(FORTUNE Magazine) – Picture prizefighter Hector "Macho" Camacho showing up at high tea. That was the effect one day in May as Bill Haseltine, CEO of Human Genome Sciences, hopped out of his limo at a Washington, D.C., hotel and burst into a meeting of dermatology researchers to give a keynote talk. It was his usual masterly spiel, a glimpse of how genomics is transforming medicine. But the liveliest parts had as much to do with the sweet science as with gene science. Haseltine fired punches at his favorite adversaries of late, the celebrated decoders of the human genome, whose work he says is vastly overrated. One jab that drew chuckles: "You may have read that you're not much different from a flatworm," he told the crowd, referring to the decoders' startling claim that our set of genes isn't much larger than that of worms. At Human Genome Sciences, "we don't think so."

In fact, Haseltine says his Rockville, Md., company has found more than 90,000 human genes. In contrast, both the government-funded Human Genome Project and Celera Genomics, the Rockville company that mounted a parallel effort to decipher the genome, recently estimated that we have only about 35,000 genes. The dispute has big implications. If Haseltine is wrong, his company may have wasted millions of dollars trying to patent genes that don't exist. If he's right, the genome projects may be no better than "reading smudged text through foggy glasses," as Haseltine recently put it, when it comes to identifying genes.

Haseltine is a formidable verbal pugilist, and we're only at the cheek-dusting stage when he implies that his adversaries would have us believe that we're basically glorified worms. Here's the haymaker: Haseltine contends his company has long since left Celera and its ilk in the dust in finding and patenting the subset of genes that really matter in medicine. Indeed, he adds, regardless of who's got the most accurate gene count, the decoders' efforts are "a meaningless footnote to a revolution that is well under way."

When Haseltine lashes out like this, you can almost see the sweat exploding off J. Craig Venter's chin. Venter, Celera's outspoken president, happens to be Haseltine's chief rival for the title of Prime Mover of the Genomics Revolution.

Their high-profile mano-a-mano thing isn't, at its most vital level, about gene counts or patent rights or even, ultimately, the relative prestige of these two brilliant, bigmouthed biologists. What truly matters here is whether major payoffs from genomics are nearly upon us, thanks to an approach spearheaded by Haseltine's company to quickly find genes and develop drugs, or unlikely to arrive for many years, as scientists sift gems from the mind-boggling mountain of data heaped up by DNA decoders like Venter. This issue has major implications for rapidly biodegrading organisms like us, who need all the preservatives we can get. How it plays out could also make biotech and pharmaceuticals stocks rock, or drop like rocks, over the next few years.

A decade ago Haseltine and Venter were not foes but partners. They joined forces to launch the first major effort to rapidly ferret out and analyze the functions of thousands of genes--that's what genomics is all about. Soon after they had a rancorous split and wound up pursuing radically different strategies. So far Venter's approach--cataloging the sequence of all three billion chemical letters in our DNA, of which only about 3% compose actual genes--has captured the limelight. Indeed, Venter seems well on his way to getting his name in history books, right after Mendel, Darwin, Watson, and Crick.

Haseltine is deeply irked by the way he's been shoved from center stage. Sequencing the whole genome is "like sending a man to the moon," he contends. While it has "poetic value," its payoff for patients is many years away--just ferreting out the valuable 3% of DNA that encodes genes from the surrounding "junk DNA" will take years. Meanwhile, Haseltine has led a crash effort to develop drugs from genomics by using a method for plucking important genes from cells without all the complicating junk--a pursuit he compares to "putting a communications satellite into earth orbit."

Since the mid-1990s, six medicines from Haseltine's company have advanced to human trials. The three for which initial patient data are available have all shown promise. Haseltine boasts that his company's productivity is 20 times the pharmaceuticals industry's average for early-stage drug development. That may be hyperbole, but there's no doubt Human Genome Sciences has churned out gene-based medicines at a phenomenal rate, including experimental therapies to heal chronic wounds, lessen cancer drugs' side effects, and boost the immune system.

Now HGS is beginning a critical phase that will put Haseltine's vision to the test--its first drugs will enter key efficacy tests over the next couple of years and potentially will be submitted to the Food and Drug Administration for marketing approval around mid-decade. If this first crop of genomics-based medicines mostly succeeds, Haseltine, 56, will be hailed as the Bill Gates of biology, and his stake in HGS, now worth some $500 million, could easily double or triple, making him genomics' first billionaire.

A series of failures at HGS, on the other hand, would be bad news not only for Haseltine but also for the entire biotech sector. Many major players in biotech are betting heavily on the automated mass genetic analyses his company has pioneered. A series of failures would also be a downer for big drug companies, which are counting on a spate of genomics-based drugs to avert looming profit shortfalls. Says venture capitalist Alan Walton, whose Oxford Bioscience Partners was one of Human Genome Sciences' founding investors: "If HGS's first drugs should fail, the public, and certainly Wall Street, will say, 'See, all this excitement about genomics has led nowhere.'"

Many Haseltine watchers wouldn't mind seeing him on the ropes--the man has a knack for making enemies and at times seems to go out of his way to rile them. His older sister, Florence, has a theory about that: "Bill is able to do two things most people can't. First, he's able to create enemies when they don't really exist. [Second,] he uses the energy of fighting against them to achieve his goals.

"Sometimes," she continues, "the enemies do exist. Sometimes he's fighting the establishment. But when I have enemies, I feel that if I keep them in my head, it's wasting my time. His approach is, 'I'm going to one-up them.'"

Lest you think this is merely envy talking, consider that Florence is every bit as formidably accomplished and, in different circles, as renowned as her brother. An M.D./Ph.D., she directs the Center for Population Research at the National Institute of Child Health and Human Development. At the same time, she has reared two daughters, founded a company that makes equipment for disabled people, and formed the Society for Women's Health Research, a national group that pushes the medical world to pay more attention to women's issues. She shares the Haseltine wit and brass: "When people ask do I know Bill, I just tell them, 'He's known me his whole life.'"

On the question of William Alan Haseltine's salient traits, Florence, and virtually everyone else I consulted, began by noting that he is not just bright and driven, but very, very bright and driven. Haseltine himself, who has all the humility of a typhoon, is rather explicit on this issue. You can't be around him long without learning that four of his mentors were Nobel laureates, that he has co-authored more than 200 scientific papers, that he is listed as an inventor on some 50 patents, that his research as a virologist at Harvard paved the way for AIDS drugs that have saved millions of lives, and that he was the first to clearly grasp how genomics would change the world.

You also soon learn that his friends include luminaries such as Harvard President Larry Summers, publisher Mort Zuckerman, former U.S. Ambassador to the United Nations Richard Holbrook--in fact, as I followed him around one day recently, names sometimes dropped so fast I couldn't get them all down--Boydon Gray, Daniel Golden, Joel Klein, John Newhouse, Beverly Sills Greenough...Not least in the glittering circle is Haseltine's wife, Gale Hayman, co-founder of the Giorgio Beverly Hills boutique.

The impressive friends-of-Bill list attests to another key trait--when not in one-upping mode, Haseltine can be quite charming. When I arrived about 7 A.M. at his stately Civil War-era house in the tony Georgetown district of Washington, D.C., the half-billionaire answered the door wearing an apron--he was fixing scrambled eggs and bacon for us. As the coffee brewed, he launched into his trademark Renaissance-man routine, delving into the art of Bali, the biophysics of DNA, the steadfastness of the slant-six Plymouth Valiant, the beauty of the weeping cherry tree, the consoling power of Camus' "The Myth of Sisyphus," the likely advent of immortality before 2100, the trouble with Boston's Big Dig. ("You know what happens when you depress a major artery?" he suddenly asked, referring to the endlessly snarled effort to put Beantown's central freeway in a tunnel. "Brain death!")

Haseltine's Renaissance routine just doesn't quit. The walls at Human Genome Sciences are lined with dozens of prints of famous paintings, from Botticellis to Picassos, each personally selected and placed by the boss. The annual reports are also chock-a-block with masterworks, which he juxtaposes with photos of company executives posed to resemble figures in the paintings. Haseltine says it all conveys a message: Gene researchers share the visionary passion that informs great artists' work. Expanding on this theme, he recently announced plans to fund a foundation for "medical sciences and the arts." When I asked what its mission would be, he replied, with no apparent irony, "To help create more people like me."

You'd think a person who says things like that would be a wild bore. Two things save Haseltine from that fate. He really does seem passionately interested in all his mental acquisitions, and he has a rare gift for seizing on and articulating what matters about them. These qualities help explain how almost overnight he transformed himself from a professor with no experience as a business manager into the CEO of a company that has a good chance of becoming the next Amgen, the $3.6-billion-a-year biotech behemoth. Says venture capitalist Walton: "Bill has this magic of presentation that I haven't heard anywhere else."

Imagine yourself as a VC in early 1993 listening to Haseltine pitch the then radically new idea for the company he was assembling. "In the normal state, the human organism is self-renewing and self-regulated," he told VCs at a meeting in Naples, Fla. "The growth and renewal processes are, for the most part, controlled by sets of proteins that serve as cellular signals.... All of the genes that regulate these processes will be available for study" by the new company. Thus "it is likely that the current shortlist of bioactive human proteins in clinical use will be increased to include a set of at least 200 to 300 such proteins."

It didn't hurt his cause at the meeting that a delegation from SmithKline Beecham unexpectedly showed up to sign a $125 million deal with his startup. Dwarfing previous biotech partnerships, the deal was the genomics era's big bang.

In the past few years Haseltine has boosted his reputation as a visionary by divining the advent of "regenerative medicine," a term he coined in a 1998 speech that included this summary: "The adult body, with all its diverse structure, has grown from a single cell, the fertilized egg. We understand this process as the consequence of discrete and sequential action of genes on specific cells and tissues. Knowledge of this process should allow us to rebuild damaged organs, tissues, and cells, [and] should permit us to maintain our bodies in normal function, perhaps perpetually."

Haseltine predicts perpetual regeneration won't arrive until after 2070 (damn!), so he's not exactly putting his credibility at risk. Still, he's no armchair futurist--HGS's experimental wound-healing drug, for instance, has shown promising clinical signs of revving up skin cells' regenerative power to heal nasty open sores called venous ulcers. "Bill has this laser focus, and when he sees what he thinks the future should be, it almost becomes a self-fulfilling prophecy," marvels his younger brother Eric, who is no slouch himself as a visionary--a former neurophysiology researcher, he heads R&D at Walt Disney Imagineering.

As if to demonstrate the power of genes, Bill manifested his most conspicuous traits as far back as anyone remembers. During his teenage Tom Swift Jr. phase, he once importantly announced to the family, "Watch out for that thing in the refrigerator wrapped in tinfoil next to the cheese. It's anthrax." Actually it was a culture of bacteria swabbed from a friend's sore throat--he was investigating the germs' ability to break down blood cells.

Science ran in the Haseltine family--Bill's father's father was an MIT grad, and so was his father, who worked as a physicist at the China Lake, Calif., Naval Weapons Center in the Mojave Desert. But Bill's interest in medical science had more to do with illness. At 7 he was bedridden for weeks with inflammation of the heart lining. "The family doctor became a very important figure in my life," he recalls. About the same time, a series of maladies, including detached retinas, incapacitating psoriasis, and severe depression, began darkening the life of his mother, Jean. In 1981, after years of getting by with the help of antidepressants, she took her own life.

Haseltine's plan to be a doctor was deflected by a perceptive physician advisor at Harvard, where he got his Ph.D. The advisor told him to forget med school unless he had a burning desire to be a hands-on healer. Conceding he didn't, Haseltine focused his mental laser instead on viral genetics. A few years later he achieved national renown at Boston's Dana-Farber Cancer Institute as a leader in the desperate scientific race to understand how the newly discovered HIV virus devastated the immune system. Among other things, Haseltine elucidated genes enabling the virus to multiply at killing speed.

Getting tenure at Harvard was another matter. Haseltine's take-no-prisoners competitive style ticked off fellow professors, some of whom tried to block his tenure bid. Eventually he won after a committee examined bridges he had burned with various colleagues and found no evidence of misconduct--it seems that just the friction of contact with Haseltine causes some people to combust. Says John T. Potts, a Harvard Medical School professor who served on the committee: "Bill has a rough, tough, in-your-face personality, and sometimes he operates at the outer edge of acceptable behavior. But you have to take your hat off to him for his sheer volume of accomplishment."

Haseltine concedes he can be rambunctious but attributes the ill will mainly to envy. There may be something to that. Long before leaving Harvard he stood out as one of its glitziest figures--he was continually quoted in the national media on the AIDS crisis, his lab churned out dozens of important papers, and he was becoming known as an entrepreneurial whiz by co-founding biotech companies. His second marriage, in 1991 to the glamorous Hayman, whom he'd met at a party in Beverly Hills, added more jet-set luster. He traveled so much, says a former protege, that a joke went around his lab: "What's the difference between Bill Haseltine and God? The answer: God is everywhere, while Haseltine is everywhere but Boston, where he's supposed to be."

One of his trips, in 1992, had momentous consequences. HealthCare Ventures, a Princeton, N.J., firm he regularly consulted with, asked him to meet a guy named Craig Venter and vet his ideas for possible venture funding.

Venter, then at the National Institutes of Health, had rocketed to prominence by marshalling powerful new tools to analyze DNA. Until around 1990, researchers generally isolated genes one at a time from DNA, the coiled molecules that compose the chromosomes within our cells, and then worked out their sequences of chemical letters via a slow, manual process. Venter vastly sped things up with the help of automated DNA sequencers developed in the late 1980s and was able to decode genes at an unprecedented rate. In another key advance, he began his genetic analyses by extracting from within cells copies of genes, called "messenger RNA," or mRNA, rather than analyzing the DNA directly.

Using mRNA let him circumvent a very tricky problem: Pieces of genes are scattered through DNA like syllables of words embedded here and there in long strings of gibberish. Scientists use computers to search for these valuable sequences in the confusing mishmash. Unfortunately, there's often little to distinguish the genes from the junk. Some researchers say the computers miss over half of the genes--that's why decoding the human genome hasn't settled the debate about how many genes there are.

But by extracting mRNA from cells, researchers effectively let nature do the finding. That's because to make the mRNA copies of genes--a key step in the manufacturing of cells' protein building blocks--cells effectively strip away the surrounding gibberish from the gene pieces they need. Venter capitalized on an existing but little-used method to pluck thousands of these ready-made gene copies from cells and, via a few other tricks, decode their chemical letters with his sequencing machines. Voila: Genomics was born.

Before the two men met, Haseltine had been skeptical that Venter's ideas were ready for prime time, says HealthCare Ventures' president, James Cavanaugh. But afterward Haseltine came back and told Cavanaugh that his firm "would be crazy" not to back a company based on Venter's new technology. There was just one problem. Venter was reluctant to join a for-profit enterprise that might limit his ability to publish breakthrough findings.

After intense wrangling, the VC group hammered out an awkward solution. They created not one company but two: a nonprofit vehicle for Venter's research, called the Institute for Genomic Research, or TIGR, and a for-profit sister, Human Genome Sciences, which would fund Venter's work at TIGR in return for patent rights to commercialize its findings.

The late Wallace Steinberg, a former Johnson & Johnson executive at HealthCare Ventures, arranged to fund TIGR with a hefty $70 million, later boosted to $85 million. Haseltine, meanwhile, was tapped as acting CEO of the sister company; he took a sabbatical from Harvard and never looked back. Among his first moves was to hire one of the brightest young researchers to pass through his Harvard lab, Craig Rosen, to lead the Human Genome Sciences research team. Another key hire was Haodong Li, a scientist from China doing postdoctoral work in the Harvard lab. When offered the job, says Li, "my immediate reaction was no. I wanted to become a professor. But Haseltine said, 'This company is different. This company is going to make history.'"

Li helped recruit six other gifted Chinese postdocs studying in Boston whom he regularly met at potluck dinners to talk science. It was a major coup--only the cream of China's young scientists were selected for study in the U.S. Within a few months, Li found a set of genes thought to be involved in heart disease, immune disorders, and other illnesses--a "proof of concept" feat that put Haseltine in a strong position to negotiate with potential drug-industry partners.

Haseltine knew he would need lots of money fast because a hotly contested race was shaping up to patent medically important genes--automated gene research had gotten under way at startups like Incyte Genomics in Palo Alto, Calif., at about the same time as at HGS/TIGR. Human Genome's landmark collaboration with SmithKline, negotiated less than a year after Haseltine joined, gave it a critical edge soon after the race began. By validating HGS as a genomics leader, the deal enabled the company to go public only a few months later, expanding its war chest by $31 million.

Working closely with Steinberg, Haseltine soon scored another coup: He convinced the company's backers that HGS should get into the risky business of actually developing drugs. Some of the VCs had wanted HGS to go for quick returns by focusing solely on selling genetic information to drug companies. Haseltine argued that the company would capture far more value from its research by taking the riskier route of bringing drugs to market. So far Wall Street has agreed. Incyte, which opted to remain an information provider, recently had a market cap of about $1.6 billion, while HGS weighed in at over $9 billion. (Not bad for a nascent company that last year had $22 million in revenues, mostly from licensing, and a $51 million operating loss.) HGS's only close genomics rival is Millennium Pharmaceuticals, a Cambridge, Mass., drug developer whose market cap is just under $9 billion.

In another key move, Haseltine focused on developing protein drugs. That has a major disadvantage: Proteins, which are large molecules, generally can't be taken as pills, for they're destroyed in the digestive tract. Instead they must be injected, which tends to limit their market potential. (Pills contain relatively small molecules that can survive the digestive gauntlet and still work.)

Pursuing proteins as drugs, however, enabled HGS to get medicines into the clinic fast--naturally existing proteins have nontoxic functions in the body and hence can be made into drugs fairly quickly compared with small-molecule pills, which are developed by testing zillions of chemicals to find one that tweaks a bodily process as desired. The proteins of greatest interest at HGS have been those that carry signals between cells. Some such proteins have highly specific actions in the body and so can be used to modify processes that have gone awry without causing dire side effects. (Most bioengineered medicines to date--growth hormone, insulin, the anti-anemia drug EPO--are signaling proteins.) Another plus: Genes that make signaling proteins have telltale structural motifs that enable genomics researchers to zero in on them in the mass of DNA sequences spewing from their machines--the first step in using them to develop drugs.

Each Friday morning, HGS's 20 or so young researchers would meet to compare notes on the week's gene discoveries. "Those meetings were so exciting," recalls former HGS researcher Kenneth C. Carter, now CEO of Avalon Pharmaceuticals, a Gaithersburg, Md., genomics startup. "It was like walking into a parking lot full of Porsches in a society where everyone else is getting around in Model Ts." Indeed, HGS was finding far more medically important genes than SmithKline could use, so the two partners licensed the surplus to other drug companies. The licensing fees enabled SmithKline, which last year merged with Glaxo Wellcome, to recoup its entire $125 million investment in the partnership. "A lot of people outside SmithKline thought we had overspent," says George Poste, the company's former research chief, now a consultant in Gilbertsville, Pa. "History has shown we got the bargain of the century."

By 1995 it seemed as though the "gene kings," as Business Week dubbed Venter and Haseltine on its cover that year, were well on their way to cracking the Code of Codes. But behind the scenes it was their collaboration that had cracked up. In fact, it had resembled Godzilla vs. King Kong from the start. At a strategy meeting, recalls a former HGS insider, Haseltine and Venter sat down many feet apart on one side of a long conference table. As the meeting got under way, each edged his wheeled chair toward the table's middle, until, after a few minutes, their chairs literally clashed as they jockeyed for the center.

Worried that Venter's TIGR team might not focus on finding genes useful for drug development, Haseltine had started a duplicate DNA-sequencing program mere months after the celebrated partnership was launched. That undercut HGS's need to work with TIGR. As interactions between the concerns dwindled, Haseltine and Venter publicly clashed over whether TIGR had published gene discoveries before HGS had had its contractually required opportunity to review them and file patents. In 1997 the gene kings officially broke up, ending HGS's partnership with TIGR. The following year Venter put aside the speedy gene-finding approach he had pioneered at TIGR and set his sights on sequencing the entire genome, junk and all, at his ballyhooed new startup, Celera Genomics.

No one really doubts that Venter's whole-genome approach at Celera has value. One reason is that there are many gems in the junk, such as pieces of DNA that help regulate genes. But lately Haseltine's strategy has yielded more to crow about on Wall Street. For all its history-making, Celera was recently valued by investors at less than one-third of HGS's market value. The gap may widen dramatically if HGS's drugs continue to do well in clinical trials. "HGS stands a very good chance of being the first to realize a major return on investment from genomics," says Rachel Leheny, a biotech analyst at Lehman Brothers. Over the past few years, she adds, Haseltine has made "very smart" moves to maintain his company's momentum.

One was to invest a hefty $70 million in a plant to produce protein drugs--a decision that looks prescient in light of a worsening industry shortage of manufacturing capacity for such drugs. In 1999, Haseltine lured one of biotechnology's most respected drug developers, David C. Stump, away from Genentech to oversee HGS's clinical trials. Most important, Haseltine dramatically expanded HGS's drug pipeline via partnerships and, last fall, a shrewd acquisition. The partnerships gave HGS the ability to develop monoclonal antibodies, or MABs, protein drugs that can home in like smart bombs on tumor cells and other disease-causing culprits. HGS's first blockbuster, says Leheny, is likely to be a MAB it is developing to treat autoimmune diseases such as lupus and rheumatoid arthritis--HGS plans to begin clinical tests on the drug this year.

HGS's shrewd acquisition was its purchase last September of closely held Principia Pharmaceutical for $120 million in stock. The deal gave HGS access to technology for making a novel class of drugs whose promise is just beginning to register on Wall Street. Called albumin-fusion proteins, the medicines consist of protein drug molecules linked to a blood protein called albumin. The two-part molecules resist breakdown in the body, enabling them to exert disease-fighting effects for days, vs. mere hours for most existing protein drugs.

The first such product, a form of an immune booster called alpha interferon, is already in clinical tests to treat hepatitis C, a viral liver disease. Early this June it announced that it would soon begin trials of growth hormone fused to albumin. Many more such drugs will follow, says Haseltine, who envisions using the technology to rejuvenate a raft of biotech blockbusters whose patents are nearing expiration. Since these fusion drugs will be based on medicines of proven efficacy, he adds, their development costs and risks should be relatively low.

HGS has more good news in the offing: It is scheduled on June 30 to enter a phase that Haseltine jubilantly refers to as "Prometheus unbound"--that's the day the contract expires under which rights to most of its research findings belong to its pharmaceuticals partners. Thereafter, HGS will be free to form new partnerships. Moreover, rights to HGS's previous gene discoveries that its drug-company partners haven't put into "active" research programs will revert to Haseltine's company--a potential treasure trove that could both fill its pipeline for years and provide lucrative fodder for new collaborations. Unlike many biotech companies, HGS can afford to be very selective about its future partnerships--between June 1999 and December 2000 it raised a whopping $1.8 billion, giving it ample cash to complete its current clinical trials.

If Haseltine's track record is any indication, his main problem may be to find a theme to top Prometheus unbound when HGS's drugs begin reaching the market around mid-decade. Hmmm. Here's one possibility: A takeoff on the hero of heroes who finally freed Prometheus--Hercules. Determining which HGS executive would be juxtaposed in its annual report with a painting of the mighty deliverer is left as an exercise for the reader.

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