BIOTECH GOLDENBOY
PAGE 8 OF 12

"They were saying medicine had been great since World War II and orthopedic surgeons, the top ones, were making a half million, a million a year and radiologists were making three hundred thousand a year and I was stupid to do anything else."

     "Any time you have a foreign body like an implant it has to be taken out [if an infection sets in]. These things are cemented into the person. It's not just a matter of pulling it out like a drain, you have to chisel it out. It's a horrible process. Chisel it out, take out the implant, put the patients on IV antibiotics for six weeks, and during that time the patients can't move cause they don't have a hip at all. You don't want that to have to happen more than one percent of the time.
     Insurance companies were coming in and telling physicians how to practice medicine and the physicians were going to be responsible for anything bad that happened. He was giving a lot of depositions for various things, and this guy's the chief of service at one of the top medical schools in the country. He thought medicine was changing dramatically from being a cottage industry where physicians had control of their practice within a small area. It's kind of like mom-and-pop video stores and you have Blockbuster coming in and basically wiping everyone out. It could have terrible consequences for patients and do not great things for physicians who had been able to command sizeable salaries.
     "So he gave me this advice off the cuff and I thought about it quite a bit. He said, 'If I had the chance to do it over again, I'd do something else, like investment banking.' He said he had a neighbor who was an investment banker. He said, 'The grass always looks greener on the other side but I see him and he does just as well if not better than I do and my wife says he's home every day at six or seven o'clock. From outward appearances it looks like he has a pretty nice life!' That got me thinking and studying about what was happening in healthcare. I came to the conclusion that he was right, medicine was changing dramatically. I told a lot of my friends in med school, including my brother, and they were saying I was dead wrong. They were saying medicine had been great since World War II and orthopedic surgeons, the top ones, were making a half million, a million a year and radiologists were making three hundred thousand a year and I was stupid to do anything else. I thought they were all wrong.
     "At the time they were starting to close down some hospitals in Philadelphia. I knew that was Part A of medicare reform, and Part B was [going to be] physician's salaries. Salaries are dictated by the government because insurance companies price in accordance with what government reimbursement does. The government in certain states said, 'You're making three thousand for a cataract procedure. We'll pay you two thousand.' It was a stroke of the pen by some legislator who was trying to meet the budget. Insurance companies quickly followed. What were physicians to do? They just focused on finding more patients for those procedures and tried to do them on volume rather than on the amount they were making on each operation. I came to the conclusion that medicine was changing and it would be horrible by the time I would finish my residency training program. I would essentially become an employee of some insurance company."
     That clinched Kuo's decision to apply to Penn's Wharton School of Business. During Christmas break of his third year Kuo announced his drastic life change to Gigi, his parents and his brother. Only Gigi supported the decision. Kuo signed up for the year's last scheduled GMAT and skipped a Saturday grand rounds session to take it. Without having had chance to do any preparation other than finding out whether there was a penalty for guessing, he he scored high enough to ensure admission to Wharton.


     The summer after his first year at Wharton Kuo began exploring the prospects of applying his dual medical and business training by working in the corporate development department of Cordis, a maker of equipment for open-heart surgeries.
     "They thought someone with a medical background could help them," Kuo recalls, "because no one had a medical background in the company."
     It normally takes four years to get an MD and two for an MBA. Kuo earned both in only five years. The two degree ceremonies were held on the same happy but hectic day in 1991. The med school's was in the main auditorium and Wharton's was at the convention center.
     "I don't think anyone ever conceived of someone [graduating from] both schools [in the same year]. They were five minutes apart timewise and they were across campus from each other and it's a big, big campus." Drawing on his high school cross-country training, Kuo ran from one to the other, still decked out in the colorful med school ensemble as he rushed into the sea of sober black and white robes of the business school.
     After what seemed to Kuo like hundreds of interviews, he accepted an offer from D. H. Blair, a Wall Street boutique investment bank, as a venture capital associate in its biotechnology group. As it happened, the group was headed by a licensed physician named Lindsay Rosenwald.
     "He interviewed me, liked me, hired me and told me I should start right away," Kuo recalls. "I started even prior to graduation. After I finished my exams I was working on Wall Street and commuting all the way from West Philadelphia to New York City which is two hours each way." He eventually moved to New York. Kuo's job entailed a lot of reading of trade journals and calling research facilities to identify bio-technologies that were promising enough to build a company around. PAGE 9

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