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Updated: 10;17 PM- Every year for the past decade, the University of Utah has printed a "Congratulations Mario Capecchi - Nobel Laureate" banner in anticipation of the renowned geneticist capturing the prestigious prize.

On Monday, at last, the U. got to hang it.

At 3 a.m., Capecchi's phone rang - thinking it was a "bogus" call, his wife almost didn't answer it - and he learned he was one of three scientists awarded the 2007 Nobel Prize in Medicine for his pioneering work in gene targeting.

Oliver Smithies, of the University of North Carolina in Chapel Hill, and Sir Martin J. Evans, of Cardiff University in Wales, shared the honor. Smithies also worked on gene targeting, while Evans' work focused on isolating embryonic stem cells and using them for research.

"It was a complete surprise," said 70-year-old Capecchi, the first-ever Nobel Prize winner at the U.

Because the Nobel Assembly at Karolinska Institutet recognized work in molecular genetics last year, Capecchi thought he was an unlikely choice for the Nobel Prize this year.

Much to everyone's delight, he was wrong.

Capecchi's and the other scientists' discoveries, the Nobel Prize committee said, are being applied to virtually all areas of biomedicine, from basic research to the development of new therapies for hundreds of diseases.

"Gene targeting in mice has pervaded all fields of biomedicine," the committee said. "Its impact on the understanding of gene function and its benefits to mankind will continue to increase over many years to come."

At a news conference at the Eccles Institute of Human Genetics, Capecchi received a thunderous standing ovation from his colleagues and friends at the U., where he is a distinguished professor of human genetics and biology.

"Today, nobody at the Health Sciences Center was sleeping soundly," said senior vice president Lorris Betz. "All of us were willing the phones to ring - and ring they did. The activation of that early morning telephone tree signaled the beginning of one of the proudest days in the history of the University of Utah."

Knockout science

A student of Nobel Laureate James D. Watson - who along with Francis Crick used X-ray data to decipher the structure of the DNA molecule in 1953 - Capecchi developed a technology called gene targeting, which is used to inactivate or "knock out" individual genes.

The technique, Capecchi said, involves altering genes in mouse embryonic stem cells, which are then placed in mouse embryos. Those embryos are implanted into "foster mother mice," which then give birth to "mosaic mice," or mice with the altered genes.

Mating the mosaic mice with normal mice creates offspring both with and without the altered gene, helping researchers to understand its role.

"Where its use comes in is, many, many diseases are caused by genes, or alternately participate in that disease," said Capecchi, also a Howard Hughes Medical Institute investigator. "This allows us then to model any particular disease in the mouse, to use that mouse as a vehicle to study the pathology."

Capecchi said the technology has "come a long way," allowing scientists to control where and when a specific gene functions. That, in turn, has helped them to "hone down where a mishap is happening" that may trigger disease.

Gordon Lark, a professor emeritus of biology who lured Capecchi to the U. from Harvard University in 1973, said Capecchi's Nobel Prize is long overdue.

"It's a remarkable technology that he developed," he said, "and allowed people in all disciplines of biology to change what they do."

Lark, who was chairman of the U.'s biology department when he recruited Capecchi, said it was fellow biology professor Larry Okun who first identified Capecchi as a stand-out scientist. Okun and Capecchi were classmates at Harvard.

"The minute Larry Okun arrived, he said I just had to hire Mario Capecchi," Lark said. "So, realizing Larry was one of the smartest people I had ever met, and knowing his taste was impeccable in science, I followed his advice."

Capecchi was courted by Lark for two or three years before he decided to move his lab to the U. Once he arrived, Capecchi was given what he needed to work: the freedom to pursue a long-term project.

"Work on the science of the future," Lark told him, "not the science that is quick and easy and what everyone else is doing."

'Not worthy'

Capecchi did just that. Only in the beginning, not everyone was on board with his vision.

In 1980, a panel of reviewers from the National Institutes of Health (NIH) said Capecchi's research on gene targeting was "not worthy of pursuit," according to a U. publication. Gene targeting, the panel said, probably wouldn't work.

Not easily dissuaded, Capecchi used funds from another project to continue his studies. Four years later, he had amassed enough research to prove the NIH wrong.

"The recognition of Mario Capecchi's work with the Nobel Prize demonstrates at the highest level - the very highest level - the resounding good that comes from stimulating and encouraging imagination, creativity, scientific inquiry and his extraordinary drive and commitment," said U. president Michael Young.

Capecchi's passion for genetics has not only led to his groundbreaking work in gene targeting, but also to an internationally recognized genetics program at the U., Young said. Researchers there have discovered the genetic predisposition to more diseases than any other university, he said.

But the researcher's influence is also felt right at home, in his lab - among the largest on the U. campus - where he offers his guidance to graduate students aspiring to make their own mark in biomedicine.

"To me, it was clear from the beginning he had good science - that's why I went to his lab," said Russell Ray, a graduate student in human genetics. "I'm just really happy to see him get the recognition he deserves."

So what's next for the U.'s Nobel Laureate?

Launching into another research project, Capecchi said, this one examining how a variety of organisms perform certain functions better than people.

"By learning how we're different from [other] species, I think there is a whole store of knowledge out there," he said. "And that's going to be our next 20-year project."