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Former Faculty Entrepreneur Digs Deep into His Own Pockets to Honor His Commitment to Stanford

September 20, 2007

STANFORD, Calif.September 18, 2007 --(BUSINESS WIRE)--Neurosurgeon and
entrepreneur James Doty, MD, was feeling generous when he agreed in 2000
to give a multimillion-dollar gift of stock to Stanford University
School of Medicine, but he didn’t realize at the time that he would end
up giving away his entire personal fortune.

Doty, who had planned to retire on his stock earnings and share his time
between San Francisco, his Italian villa and his private island in New
Zealand, instead wound up with virtually nothing as a result of his
philanthropic commitments.

“I’m happy to give it. I’m thankful. It’s actually been a wonderful
experience and has made me a better person,” said Doty, 51, who served
on Stanford’s adjunct faculty for four years between 1997 and 2004.

As of Sept. 17, the school had sold all of Doty’s donated stock—398,400
shares of Accuray Inc., a Sunnyvale, Calif.-based medical device maker.
The sale brought in nearly $5.4 million and amounts to one of the
largest to the university to date from a current or previous faculty
member. The funds will support an endowed chair in the Department of
Neurosurgery and other related programs such as research on spinal cord
injury and repair, including stem cell therapy. The funds also will
support a collaborative project with the Dalai Lama on the neurological
basis of human compassion and altruism.

“Jim is a truly remarkable individual,” said Philip Pizzo, MD, dean of
the medical school. “A highly successful physician-innovator and
committed academic leader, he is also an incredibly honorable individual
with admirable integrity. He has continued to commit his support even
though his own personal wealth has unfortunately declined. We stand in awe.”

The remarkable story of Doty’s gift began in early 2000, by which time
he had accumulated about $75 million in paper profits from investments
in medical technology companies, including Accuray, where he had served
as chief executive officer from 1997 to 1999. He was doing some estate
planning and had decided to put a substantial amount of stock into a
charitable remainder trust in which the Department of Neurosurgery at
the medical school was one of the beneficiaries.

But then the dot-com meltdown occurred, and the value of Doty’s holdings
plummeted. All of his hopes for early retirement were dashed. He had
already made a down payment on a $5 million San Francisco apartment with
a view of the bay, and was in the process of buying a 6,500-acre island
in New Zealand and a villa in Tuscany. He had planned to divide his time
between the three homes, while also volunteering a significant part of
his time as a neurosurgeon in Third World countries, he said. All those
plans evaporated overnight, along with Doty’s personal fortune.

“In six weeks, I not only had lost the paper profits but was $3 million
in debt,” he said. While he did not complete the purchase of the island,
the villa or the new San Francisco apartment, he was able to keep an
existing home in San Francisco for himself and his family.

At this point, Doty had not yet put the committed stock into the trust,
and some advisors told him there was a fine legal line that could allow
him to back out. A few told him he was a “complete fool” to give away
his remaining assets, but he said, “I felt an obligation to do what I
said, and I went ahead and did it.”

Doty said he chose Stanford’s medical school as one of the beneficiaries
of the trust because it was the place where Accuray was born. The
company was founded by John Adler, MD, a professor of neurosurgery at
Stanford and longtime friend and colleague of Doty’s. Adler invented the
CyberKnife, a robotic radiosurgery system used for treating tumors
throughout the body. In 1990, Adler started Accuray to manufacture and
market the device.

The company progressed until the late 1990s, when it nearly collapsed
because of financial difficulties. Doty, who has started several medical
technology companies, was an early investor in Accuray and was
instrumental in creating the first CyberKnife facility outside of
Stanford. He agreed to help raise funds and restructure the company,
using his own money and ultimately agreeing to guarantee a loan to
Accuray from a Taiwanese investment group.

“He put up the money when all of Silicon Valley would not. The company
would not have survived without his help,” said Adler.

By 2000, Doty’s investments in several companies were worth about $75
million on paper. Riding high, he drew up the paperwork to commit a gift
of 398,400 shares of Accuray stock to Stanford, plus more to other
charities. Those commitments eventually were worth $25 million. Then the
dot-com bust wiped out most of Doty’s paper wealth.

By February 2007, Accuray had gone public, with an initial offering at
$18 a share and a total value of more than $1 billion. At that point,
Doty’s Accuray stock was worth many millions.

Doty himself never benefited from the company’s success because those
shares were already committed. He had already left Silicon Valley for
Mississippi where he now lives. He directs a neuroscience program at
Memorial Hospital in Gulfport, which was hit hard by hurricane Katrina,
and serves on the faculty at Tulane University School of Medicine, where
he received his MD. He still treats some patients at Stanford and plans
to return to the faculty on a full-time basis in January.

Through his gift to Stanford, the Department of Neurosurgery will create
an endowed chair that is being awarded to Pak Chan, PhD, professor of
neurosurgery, to further his research on the process known as apoptosis,
or cell death, which occurs when patients suffer strokes, spinal cord
injuries and brain trauma. The funds also will help support a new
program to investigate novel strategies of treating spinal cord
injuries, such as stem cell therapy, optical stimulation of spinal cord
circuits and neuroprosthetics.

“Dr. Doty’s exceptionally generous gift will allow us to support
talented, creative scientists like Pak Chan, and allow development of
innovative neurosurgery and neuroscience programs focused on
neuroregeneration and restoring neurologic function after brain and
spinal cord damage. We are extremely grateful to him,” said Gary
Steinberg, MD, PhD, the Bernard and Ronni Lacroute-William Randolph
Hearst Professor of Neurosurgery and the Neurosciences, and chair of
neurosurgery.

Doty also has a special interest in the work of the Dalai Lama, who
visited Stanford in October 2005 for a series of discussions on the
workings of the mind, both from a scientific and a spiritual
perspective. Doty plans to support a follow-up project that will bring
the Dalai Lama together with neuroscientists to explore the neurological
basis for human compassion and altruism. Finally, Doty said he will
support a research program in the neurosciences that will encourage
postdoctoral scholars to develop novel devices for treating debilitating
neurologic problems.

Doty, whose family was on welfare throughout his adolescence, and who
worked his way through college, said he appreciates his ability to
contribute to worthwhile programs, even though he’s not living the
luxury lifestyle he once envisioned.

“You make certain decisions and you live with them,” he said. “I’m
fortunate that not only am I able to contribute to others as a
neurosurgeon, but my Stanford experience has allowed me to develop
wonderful relationships and be exposed to immense opportunity.”

Stanford University Medical Center integrates research, medical
education and patient care at its three institutions — Stanford
University School of Medicine, Stanford Hospital & Clinics and Lucile
Packard Children’s Hospital at Stanford. For more information, please
visit the Web site of the medical center’s Office of Communication &
Public Affairs at http://mednews.stanford.edu.

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