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Jorge Kalil

Jorge Kalil: Tamer of Crises

Immunologist talks about his experience as head of InCor and Butantan and suggests that development of a Brazilian vaccine against dengue shows encouraging results

Kalil, at the headquarters of Butantan, where he was in charge of the modernization of the serum factories and production of new vaccines

Leo RamosKalil, at the headquarters of Butantan, where he was in charge of the modernization of the serum factories and production of new vaccinesLeo Ramos

Skill in managing groups and identifying the core of a problem has put immunologist Jorge Kalil at the head of two large Brazilian institutions: the Heart Institute (InCor) at the University of São Paulo (USP), the country’s principal center of research, education, and care in cardiology, and the Butantan Institute, Brazil’s largest producer of serums and vaccines.

Appointed president of the board of InCor and later of the Zerbini Foundation, the organization that manages it, Kalil coordinated the team that resolved the foundation’s financial problems. At Butantan, he coordinated the updating of serum production protocols, modernization of factories, and development of new vaccines like the one for dengue fever.

Not shy about expressing his opinions, Kalil criticizes the bureaucratic obstacles to research. His work as researcher has helped reduce rejection rates in transplant recipients, identify the causes of rheumatic heart disease, and create a vaccine against it.

Born in the city of Porto Alegre, he has been married for 38 years to Liana, with whom he has two children—Emmanuelle, who has a degree in business administration and Fernando, an engineer who is working in the financial market. He dreams of establishing a center at Butantan for developing compounds with potential medical use. What follows is the interview he gave to Pesquisa FAPESP in November 2015.

Federal University of Rio Grande do Sul (undergraduate), Paris VII University (specialization, master’s, and doctorate)
School of Medicine of the University of São Paulo
Heart Institute
Butantan Institute
Scientific production
522 articles published in scientific journals, with 5,600 citations; advisor for 14 master’s theses and 19 doctoral dissertations

You are highly regarded as a good manager and administrator. Do you have a talent for resolving complicated disputes?
I think so. Despite my career as a scientist, ever since I was a young man friends have always said that I was bound to be an executive or a businessman. After I got my degree in medicine and started my residence in clinical medicine, I went to France as an intern in 1978. Two years later, when I had barely finished my master’s, Marc Fellous, my advisor and head of the laboratory, went to Israel an a sabbatical and left me in charge of the group. When he returned, I moved on to the Pasteur Institute and stayed on as chief of the laboratory at Hospital Saint Louis. I earned my doctorate when I was already in charge of the laboratory. Fellous had helped me take on the laboratory, and in fact when Professor Jean Dausset, my PhD advisor, won the Nobel Prize in Medicine in 1980, he invited me to stay there permanently. At the time, I was 27, soon to be 28. I thought about the opportunity and talked it over with my wife, who didn’t want to stay in France any longer. So I gave the news to Fellous who said “Go back to Brazil, you can make a difference there.” I took that as my mission and came back.

Did you go to São Paulo?
No, in 1983 I went back to Rio Grande do Sul, where I stayed for a little more than a year until Professors Fulvio Pillegi and Adib Jatene called on me to work at InCor. I was 30 years old and came here to set up and run a research laboratory that had initially been installed at the USP School of Medicine and later moved to InCor. There I had to manage people, administer the institution, do research, and raise money. At age 32, I established the Brazilian Association of Organ Transplantation (ABTO) and was its first president. In 1991, when I went to the United States for a sabbatical at Stanford, they also asked me to head up a laboratory there.

Right after you arrived?
I went as a visiting assistant professor and they assigned me as chief of the laboratory that was run by Rose Payne, a very charismatic women who had competed with Dausett for the Nobel Prize. She was leaving so I took over the Tissue Typing Laboratory for a year. I had never formally studied business, but was always curious about it, talked with some businessmen and slowly learned certain methods and concepts. After the first month at Stanford I was terrified because I had lost money, according to a financial report that was sent me. It was a research lab that also provided services in transplant immunology and we had performed a lot of tests. I thought we had made a fair amount of money. But the rent on the space was extremely high because, although affiliated with a university, it was situated in the most expensive part of Palo Alto. So that taught me a lesson in management. Despite that, I think I did well. They wanted me to continue running the laboratory, practicing science, and accept a permanent position as a professor at Stanford. But again, with the idea of helping develop Brazil, I came back.

Do you regret having returned?
I don’t think I have made poor choices. Perhaps at Stanford I would have made more important scientific and technological contributions. But I think that by being here I’ve done more to help this country. By that I mean that I have always been involved with science, administration, and had a strong desire to teach and form groups. Those who work with me don’t want to leave.

How do you manage to retain people?
I respect the people who work with me. When I came back from the United States, I thought for awhile that I needed to earn more money and so I worked at the Sirio-Libanês Hospital. In 1995, I organized the hospital’s clinical analysis laboratory. I spent 10 years there. The laboratory went from losing money to becoming profitable. Since my salary depended on the operating results, greed reared its ugly head. I decided that phase of my life was over and went back to USP. That was when a big crisis broke out at InCor.

The Zerbini Foundation crisis?
First it was at InCor, and they asked me to take over as president of the institute. When I saw that the problem wasn’t at InCor but at part of the Zerbini Foundation, I also assumed presidency of the foundation. I succeeded in straightening things out at InCor, and after two years, stepped down as president, although I still chaired the board of the foundation. We are still paying off some of the debts. But the foundation dealt with the problem and recovered credibility when it resumed its main function, which is to support the work of InCor. Now there is a healthy bottom line and legitimacy. And once again, it’s respected.

Did the problems arise during the construction of the new InCor building?
There was an issue with construction of the new building, but there was also the InCor unit in Brasília and the poor allocation of resources. The foundation was heavily in debt. The operation was being paid for by taking out loans, which compromised the institution’s assets. At the time, more than $150 million was owed. We worked it out. Once things had stabilized, Giovanni Cerri took over as the state of São Paulo secretary of health and asked me to come over to Butantan, which was having problems. Funds had been embezzled and there had been a fire in the building that housed the collections. In addition, morale was poor among the people who worked at the institute. There was a schism between the institute and the foundation, although the foundation exists to assist the institute. After a year and a half working with José da Silva Guedes, president of the foundation, we discussed the subject and realized that we needed to consolidate the leadership of the two as a matter of corporate governance. I retained consultants from the Getúlio Vargas Foundation, which helped me set up a governance system that I implemented when Guedes decided it was best that I assume both positions.

Of the Foundation and the Institute?
Exactly. I kept those posts until October 2015, when David Uip, state secretary of health, decided it was time for me to step aside again. Now I’m chairman of the board of the foundation and André Franco Montoro Filho, who works closely with me, is CEO. It is important that there be no rift between the activities of the foundation and those of the institute. That was what happened at InCor, and again here when the management and administrative problems arose.

What had changed before the crises?
In the case of the Zerbini Foundation, the first thing was the establishment of InCor-Brasília. InCor is an institution that belongs in the state of São Paulo. It has a role to play here as an affiliate of the USP School of Medicine. And the Zerbini Foundation had established an independent hospital in Brasília. Furthermore, just to give you an example, it was thinking of going into the trash collection business in the Northeast. It began getting involved in businesses that had nothing to do with its primary activity, which is to support InCor.

At the ABTO foundation in 1986, Kalil, at center, accompanied by surgeons Euryclides Zerbini, third from left, and Adib Jatene, last one at right

Personal archives At the ABTO foundation in 1986, Kalil, at center, accompanied by surgeons Euryclides Zerbini, third from left, and Adib Jatene, last one at rightPersonal archives

How did you resolve the question?
We cleaned things up, cut out projects that the foundation had no business getting into, and took it back to its true function.

And what was the situation like at Butantan?
When I arrived, the vaccine and serum factories were at a standstill. They were state of the art when they were established, but they had gotten older and no longer could meet the current demands of ANVISA, the Brazilian Health Surveillance Agency. The registrations were expiring and the facility was undergoing serious inspections. One of the problems was the water quality, which didn’t meet ANVISA standards for production facilities. There was also a problem with the clean zones of those units, which need air conditioning equipment with different kinds of filters, and with the flow of materials, because clean materials must not come into contact with the dirty items. But the biggest problem was perhaps with the flu vaccine. In 1999, Butantan had signed a technology transfer agreement with the French pharmaceutical firm Sanofi, in which I had participated because I’d worked with Jatene at the Ministry of Health. The technology had been transferred, but the vaccine unit was not in operation. In 2011 we produced the first lots, but ANVISA did not allow them to be turned over to the ministry.

Because of the water quality?
No. By that time, we had solved those problems. We had a license from ANVISA to prepare the formulation of the flu vaccine, divide it into doses, and put it in ampoules.  In 2011, I was able to get ANVISA to approve the production of the virus in eggs, here in Brazil. Once I have the virus production, the next step is to formulate and package it. We produced the virus, we formulated it, and packaged it, but ANVISA said that the resulting product could not be sold to the ministry because we did not have a license to make the entire product line. It was considered to be a new product and had to be registered in a different way. It’s just bureaucracy. I had some tremendous fights. ANVISA demanded changes in the area where we formulated and packaged the vaccine and in 2012 we had already done that. In 2013, we delivered the seven million doses. From 2013 to 2014, we had to carry out the second phase of the changes. Once again, ANVISA said we had not finished in time and the secretaries of the ministry forced me to buy 10 million doses from Sanofi. We had produced the 20 million that I said we would make, but they bought only 10 million. So then I got ready and we delivered 34 million doses in 2015.

Is that enough for this country?
Brazil uses 54 million doses and immunizes one-fourth of the population. When the campaign started, we immunized only the elderly, children, and health professionals. That’s why the factory was designed in the early 2000s to produce 20 million doses. The rest is supplied by companies in other countries. We help with the importing.

And the problem with the serums?
When I arrived, serums were being produced, but with difficulty. The immunization protocols are more than 100 years old and the level of antibodies produced by horses against diphtheria and tetanus was not sufficiently high. There was no problem with the final product, because we controlled the quality. We reviewed the processes and improved animal immunizations. That was when ANVISA said that the three Brazilian producers of serums were not in a position to keep producing them and that we needed to renovate the facilities. In 2014 and 2015 we renovated our factory. We doubled the production capacity and are now going through the validation process.

When does production start? Will you make the 12 serums that used to be produced by Butantan?
The idea is to begin producing by early 2016. For some of the serums, we are the only source. During the renovations, we arranged for shared production with the Vital Brazil Institute, in Rio de Janeiro, and the Ezequiel Dias, FUNED, in Minas Gerais. We got the plasma from Butantan’s horses and took it to FUNED to prepare the serums.

How much was spent on those renovations and upgrades?
In 2014 and 2015 we invested R$300 million from the Butantan Foundation to renovate the factories. We still need to renovate the facilities where the vaccines against tetanus, diphtheria, and pertussis—the DTP—are made and the factory where the vaccine against hepatitis B is made. But we don’t have the funds. Butantan is a public institution and its profit margins are small. The vaccine we deliver to the ministry at R$9 is sold by private companies to immunization clinics at R$100 or R$120. We sell at cost. That’s our mission.

How is the dengue vaccine going?
The dengue fever vaccine project was going slowly, but we have speeded it up a lot. It started in 2008 during one of the PIPE – Innovative Research in Small Businesses Programs – run by FAPESP in partnership with the National Council for Scientific and Technological Development (CNPq). We completed phase 2 clinical tests with excellent results. The production of neutralizing antibodies was approximately 90% for the four serotypes of dengue. We are ready to begin phase 3.

Who will get the vaccine in that phase?
In phase 2, there were 300 people. In phase 3, there will be 17,000; 12,000 will get the vaccine and 5,000 who will get the placebo. It will be tested at 14 centers in Brazil that were selected according to the incidence of dengue and the different serotypes of the virus. The vaccine is ready. It was approved by the FM-USP council on ethics and research, by the National Commission for Ethics in Research (CONEP), and also by the National Biosecurity Commission (CTNBio) because we are working with a recombinant virus. The last series of questions from ANVISA has been answered. We are awaiting the license to begin the study. [In December 2015, ANVISA approved Phase 3 and Butantan, having implemented the new manufacturing requirements set by the agency, began producing the lots for the tests. Immunization should begin in February 2016, although some of the funding for the clinical trials is not yet in place.]

That vaccine was developed with the National Institutes of Health (NIH) , in the United States, right?
The NIH performed the deletions that resulted in the attenuated virus. They selected the virus and made a frozen liquid formulation, which cannot be used in countries like Brazil and India. At Butantan, we worked on its industrial development. We developed ways to cultivate the cell in which the virus is inoculated and can obtain significant yields. We also found methods for purifying, lyophilizing (freeze-drying), and making the product more stable after reconstitution. We did that and compared the result with the vaccine from the NIH. We have a new vaccine that resulted in a new patent. Our product is different.

Have you already compared it with the NIH vaccine? What do the tests show?
We compared it with the NIH vaccine and found that it has the same degree of immunization. In the phase 2 study, we tested the vaccine both in individuals who had been in contact with dengue and those who had not. Working at my laboratory with Esper Kallas, at USP, we analyzed antibody production and cellular response. Usually no one studies that second part. Everyone evaluates the level of antibodies, which are produced by the B lymphocytes. But in order to make antibodies, the B lymphocytes need to interact with another type of cell, the helper T lymphocytes. We conducted an unprecedented study, with exceptional results, that explains why our vaccine works well while the others, made from the skeleton of the yellow fever virus and part of the dengue virus, do not offer such good protection. When I arrived, this project was dormant, but today it’s the specialty of the house. Both Brazilian and international pharmaceutical firms are interested in it.

How much dengue vaccine could be produced at Butantan?
We are still discussing this because the permanent factory isn’t ready yet. We have a plan that, if optimized, will permit producing enough virus for 100 million doses a year. But we don’t have the capacity to lyophilize and formulate that much. We will need more investments or else we’ll need to purchase that service. First, we are going to build the factory, the plans for which are ready. It will take a little more than a year to build it.

Will that depend on the results of phase 3?
Sanofi built a factory to make dengue vaccine when it finished phase 2. Competitive international companies have a notion of the risk, something we don’t have in Brazil. Here we don’t build a factory until we receive an order from the government. Ideally, we should build the factory without finishing phase 3. If we wait for completion of the clinical trials, the arrival of the vaccine on the market will be delayed by two years. But we don’t have the resources to do that.

How much will it take to build that factory?
To conduct phase 3 and build the factory, we will need $100 million. Sanofi spent €300 million on phase 3 alone, and €1.5 billion on the entire project. I don’t think we have spent even $10 million, and that was obtained with the help of the BNDES – the Brazilian Development Bank that, along with the FINEP – Brazilian Innovation Agency, is one of the institutions that Brazil needs to preserve.

In excellent company: Kalil, his wife Liana, and Nobel laureate Jean Dausset, friend and mentor

Personal archivesIn excellent company: Kalil, his wife Liana, and Nobel laureate Jean Dausset, friend and mentorPersonal archives

What is the status of Butantan today?
There are two financial problems. In 2014, the federal government and the courts said that a resolution had been enacted that prohibits the government from signing contracts with foundations. Government procurement contracts needed to be executed with a public institution, which in our case is the state Department of Health. This meant that we ceased to receive funds. When the government of São Paulo sends out an invoice and receives payment, it has to pass on 13% of that as a contribution to reducing the federal debt, plus 1.5% for the payment of court-issued registered warrants (precatórios) and 1% for contribution to the Pasep (Civil Service Asset Formation Program). The Butantan Foundation does not make enough profit to pay that.  In 2014, those withholdings amounted to 15.5%.  In addition, it takes time for the funds to reach us.  We have R$300 million floating around there, out of a total of R$1.2 billion that we are going to earn in 2015 from the sale of serums and vaccine.  The second problem is that in 2014 we had to sign contracts with companies outside Brazil to purchase vaccines that are delivered to the Ministry of Health, and that put a burden on us.  I didn’t want to sign those contracts because the dollar had begun to fluctuate.  But there was no alternative.  Butantan buys in dollars or euros and the government doesn’t want to give us the funds to cover the cost difference we experienced due to devaluation of the real.  Because of these issues, Butantan is having problems paying its suppliers.

Where do the foundation’s funds come from?
From a profit margin on sales of vaccines to the government.  I would like to see us also get money from royalties.

Is there any interest in transferring technology to companies?
If Butantan can gain from that, then yes.  There are 3 billion people living in areas where dengue fever is a threat.  Butantan cannot produce for everyone, but it does have distribution channels.  If we could get the vaccine distributed worldwide, with Butantan getting royalties from that, we would teach Brazil a lesson.  This country could come to understand that planting soybeans isn’t the only way to generate wealth; we can also create technologies and earn royalties on them.  We don’t know how to be competitive.  We are tied down by bureaucracy and rules.  I have tremendous difficulty managing things as a government administrator.  The Office of the Public Prosecutors and the state Court of Accounts are always calling us up to find out what we are doing.  At Butantan, we have the Innovation Center, the NIT, which holds a large number of patents.  There are people interested in working those patents, but we are being strangled by the bureaucracy.

Why is it hard to innovate in that field?
Because it’s bureaucratic.  Either Brazilian pharmaceutical companies are not innovating or they are doing it in the United States and Europe.  The universities, when they make a discovery, think they are going to earn a lot of money from the patent and so they don’t facilitate its use.  The state prosecutors don’t want the responsibility for a patent to rest with a single company, although that exclusivity results from the patent application itself.  It exists so that a company that develops a compound can obtain a financial return.  We could have more investment in innovation.  The problem is both regulatory and managerial.  Innovation law is complicated.  A lot of rules can trip people up.  The result is that there is no innovation in the pharmaceutical and health fields in Brazil.

Do you experience any retaliation because you talk about those problems?
I create enemies, certainly.  But the majority, sometimes silent, agrees with me.  Of course it is complicated and it bothers me.  Anyone can go to the Office of the Public Prosecutors and say that I’m doing something wrong, and then I’ll have to explain.  They don’t have the burden of proof; I am the one who must defend myself.  But every time the people from the Court of Accounts come here and understand what we are doing, they help us.

What is your most important scientific contribution?
The international scientific community has given awards to the papers in which, in collaboration with Luiza Guilherme, I described the mechanisms of induction and progression of human autoimmune disease, especially the mechanism by which an infectious agent causes the body to break down its tolerance of itself and start to attack its own body.  Among these are the papers in which we discovered how Streptococcus breaches the immunological tolerance and provokes the disease known as rheumatic heart disease.  It’s an important model of an autoimmune disease that is unleashed by an infectious agent.  Other diseases such as type 1 diabetes and multiple sclerosis seem to work the same way.  Working with Edecio Cunha Neto, I saw some something similar in Chagas disease.

Some time ago, you said that you were at a point in your career when you wanted to practice translational science more rapidly.
I’m already doing that.  We signed a contract for R$20 million with GSK (GlaxoSmithKline), financed by FAPESP, to install one of that company’s centers for new drug development at Butantan.  We have several compounds in the development stage, where the active principles were obtained from venoms.  I would also like to establish the Butantan Institute of Biotechnological Innovation, the IIBB.  The idea would be to take compounds that have the potential to become new drugs or vaccines and develop them in partnership with companies.  It would be a sort of incubator.

Various compounds come out of the Butantan laboratories, but they are unable to overcome the innovation barrier and give birth to new drugs.
We have 40 active patents that we are working. It’s what I have to do. I already have a lot of scientific publications and citations. I want to develop something that can actually help people. When the Zika virus emerged, I got the folks from the institute together and designed a program to study the disease. I like administration, because it enables me to put my scientific ideas into practice. To take part in the group of industrialized countries, Brazil has to show that it is able to solve its own problems.