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Genentech: The Beginnings of Biotech

Genentech: The Beginnings of Biotech

Sally Smith Hughes
2011
T3 223 pages · about 3h 43m to read OL16262753Wgoodreads

Summary

Hughes, a historian of science at Berkeley, wrote this from the oral history interviews she conducted with Genentech's founders, scientists and executives. It covers the period from Herbert Boyer and Stanley Cohen's recombinant DNA work in 1973 through the founding of Genentech by Boyer and the venture capitalist Robert Swanson in 1976, the synthesis of somatostatin and then human insulin, the 1980 public offering, and the early 1980s.

The substantive contribution is showing how a scientific technique became a company. Hughes documents the tension between academic norms of open publication and commercial requirements of patent priority and secrecy, and how Genentech resolved it by allowing publication after filing. She covers the Cohen-Boyer patent, which Stanford licensed non-exclusively and which earned enormous sums without blocking the field, and the decision to prove the technology by racing academic laboratories to synthesise a known human protein rather than by developing a novel drug. She also shows Swanson's role clearly: he supplied the conviction that the science was already commercial, several years before the scientists thought so.

The 1980 initial public offering, which occurred before Genentech had a product on the market, established the template for biotech financing that the industry still uses. Hughes is careful and archival, and the book is short. It ends in the early 1980s, so it does not cover the company's later development, the Roche acquisition, or the maturation of the industry. It is a scholarly monograph rather than a business narrative, and readers wanting management lessons will find the material thinner than the historical record.

Key takeaways 7

  1. Genentech was founded on the conviction that recombinant DNA was already a commercial technology, which the scientists involved did not yet believe.
  2. The company proved its technology by racing academic laboratories to synthesise known human proteins, which produced credibility faster than developing a novel drug would have.
  3. Genentech resolved the conflict between academic publication and commercial secrecy by permitting publication only after patent filing, and this became standard industry practice.
  4. Stanford licensed the Cohen-Boyer recombinant DNA patent non-exclusively, which earned very large royalties while allowing the whole field to develop.
  5. The 1980 public offering, made before any product reached the market, established that biotechnology companies could be financed on scientific promise rather than revenue.
  6. Genentech contracted manufacturing and marketing of its first insulin product to Eli Lilly, which supplied capability the startup could not build and set the partnering model for the industry.
  7. Recruiting academic scientists required allowing them to continue publishing and to keep their professional standing, which shaped the company's internal structure.

Who should read it

Founders and investors in deep technology who want the founding case of converting a laboratory technique into a financed company.

Where it sits in the reference 2

Companies
Industries

Who recommended it 2

Laura Demingreported
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Book recommendations listed on their Good Books profile · aggregator only

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