Yew Bark Boosters Losing Hope -- Possible Cancer Cure Stricken By Lawsuit, Other Drug Sources
The Pacific yew tree of the Northwest seemed full of promise.
The nation coveted a drug made from the tree's bark as a promising treatment for ovarian cancer.
As a result, Advanced Molecular Technologies of Tumwater (AMT) in Thurston County sought to profit from harvesting the tree and marketing the bark.
Investors in at least three states had the same hope. But in the past three months - and particularly in the past three weeks - those hopes have faded, amid a lawsuit and the discovery that the Pacific yew is not the sole source of taxol.
Two Alaska companies, Offshore Systems Inc. of Dutch Harbor, Alaska, and a subsidiary, Ocean Marine Services of Kenai, Alaska, have filed suit in U.S. District Court in Seattle against Advanced Molecular Technologies.
The companies, which have offices in Redmond, allege that Advanced Molecular Technologies misrepresented itself to the public and used fraudulent practices to entice the companies to invest $200,000 in the bark-gathering operation.
The Alaska companies were initially so impressed with Advanced Molecular Technologies' potential for providing taxol nationally that they planned to buy 90 percent of the company's stock.
Among those named in the suit is John S. Destito, company president and chief executive officer. Destito could not be reached for comment.
Advanced Molecular Technologies was incorporated in October 1988 to collect the yew bark. Before starting AMT, Destito operated The Shootist, a retail gun business in Walla Walla that in 1986 filed for Chapter 11 bankruptcy in federal court.
According to the civil suit filed Jan. 9, AMT's prospectus ``contained false statements or misrepresentations regarding AMT's financial condition and its business.'' AMT also allegedly ``failed to disclose'' that: AMT had $500,000 in ``undisclosed liabilities''; AMT owed the University of Idaho about $70,000; and that AMT ``breached'' a contract for collecting yew bark for the National Cancer Institute.
In addition, AMT officials reportedly ``falsely represented that a senior official at the National Cancer Institute intended to leave the government and become (chief executive officer) of AMT.''
The suit alleges that AMT violated federal and state securities laws and seeks, at the minimum, to recover the $200,000 invested by Offshore Systems and Ocean Marine.
The state Department of Licensing already has zeroed in on the selling of AMT stock. On Nov. 29 the Licensing Department ordered AMT and Destito to stop selling AMT stock because neither was registered to sell securities.
The order is temporary and Destito has indicated he plans to fight it, said Janet So of the Securities Division.
In the meantime, the Securities Division's investigation continues to determine if there is evidence that may lead to the filing of criminal charges.
To ascertain whether there was criminal wrongdoing, the division is focusing on the use of the money invested in the company by individuals in Washington, Oregon and California.
When the Securities Division ordered AMT and Destito to stop selling stock, it alleged that:
-- On April 17, 1989, AMT contracted with the National Cancer Institute (NCI) to supply 60,000 pounds of yew bark within a six-month period.
No deliveries were made within the initial six months. A Nov. 8, 1989, on-site visit by NCI revealed that AMT had collected only 600 to 1,000 pounds of bark.
-- NCI extended the contract on the condition that AMT ``would deliver 10,000 pounds of bark'' by Dec. 31, 1989. AMT did not deliver.
-- In February 1990, AMT ``agreed to deliver 30,000 pounds of bark'' by May 7, 1990. It delivered 7,294 pounds on April 4 but failed to deliver the balance.
-- AMT's contract with NCI ended in June 1990 with AMT delivering less than 12,000 pounds of bark.
While the company was struggling to collect yew tree bark, the Securities Division charges, Destito ``made a public appeal to the Pacific Northwest timber industry to salvage yew trees for the use in cancer research . . . ''
According to the Securities Division, in the February 1990 edition of Logger's World, Destito also stated AMT planned to raise money: ``When Destito solicited funds for AMT, he portrayed AMT as a successful growth company that was on the cutting edge of technology. What Destito did not tell investors was that AMT had issued a series of bad checks from October 1989 through February 1990.
``The checks were signed by Destito and were often for small amounts due to local restaurants and convenience stores. Destito also did not tell all of the investors that he had operated The Shootist business in Walla Walla.
The logger's magazine quoted Destito: ``We never realized how important we were going to be. We were in the right place at the right time with the right thing. . . . Our goal is to salvage yew trees from being destroyed in the normal course of timber operations and make them available to the National Cancer Institute in this cause. If we meet our goal, we will be contributing our efforts, along with all of the others in the timber industry, in helping to wipe out cancer from the face of the earth.''
One of the people who read the Logger's World article was Michael Haglund, a 38-year-old Portland attorney who specializes in timber-industry litigation. Haglund was giving a speech to a loggers' conference in Las Vegas when he came across the article.
He was so impressed with what he read that he bought 30,000 shares of AMT stock for $5,000.
``The fact that it was an enterprise toward fighting cancer . . . that was a real plus to my consideration of making an investment,'' Haglund said in a telephone interview.
``That resolved more doubts about doing it without a thorough investigation. I'm not a big investor myself but based upon what people were saying about Destito - including the editor of Logger's World - I decided to invest.
``My impression (of the company) was that it was in the midst of . . . harvesting yew bark for shipment to the cancer institute and that they were negotiating pretty lucrative deals with drug companies which wanted access to the bark and eventually taxol products derived from it.''
The Logger's World article was accompanied by several photographs of Boise Cascade log-truck drivers and logging bosses who had helped AMT harvest Pacific yew trees.
Several of the loggers in the photographs said they were unaware of any investigation or lawsuit involving AMT.
The Boise Cascade employees explained that the Pacific yew is considered a weed to logging companies and Boise allowed Destito, without charge, to take yew trees in areas that Boise was logging in the Pacific Northwest.
The fact that the yew trees were for cancer research - not simply for a business venture - further encouraged Boise employees to help Destito.
``As far as we're concerned, this yew was a weed and was of no value to us. Destito come around here and wanted yew wood and we had some,'' said George Ashton, a logging supervisor in Elgin, Ore. ``We went along with him as a good gesture. It was for taxol for cancer research. We didn't sell it to him. We donated a bunch of our time loading it.''
In all, Boise Cascade donated about $3,000 in manpower to load and move yew trees on flatbed trucks to AMT's headquarters near Olympia.
When Destito and AMT began eyeing taxol as a new anti-cancer agent a few years ago, taxol was known to come only from the Pacific yew, which grows in Washington, Oregon, California, British Columbia, Southeastern Alaska, Idaho and Montana.
That placed the state of Washington at the forefront of the harvesting and marketing of taxol. All that changed recently.
The Pacific yew no longer appears to be the only source of taxol, however, as James Agee, University of Washington professor of forest ecology, has found out.
Three months ago, the university contacted the National Cancer Institute in search of research funds to find out how much Pacific yew existed in the Pacific Northwest and whether the tree stands could meet the demand for taxol.
``They were not interested in funding any study on distribution and productivity of the Pacific yew,'' said Agee.
``They said they didn't need any study because they could derive taxol from the leaves of the English yew.''
On Jan. 7, Florida State University in Tallahassee announced that one of its chemists had found a way of producing taxol in the lab.
Florida State University Chemistry Professor Robert Holton does not need the Pacific yew's bark to produce taxol. Holton has been able to make taxol by combining the drug's two chemical fragments in a laboratory setting.
One of the chemicals is prepared by chemical synthesis. The other is believed to be extractable from the leaves of the English yew, a cousin of the Pacific yew.
Whether the future calls for use of the Pacific yew or the English yew for medicinal purposes, said Agee, the high demand for taxol may require growing the yew trees in plantations.