering the magnitude of the cloning breakthrough.

Meanwhile, a little-known biotech company named ProBio Inc. purchased the rights to technologies emerging from the laboratory. The firm, with roots in both Honolulu and Australia, had been introduced to university administrators by Perry. Under the agreement, ProBio would also control the technologies coming out of the lab for many years to come. For this, ProBio agreed to pay $400,000 annually and to give the university a percentage of future royalties and revenues derived from the cloning and other technologies.

But Perry's view of ProBio and UH soured when, much to his distress, neither he nor Wakayama were included in the negotiations with ProBio. Their side was largely represented by the school's senior vice president for research, professor Alan Teramura, a plant biologist.

In fact, Perry never saw the final licensing contract until May 7, more than five months after UH and ProBio signed. Perry says he feared that ProBio and the university lacked the contacts and the wherewithal to make the best use of his inventions. (Sources have said Wakayama is likewise dismayed but he has chosen not to speak to the press.)

Soon ProBio was having trouble paying its bills. It took out a loan from a state of Hawaii business development fund but still struggled to raise cash. That was no surprise. Serious bench research can expend cash at astonishing rates. It's not unusual for even small startups to spend several million dollars each year on research that is not even close to being commercially viable. And Hawaii has been a tough place to raise substantial capital. Another promising biotech company, Neugenesis, moved to the San Francisco Bay Area last year after fund-raising in Hawaii proved impossible despite the fact that it had better connections than ProBio.

Amid these difficulties, Perry's concerns boiled over. Early this year, he began to consider ways to assert his own rights to supersede the agreements that UH had signed on his behalf but without his consent. In April he entered into negotiations with UH that proved fruitless. The dispute also drove a wedge between Perry and Yanagimachi, who is also refusing to speak to the press about the matter.

Next page | What happens when the university/researcher partnership goes wrong?