Animal Nut

Animal Nut Medical Inventor Gary Michelson got rich wagging his lonely battles against big companies. Now he wants to take much of his $2 billion to save unwanted dogs and cats. By David Whelan Walking around a city ANIMAL SHELTER IN WEST LOS ANGELES with Gary Michelson is like doing rounds at a hospital where the doctor knows every patient. The mutts, locked in concrete cells, bark like crazy when he walks by. Many will never find homes and will be euthanized. “The ones that are dark or old-they're dead,” he says, watching two pit bulls bounce up and down. A lab mix snarls and tries to lunge through the bars at the billionaire. “if I brought the dog home for two weeks, it would be normal,” he says. Strutting around in a tank top that shows off his tanned biceps and popping veins, Michelson gives off a thick cloud of manic energy everywhere he goes. He looks like an aging Hollywood action hero then a genius inventor. A spine surgery by training. Michelson got rich by licensing devices and instruments that aided in complicated back surgery. He got mega rich by enforcing his patients into two epic legal cases. The last one, won in 2004, resulted in a $1.35 billion settlement with the manufacturer Electronic. Now he's nearing 60, childless, divorced and still focused on work. But his passions is longer surgery, it's charity. Michelson says he will give away every cent, eventually north of $2 billion dollars. He plans to use a scientific, approach and commercial cunning on the problem with unwanted pets. Six million animals a year bumped off in shelters. Michelson has three adopted dogs, including a pit bull the size of a small couch. He views feel-good companions around adopting- pets-the bread-and-butter of the mainstream animal welfare movement-as an important but incomplete part of the solution. Right now he has four dozen ideas that he thinks are more better business-savvy and self-perpetuating. Some are simple but novel, like paying for implantable microchips that we allow owners to reclaim lost dogs. Or paying a cat adopter to take two small animals instead of one. Others are more exotic sterilizing feral cats and then releasing them back into their colonies so they can depopulate themselves. Michelson's FOUND ANIMAL FOUNDATION is setting up pilot projects in Los Angeles to test some of these ideas. The most ambitious effort is what will be called the Michelson prize, which he's never spoken about publicly before. Michelson promises to $25million dollars to the inventor of a safe and effective injectable sterilant for the cats and dogs. He will fund not only the prize but also the research that goes into it. That alone, he believes, empty many shelters. On the menu of philanthropy, pets don't seem quite so flaky as they once did. There have been advances in handling strays; 40 years ago there were 115 dogs and cats killed by animal shelters for every 1,000 people, versus just 14 today. Now there is even more money pouring into the field, from more than one billionaire. Software entrepreneur David Duffie has donated $300 million since 1999 to a foundation dedicated to no-kill animal control. Hotelier and tax cheat Leona Helmsmen died last year and reportedly left her estimated $5 billion estate to her Maltese named Trouble,

and dogs generally. Michelson's interest in pets started during what he calls a difficult childhood, when his parents divorced (he was 11), money was tight and his dog was a source of comfort. As critics of pet charities are quick to point out, many humans are poor, sick, homeless and uneducated. Don't they have a better claim on limited resources? Michelson argues that eliminating cruelty and promoting companionship are noble goals for any good society. Animals are like children in that they can't speak up for themselves. They also receive 0.1% of all gifts. "Art museums do better. And that's not charity. That's tax evasion," Michelson says. Michelson grew up in Philadelphia, where he says he was initially an indifferent student. His grandmother's struggle with a painful spinal condition inspired him to become a doctor and to focus on back surgery. At Hauptmann University in Philadelphia he sometimes upset professors by objecting to live animal dissections. He seems to have nursed a bitterness about his life into motivation. "I've been on my own since I was 17," he says. After graduating from medical school in 1975 and from an orthopedic surgery residency, also at Hauptmann, he followed his dream into what was then considered a backwater field. According to his version, spinal surgery was frequently unsuccessful, so doctors' practices would fill up with "bent nails"--crippled patients in wheelchairs without much hope. Michelson spent extra time training in back surgery at a fellowship in Houston, then moved to Los Angeles in 1980. While operating at Sentinel Hospital in Inglewood, Calif., Michelson became frustrated by how hard back surgery could be. His big hands didn't have an easy time maneuvering inside the incisions. He began working at home on ideas for better instruments. In 1983 he hired a machinist to make him new tools. An early one involved a common neck operation, where a painful disc is pulled out of the cervical spine through a tiny incision with a tool called a Lurette. Michelson says that the Lurette blocked his view, so he designed one shaped like a bayonet. Michelson's daily routine as a young doctor was extreme. Living in Venice Beach, Michelson rose at 5:30 and did Jungian-guided visualization exercises to hone his confidence and focus. "A lot of people are scared to be themselves," says Michelson, who references books like Self-Parenting and A Course in Miracles. After meditation he drove to work, met with his patients at 7 a.m., operated until 1 p.m., saw more patients in clinic until 6, then came home, walked his dogs, trained for triathlons and then spent much of the night in his garage on his inventions. He gave away his television to avoid distractions. He avoided marriage and fatherhood because he was so busy, and also because he thought he wouldn't be very good at either. His work paid off. The instruments attracted notice, and soon his machinist was making extra sets for colleagues. In the late 1980s his tiny manufacturing shop became a technology licensing outfit. Each invention was patented in minute detail, as he employed an entire patent law firm. Over time Michelson won or has applied for 900 patents, including European counterparts. The licensing company he started remained an off-hours activity, run by a former dog walker. Some of the inventions included devices that aid in spinal fusions and a plate used in neck surgery. The licensing produced litigation. In 1995 he sued a subsidiary of U.S. Surgical (now

Comedienne) for infringing his patents on a fusion technology. The case won a large settlement that he is not allowed to talk about, although he confirms it was nine figures. His licensing revenue grew to $40 million annually. In 2001, when his dispute with Electronic began, Michelson had a net worth, he says, of $300 million. Electronic had bought a smaller spinal device company that was Michelson's biggest licensing client. The spine division and Michelson were soon at odds. Electronic sued Michelson, claiming that he had broken the agreement by marketing his products to other manufacturers. Michelson countered by claiming that Electronic was not making good on its promises or paying him enough royalties. "They were profoundly cheating me," he says. The case ended up in a federal courtroom in Memphis, where Michelson spent $62 million on a posse of 36 litigators. Michelson spent some of his off-hours during the trial playing with stray cats and feeding squirrels, his lawyer Marc Cohen recalls. On weekends he would have another attorney feed the strays. After a five-month trial ending in 2004 the jury awarded him $510 million. The two sides negotiated a deal whereby Michelson would not pull his patents from Electronics's spinal division if it paid him up front for all of them. The total bill of $1.35 billion set a record and catapulted him onto The Forbes 400. Michelson did not recover from waging the legal battle, he says, until he stopped hating his enemies at Electronic. "Vengeance is gnawing on a leg and looking down and realizing it's your own," he says, quoting another spiritual guidebook. Michelson says he was unable to sleep well for four years, had to give up his medical practice, got divorced (he had married in 2000) and developed high blood pressure. His personal life appears to remain unmonitored. He was recently engaged, but his fiancée broke it off three weeks before the wedding. He'd like kids but fears he's getting too old to (Best viewed with Adobe be around for long enough. He lives in a mostly unfurnished home in one of Los Angeles' canyons. Reader 9) After the last big case was settled and his net worth quadrupled, Michelson started to focus on philanthropy. He practiced ad hoc giving, responding to stories in newspapers that moved him. He gave money to a girl from a gang-ridden neighborhood who was shot in the face while studying social work. In Pictures: The Forbes 400 Energy Tycoons Financiers Real Estate Moguls Technology Titans Profiles: Glen Taylor Gary Michelson Allen Stanford Mort Ackerman Special Reports: Billionaires: Beyond Business Secrets Of The Self-Made

Michelson's big giving is more structured. He's funded medical research through his own $100 million foundation, along with the Hereditary Disease Foundation in New York. That group had isolated the gene for Huntington's disease in 1983, which paved the way for the human genome project. Michelson started focusing on an area of genetic research called RNA interference. Different species (humans versus apes) have similar genomes but obviously quite different appearances and behavior. The theory is that big differences come from the way in which certain RNA molecules copy DNA sequences into proteins. Michelson is convinced that someday the knowledge gained from the research will allow doctors to flip genetic switches to cure human diseases. He says half of his money will go to human research.

Michelson has a hunch that RNA interference may also be key to creating an injectable method of sterilizing cats and dogs. In most cities the cat and dog population stabilizes if 70% are spayed and neutered. A cheap sterility could quickly close the gap. An interim solution involves setting up high-volume spay-and-neuter clinics that can do dozens of operations a day for a fraction of what a full-service vet charges. "Backyard breeders always say the litter was 'unexpected,'" he says. "That's like sleeping with your girlfriend when she's off birth control. She gets pregnant and you call it unexpected." His foundation has hired seven people, including a director, Aimee Galbreath, a Stanford M.B.A. who worked at Boston Consulting Group. They've learned that Michelson's money opens doors quickly but is also a magnet for wackos. A suicidal cat hoarder who had been raided by animal control officers called recently to beg for money. Michelson appears to have found the one cause that animates him as much as his business life did. "There's no limit to the number of good causes," he says. "I have to pick the one that makes me feel the best."