The Team Builder

New York City

David Koch has George Eastman on his mind. “You know the Eastman story, don’t you?” he asks as he leans his six-foot-five-inch frame onto a large chenille sofa. Over his right shoulder, the view goes uptown along Madison Avenue.

He begins to relate the story of the entrepreneur who founded Eastman Kodak. “He put up the money—anonymously—to acquire property for MIT across the Charles River from Boston. He had a condition that his donation for the land and to put up the major buildings not be disclosed until after his death. He was an amazing guy.”

Eastman’s millions transformed the Massachusetts Institute of Technology. Before Eastman, MIT was a vocational commuter school. It was Eastman who provided the means to turn it into an international powerhouse for research and teaching in applied sciences. And it was very much the Eastman campus onto which a 19-year-old David Koch (pronounced “coke”) stepped in 1958. It would be one of the most formative experiences of his life.

MIT Men

David Koch is executive vice president of Koch Industries, America’s second-largest privately held company, and the CEO of Koch’s chemical technology subsidiary; he also owns 42 percent of Koch Industries. Bloomberg estimates his net worth at $34 billion. But long before his business acumen made him the fourth-wealthiest man in America, long before Koch Industries cleared $100 billion in annual revenues, long before he became one of New York’s most celebrated philanthropists, David Koch was a freshman at MIT. And he was determined to make a name for himself.

The Koch family already had a long history at the school. Fred Koch, David’s father, transferred from Rice to MIT to study in the newly established department of chemical engineering. (Fred was an undergraduate when the January 1920 issue of MIT’s student newspaper revealed—after nearly two decades of speculation—that the school’s great, anonymous benefactor was, in fact, George Eastman.) Fred captained the boxing team and, after graduation in 1922, formed a partnership with another MIT graduate.

A year before David arrived on campus, his older brother Charles earned an undergraduate degree in engineering, and then went on to earn a pair of masters degrees. David’s twin brother, William, went to MIT as well. The three Koch boys were well prepared for the rigors of the school. Their father enjoyed enormous success in the oil refining industry, but he was determined that his sons not become what he called “country club bums.” From the time they turned nine, they would spend every summer on the family’s west Kansas ranch, bailing hay and digging post holes.

David took that discipline to the basketball court. He was an intense competitor, an aggressive big man who owned the center of the key. He lit a fire under a struggling team. His sophomore year, the Engineers had a 1-15 record—one of the worst years in the program’s history. (After his team inflicted a brutal 84-34 clobbering, an embarrassed Harvard head coach apologized to his MIT counterpart.) But things were changing.

Koch led the varsity squad to a 17-4 record his senior year. As team captain, he drove the team to a season-capping 15-game winning streak. In a hard-fought contest against Rensselaer Polytechnic, he went up for a rebound and took an elbow to the head. It took four stitches to close his scalp. The next day he was back on the court, opening a game against Union College with three quick jump shots to give the Engineers an early 6-0 lead. In the final matchup of his college career, Koch threw everything he had against the visiting University of Chicago. Koch put up 19 points before fouling out with a few minutes to go. “Tech Five Ends Greatest Season in History,” blared the headline in MIT’s student paper. “Dave supplied the spark.”

Koch left the school as MIT’s all-time scoring leader. In his senior year, he tallied 41 points against Middlebury—a school record that stood until 2009. With 21 points per game, Koch still ranks second in MIT hoops history for career scoring average. He was just as aggressive under the net, hauling in 545 rebounds. By the time he earned his bachelor’s degree in chemical engineering, he had twice been named to the All-New England First Team.

Rebounding Strong

Back in Koch’s Manhattan office, hundreds of photos, awards, and plaques line the walls. On the end table, among an assortment of mementos and trophies, sits a model of an artificial knee. “See that?” he quips. “That’s what four years of college basketball got me.” But the model knee isn’t on the end table because it reminds Koch of his days in the Rockwell Cage. It’s there because he’s genuinely, almost boyishly, interested in science and medicine.

“I first joined a medical board in the middle ’80s,” he recalls—first NYU’s hospital board and then the board of New York–Presbyterian. “I’m on about a dozen hospital boards now.” His interest in medicine became less abstract and more personal in 1991, when Koch was diagnosed with advanced prostate cancer.

“That puts the fear of God in you!” he says. “I thought I was going to die, certainly in months, if not in weeks. It’s really a horrifying experience.” Soon, however, his instinctive competitiveness kicked in. First, he realized, he had to overcome his own cancer. Then, he knew, he had to beat cancer—period.

Over the past two decades he has undergone four different types of treatments. First came 3-D conformal radiation therapy at Memorial Sloan-Kettering. “My cancer went away, then came back, and I had surgery to remove my prostate,” Koch says quickly in a soft voice. “Again, the cancer went away, then it came back, and I went on hormones.”

Two years ago, Koch’s hormone treatment began to lose its effect. “They discovered that after prolonged use of hormones, eventually the prostate cancer cells—which need testosterone to grow—a tiny percentage of the cancer cells slowly learn how to generate their own testosterone internally. Externally reducing testosterone through these hormones no longer affects the generation of testosterone inside the cell.”

Luckily for Koch, a new therapy was in clinical trials: abiraterone, which goes by the trade name Zytiga. “It’s an oral treatment you take once a day,” Koch explains. He speaks more quickly now, becoming animated as he explains how Zytiga works. “What the drug does is interrupt the chain of events that the cancer cells go through to generate their own testosterone. That was a major discovery, so I was included on a clinical trial. My cancer had been rising very steadily, and so I started taking that drug. Within three months, my PSA [a protein elevated in men with prostate cancer] had collapsed to zero.”

Even as he battled his own cancer, Koch set his eyes on defeating the disease itself. “Discovering that I had cancer and the terrible fear that it generated in me turned me into a crusader,” he explains, “a crusader to provide financing to many different centers to develop cures—not only for prostate cancer but for other kinds of cancer as well.”

Cancer Crusader

Koch fairly bursts with pride at the cancer research centers he funds. He has provided $30 million for cancer research at Memorial Sloan-Kettering, $20 million for a cancer center at Johns Hopkins, $25 million to M. D. Anderson in Houston (where he’s currently receiving treatment), $15 million to New York–Presbyterian, and $25 million to the Hospital for Special Surgery in New York. (“I’ve had 10 operations there over the years,” Koch says of the latter. “I’m one of their best customers,” he jokes with a great, hearty laugh.) He also supports Rockefeller University, Cold Spring Harbor Laboratory, and the Whitehead Institute. Since 1998, Koch has donated over $395 million to support medical research.

But Koch focuses his work on cancer at MIT. In 2007, capping off over a decade of support for cancer research at MIT, he provided $100 million to create the David H. Koch Institute for Integrative Cancer Research—an interdisciplinary effort that aims to gather engineers and biological scientists in the same building, working together. (All told, since he joined MIT’s board in 1988, Koch has given over $185 million to the university.)

“It’s all the rage now among the cancer research institutes around the country,” Koch says. “What makes the Koch Institute so special is the combination of MIT’s best bioengineers and their laboratory personnel with the basic cancer researchers that were part of the MIT Center for Cancer Research.”

That old MIT cancer center, a more conventional research facility without the emphasis on involving engineers, had its own storied history. When Richard Nixon declared a “war on cancer” in 1971, MIT’s biologists began to ramp up their work. “MIT’s contribution to this effort was to apply the techniques in cell and molecular biology and genetics to understand how cancer cells arise and develop the various behaviors that they exhibit,” says cancer biologist Tyler Jacks. “It was immensely successful—a heyday in our understanding of basic molecular oncology.”

MIT researchers indeed notched some remarkable accomplishments: David Baltimore won the Nobel Prize for medicine in 1975 for his discovery of how cancer-causing viruses can reformat the genetic makeup of cells. Indeed, “five Nobel Prize winners have worked in the cancer center over the years,” beams Koch.

By early in the new millennium, however, the cancer center’s physical plant was long in the tooth. “My God, I was appalled at the inadequate conditions,” Koch recalls. “Nothing was compliant with code, and everything was grandfathered. The facilities were so poor that MIT was at risk of losing some of their top researchers. We had to build a world-class building to keep our best people.”

Team Building

The need for new facilities coincided with a fresh new vision of cancer research in Cambridge. “Many of our colleagues in engineering were beginning to turn their attention to cancer,” says Jacks, who was director of the old cancer center and remains the head of the Koch Institute. “Engineers approach problems fundamentally differently than do scientists,” he notes. “Scientists tend to dig into a question and keep digging—there’s always another question to be answered. Engineers dig into problems to fix them. They need to know only as much as is necessary to develop the solution.”

Neuroscientist Susan Hockfield was MIT’s first president with a background in life sciences. She describes this approach to cancer research as a “convergence.” “We have moved from cataloguing the basic building blocks of cells to studying the dynamic ways these building blocks can interact,” she explains. “Convergence, the melding together of the life, engineering, and physical sciences, holds the promise of new ways to detect, treat, and some day prevent cancer.”

Thus, the high concept behind the Koch Institute: “Engineers bring a series of skills unfamiliar to your average biologist—who may not understand, for example, nanotechnology or network structures—in ways that are increasingly important for understanding the complexity of cancer cells,” Jacks explains. “But engineers need a problem—they need to define the parameters of the necessary solution. Engineering development in a vacuum isn’t helpful. The contributions of the biologists are to define the nature of the problem, and to provide insights into the molecular basis of the problem.”

Initial joint-research efforts along these lines showed promise, reports Hockfield. “The interdisciplinary projects were becoming more and more common and demonstrating remarkable results,” she explains. “From those discussions the idea of a new, radically cross-disciplinary institute was born.” She shared the idea with Koch. “He got it immediately,” she says. “David had experienced what it means to be told, ‘You have cancer,’ and although his treatment was successful, he believed that cancer doctors needed dramatically improved approaches—and that no place was better equipped than MIT to bring these to reality.” In 2007, Koch got it started with his nine-figure gift.

The facility opened in 2011. Koch is thrilled. “It is the most spectacular research building on the campus. It’s brilliantly well-designed.” Because so many investigators wanted to be part of the work, the institute ended up nearly three times larger than originally envisioned. It is currently home to 650 researchers, with capacity for up to 700. Koch’s gifts were not limited to the physical plant. He also endowed the chairs of several of MIT’s top cancer researchers, including Jacks; Nobel laureate H. Robert Horvitz; chemical engineers Michael Cima, Paula Hammond, and Robert Langer; and biomedical engineer Michael Yaffe.

Koch is proud of the work his philanthropy makes possible, and he follows it closely. “Bob Langer is one of the finest biological researchers at MIT,” he says. “Bob is the world leader in the use of nanoparticles to deliver chemical toxins directly and uniquely to cancer cells.” Langer’s efforts are focused on one of the biggest dilemmas in the history of cancer treatment: how to deliver a dose of therapy sufficiently toxic to kill the cancer cells without producing ruinous side effects on the rest of the body. Although researchers have made progress in this area over the past several decades, “it’s really an unsolved problem,” says Langer. His lab has taken the effort in a new direction.
Man-to-Man Defense

Nanoparticles “deliver a drug right to a tumor,” explains Langer. In a recent study, published in April in Science Translational Medicine, Langer and his colleagues took the chemotherapy molecule docetaxel (commonly used to fight breast, ovarian, lung, and prostate cancers) and placed it inside of a semi-porous microscopic particle. They added polymers to enhance the delivery of the drug once the particle reaches the cancer cell. Finally, they added what Langer calls a “warhead” to the nanoparticle, which allows the particle to “navigate through the body—as though it has its own GPS.” The warhead attaches to receptors that exist in cancer cells but not in healthy tissue, and once the particle attaches to cancer, its porous lining breaks down and the drug is released into the cancerous cell. Not only is the therapy better targeted, but the method of delivery means that the effects of the treatment linger for several days or more, far longer than with traditional chemotherapy.

“We took this all the way from the blackboard to small animal studies, large animal studies, and now we’ve done 22 patients,” Langer explains. Many of the patients who have been treated thus far in the clinical trial have advanced metastatic cancers. In a number of cases the patients’ tumors did not grow, or even shrank—even if the nanoparticle delivered a lower dosage of docetaxel than usually administered, indicating that the therapy was better targeted.

Koch was involved in Langer’s research from the beginning. “David was the initial supporter,” Langer explains. And he stuck with it “all the way through.” Koch did more than just support the research. MIT is famous as an entrepreneurial hothouse, and Langer has co-founded a biotech company called BIND to develop nanotechnology applications for cancer. The company can help with the practical challenges of manufacturing nanoparticles and getting them into medical practice quickly. Koch is one of its investors. “He has been the catalyst for the entire program,” Langer says. “Without his help we would not be where we are today.”

Koch is enthusiastic about applying nanoparticles to other cancers. “It looks like it’s going to be hugely successful. It can revolutionize the treatment of a number of different types of cancers. So that’s probably the treatment I’m most proud of.”

“Engineers want to solve problems and create new technologies,” summarizes Langer. “Nanoparticles are a novel technology.” Thus, nanoparticles are the sort of innovation that is more likely to come out of an integrated research program like MIT’s than to emerge from a pure research venture.

The Future of Medical Research

“I’m interested in developing the treatments that, once approved by the FDA, will cure tens of thousands of patients,” Koch explains. “That’s what I think my role should be.” Cancer research is the core of his philanthropy—representing his biggest gifts, followed, in descending order, by arts and culture, education, and public policy. Despite the notoriety Koch has been assigned by left-of-center commentators for his free-market giving, he insists that “probably the smallest amount of money that I give is to public-policy institutions.”

Nor is Koch’s medical giving limited to cancer. This spring, he and his wife, Julia, pledged $10 million to Mount Sinai Hospital to fund research in how to produce safer food allergy therapies. “My oldest son, David Jr., is stricken with a serious food allergy problem,” Koch explains. On his coffee table is a photo of the Koch family: David and Julia surrounded by David Jr., Mary Julia, and Johnny, who range in age from 13 to 5. “You might wonder who these are,” he says, eyes twinkling mischievously, as he points to a nude statue of the Three Graces in the background. “Those are ex-girlfriends of mine!”

Given the importance of medical research in his giving, Koch is sensitive to what kind of environment will produce the cancer breakthroughs he hopes to see. First, he acknowledges the role that the for-profit pharmaceutical sector has in innovating cures. “One thing I worry is that someday the government may impose price controls on drugs,” he explains. “It’s the profits off of those drugs that are providing the funds to carry out this breakthrough research.”

Second, he believes that cancer research needs more funding, philanthropic and otherwise. (And mostly otherwise; philanthropy accounts for only about 2 percent of medical research funding.) From 2005 to 2010, the budget of the National Cancer Institute—the agency of the National Institutes of Health (NIH) that is the principal federal funder of cancer research—averaged about $4.9 billion annually (not counting a temporary bump up from the 2009 stimulus). “Federal support for research has stagnated,” says Tyler Jacks. “In inflation-adjusted dollars, it’s dropped.”

Philanthropy’s opportunity, however, is that the federal funding available tends to avoid high-risk/high-reward research. “You might think that somebody like me has an easy time getting money, but that’s not true!” exclaims Bob Langer. “When money’s tight, no matter who you are, if you have a cutting-edge or high-risk idea, I don’t know of any agency that will fund it.” This, Langer says, puts a premium on risk-tolerant donors like Koch.

When I ask Koch how he balances his limited-government principles with his support for more federal spending on cancer research, he answers immediately: “It’d be great if there was enough financial support from private institutions and individuals to support this enormous need for cancer research. But there really is this enormous number of very promising projects that don’t get funded through private philanthropy! I think probably the most important thing that the government does is to provide funding to these great institutions. It’s a shame that the NIH’s funding has been cut back because of these massive deficits in government. I think the long-term salvation of a healthcare system is massive and outstanding research.”

“It’s like antibiotics,” he continues, offering a personal example. “I just had a terrible battle with diverticulitis three weeks ago. I was on intravenous antibiotics for a week, then oral antibiotics. If those antibiotics hadn’t existed, my colon would’ve ruptured. I probably would have died. Discovering powerful medications will enormously reduce the cost of medical care in this country.”

And Koch is deeply concerned about a broader threat to philanthropic support for medical research. “I’m worried about the tax increases the Obama administration is lobbying for with Congress,” he explains. “A substantial amount of my income comes to me through dividends.” The administration has proposed, among other tax increases, raising the top dividend tax rate from 15 percent to 39.6 percent.

In concert with other provisions coming into force, the Wall Street Journal notes that dividends for top earners could be taxed at a cumulative rate of 44.8 percent. The cumulative rates “may have as much or greater effect on the [nonprofit] sector as reforms made to the [charitable] deduction itself,” according to Eugene Steuerle of the Urban-Brookings Tax Policy Center in recent congressional testimony.

All told, what the Obama administration’s proposals would do “is take away an extra 30 percent of my pre-tax income and give it to the federal government for general purposes,” Koch laments. “That’s the money that I would like to give—that I desperately want to give—to the great medical institutions, to set up these magnificent research programs, improve the clinics, and be able to hire more good doctors to provide better care.”

Koch becomes more animated, speaking fast and gesturing vigorously with both hands. “There are so many wealthy people who are very generous philanthropically. If these taxes go up enormously, these great institutions—medical, educational, cultural—are going to be starved of the capital they need to continue their mission in this world. That’s one of the greatest fears I have. They’re going to suffer terribly if wealthy people have a substantial portion of their income taken away from them.”

Supplying the Spark

George Eastman was, if this is the right turn of phrase, famously anonymous—his identity as one of MIT’s leading donors was not supposed to be disclosed until after his death. David Koch is not bound by anonymity; he is happy to have his name attached to the projects he funds.

But he is like Eastman in another important way. As Koch describes his big gifts he is positively buoyant, and clearly relishes what his giving makes possible. “Men who leave their money to be distributed by others are pie-faced mutts,” Eastman once said. “I want to see the action during my lifetime.”

Koch—the six-foot-five basketball star, an unstoppable force even with four stitches in his head—loves being in the action. And he believes he’s seeing the action now. “It’s amazing how little hindsight leading cancer researchers had about how cancer functions, how it works, when they launched the war on cancer. It’s extraordinarily more difficult than anybody ever realized.”

He pauses for a moment. A spark flashes in his eyes. “The rate of breakthrough discoveries is steadily increasing. I expect that, in the next 10 to 15 years, we will see phenomenal discoveries. I expect to see FDA approvals for new treatments, treatments that will go a long way toward curing people of cancer. But what I expect most of all is to see our people helping to drive everything forward.”

This article was originally published in Philanthropy magazine’s Summer 2012 issue.

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