History of the Wellcome Trust
By Penny Bailey
The Wellcome Trust is the legacy of Sir Henry Wellcome, a pharmaceutical pioneer, progressive industrialist, philanthropist, archaeologist and voracious collector. On his death in 1936, he left the entire share capital of his pharmaceutical company, the Wellcome Foundation, to a new charitable foundation, the Wellcome Trust.
The Trust's purpose was to advance medical and scientific research and the history of medicine. In the 75 years since it was formed, the Trust has grown to be a leading funder of biomedical research, supporting a wide range of activities that include technology transfer, public engagement, the history of medicine and biomedical ethics.
Our founder: Henry Wellcome
By the age of eight, Henry Wellcome had travelled 300 miles in a covered wagon train - from the forest log cabin in Wisconsin where he was born in 1853, to Garden City in Minnesota - and was involved in emergency surgery on settlers wounded in battle against the Sioux. That early introduction to human anatomy has been credited with sparking a lifelong passion for medicine and research. A decade later he graduated from the Philadelphia College of Pharmacy, travelled across the USA as a drug salesman, and published papers on the preparation of quinine in academic journals.
In the USA, a new form of mass-produced compressed pill was replacing the traditional pestle-and-mortar method of preparing medicines. But across the Atlantic in England there were very few drug-manufacturing companies, and individual chemists still made their own medicines.
In 1880, Wellcome joined his college friend Silas Burroughs in London and set up a drug company, Burroughs Wellcome & Co., to produce and sell the new pills to the virgin English and European markets. Early products included Kepler's Cod Liver Oil and Malt, Wyeth's Compressed Tablets of Chlorate of Potash (to soothe sore throats and mouths) and Peptonic Tablets (to relieve indigestion), and McKesson & Robbins's Salicylic Acid (to treat acne) and Digitalin (derived from the foxglove plant, to control heart rate).
Display of products by Burroughs Wellcome & Co., at the International Medical and Sanitary Exhibition, London, 1881.
However, the range was limited, and few of the drugs they were selling could be classed as effective medicines by today's standards. At the end of the 19th century, people understood little about the causes and mechanisms of diseases, and few therapies had been designed to target them. Bayer had not yet patented aspirin, and clinical trials of the first antibiotic were 25 years away.
Drug companies produced and marketed existing medicines, but didn't support research to develop new therapies. Scientists and physicians carried out their own research independently in universities or home-made laboratories.
So when Wellcome opened his Physiological Research Laboratories in 1894 and his Chemical Research Laboratories in 1896, he was taking a pioneering and ambitious step. He later financed laboratories in Sudan (1910) and set up the Bureau of Scientific Research (dedicated to tropical medicine) in London in 1913.
From the start he gave his scientific staff freedom to pursue their own interests, rather than pressing them to deliver profitable new drugs. As a result they made numerous important discoveries, including that of histamine by Sir Henry Dale (later a Nobel Prize winner and Chairman of the Wellcome Trust) in 1910.
Wellcome also had a passion for history. He collected around 1.5 million books and objects relating to the history of medicine as well as financing two major excavation programmes at Jebel Moya in Sudan and Lachish in Palestine.
Silas Burroughs died of pneumonia in 1895 and full control of the business passed to Wellcome, who continued to expand the company globally. By 1912, Burroughs Wellcome & Co. had branches in Sydney, New York, Montreal, Buenos Aires, Cape Town, Milan, Shanghai and Bombay.
The Wellcome Research Institution and Foundation
By the 1920s, Wellcome was seeking to consolidate his diverse global interests. He registered the Wellcome Foundation Limited as a private holding company to own, coordinate and control all his activities. Burroughs Wellcome & Co. in the UK was subsumed into the Foundation, and its overseas branches, along with Wellcome's museums and laboratories, became assets of the holding company.
Wellcome remained the sole shareholder and Governing Director of the Foundation. He used the dividends from the company profits to finance his non-commercial, academic activities, including his collections, archaeological digs and scientific research.
In 1930 he bought a site on Euston Road in London to house his scattered museums and laboratories. The building - known as the Wellcome Research Institution until 1955, when it was renamed the Wellcome Building - was completed in 1932.
Wellcome was knighted and made an Honorary Fellow of the Royal College of Surgeons in 1932. He died in 1936, and his will created the charitable foundation the Wellcome Trust.
Wellcome wanted the Trust to continue his role: to own the company, to use the profits to advance medical and historical research, and to oversee and develop his academic interests - the laboratories, collections and archaeological digs.
The structure that worked in his lifetime was no longer tenable after his death, however. It left the Trust entirely reliant on the pharmaceutical company - to both make profits and pay the Trust a reasonable dividend - before it could carry out Wellcome's philanthropic wishes. His collections, the Wellcome Building and the laboratories remained assets of the company. And death duties, based on the value of Wellcome Foundation shares (including the laboratories and collections owned by the Foundation), were £2m.
To add to the trustees' problems, World War II began in 1939, and war tax ate up all the company's profits for the next few years. By the late 1940s, the company was nearly bankrupt - a fate that was only prevented by a transfer of funds from the US branch. This had been established in New York in 1906, initially to market products made in Britain. Later, the branch set up laboratories and a manufacturing plant to make its own products. Largely unaffected by the war in Europe, it was making large profits, mainly from the aspirin Empirin.
The Trust's early years
So for its first 20 years, from 1936 to 1955, the Wellcome Trust was only able to spend £1.2m on medical and historical research. This included £20 000 to build a plant to provide dried plasma and serum on an industrial scale. Between 1943 and 1945, it provided enough of this for the entire Royal Navy, the civilian population, and a proportion of the Army and RAF.
One of the Trust's early expenditures was in 1938, when it took over the League of Nations Malaria Research Laboratory headed by Henry Foy in Thessaloniki, Greece. The first Trust scientific employee, Foy was once captured and held hostage by bandits while collecting infected mosquitoes in Greece. The unit eventually moved to Nairobi, Kenya, in 1949, where today, in partnership with the Kenya Medical Research Institute (KEMRI), it is one of the Trust's Major Overseas Programmes.
In the Trust's early years, the trustees also completed and published Wellcome's archaeological excavations in Sudan and Middle East. True to Wellcome's wishes, they used some of their limited funds to develop research museums and libraries in the UK and overseas (including Montreal and Melbourne). Their spend incorporated an award to the secretary of the late Paul Ehrlich (who developed and trialled the first ever antibiotic in 1909) to help her collect and transcribe his papers. In 1946, the Wellcome Library, which was still only partially catalogued, opened to its first readers by arrangement, formally opening in 1949 as the Wellcome Historical Medical Library.
Having teetered on the edge of bankruptcy, the company's main priority after the War was to get profitable again. It invested heavily in modernising and extending its laboratories and production facilities, and increasing its international market presence.
The UK laboratories became more commercial. The discoveries of Dr D W Adamson and colleagues led to profitable new products, including Kemadrin for Parkinson's disease, Actidil, an antihistamine, and Septrin, which became a major antibiotic with a worldwide market.
In the US laboratories, the extraordinary partnership of Dr Gertrude Elion and Dr George Hitchings (left) produced a plethora of new drugs that were the main drivers of the company's growth, and won the researchers a share of the Nobel Prize in Physiology or Medicine in 1988. Their findings included immune suppressants 6-mercaptopurine (which proved to be a powerful agent against leukaemia) and azathioprine.
In the UK, English surgeon Roy Calne introduced azathioprine in 1960 to prevent rejection in kidney transplantation. In 1966 the Trust helped to establish a Chair of Postgraduate Surgery at the University of Cambridge for Calne, who went on to perform the first liver transplant operation in Europe in 1968.
By 1986, the company had grown dramatically, with sales of over £500m per annum (compared with £10m in 1950). It had over 60 associated companies and subsidiaries in Europe, the USA, Africa, Asia and Australia.
Some 40 per cent of this growth had been generated by the US branch of Burroughs Wellcome. But because of Britain's tight restrictions on currency transfers, the Trust could send little of that money back to the USA. In the 1950s, Bill Creasy, Chairman of the US company, spoke to the then Trust Chairman, Sir Henry Dale, about a new US law that allowed corporations to avoid paying tax on a portion of their income if it was spent on charitable causes. With Dale's agreement, he set up a separate research-funding charity - the Burroughs Wellcome Fund - in the USA in 1955.
The large-scale capital investment in plant and infrastructure required to fund the Foundation's growth worldwide was possible both because of the success of the US operation and because of the courtesy of an important agreement between the company board and the trustees. Recognising that they needed the company to expand if they were to have enough funds to support research, the trustees agreed to accept a low dividend of only 30 per cent of the profits, allowing the remaining 70 per cent to be reinvested to fund company growth.
Funding in the 1950s and 1960s
The company's growth meant that the Wellcome Trust was able to spend £8.5m fulfilling Wellcome's charitable wishes from 1957 to 1966. A dearth of research laboratories and equipment in UK universities was hampering innovative research, so over 60 per cent of Trust funds were spent on building and equipping postgraduate research facilities.
By the end of this period there were 83 Trust-funded buildings in the UK. The Trust also made 65 awards for electron microscopes between 1955 and 1983, and gave £15 000 for the UK's first nuclear magnetic resonance spectrometer in 1956.
In 1960, the Trust gave a grant to Dr Griffith Pugh, scientific leader of the nine-month Himalayan Scientific and Mountaineering Expedition led by Everest conqueror Sir Edmund Hillary. The £1000 award was for an oxygen meter and gas chromatograph to study the physiological effects of extreme altitude on humans - the first such study ever carried out.
Meanwhile, awards to overseas researchers included one made in 1959 to New Zealand medical scientist Dr Graham Liggins. His experiments on lambs led to his pioneering use of hormone injections to accelerate the lung growth of premature babies - work that has had a worldwide impact, allowing many preterm babies with lung problems to survive.
And in 1964, the Trust awarded a grant to set up a research unit at the Evandro Chagas Institute in Belém, Brazil, headed by Ds Ralph Lainson and Dr Jeffrey Shaw. In 1996 Lainson was awarded an OBE for his studies of leishmaniasis.
A new policy
By the 1960s, the UK government had started to invest in research infrastructure, taking some of the pressure off the Trust, which could now look at other types of support. The Trust's 1966 policy set career fellowship schemes as a priority, helping to provide a career structure for scientists in UK universities. These became the Trust's hallmark schemes, and today fund researchers at all stages of their careers.
The 1966 policy also identified mental health, pathology and ophthalmology as priority areas for funding, and in 1976 the Trust established its Mental Health Programme and Advisory Panel.
Tropical medicine - one of Wellcome's particular interests - was another priority area. In 1976 the Trust set up a Wellcome Research Unit in Bangkok with the Universities of Mahidol (in Bangkok) and Oxford (in the UK). Led by Professor Nick White, researchers there carried out trials on the antimalarial drug artemisinin - now the WHO-recommended first-line treatment for malaria. Over the next couple of decades, the Trust established research programmes in Kilifi, Kenya (1986), Ho Chi Minh City, Vietnam (1990), Malawi (1995) and South Africa (1997).
Share sales and diversification
When Sir David Steel and Sir Roger Gibbs joined the Trust as Chairman and Trustee in 1982 and 1983, the company's annual sales were approaching £500m, and the Foundation was valued at £1 billion. Yet 70 per cent of the net profit was still being ploughed back into the company to fund its growth, rather than being distributed to the Trust, as shareholder.
Both men were concerned that the Trust's only asset was the company, which meant that if the company foundered, so would the Trust. They saw an ominous warning in the fate of the Nuffield Foundation. Gibbs's father had been Chairman of the Nuffield Foundation, which was built on Morris Motors, and tried in vain to persuade Lord Nuffield to allow diversification. When the British motor industry crumbled, the Nuffield Foundation fell too.
Under the terms of Wellcome's will, sale of the company was permitted under "exceptional circumstances". Steel approached the Charity Commissioners for a resolution, and was told, to his surprise, that it was the trustee's fiduciary duty to think actively about diversification.
On 14 February 1986, the Trust floated the Foundation on the London stock market as Wellcome plc, and reduced its holdings in the company from 100 to 75 per cent. Reinvestment of the proceeds produced £211m, well above the reserves of £35m prior to the flotation.
In 1989, Steel retired and Gibbs became Chairman. He felt that the Trust's 75 per cent stake in Wellcome plc was still too high. So, on 27 July 1992, the Trust sold 288m shares in Wellcome plc, taking its shareholding down to just below 40 per cent. The sale, the largest non-government stock exchange transaction ever carried out, raised £2.3bn - the biggest cheque ever written - and a time capsule of the share offering was placed on Mount Everest by an SAS expedition. In 1993, the Trust endowed the Burroughs Wellcome Fund in the USA with $400m: a gift that catapulted the Fund from a small foundation (with assets worth $35m) to one of the top 50 in the USA.
The 1990s saw a succession of mega-mergers in the pharmaceutical industry, and in 1995, the trustees accepted a buyout offer from Glaxo, retaining just a 4.5 per cent share in the newly created Glaxo Wellcome. The sale increased the Trust's total assets from £5.3bn to £6.8bn, making it the largest charity in the world. The merger between GlaxoWellcome and SmithKlineBeecham in 2000 left the Trust with a shareholding in the new company of less than 3 per cent. It sold these remaining shares over the following five years, selling out completely in July 2005.
The proceeds of the three sales of Wellcome plc were invested widely by a dedicated Wellcome Trust investment team, which has continued to pursue creative investment strategies, including the purchase of 1800 freeholds in South Kensington by Sir Roger Gibbs over lunch in 1996. In 2006, the Trust became the only UK-domiciled non-public-sector organisation with an AAA/Aaa credit rating - higher than those of most European governments - and the first UK charity to issue a listed bond.
Today the Trust's portfolio is well diversified, with investments in equities, hedge funds, property, currency and bonds. This has allowed it to spend approximately £600m in 2009/10 on fulfilling its mission to achieve extraordinary improvements in human and animal health.
Funding from 1990 to 2010
The growth of the Trust following the sale of the company has enabled it to fund some extraordinary research in the last two decades.
In 1992, it established the Sanger Centre (now the Wellcome Trust Sanger Institute) under the leadership of Nobel Prize winner Professor Sir John Sulston, where one-third of the human genome was sequenced. Today, world-class researchers at the Institute are at the cutting edge of research into cancer, pathogen and model organism genomics and bioinformatics.
In 2007, the £9m Wellcome Trust Case Control Consortium (WTCCC) published the results of the largest ever study of the genetics of common diseases, revealing for the first time a number of genes that increase the risk of disease. The UK Biobank project, launched in 2002, is further exploring the role of genes and environment in health in half a million people in Britain.
The Trust continues to work with partners to fund research into tropical diseases through its Major Overseas Programmes in Thailand, Vietnam, South Africa, Malawi and Kenya. In 1997 it gave award-winning researcher Dr Helen Lee £2.1m to develop an on-the-spot chlamydia test kit to use in isolated communities in the tropics. And in 1998 it helped to establish the Multilateral Initiative on Malaria to promote and coordinate scientific research into malaria across the globe.
To ensure the fruits of the research it funds are translated into new therapies and technologies that will improve health, the Trust set up its Technology Transfer division (originally Catalyst BioMedica) in 1998. Following the discovery of the BRAF gene by Sanger Institute scientists, it launched a collaborative drug discovery project with the Institute of Cancer Research to find novel inhibitors of the BRAF enzyme. In 2005, the Trust launched its Seeding Drug Discovery initiative, to support the development of new small-molecule drugs. And in June 2009 the Trust and the Engineering and Physical Sciences Research Council announced joint funding totalling £41m for four new UK Centres of Excellence in Medical Engineering, which will develop innovative health solutions.
The single biggest element of the Wellcome Trust's funding portfolio is support for biomedical research, through our Fellowship schemes, Investigator Awards and Strategic Awards. Among the many achievements of Wellcome Trust Fellows was Professor Eleanor Maguire's discovery that London taxi drivers have larger-than-average hippocampi in their brains, as a result of learning 'The Knowledge'. The research, published in 2000, was the very first to show that brains of adults can grow in response to specialist use. Professor Maguire receive the 2008 Royal Society Rosalind Franklin Award for her work on mapping memory in the brain.
Exploring science and culture
Fascinated by the art and science of healing throughout the ages, Henry Wellcome had collected books and objects on a colossal scale: by the time of his death, his collection of around 1.5m items dwarfed those of Europe's most famous museums. This has inspired the Trust's work in the history of medicine, biomedical ethics and public engagement.
The Trust bought Wellcome's library and museum from the Foundation in 1960, for around £3m, and in 1968 combined the two to form the Wellcome Institute for the History of Medicine, to help to reinforce their academic status. The prolific writer Professor Roy Porter joined the Institute as a lecturer in 1979, where he pioneered a new approach to the history of medicine, focusing on the perspective of patients over doctors. With consistent funding from the Trust since 1966, the history of medicine has developed into a vibrant field of research. This has been complemented by the Trust's Biomedical Ethics Programme, set up in 1997 to support research into the ethical, legal, social and public policy aspects of developments in biomedical science.
The Trust has also become well known for its innovative and wide-ranging public engagement programme. Established in 1990, this has funded many different activities that bring science to life, and aim to get people thinking about and discussing biomedical science and the ways it might influence or change their lives. One such project was 'Primitive Streak', an exhibition at the Eden Project in Cornwall in August 2002. A joint venture between erstwhile 'enfant terrible' of the fashion industry Professor Helen Storey and her sister, developmental biologist Dr Kate Storey, this project comprised 27 garments illustrating the first 1000 hours of human life before birth - the first stages of embryonic development.
Increasing school students' interest in and enjoyment of science has been a key strand of the Trust's public engagement programme. It has provided £25m to fund the National Science Learning Centre, the hub of a new £51m national network of Centres dedicated to high-quality professional development of science teachers.
The Trust's new headquarters, the Gibbs Building, opened in 2004, and the Wellcome Building, renamed Wellcome Collection, is now a public venue that includes exhibition spaces, meeting areas, a café, a bookshop and the Wellcome Library.
Henry Wellcome's influence, which made the UK a world leader in pharmaceutical manufacturing and marketing during his lifetime, is mirrored today by that of the charitable foundation made possible by his death. Independent of commercial and political interests, the Wellcome Trust exerts a powerful influence on the research landscape in the UK and beyond, dedicated to achieving extraordinary improvements in human and animal health.