(FORTUNE Magazine) – CAUTIOUS CLINICAL investigators fear the familiar phrase ''cancer breakthrough'' almost as much as laymen dread the word cancer itself. Surgery, chemicals, and radiation have so far failed to win the long, frustrating war against the killer disease, and hopes of a sweeping cure raised some years back by interferon have yet to be realized. But these days even the most careful researchers are having trouble containing their excitement about a striking family of biological compounds as a way to treat cancer. So powerful are the new weapons that many clinicians believe the odds in the struggle against cancer will soon be tipped in favor of the patient. Until recently scientists thought of cancer as a hundred different diseases, each requiring treatment by a different chemical. But they have now discovered how to use a small group of substances produced by the body's own immune system to control all cancers. Researchers have found they can either bolster the immune system by activating natural killer cells, or use copies of other substances the system produces to destroy tumor cells directly. Perhaps these substances already prevent many people from getting cancer; perhaps they fail in others because the body isn't making enough of them to stop the disease from developing. No one is yet certain. The first results of treating cancer patients experimentally with the new approach are impressive. The treatment has produced remission -- where no sign of cancer can be seen nearly a year later -- in patients whose cancer was so far advanced that they no longer responded to chemotherapy or radiation. They would otherwise have died in a few months. The investigators responsible for those successes are at the National Cancer Institute in Bethesda, Maryland, and led by the chief of surgery, Steven A. Rosenberg. In his first study Rosenberg is reported to have obtained remissions in half of 30 critically ill patients. Two were totally free of cancer about nine months after the initial month-long treatment; in the other 13 patients tumors shrank by more than half and stayed that way at least a month after treatment. That kind of result is unheard of with cancer drugs. At best, clinicians consider a new drug promising if they get positive results in 10% to 15% of cancer patients. Rosenberg's secret is to give patients massive doses of an immune system activator called Interleukin-2, IL-2 for short, together with a patient's own activated cancer-killing cells. He first withdraws about 10% of a patient's white blood cells and mixes them with IL-2. Then he injects the cells and large doses of IL-2 back into the patient. The IL-2 multiplies the killer cells in the patient's body, which start attacking the tumor. There are side effects: fever, chills, malaise, and sometimes a swelling of the spleen. But they are bearable, and they stop when the treatment ends. By contrast, chemotherapy and radiation can cause hair loss, nausea, and inability to eat for as long as a week. Because they also interfere with production of blood cells by the bone marrow and thus suppress the immune system, those treatments set off secondary cancers in 15% of patients. Surgery, the other standard approach, works in some cancer cases; Rosenberg used this method in July when he served on the team that excised a large portion of President Reagan's colon to remove a small cancerous growth. But surgeons can never be sure that some cancer cells have not been left inside the body, where they can resume their malignant course. What particularly excites scientists about Rosenberg's results is that Interleukin-2 works across a broad range of solid tumors -- in the lungs, colon, and elsewhere. Unlike leukemia, for example, such tumors -- the most devastating of all cancers -- are notoriously resistant to conventional therapies. Eager to stick to scientific protocol, which requires an experimenter to publish results in a scientific journal before discussing them publicly, Rosenberg refused to be interviewed for this article. He has said only that he is ''excited and optimistic'' about some things he has done with IL-2. Enough data have leaked out around the cancer research circuit, however, to suggest not only that Rosenberg's results are striking, but also that they mark a milestone in medicine -- the first successful and reliable enhancement of a major part of the human immune response system. ''The beauty of Interleukin-2 is that everything works very logically,'' says Roland Mertelsmann, a hematologist who leads a big IL-2 project at New York's Memorial Sloan-Kettering Cancer Center. ''So far, at least, the things we've predicted with a grain of salt have happened. Here we have an agent where we think we know what it's doing'' -- not always the case in modern medicine. Another beauty of the approach is that IL-2 is not the only highly promising anticancer agent of its kind. Moving in right behind it are other potent new weapons called tumor necrosis factor and colony-stimulating factor, as well as about a dozen other biological substances that show promise in combating tumors. Because the immune system is so central to maintaining health, medical researchers expect these substances to be extremely useful in fighting many other diseases -- among them rheumatoid arthritis, multiple sclerosis, and even allergies. Laymen, especially those affected in any way by cancer, understandably want the gap between the promise and the availability of a new treatment bridged quickly -- especially when the treatment is as promising as IL-2. Scientists are necessarily more cautious. Many note that as much as five to ten years of observing patients will be needed to determine whether IL-2 can cure cancer permanently. Tumors have recurred in people treated with IL-2 after treatment was stopped. In all cases, the cancer disappeared again with further doses. But it isn't yet clear whether cancer patients will need lifetime doses of IL- 2, as diabetics do of insulin -- or even whether the treatment will work for everyone who gets cancer. WHILE FDA approval of IL-2 is not expected before the end of 1988, a variety of companies -- notably Cetus Corp. of Emeryville, California, Genentech Inc. of South San Francisco, and Immunex Corp. of Seattle -- have patented processes and products altered by genetic engineering, positioning themselves to capitalize on the new discoveries. Cetus's president, Robert A. Fildes, thinks the worldwide cancer therapy market will triple from its current $1 billion a year in five to ten years. Clinicians rightly fear the spread of false hopes that IL-2 has already arrived as a cancer cure. The scientists want to see Rosenberg's results confirmed in other studies, a process now beginning. Moreover, Rosenberg's approach is costly and requires patients to remain in bed, often for a month at a time. Still, the promising signals continue to flash. Researchers elsewhere -- at Sloan-Kettering, the M.D. Anderson Hospital and Tumor Institute in Houston, and other institutions -- are hoping that subtler manipulation of the immune system with smaller doses of IL-2 can produce similarly impressive results. They are gradually raising the doses of IL-2 without taking the complex step of injecting patients with activated killer cells, as Rosenberg does, and they are beginning to see tumors shrink and in some cases disappear. So far the only published results of such work have come from a group at a hospital in Bologna, Italy. Late last year these researchers reported giving relatively high doses of IL-2 to six bladder cancer patients, obtaining complete tumor regression in three patients and 70% regression in two. In the sixth patient, whose bladder was removed surgically for other reasons, they observed massive destruction of the tumor. Rosenberg recently began administering high doses of IL-2 alone to several patients, reportedly achieving partial remission in one case. Most of the substances that have scientists excited belong to the family known as lymphokines -- a word formed from a contraction of lymphocyte, a type of white blood cell, and kinein, Greek for ''to move.'' Lymphokines are produced in minute amounts by white blood cells in response to an external challenge, such as the appearance of cancer cells. They move from cell to cell telling the immune system how to cope with the threat. Two types of interferon, alpha and gamma, are classed as lymphokines because they are produced by white blood cells. Interferon first appeared in the late 1950s and was subsequently hailed as a miracle drug against cancer and viral infections. Once genetic-engineering companies were able to use recombinant DNA techniques to mass-produce the three major types of interferon, large- scale clinical testing became possible. But the testing achieved only what , Evan M. Hersh, chairman of the clinical immunology department at the M.D. Anderson center, calls ''modest success'' -- never anything resembling the results Rosenberg and the Italians have had with IL-2. The most versatile of all the lymphokines may be IL-1, which performs more functions in the body than the others. (IL-1, released into the blood- stream by a variety of lymphocyte, stimulates production of IL-2.) At least two types of IL-1 exist; those identified so far are called alpha and beta. Both encourage production of a lymphocyte that makes protective substances known as antibodies. Alpha IL-1 also makes skin cells proliferate and stops bleeding of the gums; product developers are talking about putting IL-1 into bandages, toothpaste, suntan creams, and acne medicines. Paradoxically, too much IL-1 or IL-2 can be a bad thing. Because both exacerbate inflammations, Immunex is working with the bigger drug company Syntex on antidotes to them that could act as antiarthritic agents. One possible antidote is the IL-2 receptor -- the docking structure on lymphocytes to which IL-2 attaches in order to activate them. Immunex scientists have cloned the receptors and are looking into them as possible medications, chiefly for rheumatoid arthritis. The synthesized receptors would act as sponges to soak up excess IL-2 in arthritic joints. Alpha interferon has shown itself useful for the treatment of hairy cell leukemia (a rare variant that gets its name from the ciliated appearance of the cells). Alpha and gamma interferons are also somewhat effective against three or four other fairly rare types of cancer, including Kaposi's sarcoma, which afflicts some people who have AIDS (acquired immune deficiency syndrome). AMONG OTHER promising lymphokines, tumor necrosis factor has been shown in test-tube and animal experiments to explode cancer cells and leave normal cells untouched (see photograph, page 21). Like IL-2, it works against a whole range of cancers. U.S. researchers have just begun tests to establish safe dosages and work out the best ways to administer the chemical; in Japan tests have been going on for some months. Tests of colony-stimulating factor, the third family of the new lymphokines, are scheduled to be performed on cancer patients early next year. Dazzling advances in knowledge of how the immune system works permitted researchers to identify the lymphokines. They can now pinpoint the very molecules that make up components of the immune system and are beginning to understand how they work in concert. At the same time, genetic engineering makes it possible for companies such as Cetus, Genentech, and Immunex to extract the components, synthesize them, and mass-produce them using recombinant DNA. The immune system is a highly complex, three-tiered orchestra that uses a variety of instruments to play the body's defensive music. One section of the orchestra is the so-called humoral antibody system, in which white blood cells known as B lymphocytes manufacture protein particles called antibodies. The antibodies attach themselves to invading foreign cells, including tumors. Sometimes antibodies kill the invaders directly; sometimes they alert other components of the immune system to come in and finish the job. (The B in B lymphocytes comes from the bursa of Fabricius, a lymphocyte-producing organ in chickens, where the cells were discovered.) The second section of the body's defensive orchestra is the T (for thymus- dependent) lymphocyte cellular immunity system. Derived from cells in blood- making tissue, T lymphocytes take many forms, including helper, killer, and suppressor cells. The system's workings are extremely intricate. Cells called helper T cells stimulate B cells to proliferate and secrete antibodies. A second variety, killer T cells, puncture and destroy cancer and virus- infected cells. And suppressor T cells regulate killer T cells by releasing a lymphokine that attaches to the killer cells and neutralizes them. Killer T lymphocytes spring into action when challenged by the appearance in the body of cancer cells, viruses, bacteria, and other hostile substances. Rising to the challenge, the killer cells start releasing minute amounts of Interleukin- 2, which then commands other cells to multiply. The immune-system orchestra's third section consists of macrophages, scavenger cells that recognize the foreign substances that antibodies have attacked and then help dispose of the debris. But macrophages are more than microminiaturized garbage trucks. They can also kill cancer cells outright, and they interact with intruders to make them recognizable to killer T cells as targets. Moreover, when properly stimulated, macrophages synthesize and secrete such toxic substances as tumor necrosis factor, which also kills foreign invaders. Colony-stimulating factor is the counterpart of IL-2 in this section of the orchestra; it encourages macrophages to proliferate, just as IL-2 stimulates lymphocytes. Many of the immune system's elaborate processes are not yet fully understood. Administration of IL-2, for instance, also makes T lymphocytes release gamma interferon and a variety of tumor necrosis factor. Through a delicate cascade of biochemical events, IL-2 activates still another class of white blood cells, called native killer cells, that strike at tumors. The immune system thus attacks tumor cells with an array of weapons. YET CANCER CELLS have ways of outwitting even such fully functioning multiple defenses. The incidence of cancer soars after age 40, when parts of the immune system may have begun to fail; people with advanced cancers are known to suffer from a shortage of lymphocytes. But cancer also strikes young people, even children, with intact immune systems. In these victims cancer cells may escape detection and destruction because their surfaces don't differ much from those of normal cells. Whatever the failures of the system, IL-2 seems to overcome them by mass-producing killer T cells. And apparently the more IL-2, the better. So far neither IL-2 nor interferon has done much for AIDS victims, who provide an extreme example of what happens when the T part of the immune system is almost totally destroyed (by a virus, in this case). There's hope, though, that lymphokines such as IL-2 may help them in a very early stage of the disease by restoring their immune systems. In later stages of AIDS, antiviral drugs and IL-2 may work in combination. Studies are under way at the National Cancer Institute, San Francisco General Hospital, and elsewhere. Not many doubts remain that lymphokines can be effective against cancer and that they work ''logically,'' as Sloan-Kettering's Mertelsmann puts it. Besides more extensive clinical trials of IL-2 and its cousins, the next step is to devise relatively simple treatment programs. Researchers are eager to show that the lymphokines can be made to work without the complications of Rosenberg's approach. For one thing, Rosenberg's patients must be hospitalized while undergoing treatment. ''It would be hard to picture Rosenberg's work as a generalized treatment for cancer because of the complexity, skill, and cost involved in that system,'' says Mertelsmann. Adds Stephen A. Duzan, president of Immunex, ''That type of technique may work at a sophisticated clinical center, but not at a community hospital in suburban Seattle.'' Other researchers disagree: they think that regular blood transfusion equipment, widely available in hospitals, could be used to administer Rosenberg's treatment if it turns out that giving IL-2 in conjunction with activated killer cells is the only approach that really works. A substantial effort is already under way at the National Cancer Institute (NCI) to streamline the Rosenberg procedure so that it could be applied by doctors everywhere. Says Dan Longo, an immunologist who directs NCI's biological response modifiers program, ''We're working on that as fast as we can.'' NCI is trying two approaches. In the first, a semiautomated system would pump cells out of the body for treatment and then pump them back in. In the second, ready-to-use lymphocytes would be grown in vast numbers and given to a patient without the need to remove any of his own cells. Somewhat less restrained than the researchers, commercial exploiters of lymphokines are already anticipating a great future for their products. Though he won't predict the size of the potential market, Genentech's chief executive, Robert A. Swanson, says his company aims to be first out with tumor necrosis factor. For the near term, Genentech has chosen to emphasize tumor necrosis factor and gamma interferon instead of IL-2 because it feels that these drugs can be developed faster, using molecules that act on cancer cells more directly than IL-2 does. (Similarly, Biogen of Cambridge, Massachusetts, is concentrating on interferons at the outset.) CETUS and Immunex are taking a broader approach. ''We are effectively mining the immune system from every angle,'' says Cetus President Fildes. In addition to IL-2, Cetus is preparing to test tumor necrosis factor, a type of colony- stimulating factor, and beta interferon in cancer patients. The company will also try out immunotoxins, which are genetically engineered antibodies linked to potent toxins designed to seek out and kill cancer cells more specifically than conventional chemotherapy can. Fildes believes that Cetus, with revenues now running about $45 million annually, will grow to become a $400-million-a- year company by 1990 or 1995. Neck and neck with Cetus is four-year-old Immunex; unlike Cetus and Genentech, which have many other biotechnological fish to fry, its staff of 125 works strictly on lymphokines. At this point Immunex is doing only research and development, but it has a powerful partner in the Swiss giant Hoffmann-La Roche, which manufactures IL-2 using a process devised with Immunex. An Immunex variant of colony-stimulating factor -- one of seven variants known -- will be tested soon on cancer patients in Europe by Behringwerke, a Hoechst subsidiary. The colony stimulating factors may have an important role of their own in cancer treatment. While IL-2 acts broadly on the immune system, some colony-stimulating factors are much more specific in mobilizing macrophages -- the branch of the immune response that IL-2 has the least effect on. Indeed, a weakness in macrophage response could be the reason that half the patients in Rosenberg's studies did not respond to IL-2. Rosenberg is now beginning to test colony-stimulating factor and macrophages activated by it on a group of patients. Immunex is also investigating factors that make B cells multiply; those factors are expected to constitute yet another stage of lymphokine products. Many other companies in the U.S., Japan, and Europe are working on lymphokines. Interleukin-2 Inc., a small Alexandria, Virginia, company, is banking on natural IL-2, extracted from blood cells. But almost everyone else is going with the recombinant variety, which can already be made in virtually unlimited amounts. Du Pont, for instance, is interested in IL-2 as a possible drug, and also because the company could become an apparatus supplier if the Rosenberg method finds wide use. Today more than one American in five dies of cancer. Even if lymphokines live up to only half of their promise, there will be a lot of joyful faces -- not only in the research clinics and in the boardrooms of companies well placed to profit from the breakthrough but also, even more important, in countless households that the disease will touch. BOX: INVESTOR'S SNAPSHOT GENENTECH SALES (LATEST FOUR QUARTERS) $73.0 MILLION CHANGE FROM YEAR EARLIER UP 35% NET PROFIT $3.5 MILLION CHANGE UP 124% RETURN ON COMMON STOCKHOLDERS' EQUITY 1.8% FIVE-YEAR AVERAGE 1.2% RECENT SHARE PRICE $49.50 PRICE/EARNINGS MULTIPLE 206 TOTAL RETURN TO INVESTORS (12 MONTHS TO 10/25) 68% PRINCIPAL MARKET OTC CETUS SALES (LATEST FOUR QUARTERS) $45.4 MILLION CHANGE FROM YEAR EARLIER UP 27% NET PROFIT $1.2 MILLION CHANGE UP 23% RETURN ON COMMON STOCKHOLDERS' EQUITY .9% FIVE-YEAR AVERAGE .4% RECENT SHARE PRICE $16.25 PRICE/EARNINGS MULTIPLE 325 TOTAL RETURN TO INVESTORS (12 MONTHS TO 10/25) 54% PRINCIPAL MARKET OTC IMMUNEX SALES (LATEST FOUR QUARTERS) $2.3 MILLION CHANGE FROM YEAR EARLIER UP 116% NET LOSS $3.7 MILLION CHANGE LOSS YEAR EARLIER RETURN ON COMMON STOCKHOLDERS' EQUITY -29% FIVE-YEAR AVERAGE -19% RECENT SHARE PRICE $5.50 PRICE/EARNINGS MULTIPLE N.A. TOTAL RETURN TO INVESTORS (12 MONTHS TO 10/25) 13% PRINCIPAL MARKET OTC Explanatory notes: page 200