Genentech A series in the history of chemistry, broadly construed, edited by Angela N. H. Creager, John E. Lesch, Stuart W. Leslie, Lawrence M. Principe, Alan Rocke, E. C. Spary, and Audra J. Wolfe, in partnership with the Chemical Heritage Foundation Genentech The Beginnings of Biotech

SALLY SMITH HUGHES

The University of Chicago Press Chicago and London

Dedicated to the memory of Janet Wentworth Smith (1910–2007) and to my children, Dylan, Amy, and Casey

Contents

PROLOGUE ix

ACKNOWLEDGMENTS xiii

1 INVENTING RECOMBINANT DNA TECHNOLOGY 1 Two Scientists on Converging Paths 2 The Collaboration 11 Patenting and Politics 20 Steps toward Commercialization 24

2 CREATING GENENTECH 29 Bob Swanson 29 Founding Genentech 34 Legal and Political Obstacles 44 A Full Business Plan 47

3 PROVING THE TECHNOLOGY 49 A Portentous Experiment 50 Switching Targets 52 Negotiating Research Agreements 55 Making Somatostatin 59 Wider Issues 66

4 HUMAN INSULIN: GENENTECH MAKES ITS MARK 75 Seeking Corporate Contracts 76 Procuring a Facility and Staff 77 Genentech’s Human Insulin Project 86 The Eli Lilly Contract 94 Publicity and Expansion 98 5 HUMAN GROWTH HORMONE: SHAPING A COMMERCIAL FUTURE 107 Competing for Human Growth Hormone 108 Moving toward Corporate Integration 120 Scaling Up Insulin and Growth Hormone 122 Corporate Expansion 127 An Emerging Culture 131

6 WALL STREET DEBUT 137 Biomania 137 Exit Strategies 139 Interferon: The New Wonder Drug? 142 Run-Up to an Initial Public Offering 146 Legal Impediments 148 The IPO 158

EPILOGUE 165

Notes 171 Bibliography 195 Oral History Bibliography 203 Index 207 Prologue

Genentech: The Beginnings of Biotech is the story of a pioneering genetic- engineering company that inspired a new industrial sector, trans- forming the biomedical and commercial landscapes ever after. Yet the enormous success of Genentech—today an icon of a worldwide bio- technology industry—appears to confi rm an industrial myth: that the company’s achievements and the industry it fostered were straight- forward, pre ordained, and inevitable events. This interpretation is far from the mark. Genentech was by almost any measure an inauspicious and improb- able enterprise. The fi rm arose in the spring of 1976 as the unlikely vision of two naive entrepreneurs: Herbert Boyer, a professor of microbiology at the University of California, San Francisco; and Robert Swanson, an un- employed venture capitalist. Its name, a contraction of genetic engineer- ing technology, captured its extraordinary agenda: to apply the radically new technology of recombinant DNA in engineering bacteria to make insulin, growth hormone, and other important pharmaceuticals. But no one had ever employed the technology as an industrial process, much less built a business upon it and tried to make a profi t from it. Could the company produce, before the money ran out, the novel therapeutic sub- stances Boyer and Swanson had in mind? Prominent molecular biolo- gists thought not. The making of Genentech was in fact racked by problems, internal and external. The science did not always work. Swanson and Boyer strug- gled to raise and sustain venture-capital backing and to forge contracts with a skeptical pharmaceutical industry. Scientists, managers, and c, rm rm edg- rst few c contests against cant genes in three rst research and de- c needs. Molecular biology was be- patents,le for and above all make market- t, fi t, table, and controversial in a manner never before c and business standards that a handful of fl rm struggled to off get the ground during a time of soar- Remarkably, justRemarkably, four years after its creation, Genentech became the Genentech’s futureGenentech’s rested on technological innovation, business minutes of trading. was It the largest gain in stock market history, making headlines around the the investment world. To and business coming practical, profi experienced. overnight darling of Wall Street. Its public stock offering raised over million,$38 as share price in to $89 rocketed a wild from $35 fi prestigious university teams led to biotechnology’s fi velopment contracts with pharmaceutical companies. the By 1980 fi was setting scientifi ling biotech companies and academic entrepreneurs would attempt to emulate and adapt to their specifi ingly different from anything the pharmaceutical industry offered. Its handful of irreverent scientists captured a swiftly expanding audience as they cloned and expressed three medically signifi human and hormone, growth human insulin, human years: successive interferon—the latter a supposed miracle drug predicted to cure cancer and other ills. come-from-behind scientifi Genentech’s had to also navigate federal guidelines recombinant for research, DNA theface threat of restrictive legislation, and run the gauntlet of legal un- things. living patenting in knowns acumen, human dedication, and a freewheeling, can-do culture strik- External conditions likewise menaced agenda to put Genentech’s genes to work. fi The ing public apprehension over biology’s new power to engineer bacteria of possible threat to human health and safety. As if the deepening scientifi political,and cultural ferment were not enough, the infant company and Boyer had to devise corporate structure and erect intellectual prop- erty protection, giving Genentech a chance to compete against far larger and well-established companies with vastly deeper needed pockets. He touniversity-like somehow balance culture a freewheeling, against the dire need to eke out a profi products.able cards The appeared stacked against the success.venture’s attorneys needed cajoling and incentives to abandonuniversity and cor- porate positionsto join a company broadcasting risk every at level. In a tumultuous period of science politics,pending government regulation and adverse public opinion threatened substantial interference. Swanson

x PROLOGUE xi PROLOGUE ts, and fashioning a new industrial rmed that genetic engineering could build a business, This intimate and people-centered history traces the seminal early entrepreneurial biologist. As a prime instigator of a mounting commer- cialism blossoming in Genentech biology of the in 1970s, large measure recast the aspirations, direction, and culture of life science and setthe stage the for formation of a biotechnology industry. over biotechnology as a revolutionary creating for approach novel prod- profi incalculable generating ucts, sector. years of a company thatdevised new models biomedical for research, business, and culture, in the process introducing a novel creation—the communities and a rivetedpublic, what at they agog were witnessing, the company confi attract and promise major money, lifesaving pharmaceuticals as well. spectacularGenentech’s success launched a period speculative of frenzy

Acknowledgments

The long journey to a published book began in 1992 with a modest proj- ect at the University of California, San Francisco, to interview a few of its movers and shakers in molecular biology and biotechnology. Signifi - cantly, Herbert Boyer and William Rutter were among them. Little did I then know that this was not just another fascinating project in my many years of interviewing in and writing on recent science and technology. The interviews with Boyer and Rutter brought to life important themes: the contingent process of making a basic science practical, patentable, and profi table; the impact of political controversy and monumental legal questions; and the historical signifi cance of captivating personalities, sometimes at odds with one another. Whether I fully realized it or not, seeds for a historical work had begun to germinate. When I returned in the late 1990s to the Bancroft Library at the Univer- sity of California, Berkeley, Daniel E. Koshland Jr.—a prominent Berkeley biochemistry professor, Lasker Award winner, and former chief editor of the journal Science—made a generous donation to inaugurate an oral history and archival project documenting bioscience and biotechnology in the San Francisco Bay Area. I am inordinately grateful to him for his support and friendship. To my sorrow, Dan died in 2007 without seeing this book, a tangible product of his benevolence. In 2001 the baton was even more generously taken up by the Genen- tech Foundation in sponsoring an oral history and archival program on its foundational period. The rich trove of original oral and written doc- umentation assembled over the next few years became a central source for the present book. Bob Swanson, Genentech’s cofounder and fi rst CEO, t of the oral history process was ted from my various presentations Berkeley, at sole conditiont. company’s The was to submit draft interview My deepestMy thanks to the following individuals critiquing for draft A fellowship at the National Humanities Center in 2006–7 gave me a a me gave 2006–7 in Center Humanities National the at fellowship A Aside from the colorful personalities and working lives of Genentech’s rst generation—a carrot an for author fascinated by human agency— nal form as the Bancroft Library alone produced them. entire The inter- chapters: Henry Bourne, Herb Boyer, Stan Cohen, Bob Cook-Deegan, atmosphere they provided critiques for of early draft chapters. This book has also greatly benefi anony- two by Duke University, the History of Science Society Society, comments the for History from as well as elsewhere, and Technology, of mous readers selected by the University of Chicago Press. ment the for Humanities supporting for my fellowship. center The is a blessing to scholars in the uninterrupted time and support provides it fellows concentrated for writing and daily opportunities conversa- for tions with scholars in the full sweep of the humanities. I am particularly indebted to participants in the history writing group the for congenial projects/biosci/. Oneprojects/biosci/. incalculable benefi the personal relationships created that allowed me later in the course of writing to return time and again to Genentech folks with questions and requests. history The told herein is fuller and accurate more as a result. luxurious nine months to focus on writing. I thank the National Endow- transcripts to its legal department review for exclusively legal for mat- ters. attorneys The never responded; once the oral histories appear in http://bancroft.berkeley.edu/ROHO/ at fi format view searchable series on Genentech and on science and in technology generally more available is the oral history project, even more so were the insights I gathered regard- ing the wider meanings early of Genentech’s history science, for indus- andtry, society. am I deeply grateful the for support andespecially for the free rein the company me to gave conduct research and interviews as I saw fi of a braintumor A small in 1999. comfort is the eight hours of interviews earlyon Genentech’s years that with recorded he and me in 1997. 1996 fi participants’ enthralling accounts of erecting a novel company upon controversial basic science were an immediate As draw. I moved along in permitted me access to documents in his private possession and in corpo- Genentech—documents archivesrate at that had never been before avail- to outsiders.able history The recounted in these is pages far richer as a result. was It with great sadness that premature I learned demise of Bob’s

xiv ACKNOWLEDGMENTS xv ACKNOWLEDGMENTS ling and Audra who helped Wolfe, to shape and shepherd thisbook. ter, Milt Schlesinger, Sondra Schlesinger, Winni Sullivan, Eric Vettel, Vettel, Eric Sullivan, Winni Roberto Schlesinger, Crea, Martha Dill, Jane Gitschier, Goeddel, Dave Ellie Goldberg, Sondra Herb Heyneker, Kiley, Dennis Tom Kleid, John Lesch, Art Riggs, Bill Rut- Schlesinger, Milt ter, Ron Wetzel, and Dan Yansura. Special thanks also to editors Karen Dar-

1 Inventing Recombinant DNA Technology

I looked at the fi rst gels [in the fi rst recombinant DNA cloning experi- ment], and I can remember tears coming into my eyes, it was so nice. I mean, there it was. You could visualize your results in physical terms, and after that we knew we could do a lot of things. Herbert W. Boyer, March 28, 19941

Modern biotechnology originated in 1973 with the invention of recom- binant DNA technology, a now-universal form of genetic engineering. It entails recombining (joining) pieces of DNA in a test tube, cloning (creating identical copies of DNA) in a bacterium or other organism, and expressing the DNA code as a protein or RNA molecule. It soon vastly ex- tended the power and scope of molecular biology, penetrated several in- dustrial sectors, and became a cornerstone of a new industry of biotech- nology. Yet technological power and potential cannot alone explain its fi rst commercial application—at the biotechnology company Genentech in the mid-1970s. Stanley Cohen and Herbert Boyer, the two inventors, had designed the technique for basic-science research. But they immedi- ately foresaw its practical applications in making plentiful quantities of insulin, growth hormone, and other useful substances in bacteria. De- spite their common starting point, Cohen and Boyer chose different av- enues for industrializing recombinant DNA technology. Why they did so was a matter of personality and professional commitments. It was also a matter of the national environment in the U.S. of the 1970s—a pivotal de- cade of raging debate in science politics, major dilemmas and decisions in constitutional and patent law, and cultural, attitudinal, and personal nances, gentle nances, shed with his father and and father his with shed rst child and only son of parents rst entered molecular biology full rst in his family to do He was so. off to rst years Derry at Borough High School were a ning. One way or another, he had to out. get Herb ned home life. While Boyer interven- needed Coach Bucci’s he later admitted. took a no-nonsense It football and coach 2 Stanley Norman Cohen is also the fi troll wider horizons but destined never to lose the down-to-earth practi- cality and lack of pretension of his blue-collar upbringing. teacher Herb Bucci to out “Pat jolt of his straightened apathy. me out,” he subsequently observed. He began belatedly to focusschoolwork. on Coming into his own, he was elected junior- and senior-class president and voted most athletic. But the limited vistas of a small railroad town confi more and more felt fi the college, to on go to resolved academic achievement. He was on “a rather perilous course of delin- of course perilous rather friends to “a play country-western music—brightspots in an on otherwise was He workaday fi world. Herb’s steady round of football, basketball,anything achievement. baseball, and but girls— academic quency,” home to look after Herb and a younger sister. Herb earned pocket money by mowing lawns, deliveringnewspapers, and doing other odd of jobs a middle-American boyhood. He hunted and fi developed an abiding love of the outdoors. All four Boyers least played at one musical instrument and regularly together got with family and up in the little town of Derry, thirty miles from Pittsburgh in the coal- the in Pittsburgh from Herbert Wayne Boyer was miles born into in a blue-collar 1936 family thirty and grew Derry, of town little the in up mining country of western Pennsylvania. His father had left school in eighthgrade and eventuallyfound as work a railroad brakeman and conductor. His mother married straight out of high school and stayed challenges as commercial interests fi interests commercial as challenges force. PATHS ON CONVERGING TWO SCIENTISTS largely defi tion his to provoke attention to schoolwork, learning came naturally and trades in and around their home in Perth a town New Amboy, Jersey, just mother a time for worked Stan’s southwest as City. a secretary of New York and raised an as only child un- was make born endsto Stan in meet. 1935 til the birth of a sister when Stan was almost ten. Tight fi discipline, and parental ambition their for children to rise in the world whose formal education ended with high school. His father was a small businessman who tried his hand, never very successfully, several at

2 CHAPTER ONE 3 INVENTING RECOMBINANT DNA TECHNOLOGY . From the. From start he He and his a frus- father, 3 nancially strapped; both could ) in his high school laboratory, in Derry, Pennsylvania, in the mid- c interests which centered on biology, to Stan meant second row on leftsecond on row nancial assistance from their families; both chose colleges Herb Boyer ( Boyer and Cohen, with only slightly than more a year between them, at anat early Cohen. for age No adult had to build discipline in young Stan. he recalled, suppose,” “I “that overall much I wasn’t of a wayward kid, so there really discipline.” a lot of need wasn’t for Fig. 1. Fig. (Photographer1950s. unknown; photograph courtesy of Herbert Boyer; W. credit: Cover Studio, 504 Johnstown, PA.) Main Street, learn to drive, let alone to buy a family car. Boyer majored in biology and chemistry, intending on to to medical go school. A chance class assign- expect no fi no expect close Boyer to home. entered In Saint 1954 Vincent College, a liberal-arts institution run by Benedictine monks in Latrobe, Pennsylvania, a few easy miles from Derry. He lived home to at save money and hitchhiked or rode the bus to and from classes. His a railroad father, man, refused to the narrow scope of his upbringing. he would remain Yet stamped with the ethic, work professional ambition, and respect knowledge for of his Jewish heritage. came in age of the Both early werefi 1950s. mechanical projects. Cohen credits his father with sparking his interest science in interest his work—sparking things how in was motivated to achieve, and achieve he consistently did. In high school he was editor of the school paper and associate editorthe of yearbook. thenBy his scientifi becoming a physician. He now had a goal that would move him beyond trated inventor, spent in off-hours the basement doing small wiring and

7 c] He 5 decades ve Boyer later, re- 4 rst year of graduate school, Boyer mar- 6 c ferment and freeform discussion on genetic exchange andre- In 1959, at the at end of hisIn 1959, fi cover. Each of us was assigned a chapter, and we had to give a seminar on it. Which one did “The I get? Structure and This the of DNA.” was buzz 1957, wasof DNA just getting into the textbooks. . . . I was really taken with the Watson-Crick structure and of DNA this started my fascination with the heuristic value of the structure. We had shiny a brand-new, We [cell physiology] textbook with a blue and white Boyer applied and failed to enter medical school, in a D metaphys- awakening.” on major questions—primeon major among them, the nature of the genetic code and the mechanism of protein synthesis. Much of this research trans- pired in bacteria, employed by experimentalists their for relative sim- plicity as compared to the animal kingdom. Boyer thrived on the lab’s scientifi combination Boyer recalled, in bacteria. “was “That [lab],” my [scientifi craved intellectual stimulus and found in it the heady research of a bac- terial genetics laboratory a watershed at moment in molecular biology. and Crick’sWatson discovery had launched of 1953 an avalanche of work He managed to squeeze out enough data to complete a dissertation. His attraction to challenging problems would become a mark of his profes- Pittsburgh, partly to improve his grades and to reapply medical school, partly because small-town “a boy stray doesn’t too far from home.” A sign of his new infatuation was Siamese and Boyer’s cats, Crick. Watson SaintIn Vincent 1958 awarded Boyer degree a bachelor’s in biology and chemistry. ics being his nemesis. He settled on graduate school the at University of ment suggested another direction. than More fi called the shift with the clarity formative of a moment: code was the foremost in problem molecular biology one that of the day, only a supremely ambitious—or naive—graduate student would agree to take on. Boyer even did after and away, plugged two biochemists broke a futurethe “Boyer,” colleague code in 1961. commented, “consistently tried big things without knowing whether they could or should work.” ried his high school sweetheart, Marigrace Hensler, a biologist in her own right. gamely She supported the couple, as Boyer tackled a near- intractable experiment on deciphering the genetic code. Breaking the

4 CHAPTER ONE 5 INVENTING RECOMBINANT DNA TECHNOLOGY

9 10 rst taste of basic he recalled, remembering the 8 urry of extracurricular activities, activities, extracurricular urryof rst paper. He took time off that summer to ned fragments and map itsstructure. He suspected early ve-year period, swinging from the East Coast to the South, Cohen Boyer’s careerBoyer’s took a less peripatetic course. He went straight from Cohen a few short University, chose Rutgers miles from Perth Amboy. joined a lab focused genetic on exchange and recombination in bacte- ria. He became fascinated with the restriction enzymes of bacteria— enzymes that cut up and destroy entering foreign DNA the bacterial cell. Pittsburgh to Yale as a postdoctoral fellow in microbiology. There he he There fi wind microbiology. completed an internship, a two-year in research position the at National In- fellow stitutes of Health and (NIH), a residency in medicine. he married In 1961 postdoctoral andJoanna they Wolter, eventually a had twochildren. as Yale to Pittsburgh freedom and lack of responsibility. Life from then on would never again be as carefree, but banjo and song would remain outlets life. for In 1960 Cohen graduated from Penn with a degree in medicine. Within a whirl- striction enzyme research and genetic manipulation. Boyer now lived and breathed his science. After a night on the town, he would return to and others recognized, one could use these strange enzymes to clip DNA well-defi into on that restriction enzymes were going to be “very helpful enzymes” for the precision cutting, recombination, and characterization of DNA. suspicionThe was prophetic: his passion career-long would become re- The word just word The emerging in was the that 1960s certain types of restriction enzymes sever unique at DNA sequences in the molecule. Perhaps, Boyer wander the cafés of Europe, supporting himself by singing and strum- ming was the “It a wonderful banjo. time,” 1956 he graduated magna1956 cum laude fall That from Rutgers. Cohen en- tered medical school the at University of Pennsylvania, draw a major be- ing the substantial scholarship funds provided. it His fi London in position research summer a to led year second the in research and to the publication of his fi Rutgers offered theRutgers most scholarship support and was close to his ailing father. Studious asever, Cohen hard worked but carried to extremes his debat- In university the joined He academics. beyond life a make to resolve performance. academic his dent ing team, took up the guitar, to and tried his hand writing at pop songs, one failed of which reached the hit parade. intensity, This fl its in predictive sional career. Boyer was setting an enduring pattern. Below the casual surface lay ambition and Boyer tenacity. earned In 1963 a doctoral degree bacteriology. in His answer was 11 he would cation,” glibly answer, using the technical Stan Cohen, circa yearbook 1956, photograph, Rutgers University. (Photographer unknown; would know—cure respond, don’t “I the common cold.” the lab or rise in the dark to observe an experiment. But the folks home at were stymied. “What are you doing?” his father would ask. “Restriction modifi endonuclease term his for research area. He would then pause his for inevitable father’s retort, “Well, what What are good is you going it? to do with that?” Boyer Fig. 2.Fig. photograph courtesy of Stanley N. Cohen.)

6 CHAPTER ONE 7 INVENTING RECOMBINANT DNA TECHNOLOGY eld eld nd him- nd t: he knew nding a faculty position. One of his men- 14 He was correct in every regard except expecting for the fi 13 Cohen reasoned that his heavy clinical responsibilities would 12 He was disheartened to fi nd that no one in the department shared shared department the in one no that nd fi to disheartened was He By 1968 Cohen wasBy 1968 intent on fi Cohen meanwhilehad begun postdoctoral a research fellowship cult if not impossible. Plasmid research seemed a perfect fi to remain tranquil. was It about to explode, and Cohen would fi epicenter. self its at Kornberg, the powerful chairman biochemistry of Stanford’s depart- Medicine offered Cohen an assistant professorship in its Division of He- Cohen,matology. drawn by the California climate and lifestyle, accepted and moved in with 1968 his wife to the sun-swept campus in Palo Alto. his fascination with molecular genetics. He turned advice for to Arthur at Stanfordat Hospital in San Francisco had moved south to join the pre- reorganization campus—a Alto Palo Stanford’s on departments clinical aimed bringing at basic science and clinical medicine into geographic and intellectual proximity. Recognizing Cohen as one of a new breed of physician-scientists the school sought to attract, the Department of tors had collegial associations with several members of the biochemistry department Stanford at connections The University. led offer, to a job but not in biochemistry. Some years earlier, the clinical departments another, spreading the resistance problem. study The of plasmids was at the time a quiet backwater and to Cohen consequently appealing. Scien- studied mainly regulation gene and exchange genetic in interested tists viruses, which had been a central focus of molecular studies from the on. 1930s New York. It was It here he stoppedNew wavering York. between a career in medicine or science. He decided to pursue both, apparently expecting the rewards of a dual career to outbalance its tensions and frantic He took pace. up research plasmids, on tiny rings in of DNA the cytoplasmof bacterial cells that reproduce outside the main chromosome. Plasmids typically carry antibiotic resistance genes that can pass from one bacteriumto dismissive, but his question father’s prompted him to ponder the practi- cal utility of his research. in molecular biology Albert at (1965–67) Einstein College of Medicine in make successful competition with “hotshot” molecular biology labs dif- fi the necessary molecular and biochemical techniques, and the growing medical of antibiotic problem resistance was an appropriate topic a for physician. De- 16 c knowledge c from dis-ted c interests and Cohen recalled. His 15 rst recombinant mol- DNA ted from the chance “to bounce He particularly profi 18 17 gure to with. reckon one to Not mince words, 19 However, no member of the Stanford biochemistry 20 Cohen was using plasmids to transport genes and fragments DNA Berg exaggerated, but Cohen indeed thrived on the department’s stim- ecules in a test tube. into bacteria; group and Berg’s others in Stanford biochemistry were us- ing viruses as transport vehicles. department The was the at forefront of techniques joining for molecules DNA from different sources. In 1972 Berg and his lab succeeded in making the fi ulating intellectual exchange and had access to its electron microscope and other equipment lacking in his home department. He regularly at- tended biochemistry seminars and benefi in that department.”ideas off people spite the tepid welcome and even after his own lab was operating, Cohen, according to biochemist Paul Berg, “hung around in Department [the of] Biochemistry most of the time.” wasn’t a very comforting introduction to Stanford,” ment. By virtueof his Nobel Prize,academic position, and forcefulper- sonality, Kornberg was a fi he told Cohen that plasmid research was an uninteresting line of inves- tigation. irony The the of remark would soon become apparent. “So this granted jointappointments and also believed that only a rare individual could optimally perform both clinical medicine and basic research. understatement skated over what must have been an unsettling blow: blow: unsettling an been have must what over skated understatement association Cohen’s that considering Stanford to come had he that shared scientifi clear it made Kornberg collegial ties might lead to a joint appointment in the Department of Instead, never Biochemistry. almost Kornberg informal. be to best at was department the with faculty or anyone elsewhere created a method cloning for vari- The DNA. at Stanford originated in the Department of Biochemistry, the work on on work the Biochemistry, of Department the in originated Stanford at DNA replication in that department had absolutelysearch. Similarly, the on biochemical work methods of dAT joining”—a zero impact on my re- biochemical method joining for fragments—“by DNA Berg and others did not impact my work.” DNA uptake by animal cells. In turn, he shared with biochemistry col- biochemistry with shared he turn, cussing In ongoing departmental research ligation on DNA (joining) cells. and animal by uptake DNA leagues his on plasmid work isolation and characterization. But the re- search Cohen published in was the not done early in collaboration 1970s with Stanford biochemistry faculty. scientifi As important all he that stated notion forcefully Kornberg’s withstanding in 2010: “Not-

8 CHAPTER ONE 9 INVENTING RECOMBINANT DNA TECHNOLOGY Discouraged Discouraged 25 How far should as Berg himself himself Berg as 23 21 sh out of water in his cient method joining for and Like many of his colleagues, was he captivated by the growing 22 It was It not the last time Boyer would participate in gatherings on nd one that made a unique and predictable break. 24 Boyer was also looking a faculty for appointment as his postdoctoral UCSF administrators,UCSF determined more than for a decade to turn a nd himself protesting governmental efforts to restrain science. His so- interest in molecular genetics. Boyer found diversion in the rich protest and counterculture movements of the Bay Area in later the telling 1960s, a reporter that he had participated in nearly every antiwar rally in the vicinity. wanted to visit California. Boyer accepted an appointment as assistant professor an at annual salary and in moved $12,500, of 1966 with his fam- ily to join the faculty. basic-science Denied the promised lab space in one of the new research towers, he settled, much annoyed, into cramped labo- ratories in a department chaired by an old-school microbiologist with no replicating genetic material continued unanswered. to go years wound down. Hearing of an open position in the microbiology de- partment the at University of California, San Francisco, he applied, lured less by the medical reputation—mediocre—than school’s by the charms of the Golden He loved State. cowboy and Indian movies and had always admitted. dire The a simple need for and effi ous biochemical approaches Berg and the others developed recombin- for ing weretechnically DNA complicated and required a battery of enzymes and skills beyond the “probably ability of most labs,” second-tier medical school into a premier research institution, had by the decided late that 1960s the Department of Biochemistry should lead by his lack of research progress and feeling like a fi department, he thought of searching a position for elsewhere. Then cir- improve. to began cumstances was also troubled by its social and ethical implications. technical power the of new genetics to manipulate the stuff of life. But he scientists in go their ability to “tamper with life”? In of many one occa- sions, he and others a molecular at biology meeting spent an entire eve- ning discussing how genetic engineering might affect society good for ill. and was to fi fi cial activism served as a diversion a time at when his research, despite long, laborious hours, was only marginally productive. He spent four years studying a restriction enzyme that he eventually concluded cut the molecule DNA in an unhelpfully random fashion. What drove him social accountability in science, although as the tables turned, he would Rutter’s multidisciplinary research research multidisciplinary Rutter’s 27 ciencies of his plasmid transfer system Yet somehow his Yet productivity only in- 29 Like Cohen, he had found an environment far 28 cient. shearing The process the broke plasmid into DNA c style. After the arrival of biochemist Howard Goodman Cohen pondered these defi 30 The tirelessly The resolute biochemist, strategic a thinker if there ever 26 Cohen meanwhile juggled a staggering workload in three different Unknown to Cohen the at time, the Boyer lab that year had made a cult,and only on rare occasion did the plasmid enter DNA the bacterial try department that would breaking apply knowledge inmolecular biol- ogy and biochemistry to research on the complex genetic mechanisms of higher organisms. was It a deliberate departure which (in he was not from molecularalone) biology’s traditional focus on bacteria and viruses and an agenda requiring the latest techniques to decipher the compli- cated genomes of higher organisms. was one, appeared under the ambitious banner of building a biochemis- fi cells. removing plasmid DNA from bacterial cells, shearing it into pieces in a a in pieces into it shearing cells, bacterial from DNA plasmid removing blender, and inserting single molecules of plasmidinto DNA bacteria to study plasmid structure and antibiotic resistance. But the procedure was ineffi and slow a welter of random-length fragments, making selection and study dif- creased. In 1970–72 he published thirteencreased. In 1970–72 papers, including nine on plasmids. he and two assistants By mid-1972 had developed a system for the way. An individual widely credited with facilitating the revitaliza- the facilitating with credited widely individual An way. the tion arrived in in the 1968 driving and dapperperson William of Rut- J. ter. enzyme became problems. It a second academic home—for seminars, chitchat, and the collegiality and conviviality he thrived on. bio- The chemistry department, Boyer recalled, to be a very exciting “got place in the early seventies me.” for strategy and the cooperative interdepartmental culture he sought to fos- ter were highly with compatible research Boyer’s interests and collabora- scientifi tive early of Rutter’s one recruits,in Boyer 1970, spent ever time more in the biochemistry department, working closely with Goodman on restriction areas. He had demanding clinical and basic research obligations and was also collaborating and publishing system on a computer-based for interactions. drug identifying more compatible with compatible more his research interests than his own department. related discovery. A graduate student had isolated a restriction enzyme (the soon to be widely employed EcoRI) that cut DNA predictably at a spe- as he began to organize a conference on plasmid research scheduled for in Honolulu. 1972 November

10 CHAPTER ONE 11 INVENTING RECOMBINANT DNA TECHNOLOGY ndingby The idea The of using 32 cial sticky ends, attaching nding—by scientists in Stan- in scientists nding—by rmed the Stanford fi ash of insight, he wondered: could one The startling The concept, if found to work, 35 Boyer recognized a golden chance to talk chance to recognized golden a Boyer Instead, it made a staggered cut, creating 34 31 The procedures The were long and tedious. enzyme Boyer’s with 33 c position in the molecule—exactly the characteristics that Boyer had summer of 1972 and they were getting nowhere. tial leap in ease and effi ciency in splicing together DNA pieces to form form to pieces DNA together splicing in ciency its natural ability to create sticky ends in effi just one step offered a substan- and ease in leap tial recombinant molecules. Trying to capitalize on these features, Boyer and Robert Helling, a biochemist on sabbatical leave were in us- lab, Boyer’s ing the EcoRI enzyme in attempts to combine fragments. DNA was It the to attach fragment? a second DNA hybrid The plasmid might then be in- cloning. for bacteria into serted research. As came it time Boyer for to present, Cohen listened raptly to his description properties. of EcoRI’s His mind lit up when he heard that the enzyme molecules cut DNA predictably and reproducibly into unique fragments with sticky ends. In a fl use enzyme Boyer’s to sever a plasmid precisely and use the sticky ends about EcoRI and agreed to come. In November Cohen and Boyer arrived in Honolulu the for conference, neither knowing the details of the other’s two single projecting DNA strands. Each single strand was able to bond bond to able was strand single Each strands. DNA projecting single two with a complementary strand, DNA strip as one Velcro unites with an- other. Goodman The and Boyer labs confi sequencing the site cut DNA by EcoRI and determining the order of the nucleotide subunits composing the restriction site. restriction enzyme. Seeing its possible relevance to characterizing plas- mid he issued DNA, whom Boyer, he had never met,last-minute a invita- conference. the attend to tion THE COLLABORATION Cohen, meanwhile, was organizing the Honolulu plasmid conference and on the work belatedly as-yet-unpublished new of Boyer’s word got strands of the molecule. DNA cifi Especially sought. long exciting was thefi biochemistryford and genetics, to whom Boyer had donated the enzyme in generous quantity—that EcoRI did not cut evenly through the double cohesive or “sticky as they ends,” were called, to fragments join DNA had been around a decade In for or so. fact, several groups in Stanford bio- chemistry chemically were synthesizing artifi them fragments, to DNA and using the sticky ends to splice one fragment another. to ciency of his plasmid transfer pro- gure strikingly like Cohen is depicted at right, a Also to the point, Cohen needed the 38 ash it struck them that they might have have might they that them struck it ash rst impulse was to donate some of his enzyme, But would the ideas brainstormed over beer and deli 37 fi nd out. Boyer’s The walk The Cohen gave and Boyer a chance to talk about the ongoing 36 Cartoon by Dick Adair re-creating the Honolulu delicatessen conversation in which Cohen The occasionThe arose after a long day of presentations in a stuffy confer- grew increasingly as “jazzed,” Boyer later about put the it, potential syn- ergism of their separate isolating approaches for and copying selected DNA fragments. experiments in their labs. In a fl between them the makings of a method joining for and cloning DNA molecules. Pausing a delicatessen at near the Waikiki, beach at the group settled into a booth and ordered sandwiches and Cohen beer. and Boyer spire as conceived. Boyer agreed to collaborate. Boyer lab’s expertiseBoyer lab’s in restriction enzymes the for experiment to tran- as he had done the for Stanford scientists, and let Cohen conduct the ex- periment on his own. Cohenrecalled saying, “Well, that seem doesn’t quite lab fair. has Your spent a lot of time isolating the enzyme and we collaboration.” a as this do should sandwiches pan out in actualexperiment? Cohen proposed a collabora- fi to tion and Boyer agreed to collaborate, November A fi 1972. Boyer likeness is absent. (Reproduction of cartoon by kind permission of Dick Adair.) Fig. 3.Fig. eager to stretch their andlegs take in the balmy air of a Hawaiian eve- ning. might the solve randomnessand ineffi cedure. He urgently needed to talk with Boyer. ence hall. Cohen and Boyerdecided to take a stroll with some colleagues,

12 CHAPTER ONE 13 INVENTING RECOMBINANT DNA TECHNOLOGY

39 gure, and at- He brought the 40 uorescent that dye made c knowledge and technical exper- ned a natural division labor: of the Cohen laboratory 42 But the ultimate outcome of the experiment was anything but 41 Uncertain of the experiment’s success, Cohen assigned to his it re- Shared interests and the combined need for expertise and resources In January Cohen and Boyer 1973 began the experiment outlined in ce. Even in appearance, the contrast wasstriking. Boyer sported a mop search assistant Annie Chang, rather than to one of his postdoctoral stu- dents whose career might suffer if the failed. project Chang, who lived obvious that the chimeric could[recombinant] DNA be cloned. That’s easy to say in retrospect, but in actuality was it not the case—especially molecules DNA for that contain components derived from different bio- logical species.” clear. As Cohenlater observed, “There are some people who think that once a method of biochemical joining ends DNA was was out, it worked offi of unruly brown hair, an open and cherubic a robust face, fi tire of jeans, running shoes, and leather vest that stretched the limits of casual. A reporter later described him baroque as “a angel in jeans.” blue he was willingto gamble on possibilities.circumspect, Cohen and exacting struck of himself and colleagues. others Both men were in- as private, veterate workaholics and passionate about their science. their But pas- sion manifested in contrasting manners. Boyer ran anexpansively cha- otic lab and preferred brainstorming over Cohen a beer. headed a small, self-contained lab group and often discussed research in the quiet of his brought together two very different personalities. In many ways, they were polar opposites—in manner, demeanor, and to life. approach Boyer came across as gregarious, relaxed, and unassuming. Open to new ideas, tise of each lab defi lab each of tise handled the plasmid isolation and transfer the Boyer’s enzymol- work, ogy and electrophoresis studies. In a stroke of fortune, Boyer had visited colleagues on his return from Honolulu whohad demonstrated their method staining for fragments DNA with a fl the fragments stand out vividly on electrophoresis gels. but neatly in slacks and sweater or sport jacket. He was the quintessential image of the solid professor, citizen, and serious intellectual. Honolulu, working into it their ongoing projects and initially giving no exceptionalit priority. specifi The Cohen was trim, bearded, balding, and bespectacled. He dressed casually technique back to Bob Helling, still pursuing sabbatical research in Boy- who did lab, furtherer’s correlating work fragment size and mobility on the gels. In remark- In 43 ce and mid-1970s. In lab, UCSF, the lab Herb Boyer in his Department Microbiology of offi courtesy of Mary C. Betlach.) in San Francisco, became the conduit between the two labs, ferrying plasmid samples and back forth in her Volkswagen Beetle. Fig. 4.Fig. photo, note his running clothes drying in the fume hood. (Photographer unknown; photograph and Helling examined the electrophoresis gels displaying the various fragments.DNA in There plain sight was a telltale band composed of ably short theyably order, had results. On triumphal a day in March, Boyer

14 CHAPTER ONE 15 INVENTING RECOMBINANT DNA TECHNOLOGY

they had cloned it! uorescenttheir orange. To Diagram of the Cohen-Boyer recombinant DNA procedure. (From a slide- courtesy of Stan Fig. 5.Fig. Cohen.)ley N. into them. into two typesof plasmid standing DNA out in fl inestimable they had not only joy, recombined DNA— engineeredThe plasmids with their ability to reproduce themselvesin bacterial cells had also faithfullythe cloned the inserted foreign DNA c genes c c account ted enormously 44 46 The experiment The had worked But they allowed themselves 45 47 with [plasmid] the DNA, restriction enzyme business; c and technological convergence set the stage for ciency anything the Stanford biochemists or anyone anyone or biochemists Stanford the anything ciency E. coli E. rst experiments more or less worked. gle. Thefi it wasit all coming to fruition the at same time. experiment] . . . [The went very fast. was It straightforward. There was not much in the way of strug- Things just came together that at time: the study of small plasmids, trans- formation of anything. . . . I was really moved by it. I had tears welling up in my eyes because was it sort a cloudy of vision of what was to come. Cohen,For “That moment was elation.” The [DNA] bands wereThe [DNA] lined theand up [on gel] youcould just look them at and you knew . . . [that recombination DNA and cloning] had been success- ful. . . . I was just ecstatic. . . . I remember going home and showing a photo- graph the to [of my gel] wife. know, I looked that at . . . You thing until early in the morning. . . . When I saw . . . I knew it that you could dojust about The sightThe brought tears eyes: to him here Boyer’s before was evidence The paperThe published in November 1973—one year to the month af- of a simple method isolatingfor and accurately copying specifi and fragments DNA in virtually endless quantity. He recalled the emo- moment: tional niques had converged: had niques simplicity and effi and simplicity else had devised joining for fragments. DNA But the crowning accom- plishment was the invention of a straightforward technique cloning for a techniqueDNA, so simple that high school students would soon use it. Boyer later remarked on how neatly new knowledge and breaking tech- like a charm. He and Boyer had invented a technique that outshone in one speculation. Although the experiment involved only plasmid DNA, relayed in the sober language of science. biology and biochemistry manipulating for and characterizing DNA molecules. Scientifi invention. dazzling their ter the seminal meeting in Hawaii—was a strictly scientifi The novelThe idea the for cloning procedure was strictly their own. But, as both Cohen and Boyer acknowledged, they had benefi from the intellectual milieu and technical breakthroughs in molecular

16 CHAPTER ONE 17 INVENTING RECOMBINANT DNA TECHNOLOGY

c E. coli E. It was 49 Mary Betlach, Mary Betlach, rst experiment rst 50 in But Juneoors away. He might have added, “And clone 52 What had started as an experiment 48 cult to honor. A colleague and friend of both scientists 51 c topics. He had struggled three for long months to keep their cance. light The dawning, one scientist exclaimed: “Well, now we Onlyat. somewhat later did the participants grasp its electrifying Arriving the at conference, Boyer found their discovery impossible Cohen, a cautious foil to the outgoing pressed Boyer, to keep the re- Cohen, meanwhile, was hard work. Proceeding at without the UCSF voked a few technicalvoked questions, but the radical method’s implications fell fl signifi can put together any we want DNA to.” to keep to himself. Here he was in the company of the very scientists he he scientists very the of company the in was he Here himself. to keep to suspected would thrill to the invention. In a session on restriction en- zymes, he explained the amazing properties of EcoRI and the cloning experiment he and Cohen had recently concluded. His presentation pro- to furthertheir respective interests in plasmids and restriction enzymes suddenly appeared to possess far wider applications. search quiet until was it published and their priority established. about it.” about it.” a technician in the Boyer lab the at time, agreed with the assessment of Boyer: is “Herb the kind of guy that never held anything back. . . . As soon as something happens, written care he doesn’t if it’s he wants up; to talk Cohen and Boyer suggested something sweeping. more Their method, they ventured, was notrestricted to lowly plasmids; they be- foresaw it coming a general tool selecting for and cloning the of organisms DNA up and down the evolutionary scale. they could join and replicate plasmid from two DNA unrelated bacterial species. Once again, the recombinant plasmids with antibiotic resistance repercussions science for and beyond. he andgroup, Chang launched a second experiment. fi The had dealt with two closely related plasmid species that both inhabit bacteria. In the second, Cohen and Chang sought to determine whether it init talk, bacteria.” With Boyer’s the was word out, carrying far-reaching observed, keep anything “Herb can’t to himself. Stan, on the other hand, tends to be relatively secretive about what he is doing.” 1973, before publication before of their1973, experiment, Boyer attended a meeting on nucleic acids, one of the annual Gordon conferencesdevoted to specifi scientifi discovery secret. Innately open and effervescent, Boyer found the request agonizingly diffi not an unreasonable request, particularly considering the fearsomely competitive Stanford biochemists working a few fl Fig. 6. Stan Cohen and Annie Chang in their Department of Medicine lab, Stanford University, 1975. (Photographer unknown; photograph courtesy of Stanley N. Cohen.) 19 INVENTING RECOMBINANT DNA TECHNOLOGY ) It 54 Xenopus laevis Xenopus 56 ed DNA from a froged DNA ( 55 ed the bacteria containing the frog DNA. 53 nding sparked sense Boyer’s of humor. A colleague telephoned to Losing no time, they began the experiment using inJuly 1973, the same For theFor last experiment, the Boyer and Cohen teams reassembled, with that a mentor had characterized. If his mentor approved, Morrow would provide a sample the for experiment Boyer and Cohen had in mind. ony on the [culture] plate until one turned into a prince. Then he hung and I hadup, to return the call to the get real answer.” Cohen suspicions and Boyer’s to be dramatically correct: their method could reliably clone complex animal genes in primitive bacterial cells. fi The learn how they had identifi the colleague“Herb,” reported, “just said he kissed every (bacterial) col- overall of the approach previous experiments. Once again, success was resounding: the recombinant plasmids containing the faith- frog DNA fully replicated in the bacteria, even though the came frog DNA from an animal many levels higher on the evolutionary tree. results The proved ganism. problem was The where to obtain a sample of well-characterized animal a rare DNA, commodity the at time. They required of known DNA structure to be able to distinguish it fromrial theand plasmid within DNA welter the bacteria. Morrow told Boyer of that had he extraneous bacte- in a freezer Stanford at some purifi mine if the method could clone the of a complex organism. DNA do To the experiment, the team needed a sample of animal Chance DNA. was again on their side. After presenting the cloning procedure the at June Gordon conference, Boyer1973 had mentioned to Morrow what he con- sidered the obvious next step: to attempt to clone the of a higher DNA or- the addition graduate of Paul Berg’s student JohnMorrow and Boyer’s research partner Howard Goodman. Their aim was ambitious: to deter- was a stroke of exceptional good fortune. Cohen-Boyer The team now had within their grasp the scarce material needed. it Boyer placed a hurried call to Cohen, telling him the news. good They set up what would be their last collaborativeexperiment. foreign various genes for new and useful functions. He mentioned pho- poten- processes of examples as production antibiotic and tosynthesis tially possible to introduce. characteristics of bothplasmid parents reproduced in the bacterial cells. Here wasevidence that could foreignDNA in propagate bacteria. Cohen rst time in print what he andproposed the Boyer for fi had privately con- sidered: scientists using their technique might implant bacteria with The 59 He was 60 ask more. for On another occa- cient method for did cance. Their pro- Their cance. 57 58 cant question: could simple nitive answer. nitive cance of Cohen and invention. Boyer’s Their c genes from any imaginable organism and accurately uential sets of experiments Cohen in and biology, Boyer rst to prophesy the genetic engineering of pharmaceuticals— ung open a door long shut to the productive study of the genetics of eld. In the frog Cohen work, and Boyer achieved goal a long-sought In fact, scientists—Cohen and Boyer included— Although Boyer made light their of success, both he and Cohen in- cials up to woke the signifi of the most infl had fl higher organisms. As Boyer remarked: “This technology could take you to the point where you could isolate any gene and make large quantities andof it then study the hell if out of it you wanted to.” moment,the lacka straightforward of method investigating for the ge- netics of animals and humans had frustrated researchers and held back the fi in molecular biology: the invention of a simple and effi selecting specifi reproducing the genetic material in pure and unlimited quantity. In one stantly recognized the experiment’s stunning signifi stunning experiment’s the recognized stantly cedure every gave indication of working with the of all DNA and every creature regardless of its position in thehierarchy of nature. Up to that news bulletin, timed release for the day the publication appeared. PATENTING AND POLITICS PATENTING That question hung in the balance later for exploration as Stanford of- fi research,frog DNA published prompted Stanford to issue in May 1974, a much to transfer the technology into the laboratory. It just became so so became just It laboratory. the sion, soberly: more think put he it “I the great thing about this into technol- technology ogy was that the was it very straightforward, very simple, and didn’t it take transfer to much widespread in a very short period of time, and an amount of good things came out What of it. more could you ask for?” making biological elements such as insulin and antibiotics.” “may completely change the pharmaceutical industry’s approach to to approach industry’s No- Stanford’s quoted It pharmaceutical the pharmaceuticals. making bulletin in mentioned the utility method’s in basic research and went on to change potential its tout bel laureate Joshua Lederberg opining grandly that the cloning completely method “may not the fi Their experiments had not answered a signifi anywhere one No on? bacteria so the “read” complex genes of higher and organisms and express them hormone, growth insulin, like proteins as had provided a valid and defi

20 CHAPTER ONE 21 INVENTING RECOMBINANT DNA TECHNOLOGY San But com- Alerted to 61 64 rst concrete rst Most supported, 67 gure, opinions Lederberg’s ce of Technology Licensing. The message commercial of The promise was 63 New York Times the provoked New fi York science correspondent telephoned Cohen, who elds such as chemistry, engineering, and agri- and engineering, chemistry, as such elds Newsweek, which carried an article on “the gene A common belief dating to the early years of the 68 picked up the story, focusing on the possibility of bac- article and immediately called Cohen to discuss a pos- The “microbe as factory”idea also was not new, as human- A clipping of the story landed on the desk of Niels Reimers, 62 65 Times 66 At the time, biomedical scientists in American universities were sel- A front-page articleA front-page in the ndings. tion was to question whether one could should or patent basic research fi sible patent application. suggestion The caught Cohen by surprise. De- spite his recognition of the potential invention’s practicality, his reac- even at a university as entrepreneurial as Stanford. as entrepreneurial as dom preoccupied with patenting and intellectual property protection, university a at even the enterprising director of Stanford’s Offi Stanford’s of director enterprising the Reimers administered a patenting and licensing program that actively solicited faculty inventions patenting for in a manner new to academia. He read the a breaking a Times story, recounted the industrial applications resulting The he foresaw. article highlighted the novel technology’s likely practical uses in medicine and agriculture. such ideas had circulated in molecular biology some years. for caught the attention of transplanters” and their goalusing of bacteria to produce pharmaceuti- cal and agricultural products. kind’s age-old use age-old kind’s of microorganisms in making cheese, and bread, beer, wine attests. But the the gave Cohen-Boyer work metaphor new currency that future popular accounts would monotonously repeat. research The step toward commercializing recombinant technology. DNA hard to miss. to hard cal grounds and considerably less surprise frequent—hence Cohen’s at suggestion.Reimers’s at leastat in the ideal, an academic culture valuing open intellectual ex- change and the sharing of research results and materials. Although uni- versities throughout the twentieth century had sought patent rights on fi practical in inventions culture, patenting in academic biomedicine was controversial on ethi- Francisco Chronicle teria being transformedinto “factories” the for production of insulinand other drugs. ing from a Nobel laureate andrespected fi counted, helping to plant a concept of the Cohen and Boyer procedure as an invention with sweeping industrial potential. next The day the 70 ling a patent gure it out. So 69 led a patent application on the recombi- has extremely high potential with respect to its commercial application. If the patent is successful there is little doubt that represents it a potential source of considerable amount of royalties the for Universities involved. This technological development very clearly has immediate applications and probably represents one of the most outstanding new developments in molecular biology in recent years. is It a far-reaching development and The twoThe universities routinely required external evaluations before A heated political over debate the possible hazards of genetic engi- Cohen then who approached Boyer, after a few queries agreed that rst public disclosure, in this case the November publication 1973 on the sinking money into a patent application. One molecular biologist re- viewing the Cohen-Boyer application wrote with remarkable foresight: nant procedure on behalf DNA of Stanford and the University of Califor- nia. He had beaten the patent bar by a slim patent law week. requires U.S. ling of a patent applicationthe fi within the year following the invention’s fi procedure. cloning On November 4, 1974, ReimersOn November fi 4, 1974, didn’t have a lot of patience with patent law and trying to fi I just patent told attorney] [the everything I knew and the guy went ahead and did Stanley it. helped him out quite a bit; they were always working together.on it I tossed in a few ideas.” year, politicallyyear, fraught effort to prosecute the patent. University The of California, then employer, as Boyer’s became a cosponsor of the patent application. Cohen spent long hours with an outside patent attorney, struggling to the get wording and claims right. in Boyer, contrast, was quite willing to letothers manage the patenting process: must “I admit, I hen’s reservationshen’s and persuade him to agree to Stanfordfi application on the basic recombinant procedure. DNA to seemed effort The application. patent a with proceed should Reimers Boyer a long shot but worth a try. After all, Reimers with Stanford behind him was willing to take the brunt of managing what would become a six- century was that discoveries in biomedicine, especially those related to human health, should be publicly available and not restricted by patents. In some fast talking about patents as a prime means to encourage an in- commercialvention’s development, Reimers managed to overcome Co-

22 CHAPTER ONE 23 INVENTING RECOMBINANT DNA TECHNOLOGY

72 eld. Science 73 announced the in for- November c witch hunt” that him gave heartburn and oor to vote the approve draft. Cohen refused to In February a select group 1975 of about a hundred mo- 74 His remark that the experiment with Cohen had created a 71 In July 1974 the so-calledIn July 1974 Berg committee published a letter in search guidelines. The Federal The Register guidelines. search mation of the Recombinant Advisory DNA Committee, withmandate a to advise the NIH director on technical matters related to recombinant research.DNA signed by ten prominent scientists, including Boyer and Cohen. called It a temporaryfor moratorium on certain kinds of recombinant re- DNA search until a conference convened to consider the risks and develop re- dangerous combinations of antibiotic resistance genes. resistance antibiotic of combinations dangerous While the committee deliberated, Cohen a growing faced problem—how to handle requests his for plasmid, the at time theonly one suitable for use in cloning research. He decided to restrict distribution to scientists planning experiments that he judged would not create new and possibly neering gained momentum as the patentingprocess under In got way. his Gordon conference June 1973 presentation, Boyer had unwittingly planted the seeds what came for to be known as the recombinant DNA controversy. had turned into “a scientifi “a into turned had came up with a preliminary draft of recombinant research guidelines. guidelines. research recombinant of draft preliminary a with up came Cohen, Joshua Lederberg, stood and James out as Watson the only dis- senters in the rushed fl endorse what he saw as a politically motivated document that he and much of the assembly had not reviewed. conference The in his opinion sider the technical issue of laboratory research explicitly safety, avoiding deliberation on the technology’s larger social and ethical implications. Striving to government avoid regulation, the scientists proposed to de- vise their own safety regulations with the idea that recombinant DNA research could then proceed. After contentious the debate, participants lecular biologists arrived the at now-celebrated Conference on Recombi- nant Molecules DNA California’s at Asilomar conference grounds to con- Berg as chairman, to study safety measures research for in the new fi novel combination of antibiotic resistance genes triggered concern about the safety of the new procedure. A majority of the attendees voted to send letters to the National Academy of Sciences and the National Institute of Medicine requesting formation of a committee to investigate thepo- tential risk of recombinant experiments DNA and the research need for guidelines. National The Academy then formed a committee, with Paul amed amed 76 t from a basic biolog- It was It not a perspective condu- 78 Even the more sanguine Boyer was under duress, dis- 75 ghting andpoliticking. He later labeled the Asilomar le and avoiding further rocking the boat. Throughout this pe- Others charged that a successfully issuing patent would encour- 77 The Stanford-UC effort Stanford-UC The to patent the Cohen-Boyer procedure was ical discovery. Berg was particularly upset, charging that the proposed proposed the that charging upset, particularly was Berg discovery. ical patent covered “production of all possible recombinants, joined in all possible ways, cloned in all possible organisms, using all possible vectors [vehicles such as plasmids and viruses used to transport genetic mate- rial].” swept into the swirling political over debate the safety of recombinant research,DNA complicating the patenting process and prompting Co- tense vigilancehen’s in matters related politics. to DNA In the enfl political climate, critics—Arthur Kornberg and PaulBerg prominent among them—attacked the two universitiesand the two co-inventors for attempting through patenting to privatize and profi turbed by the in-fi the by turbed conference nightmare” “a and admittedhe was too upset to sleep. patent application, and his own cautious nature argued maintaining for a low profi riod, he kept a slogan his on desk that said, in effect, if whales rise don’t to the surface, theyharpooned. get don’t age theage technology’s dissemination to industry, carrying along with a it burden of potential hazards. was It an anxious period both for Cohen and singledBoyer, criticism out for as creators and practitioners of recom- binant technology DNA and inventors on the patent application. But it was especially troublesome Cohen. politics, for DNA contention over the had served to reinforce the notion that publicly funded research, par- ticularly in the life sciences, should lead to practical applications of use ican science and were accustomed to justifying their grant proposals in terms of the eventual social utility of the proposed research. vari- The ous social movements in of the which 1960s, both Cohen and Boyer had actively participated—Cohen singing and playing political protest bal- lads on his and banjo, both scientists attending anti-Vietnam rallies— STEPS TOWARD COMMERCIALIZATION STEPS TOWARD twoThe cloning experiments were the last time Cohen and Boyer ever collaborated. they After set off on separate 1974 tracks. Like most of their colleagues, both subscribed to the utilitarian aims long a theme of Amer- lingering anxiety. lingering cive to bold ventures.

24 CHAPTER ONE 25 INVENTING RECOMBINANT DNA TECHNOLOGY Corporate consulting 82 He would continue to give prime prime give to continue would He 84 83 “All of a sudden,” “All Cetus cofounder Pete 80 rst and foremost an academic—in basic- Cape’s offer was in line with Stanford policy 81 cant hand in moving the recombinant inven- DNA Yet despite this Yet utilitarian strand in American science, 79 c advisory board. A consultant position suited Cohen in terms of career objectives and Then, Cohen early received an offer in that 1975, he saw as a means Stanford policy, professors were to devote no more than thirteen days days thirteen than more no devote to science orientation were and professional aspiration—and anything but professors the stereotypical risk-taking, freewheeling entrepreneur. According to policy, Stanford per academic quarter to consulting. personal makeup. He was fi might have a signifi tion toward industrial application. Cohen signed In May 1975 a consul- attention to his academic responsibilities; yet as a Cetus consultant, he portance diagnostic for and therapeutic medicine,” then promoted his colleague and friend Stan Cohen as an obvious choice advising for Cetus on applying the new technology. at Stanford University School of Medicine was In fact, Cape had already1970s. fairly convinced Joshua Lederberg and other no- commonplace in the tables to join the Cetus science advisory board. laureate, The whosought out occasions to extol recombinant as a “technology DNA of untold im- Farley breathlessly “Stan put it, Cohen and Herb Boyer together got and started snipping and up DNA stitching back together it again; we thought, my God,‘Oh just that!’ So we immediately look at went after Cohen and signed him up exclusively.” on faculty consulting, designed to bring the university in close touch with industry and stimulate technology transfer. the scientifi the to advance commercializationwithout upsetting the political apple cart and detractingfrom his academic responsibilities. Ronald Cape, the smooth-tongued cofounder and chairman of Cetus Corporation—a start-up formed in Berkeley in 1971 to capitalize on an automated method selectingfor antibiotic-producing bacteria—offered Cohen a position on no desire to leave academia argued against either scientist giving seri- giving scientist professorship. either Academic cultural against tradition, the argued precarioustext recombinant of research, political DNA and the fact that Cohen and Boyerhad academia con- leave to desire no ous consideration to forming No evidence a company. the at time of their seminal research collaboration suggests that they did. tothe public. biomedical culture into was the notably inhospitable late 1970s to pro- fessors forming consuming relationships withbusiness, let alone taking the almost unheard-of step of founding a company without giving up a Boyer Boyer 86 ce representative ce An institutional cient. 90 c discoveries and examples of ed company, he admitted, ed company, was not inter- The increase The suggests the value the company placed on 85 At a meeting with a Stanford licensing offi But the unidentifi 88 89 c and technical expertise. Accepting the position, as well as He was a professor and basic scientist—that was his life and aspi- 87 As Cohen took a measured step intothe corporate world, Boyer re- Yet it was it withinYet the realm of accepted academic practice to test in speculation was entertaining, but he had no thought of founding a com- pany. also published profusely and still (twenty-three publications in 1973–75) found time to play soccer with his two young sons. Preoccupied though he was, he never promise lost the in vision phar- of recombinant DNA’s maceuticalmanufacture. tossing around In ideas about its industrial casual prospects. freewheeling Such moments with colleagues, he relished tion with and equity in a company. preoccupations. academic consuming his in UCSF at grounded mained His burgeoning lab was cloning a “zoo” of various animal genes and struggling tosatisfy a deluge of outside requests the for plasmids and re- striction enzymes essential recombinant for experiments. DNA his scientifi his the Cetus shares that came with brought it, Cohen into formal associa- periments, the technology could demonstrate increased product yields. Boyer thought the technology was ready to commercialize and on his own he tried to interest least “at one drug company” in exploring that possibility. to estimate the industrial potential of recombinantBoyer DNA, stated that he foresaw the “immediate” industrial use of the technology in the synthesis of hormones and enzymes. He mentioned insulin as a likely target. Companies, he predicted, would be interested if, through ex- tant per higher year, agreement than that paid Cetus$7,500 the $6,000 offered. initially think about how we could these get [pharmaceutical industry] guys in- terested to take this [technology] and do things.” ested. thinking wasn’t “I about starting I was just a company. trying to these lines. these ing and licensing operation was not active or effi framework commercializing for scientifi professors launchingUCSF start-up companies was almost nonexistent. laboratory-level experiments possibilities recombinant in practi- DNA’s cal memo application. outlines A September thoughts 1974 Boyer’s along ration. Furthermore, the university paid scant attention to capitalizing on employees’ inventions. Unlike Stanford, did UCSF not have a history of close interaction with local businesses, and the university’s patent-

26 CHAPTER ONE 27 INVENTING RECOMBINANT DNA TECHNOLOGY rst industrial rst As the September deadline passed, 92 At Boyer’s behest, At Boyer’s a chemist in Germany had agreed to 91 Before a yearBefore had passed, Boyer had taken matters into his own hands for utilizingfor the technology in a commercial sense, that is, could one bacteriaget to make hormones, etc. that one project etc., So that’s we’re with.” involved maceutical production. In May 1975 he told an interviewer: “I think this this think “I and arranged a research collaboration interviewer: to test an the technology’s use in told phar- he 1975 May In production. maceutical [possibility of producing proteins in bacteria] has a lot of implications attempt to clone the synthetic gene. chemically synthesize fragments DNA a tiny for gene codinga hu- for man hormone (angiotensin and II) deliver them to Boyer by September Once the synthetic1975. arrived, DNA the plan was the for Boyer lab to plan evaporated in the Cohen, fall ensconced of 1975, as a Cetus consul- tant, appeared to be in a superior position to oversee the fi application of recombinant technology. DNA it becameit frustratingly clear that the synthetic was DNA not goingto ar- rive. Boyer later learned that the German chemist had decided to attempt the research in his own With no lab. capacity synthesis in DNA UCSF, at Boyer was left without an carrying avenue for his strategy further. As his

2 Creating Genentech

I had these little seeds of thought, fantasy more than anything. But I had no idea how you would start a company. Herbert Boyer, April 7, 19941

BOB SWANSON

The impasse that Boyer had reached in exploring the practical applica- tion of recombinant DNA technology took an unexpectedly consequen- tial turn in an encounter with an unemployed venture capitalist. Robert Arthur Swanson was born in Brooklyn, New York, in 1947, the only child of parents with a year or two of college education. The family moved when the boy was three to Miami Springs, Florida, a small town near the Miami airport where his father headed an electrical maintenance crew for an airline. Bob’s childhood was a secure world of Little League base- ball coached by his father and the doting attention of his parents and grandmother. They imbued him from an early age with the notion that each generation was to do better than the last, perhaps the origin of his remarkable drive and ambition in later life. He recalled the launching of Sputnik in 1957 as a landmark in his young life, channeling his interest toward the science and technology that captivated American boys of his generation. He attended a large public high school in nearby Hialeah, where he earned high marks in science and math. To his family’s great pride, Bob entered the Massachusetts Institute of Technology in 1965, accompanied by a trunk stenciled with his full name. The trunk would later serve as a makeshift coffee table in his For an For individual 4 His fraternity brothers 2 y competitive and the course- rst D, “a letter of the alphabet,” he re- he alphabet,” the of letter “a D, rst nished his last undergraduate year in 3 In 1970 Swanson In graduated 1970 from MIT with an undergraduate 5 Swanson in majored chemistry with the thought of preparing a for Following up on his fascination with venture capital, Swanson took Swanson’s enterprisingSwanson’s move marked a turning point in career direc- ably isn’t going to be what I’d want to do all my life.’ ” want to going do isn’t all to be whatably I’d my life.’ career in industry. But a summer job in research at a chemical company company chemical a at research in job summer a But industry. in career changed his mind. was “It a great learning experience,” he recalled, “and I discovered a lot about myself. One of the things I discovered was that I enjoyed people more than things. So I said myself], [to ‘Gee, this prob- play his outgoing personality. He became chairman of the fraternity’s fraternity’s the of chairman became provided He the coaching A student to he needed bring his up grades to A’s. personality. asjob a campus tour leader provided pocket money and a chance to dis- outgoing his play social activities and took to heartits emphasis on brotherhood and inter- personal networking. a job witha job Citibank, which was building a venture investment group in degree in chemistry and a master of science degree in management. called, had “I never seen on a grade before slip.” less-than-opulent bachelor apartments. Bob joined fraternity a and fell right in with its masculine camaraderie. But despite a solid high school education, he found MIT academics stiffl a challenge.work He receivedhis fi trepreneurial start-ups in exchange equity for stakes in the young com- panies. Swanson was enthralled: he recalled, venture [in “Here capital],” ideas got “you’ve going to products the at same building time you’re a company.” opment caught his fancy. The course gave students real-world experience students course real-world gave The his caught opment fancy. and companies, start-up local following investors, risk meeting through writing practice business plans. He learned that the few professionals in the cottage industry just beginning to be known as venture capital of- privatefered investment funds and management advice to promising en- School of Management while he fi chemistry. He had notime to waste in getting ahead. tion and, not incidentally, an escape from the draft the for Vietnam War. He found a course on entrepreneurship by far the most eye-opening in the devel- organizational Prophetically, curriculum. school business entire analysis may have probed no deeper than realizing he wished to be in in be to wished he realizing than deeper no not given probed to deep introspection—he was not a doer, a thinker—his have self- may analysis the thick of things. Swanson then took the initiative to petition MIT to permit premature entry into a graduate business program its Sloan at

30 CHAPTER TWO 31 CREATING GENENTECH The 11 When 9 Taking 8 Impressed, his his Impressed, 6 ces in San Francisco. Swanson had found his milieu. 7 Kleiner and Perkins worried that Cetus 10 ll a vacancy the at partnership. Perkins, a c adviser. c nancing and building companies. One of Swanson’s assignmentsOne of Swanson’s was to monitor the partnership’s sub- Inevitably, not every Citicorp investment went well. became It Swan- ce on Sand Hill Road.He was twenty-six. Citicorp ce for Venture Capital.plan The was to exploit the rich oppor- stantial investment in Cetus Corporation, the company about to acquire Stan Cohen as scientifi downhill. Serving on the board of the failing he met Eugene company, Kleiner, who with Thomas Perkins had founded in 1972 Kleiner & Per- kins, a venture capital partnership with offi son’s task to tryson’s to salvage the bank’s stake in a company rapidly going brainstorming session ranged over a number of emerging technologies that Cetus might develop, including the new phenomenon of recombi- Swanson decided to leave Citibank and seek a new position, Kleiner rec- ommended him to Perkins to fi former Hewlett-Packard engineer with a Harvard MBA, respected Klein- abilityer’s to assess individual character and motivation. Late in 1974 Swanson joined Kleiner & Perkins as a junior partner in its Menlo Park offi son arranged a luncheon with company cofounders Ron Cape, Pete Far- and Nobelley, laureate Donald Glaser. At the last minute, Perkins also came along. two The venture capitalists hoped to persuade management, as Perkins “to put it, do something that wouldamount to something” and redirect the company along focused and productive lines. was not focused on product development and feared their equity stake was turning sour. As part of the effort to Cetus get on track, Swan- in 1975 region in the world, boasting a refreshingly boundless, risk-tolerant, risk-tolerant, boundless, refreshingly a boasting world, the in region success-breeds-success culture in which an aspiring young person could spread hiswings and try new things. superiors chose him and a colleague to move west to open a San Francisco offi tunities risk for investment in the Bay Area. Arriving Swanson in 1970, encountered a thriving center of the microelectronics and computer in- dustries in a region thirty miles south of San Francisco, soon to become known as was Silicon It without Valley. doubt the most entrepreneurial a measure of Swanson, Kleiner was impressed, according to Perkins, with the ability young man’s “to think straight and things get done.” New York City. In an City. unusualNew York gesture, the bank its gave newly minted business school graduates a sum of money to invest. neophytes The did very well. Swanson later jokingly referred to the experience ashis post- fi in training doctoral

really 13 In frus- In 14 eld, Cetus management felt no rst exploratory recombinant DNA Despite the striking opportunity to be- 15 Glaser, presented a friend a glowing of Cohen’s, picture of 12 rst mover in a virgin industrial fi Swanson spent the next few weeks reading recombinant up on DNA Cetus was not alone in its hesitation regarding the industrial appli- nally convincing them that a technology potentially of making capable nally become operational and the fi tried very hard. I proposed to Cetus that we set up a separate division of Cetus to do that and put Bob in charge They of it. wouldn’t hear It of it. was absolutely rejected. So we reached a dead end with Cetus.” medical substances in bacteria had striking industrial possibilities. As avail. As had He more luck with Kleiner and Perkins, his infectious fervor possibilities. industrial striking fi had bacteria in substances medical Perkins recalled: became very “We interested in gene splicing—all of us, Kleiner, Swanson, and tried myself. We to encourage Cetus to do Bob it. technology and urging Cape and Farley to take it up at Cetus—to no no Cetus—to at up it take to Farley and Cape urging and technology experiments were launched. begin to build genetic engineering research facilities until December than more a year1976, and a half after Stan Cohen had become an adviser on commercializing the technology. Only did in Cetus’s 1978 state-of- the-art laboratory facilities, designed to contain any imaginable hazard, fi watchword regarding recombinant was DNA “wait Only and see.” with evidence of commercial feasibility were established corporations willing to consider putting human and material resources into trying to trans- form the technique basic-science of recombinant into DNA a productive industrial technology. Cetus, despite its entrepreneurial traits, did not cation of recombinant technology. DNA Pharmaceutical and chemical reservations, had also heart, at institutions conservative corporations, anxious not to lose out if the radical proved competitive approach but also aware of the many unanswered questions concerning its industrial implementation and industry’s productivity. In the common mid-1970s tration, Kleiner and Perkins sold the partnership’s shares in Cetus and abandoned the company. nant DNA. nant come a fi was captivated by Glaser’s account. Perkins recalled: “But Swanson that.got I remember the next day he took me aside, and he said, ‘This idea genetic[of engineering] is absolutely fantastic; is it revolutionary; will it change thethe most world; important it’s ” thing I have ever heard.’ the cloning procedure and its possibilities in genetic engineering. Cape in biol- with Perkins, and background no interest, no showed Farley and failedogy, to grasp the technology’s industrial potential. Swanson alone

32 CHAPTER TWO 33 CREATING GENENTECH ve or ten At the end of eld in which 18 e industrial R&D c Heights exclusive [an San Francisco 16 Not surprisingly, industry preferred voluntary regula- 17 eld. My half of an apartment in Pacifi in apartment an of half My neighborhood] My lease rent]. [in payment was $250 on the Datsun 240Z DNA politicsDNA presented an additional roadblock. Cape and other cor- Calamity meanwhile had befallen Bob Swanson. After the denoue- tomorrow”—regulations, he warned, that would stifl in the new fi of Health. agenda The was to discuss the impact on industry of the NIH guidelines recombinant for research, DNA formal due for public release A tradethat publication July. reporting on the meeting wrote that the in- dustrialists expressed “no detectable enthusiasm the for guidelines” and quoted one executive as stating that “what are guides today will be regs meet with Donald Fredrickson, the director of the National Institutes Institutes Berkeley to Cambridge, had passed or were considering restrictive local National the of ordinances. June That nearlythirty corporations and two manufactur- pros- industrial director engineering’s genetic in the interested associations—all ing Fredrickson, pects but wary of attendant political problems, sent representatives to Donald with meet porate leaders hesitated to entera politically precarious fi the safety of recombinant was DNA hotly debated and the imposition of governmentregulation a seemingly likelya host of bills all it, before stipulating outcome. regulation in one form or another In1976 Congress had of recombinant research. DNA Additionally, a number of cities, from ment over Cetus, Kleiner and Perkins began to question suit- Swanson’s ability as an associate. reached “So we a dead end with Cetus,” Perkins commented. “Kleiner had kind of reacheda dead end with Swanson. So we advised that should he Bob seek employment elsewhere.” tory compliance better or, yet, no regulation all. at Pharmaceutical com- panies, weighing the worrisome political issues on top of recombinant uncertain industrialDNA’s feasibility, largely decided not to initiate in- being. time the for programs ternal urgency the toapply new technology. “WhateverAs in Cape put it 1978, practical applications I could recombinant see for . . . were fi DNA and, therefore,years there away, was simplyno rush to started, get from c point of view.” a scientifi 1975, Swanson found1975, himself suddenly looking his work, for career plans dashed, no alternative direction in sight, and no one anxious to take him on. Reduced to living on monthly unemployment checks—“$410 a month scrimped totax-free”—he meet expenses: He 22 19 eld. Swanson be- Swanson, not one 20 24 Persisting despite the 23 y. “He told me he was very busy,” was very he me busy,” told “He y. His seven years in venture capital had provided 21 yingcareer expectations. Anxious thoughwas, he kept he his op- own, to lots of smaller companies. I probably had three interviews a day threefor or four months. This was a pretty scary period. I was interviewing a lot of people, from large companies like Intel, where I could get some operating experience before I went out and started onmy was and $110, the rest waspeanut butter sandwiches and an occasional movie, plus I had a little savings, not very much that at time. valuable training in raising money and advising new companies, but the experience had also made him feel “like on the a coach sidelines.” combinant to him felt DNA “like important stuff,” important enough to build a company upon. FOUNDING GENENTECH cir- precarious by driven act, to decided Swanson 1975, in late Sometime cumstance and naive faith in the technology’s commercial prospects. Re- But all the while he kept coming to back recombinant and DNA his vision of its commercial promise. high-fl tions open, consideringa dizzying variety of employment opportuni- ties. He recalled: It wasIt a rudeawakening an for exceedingly ambitious young man with to give pressured up easily, him a meeting. for Boyer reluctantly in. gave He would see Swanson—but only briefl rebuffs, Swanson called oblivious Boyer, of the fact that he was contact- ing an inventor of the technology. He wanted to start Swan- a company, son told the preoccupied and he thought professor, recombinant DNA was ready to commercialize. He was right, probably Boyer replied laconi- cally, thinking to end the call and back to get work. DNA, he drew up a list of scientists prominent in the fi the in prominent scientists of list a up drew he DNA, gan to cold-call the scientists, asking if they thought the technology was toready commercialize. Without exception, all believed recombinant had industrialDNA promise but surmised would it require a decade or two of development a commercial before payoff. wanted a piece of the action; he wanted a company of his own. Culling names from Asilomar publicity on the 1975 conference on recombinant

34 CHAPTER TWO 35 CREATING GENENTECH nanc- 27

. He agreed to give me ten ten me give to agreed He . 25 nancing start-ups. Boyer reminisced: Swanson related his experience in funding 26 ce in the Department of Microbiology. If Swanson had elds in the Bay Area the at time, computers or running shoes or different. . . . He had read a lot about the [recombinant technology, DNA] and thought might it be useful. I said, “Sure, why not.” When Bob came along, he explained venture capital to me. He had this de- sire to start a company of his own, and he didn’t want to start out in the something do to wanted He usual time. fi that at popular were that things other As their conversation continued, the two found themselves immedi- In January Swanson, 1976 smartly dressed in a suit and tie, thinning the technology and in a shared down-to-earth style. They adjourned to a neighborhood tavern, the allotted ten minutes extending to three hours beers.” many as least at “and professor grew more and more intrigued. him Here before was an eager young man asserting that he knew how about to creating go and fi ing a company—unknown and forbidding territory an for academic like himself. ately doubtless compatible, discovering a bond in their enthusiasm for of recombinant technology; DNA he was one of its inventors. Still more surprising, he found that Boyer had so far gone as to arrange a research collaboration with a German chemist to test its industrial possibilities. had out,It not but he and worked Boyer seemed of one mind regarding reluctant the the himself, of spite In possibilities. commercial technology’s to Herb who Boyer, was substantial and disheveled, his signature leather vest in keeping with casual academic dress. professor The greeted Swan- son in his usual genial fashion but with a thought of dismissing him in short order and getting to back the affairs As of the the day. conversa- tion continued, Swanson learnedthat Boyer was not only a practitioner eight—strode purposefullyeight—strode dingy corridors through Boyer’s to UCSF’s cramped offi doubts, he didn’t show them. His business attire signaled to puzzled lab folks a visitor from the alien world of commerce. Something was up—but Short andwhat? stocky magazine (a article later described Swanson as not a big man unless standing on his wallet), he was a study in contrasts hair trimmed and tidy above a youthful face—he was all twenty- of Swanson recalled. was “He friendly, but busy minutes of his time a Friday on afternoon.” and advising high-technology companies, describing to a rapt Boyer the function of venture capital in fi nan- rst and rst gurerecombi-in Naïveté, in fact, was a 28 31 By aligning himself with with himself aligning By 30 29 For his For part, Swanson had found a preeminent fi 32 Boyer had cause quick for and casual assent. last Here at was the Boyer was primed an for industrial venture of some sort Swan- before reason. In an era of declining federal support basic for research, Boyer saw the proposed company as a likely source of research contracts and fundingmuch-needed his for Swanson, lab. he recalled, “said he had ac- laboratory.” my in cess and to I thought some money, would it way be a good to fund some work some and postdocs and would shoulder the brunt of getting off it the ground, why shouldn’t he give try? a He had it no intention of leaving the university; if a com- pany indeed materialized, he would treat as it a sideline. He was fi foremost a professor directing a laboratory the at frontier of recombinant science. priority That proposition made appealing Swanson’s another for chance he had sought to test the technology’s utility as an industrial pro- cess. Assured that Swanson knew how about creating to go a company son arrived on the scene. But he needed someone with business and fi cial experience to put a vague had “I concept these into play. little seeds of thought, fantasy more than anything,” he recalled. “But I had no idea how you would start a company and where you would what you would go, do.” if we had known about all the problems we were going to encounter, we would have thought twice about starting. . . . Naïveté was the extra added biotechnology.” in ingredient salient quality of their always “I maintain,” concept a company. for Boyer reminisced, “that the best attribute we had was our naïveté. . . . I think As Boyer take remarked two years “You naïve later, people and put them in a room, they just boost each other over the bar.” nant research DNA who was willing to serve as the research company’s adviser, recruit scientists, and provide the proposed enterprise with an out to be true. experience The nonetheless prompted Boyer to remark to his we could know, wife, make Gracie: “You human growth hormone; all we have to do is isolate the gene. And this,” he remarked in an interview, “was had Bob gotten before in touch with me.” yet when tested was found to have normal levels of growth hormone. hormone. growth of perhaps he coulda company, mitigate the perennially pressing problem levels normal of raising funds have his for There was lab. also a personal aspect to to Boyer’s found was interest. One of his young sons was on the lower end of the growth curve, tested when yet the pediatrician boy, The assured the concerned parents, would likely reach an acceptable height without treatment, a prediction that turned

36 CHAPTER TWO 37 CREATING GENENTECH

33 nes of a Used in Used diabetes treatment since the the hor- 1920s, 34 c legitimacy. evening, That in the modest confi c rationale choosing for insulin. Unlike many proteins of Sculpture depicting the initial meeting of Swanson and Boyer in a San Francisco tavern, with Swanson’s subsequent market research led repeatedly to insulin, the the insulin, to repeatedly led research market subsequent Swanson’s ture Swanson for to research and identify small protein hormones for synthesis.possible hormone whose name was currently in the air as a prime target ge- for netic engineering. The meetingThe ended with Boyer recommending an atlas on protein struc- tavern, they agreed to form a partnership, with each contributing $500 $500 contributing each with partnership, a form to agreed they tavern, toward legal be sure can’t fees. “I in retrospect,” Swanson remarked, “whether enthusiasm, was it my persuasiveness, or the effect [Herb’s] of the beers, but we agreed that night to establish a legal partnership to in- vestigate the commercial feasibility of recombinant technology.” DNA Fig. 7. 7. Fig. the living originals. The life-size bronze statue by sculptor Larry Anderson sits outsidebuilding a research on the Genentech campus. (Photographer unknown; photograph courtesy of CorporateCommunications, Genentech, Inc.) aura of scientifi the era, its molecular structure—the sequence of amino acids making up the protein—was known, information critical devising for an experi- mone extracted and from pigs cows was an essential staple of medical practice, yet on occasion caused allergic reactions in human recipients. thinkingThe was that human insulin, as a natural product of the hu- wouldman not present body, such problems. Furthermore, there was scientifi strong nancial nancial “He was “He Swanson 36 37 rm, as his business nancial backing. That rst industrial trial of recombinant cantly better mankind. To manufacture manufacture To mankind. better cantly The goals The were notably ambitious, the lat- 38 rm since Considering the 1920s. this forbidding A ready-made market A ready-made with a patient population in place counted as 35 A target chosen, the overriding need was fi for His short-term strategy was more realistic. fi The was Swanson’s province.was Swanson’s In completed he a preliminary March 1976 busi- ness plan, a critical document presenting for a company to the fi community. After a failed pitch to an heir of a California banking family, Swanson his approached former partners Kleiner at & Perkins. form of insulin that promised to out-compete the animal insulins on on insulins animal the out-compete to promised that insulin of form the current market. Human insulin, Boyer and Swanson readily agreed, was their hands-down choice the for fi technology.DNA notable advantages a cash-strapped for precluding start-up, the daunting expense of promoting and developing a market a new for and unfamiliar there wasproduct. Yet room, Swanson believed, introducing for a human presented them with his business plan, a straightforward docu- six-page ment. mission, company’s The the document proclaimed, was “to engage in the development of unique microorganisms that are of pro- capable ducing products that will signifi and market those products.” reliable moneymaker number a for of American and European pharma- ceutical houses, with world sales greater than million $100 and grow- ing. laboratory synthesis. Swanson, bringing his business training to bear, bear, to mental strategy making for training the hormone. Insulin, was moreover, one of business his bringing the smallerfty-one amino proteins, acids long, suggesting only fi Swanson, easier synthesis. laboratory found insulin economics impressive. hormone The was an immense and record, therecord, likelihood of the proposed start-up becoming an independent Swanson’s than more little was soon anytime company pharmaceutical dream. distant and grandiose ter in particular. become a self-contained To company making and sell- ing its own products would entail breaking into the highly competitive and capital-intensive pharmaceutical industry. With the one exception of Syntex Corporation, developer of the oral contraceptive, the industry had not admitted a new fi ing to make a career out of this either with us or without us.” us.” without or us with this either of out career a make to ing hot as blazesgenetic on engineering,” Perkins remembered. was “He go- isms manipulated to therapeutic produce hormones could economi- cally compete with older production methods. company The would then plan laid out, would identify an existing market in which microorgan- which in market existing an identify would out, laid plan

38 CHAPTER TWO 39 CREATING GENENTECH By partnering with an established corporation, corporation, established an with partnering By 39 Outline of Swanson’s presentation to Eugene Kleiner and Perkins, Tom April (Chief 1, 1976. review and approval. license the engineered bacteria to one of the established pharmaceutical houses with the know-how and deep pockets to handle the exorbitantly expensive process of drug development, clinical trials, and government Fig. 8. Fig. Financialcer archives, Offi Genentech, Inc., copy courtesy of Robert A. Swanson.) the start-up would not need to acquire the expertise and shoulder the

41 nancial return. nancial Kleinerrst-ever & Per- 40 t margins.Swanson requested c mind behind the enter- proposed edgling operation—of the later stages of rst stake in recombinant technology. DNA was But it rsttarget, stressing its immense domestic market. went He but at leastbut at they knew how to do the experiment. said, “Let’s just go through it step by step. Tell me what you’re going to to going you’re what me Tell step. by step it through go just “Let’s said, do. What equipment you’ll need. How will you know if succeeded? you’ve How long will take?” it I was very impressed with Boyer. He had thought through the whole thing. He had an answer all for those questions—[we’ll] need this equipment, these basic chemicals, and take these measure- ments, and on and on. I concluded that the experiment might not work, make a new form of life like this?” I was very skeptical. I said that I would agree to meet with Boyer. He came in the same week, and we sat down I in So ask. to our conference room about for questions three hours. of Of course, I have a background kind what know in physics, didn’t electronics, optics, computers, lasers. Biology was really never a I me. for strength [Swanson’s business[Swanson’s plan] was very conventional in that I [representing Kleiner & Perkins] would put the up they money, would hire the people, and would it be a very straightforward venture. I took the view that the technical risk was enormous. I remember asking, “Would God let you The strategyThe of the two savvy venture capitalists, as was true in risk Kleiner and Perkins were decidedly intrigued but insisted on hearing However, Kleiner and Perkins, both with operating experience, differed from some of their venture capital colleagues in taking an assiduously only small fraction of the million $8 total in the fi kins venture fund. investment generally, was to make carefully calculated investments in young companies the for chance of substantial future fi Boyer’s clearBoyer’s explanation of complex science andappli- its real-world cations did the trick. Kleiner- and Perkins agreed to invest $100,000— venture fi capital’s mine by building “bugs” (bacteria) producing insulin at a fraction of of fraction a at insulin producing (bacteria) “bugs” building by mine its current selling price and high at profi funds. in start-up $500,000 from the Boyer, all-important scientifi prise. Perkins recalled the subsequent meeting: high cost—staggering a fl for pharmaceutical production. Swanson then spotlighted insulin as the fi company’s on to claimthat recombinant technology DNA could tap into this gold

40 CHAPTER TWO 41 CREATING GENENTECH

42 In the the In 44 gured bet- gured nology and Swanson was tech 45 nanciers. despite Yet gineering gineering en etic etic gen ashes of brilliance which for [Herb] nally Boyer over. became vice presi- 43 Their salaries were fairly standard a start-up for of 46 name, and the entire process took maybe ten seconds.” c On the promise of the Kleiner & Perkins Swanson seed money, and terrifi Boyer dissolved their partnership signed incorpora- 1976, and on April 7, tion papers creating a legal entity known as Genentech. Boyer had come up with the name, a contraction of designated president and treasurer a monthly at salary his of $2,500, anxious period of unemployment fi dent and secretary a month. $1,000 at Both shares men received 25,000 Genentech stock. of are better than thoughts? Second all. “Not at percent.” 50 If the worked, it rewards would be obvious.” evidence existed that they or anyone else could transform the basic- science technique of recombinant into DNA a feasible industrial process, let alone come up with marketable products. Asked later about the level of risk the partnership took on, Perkins replied: “Very high. I fi rare when lose the But it’s it. oddster than on a new we’d technology 50–50 Yet the riskYet represented in the enterprise that Swanson proposed was prototyped greater than products the partners with envisioned or taking on. Their other investments products existing with companies in were and in sight of the marketplace. company The Swanson and Boyer pro- posed lacked products, nearterm or otherwise. Far worrying, more no careful oversight and intent to reduce risk, the business of Kleiner & Per- kins was by its inherent nature extraordinarily speculative. As Kleiner wrote to an inquiring California securities regulator apparently con- speculative, highly is cerned about the Genentech risky in nature of their Genentech investment: “Kleiner & investment an that realizes Perkins but we are in the businessmaking of highly speculative investments.” hands-on approach to managing their companies, assuming a seat on on seat a assuming companies, their managing to approach hands-on the board of directors, and advising corporate on management and de- velopment. Their modeoperation of was a striking departure from the fi Coast East most of approach invest-and-leave-it the period. future The value of their shareholdings would be a different story. acquired 20,000 shares of Genentech preferred stock. preferred Genentech of shares 20,000 acquired May closing, Kleiner and Perkins handed and over a check $100,000 for a vast improvement improbable suggestion over Swanson’s “HerBob.” of As Swanson recalled, “In one of the fl is famous, he immediately came up with Genentech. seemed . . . It like a For 47 Bob Swanson around the time of Genentech’s foundation. (Photographer unknown; photo- As a condition the of investment,Perkins joined Swanson and Boyer literally billions of dollars this for thing,’ I might not have done it.” know the at outset how heavily instrumental he would continue to be in the constant company’s fund-raising. “What was so different about Genentech,” he later observed, “was the astonishing amount of capital required to do all this. on day I know, one, if anyone had whispered into my ear that, the ‘For next twenty years, you will be involved in raising on the board of directors and was elected chairman. Little did Perkins almost two decades, Perkins would serve hands-on as Genentech’s direc- Fig. 9. Fig. graph courtesy of Corporate Communications, Genentech, Inc.)

42 CHAPTER TWO 43 CREATING GENENTECH

48 ts, the ex- guidance.c Boyer cient in essential technologies, directionrm’s and development. c adviser, and a part-time that. one at In UCSF’s administration at last allotted him generous, generous, him allotted last at administration UCSF’s exibility the at Firm top. direction and product focus, 49 c advisers. in Boyer existed Yet a fund of rare knowledge and tech- Of even starker economy was scientifi Genentech’s rather than star power, were the company’s priorities. company’s the were power, star than rather The executiveThe deliberately board’s small size allowed quick for decisions, fl and unanimity, lab of young scientists adept in genetic sequencing. appointment Boyer’s in a leading department of recombinant science DNA and the network of tion of the enzymes required splicing gene for and cloning. had become It a virtual factory of materials needed recombinant for research, sending themout free of charge to researchers worldwide a time at when com- mercial reagents additional For were hard to come by. technical exper- tise, Boyer could turn to his research partner Howard Goodman and his up-to-datelab space in one of the research towers and an appointment in biochemistry’s new Division of Genetics. He was now located in one of the key departments in molecular biology/biochemistry worldwide. Boyer withThe lab, to room expand, was a beehive of recombinant DNA research and technical activities—in plasmid construction and prepara- it dawned on me that Genentech would probably be the most important important most the be probably would Genentech that me benefi on dawned it social the returns, terms—the many in life, my of deal citement, the technical prowess, and the fun. I was a total By ’79 Genen- tech junkie. I was committed to making Genentech into success.” a huge tor, oftentor, spending afternoon one year a week the in at company, and year out, deeply involvedand bringing his keen operating sense and vast network of connections to bear on the fi Looking on his back service, he recalled, remember can’t “I what at point conceptual and technical knowledge and human and material resources that entailed. In Boyer December had resigned 1975 from the “more or less sterile environment” of the microbiology department and joined the faculty of the increasingly powerful Department of Biochemistry, where his interests in genetic manipulation and molecular events were aligned. closely scientifi profi scientists to access expertise, nical and ties to and credibility in the academic community, not only UCSF at but throughout molecular He was biology. the increasingly well-known chief of a lab the at leading of recombinant edge research, with all the wasthe main company’s scientifi this regard, the company was an anomaly in the research-based business of board star-studded Cetus’s with comparison in especially community, - ce of ce Cetus 51 edgling rm’s survival. rm’s But ces at Stanford and and Stanford at ces nal development and manufac- The document introduced Genentech—scarcely more 50 rst target and his strategy to sell insulin-producing bacteria c application. c In April Swanson 1976 presented Niels Reimers Offi of Stanford’s rm, making it more attractive to investors, or so he hoped. Beginning a these assertions, all considerable leaps of faith, to remove any taint of risk from an endeavor that every at level was deeply risk-laden. As a fi nal incentive, Swanson offered Stanford and four UC thousand shares of common stock if they agreed to grant Genentech an exclusive license to practice recombinant under DNA the patent, assuming issued. it productive industrial process. Swanson made the case insulin for asthe fi company’s to a major pharmaceutical company fi for ture. He then reiterated his vision to build a company manufacturing and marketing its own engineered pharmaceuticals. Swanson intended than a concept the at time—as poised to turn recombinant into DNA a president somehow Pete Farley, getting wind called offer, of Swanson’s it specifi Technology Licensing with a business plan, written to play upon Stan- and interest Reimers’s inford’s industrialization prompt of its licensed technologies. few weeks after incorporation Genentech’s in April, Swanson insisted in urry of letters anda fl visits to the patent licensing offi thatUC obtaining license rights was critical to the fi wasit not just any license he sought; he set out to negotiate an exclusive license to make recombinant pharmaceuticals and gain control over that a patent was issued, the universities would demand that Genentech and any other company using the technology purchase a license—or risk be- ing sued if they did not. Swanson also appreciated that owning a license on an important patent would add credibility and luster to his fl fi LEGAL AND POLITICAL OBSTACLES LEGAL AND skeletonThe company of a established, Swanson had a number of press- ing concerns to attend Among to. the foremost was to petition Stanford and the University of California a license for to practice recombinant technologyDNA under the patent that the universities were pursuing. If personal, intellectual, and material resources commanded he were tobe of inestimable value to Genentech. Boyer In July attained 1976 the rank of professor. full

44 CHAPTER TWO 45 CREATING GENENTECH nal nal eld, eld, Genentech, Swan- Genentech, 53 cer and his university superiors had not decided upon a fi 52 ] Genentech’s work.” “Genentech’s engineering,” “Genentech’s the work.” document] Genentech’s con- Keenly aware tense of Stanford’s embroilment in politics, DNA Swan- But it wasBut it not only the business venture’s risks that Swanson knew Swanson’s salesmanshipSwanson’s failed to persuade Reimers. embattled The li- sic [biosafety] containment, well within the standard university facilities. specialNo containment will procedures needed.” be circumstance. the business company, The plan asserted, did not intend to employ the allegedly dangerous organisms subject to the pending NIH guidelines: experimentation “None of the [NIH-]prohibited will effect [ of tinued, “will ranges medium low equivalent to to in facilities done be only to research funded by the federal government—not to privately privately to government—not federal the by tus regarding the NIH guidelines recombinant for research, DNA not yet funded formally released but available in advance copies. guidelines The research applied to only supported research such as that Genentech contemplated. But Swanson recognized the political and persuasive advantages of satisfying Reimers and the research two wouldrm’s universities be safe under that any the fi anxious not to trigger further outcry against the controversial patent application the but at same time anxious to capture licensing and fees royalties if the government granted a patent. son added a section to the business plan that addressed sta- Genentech’s out, it should by right be freely accessible to whoever wished to use it. it. use to wished whoever to accessible freely be right commer- by foster to should it designed was out, issue, it should patent, a Furthermore, cialization of what in this case was deemed a potentially dangerous tech- Recognizingnology. a possibly explosive situation inthe making, the two universities were tiptoeing through a public-relations minefi would concern Reimers. national The controversy over the safety of recombinant research DNA had grown steadily more turbulent, with Stanford and in UC the eye of the political storm. Not only were the two campuses active centers of recombinant science, but critics also angrily method the on claims patent make to effort universities’ the challenged itself. As an invention publicly of supported basic science, they pointed a “preposterous proposal” intended,as Swansondoubtless had in mind, to tie up an emerging industrial area and gain a substantial competitive advantage. censing offi son was keen to establish, would not give an academic community and agitated public an added cause worry. for Was 54 55 eld. ed workforce— ed 58 despiteappable the licensing set- y considered moving Genentech offshore in 56 as Perkins undisclosed For put it. reasons—but likely related to the 57 Swanson remained outwardly unfl mercially]. hadn’t even We proven that we could make a useful product out of it. So he saw the potential and I saw the potential, but there weren’t a bunch of other companies clamoring to invest money in this fi No, [he later [he No, asserted], because was it pretty clear that someone else wasn’t going to exclusive get [an license] if we weren’t, and that Niels would make a decision to make [the licenses]broadly available. Remember, that at time nobody else believed [recombinant technology] DNA could work [com- stay the course toward discrete objectives.” unswerving—some called stubborn—determination it and persistence were plainly evident. As colleague a remarked, like “Bob, many entre- preneurs, was very single-minded and very goal-oriented, and having set himself in a certain direction, he trudged through whatever was re- quired to attain . . . I think it. great geniuses one of Bob’s was his ability to advantages of proximity to Boyer and a technically qualifi the two decided that the company would remain in California. Swanson’s most institutions of higher learning were not, would eventually grant grant eventually would not, were learning higher mistic that of Stanford, a notably entrepreneurial university a time at when institutions most Genentech a license. Perkins, who had previous ties with Reimers and his staff, was also opti- the consequences Genentech for if Stanford decided upon a nonexclusive licensing policy: “Thiscourse of [decision] means that Genentech will not obtain its desired exclusive that forgo [license], and we [Stanford UC] equity and a possible substantial front payment an for exclusive, and it may mean that Genentech as a viable company cannot survive.” licensing strategy thatwould be both equitable and politically expedient in light of the recombinantcontroversy. Reimers DNA was of no mind thatat point to grant Genentech any or other company a license re- on combinant as he admitted technology. DNA Yet, he appreciated privately, Swanson discouraged by the outcome? Early on he and Perkins briefl light of “the uproar over genetic engineering in the press and in the pub- lic,” back andback worrisomely unfavorable political environment. He was deter- mined to Genentech get up and going, whatever recourse meant it taking.

46 CHAPTER TWO 47 CREATING GENENTECH nancing nancing Boyer wrote the cient, and inde- 60 The document The portrayed 62 Swanson, Boyer, and Perkins pre- Perkins and Boyer, Swanson, 59 Although the company planned to 61 rst recombinant therapeutic as sched- nancial, commercial, and political challenges. A timeline for rst full business plan, document. a 46-page Swanson went on to assert with more than a little exaggeration that that exaggeration little a than more with assert to on went Swanson nancing. was It high time. In December Genentech reported total as- edgling state or to the fact that its basic technology had never been ght viral infection. Any product produced by a living organism is even- fi tually within the reach.” company’s ing the industrial uses of recombinant as multiple DNA and far-reaching, Swanson his at promotional best told of its sweeping potential in vari- ous worldwide markets capacity and Genentech’s to exploit “With it: Ge- technology, microorganismsnentech’s could be engineered to produce needed protein to meet the needs food world or to produce antibodies to technical sections, and Perkins, as lead investor in the second fi round, vetted and doubtless contributed. plan The presented essentially the same corporate strategy and goals laid out in the earlier documents. But there were some differences and considerably more detail. Describ- sets of $88,421 and a net loss of $88,601. A FULL BUSINESS PLAN BUSINESS A FULL SwansonToward the a second geared round for up end of 1976, of private fi pendent company. stage of the“each technology has been committed to practice” and that “technical risks have been all but eliminated.” start off modestly as a supplier of engineered bacteria to established cor- porations, its future destiny, Swanson boldly reiterated, was to enter the pharmaceutical industry as a fully integrated, self-suffi paredthe fi in production mode, was close to A diagram it. of an insulin molecule, its certain success of the business venture and glossing over the harrowing fi technical, product development listed the fi already not if Genentech, a mere six that monthsuled production distant. for by mid-1977, develop- The message intended an sent schedule ment tested as an industrial process. did It not mention the hostile national environment a company for premised on recombinant technology DNA nor the failure to license recombinant technology DNA under Stanford patent. Like hoped-for most businessand UC’s plans, was it a thoroughly promotional creation, designed to convince potential investors of the a company on the of productivity, verge nowhere alluding to its actual fl c, technological,c, and industrial rm had not initiatedresearch on insulin. optimistic The rst experiment. in the contemplated company, The research, was But there had been propitious one development. December The busi- territory. ness plan announced the formation development of a “core team” that in- cluded Boyer and his lab and UCSF scientists two at Southern California institutions. Both groups were under contract by Genentech to perform its fi scientifi virgin into cross to preparing line with sober reality. Genentech this at point was no than more a virtual equipment, scientists research no no laboratories, no had of It company. its own, no money sustained for development, no patents or licenses se- curely in hand, no certainty of the impact of the festering recombinant debate. DNA entire sequenceamino of acids spread impressively across one full page, suggested a needed product in the making. plan The entirely ignored the fi the that fact forecasts were typical of entrepreneurial promotion but strikingly out of

48 CHAPTER TWO 3 Proving the Technology

. . . a scientifi c triumph of the fi rst order. Philip Handler, President, National Academy of Sciences, statement in the U.S. Congress, November 19771

Swanson’s experience as a venture capitalist had centered on young Sili- con Valley companies, each with products that had been prototyped and were nearing or on the market. Genentech presented a very different situ- ation. Its fundamental technology was raw and industrially untested, and it lacked a single product in the pipeline or even on the near horizon. Moreover, Boyer and Swanson seemed to blithely disregard the fact that no one anywhere had succeeded in expressing a foreign protein in bac- teria, let alone a protein of insulin’s complexity. That was the leap they expected Genentech to take—to shoot straight for human insulin, the ballyhooed substance with proven therapeutic value and an immense worldwide market. Instead, Swanson found that he had to stand by, more or less helplessly, as Boyer and the contract scientists came to a differ- ent approach, a different decision, a different target. To his consterna- tion, scientifi c rather than business considerations drove the change of direction. A previous collaboration between the Boyer lab and two Southern California scientists provided the rationale, personnel, and material re- sources for Genentech’s fi rst experiment, the critical proof-of-concept research that would determine whether or not its core technology was workable as an industrial process. Genentech’s future, as Swanson knew with chilling anxiety, rested in the hands and minds of these scientists. 4 lled with vi- with lled toce discuss an idea a collabora- for intooated the lab on a cloud of goodwill. Boyer and Riggs agreed on the spot to collaborate. 3 cient synthetic and error-prone chemistry of the era, he They decided that Itakurathetic would provide a piece of syn 2 ciency in chemical DNA synthesis, the laboratory construction cial genes and fragments DNA from chemicals off the shelf. But Boyer returned to San Francisco and assigned the to work Herbert The quantitiesThe Itakura managed laboriously to synthesize were inad- enthusiastic Dutchman had fl He had brought along with him from Holland a thermos fi Heyneker, postdoctoral a student who had joined the lab in the fall of more than1975, eager to take on a hotproject. wiry, The boundlessly cedure].’ ” cedure].’ leagues were currently conducting. Boyer recalls that after his seminar he and Riggs retired offi toRiggs’s tive experiment that, if they were fortunate, would produce an unlimited supply of pure Boyer DNA. re-created their thinking: said, ‘Why “We don’t we clone this chemically synthesized and DNA you only have to synthe- size once and it we’ll let the bacteria after do it that [via the cloning pro- due to the ineffi could make only minuscule amounts of synthetic and with DNA inher- ent impurities to boot. equate most for experiments, including the one Riggs, Itakura, and col- a problem he anda problem Itakura had encountered in collaborating with a high- powered Caltech group trying without success to crystallize a protein lac of major interest repressor) (the in molecular Itakura biology. had a profi rare of artifi with Arthur Riggs, quietly a inventive molecular biologist, and his col- California, Duarte, in league Center Keiichi Itakura, a Japanese organic chemist Medical of Samurai lineage, National Hope of City the at both near Los Angeles. collaboration The sprang from a seminar Boyer gave Cityat on theHope of in recombinant 1975 procedure. DNA In the course of the presentation, struck it Riggs that the novel procedure might solve A PORTENTOUS EXPERIMENT A PORTENTOUS Results of an earlier experimentarriving early convinced in 1976 Boyer that Genentech was on the right track. He and his lab had collaborated thetic (so-called DNA linkers) in studies of the interaction of restriction enzymes DNA. with DNA (the lac he had operator) previously (the DNA made in his dissertation re- search, and the Boyer lab would try to clone the Boyer, For it. idea of using synthetic in experiments DNA was not only familiar but one he had put into actual practice. his As early lab was as 1974, using short pieces of syn-

50 CHAPTER THREE 51 PROVING THE TECHNOLOGY DNA ed on on ed 8 He went 6 7 with helps dence; it the ciently spewing out quan- hised for thesis research. These enzymes were not Man-made genetic material had behaved in identical fashion to 5 your whole state of mind. helps It with your confi publications you write; helps it with your future, with your career. So it really was a very positive time from that point of view. Press coverage of the breakthrough quoted an ecstatic Boyer brim- We were young,We and when you are successful, helps it enormously with The collaborationThe proceeded according to plan: Itakura contrib- tities of insulin, growth hormone, and other pharmaceuticals. other and ming with optimism. out of the gone area of basic science “We’ve into hormone, the area of practical he proclaimed, application,” and went on to describe growth enthralling insulin, images of bacterial “factories” of effi tities that we could immortalize synthetic [through DNA cloning] and be- it comes part a plasmid, of becomes part a biological of system.” natural was It an DNA. astounding discovery, blurring the boundary between the chemically inert and the biologically active. Heyneker re- calledthe thrill: “The most exciting moment was when we demonstrated telltale sign of blue coloring, an indication of natural biological func- biological natural of indication an coloring, blue of sign telltale tion. painstakingly exacting and time-consuming procedures, each step re- quiring improvisation and laborious chemistry. experimental The re- sults, arriving in February exceeded all 1976, expectations. chemi- The synthesized was DNA biologically functional.cally lay proof The in the fact that the synthetic bound DNA to a bacterial protein, leaving a array of genetic recombination and cloning experiments ongoing in the lab. Boyer uted the synthetic fragment, DNA and Heyneker managed to splice it into plasmidsand clone in it bacteria. Neither component was easily achieved. synthesis DNA and cloning DNA were both in the mid-1970s als enzymes of purifi through borrowed or begged be to had and commercially available then a network of material exchange or tediouslysynthesized and purifi own.one’s Heyneker’s gift was consequently a boon while lasted it the for on to note the psychological impact on colleagues at the outset of their their of outset the at colleagues on impact psychological the note to on careers: make recombinant a feasible industrial DNA technology, not sometime off in the future, as most imagined, but in the tantalizingly reachable synthesis, he was convinced, was the companion technology that would Over Over 11 rst research a make-or- project, Yet encouraging Yet as the results were, 10 cance. “That was my dream, making a cial genes, inserted into bacteria, program program bacteria, into inserted genes, cial cial copy of a gene whose customized instructions instructions customized whose gene a of copy cial andnd compatible express as somatostatin. Riggs cations? Genentech’s fi Genentech’s cations? “I thought,” Boyer thought,” “I recalled, “it was very important that we 9 fty-one, was a far better the choice for time-consuming process cial gene—a coding gene somatostatin. for But their aim was not We didn’t tryWe to copyhuman a gene and put that in bacteria. designed We a gene that would work in bacteria. So this was a totally man-made—not Early they together in got 1976 to compose on paper a structure an for pany’s future hung in the balance. the evidence that recombinant and synthesis DNA DNA could produce functional proteins in bacteria? A number of molecular biologists were highly dubious. Could artifi them to become microscopic production sites spewing out proteins of human specifi break experiment,- would attempt to answer that question. com The the experiment had not settled a point critical of importance: where was [at Genentech] have chemically synthesized DNA, no matter what we we what matter no DNA, synthesized chemically have Genentech] [at did. I thought that was the key.” territory. his Since student days in Itakura Japan, had envisioned build- ing with a gene practical signifi he reminisced.gene,” “So maybe insulin gene—or whatever gene.” SWITCHING TARGETS ItakuraFor and Riggs, the ambition to make human insulin was familiar near term. tions encoded in the genes of higher animals. Instead, their strategy was to construct an artifi the bacteria would fi explained: of chemical synthesis. DNA He and Itakura decided to give a try. it instruc- “read” to artifi unable be would tree to design a gene as existed it in nature; they evolutionary suspected that bacteria the near of bottom the A man-made insulin gene for was the at top of their list. Then Riggs abruptly changed his mind. He attended a seminar in which an endocri- nologist presented his on a number work of brain hormones, including one called somatostatin. struck It Riggs that somatostatin, composed of a single chain of fourteen amino acids in contrast to insulin’s double chain fi of edly talked of chemically synthesizing a gene with biological function. function. biological with gene the a several years he and Riggs had known each other, they had repeat- synthesizing chemically of talked edly

52 CHAPTER THREE 53 PROVING THE TECHNOLOGY cant cant 12 nitive nitive They asked for $400,000 $400,000 for asked They cial as gene a functional 15 .” coli . E can be used to produce human hor- E. coli E. Riggs recalled the uncertainty: cance Genentech, for whose future rested on 13 . We think. We that 14 peptide [protein components] chemistry. The availability of inexpensive, high quality human hormones will have many clinical application[s]. The work proposed here will lead to the production of human hormone hormone human of production the to lead will here proposed work The peptides coli in E. mones more cheaply and of better quality than can be made by synthetic would function in vivo. Nobody had shown that you could actually make a protein product bacteria]. [in makes So DNA RNA makes protein—none of that had been done using synthetic or DNA, even using any other ap- proach, really. So we had shown the [in collaboration with that Boyer’s lab] the DNA Despite Riggs’s optimism,Despite Riggs’s he did indeed worry about genetic incom- only man-made but man-designed—gene, and I thought that was one of the most key aspects know didn’t doing, were our what we of of We approach. that was it going to be successful, but we thought we had a good chance. To conduct theTo experiment, Riggs and Itakura needed funding. In Feb- dence, considering the uncertainties involved: biologist wondered whether bacteria were indeed of interpreting capable animal genes engineered into them. molecular “Most biologists,” he con- cluded, “would guess not.” patibilities among species. Like many molecular biologists, he suspected suspected he biologists, molecular many Like species. among patibilities that differences might wellexist in the regulation of gene expression in simple and complex organisms. Could bacteria interpret the genes of higher creatures and express them as proteins? No one had a defi answer. Many scientists were highly skeptical. A prominent molecular ruary they 1976 submitted a grant application to the NIH entitled “Hu- man Peptide Hormone Production in The mainThe objective of the somatostatin experiment was to determine whether bacteria could in fact express an artifi mammalian protein. A conclusive result would count as a signifi contribution to an understanding regulation of gene and expression. It signifi arresting of be would its capacity to produce useful proteins in bacteria. fi for a three-yearfor project to make somatostatin using synthesis DNA and recombinant technologies. DNA They went on to state with notable con- le cant cant 17 cult it was was it cult c and business 16 products. fought experi- that “I [proof-of-principle The “real The thing” was human insulin, the high-profi ict that research-driven companies repeatedly expe- 18 marketable to convince him that we should make this small peptide [somatostatin] [somatostatin] peptide small this make I wound up talking should with Robert we Swanson, so I do know how diffi that him convince to Convincing Swanson to switch targets was considerably more dif- While waiting the for NIH to respond, Riggs received a call from Boyer, cult. Digging in his heels, he clung stubbornly to insulin, a proven fi therapeutic substance renown of world and an established moneymaker. He adamantly resisted going after somatostatin, an obscure hormone without clear clinical application andmarket potential. He wanted products— spite corporate sponsorship they would publish the results, Riggs and Itakura signed was on. It a fortunate decision. fall That the NIH turned down their grant application. reviewers The decided that Riggs and Ita- kura could not accomplish the proposed research in the stipulated three years and labeled “an academic it exercise” without practical merit. they should go after. If they succeeded, they could then attempt the more more the attempt then could they succeeded, they If after. go should they ambitious experiment of making human insulin. Boyer was easily per- suaded; a stepwise made approach sense. agreed He to shift the target to somatostatin. No need to worry Boyer explained; about money, Genen- tech was prepared to fund the research. After assurance Boyer’s that de- who suggested a second collaboration, this time to attempt to synthe- size human insulin. Riggs was immediately intrigued. offer was Boyer’s ex- took he But a chance to takerst collaboration protein. the technology a a signifi of their of fi production bacterial actual to further, step ception to targeting insulin.Somatostatin, he advised, was the substance mental do-ability rather than marketability and the bottom line. was It not only a battle of wills; was it a contest between scientifi objectives—a confl rience. Riggs recalled: product that would attract investors and bring in the money Genentech desperately needed. scientists, The on the other hand, focused on experi- Despite these assertions, Riggs later maintained that commercializa- tion was not their immediategoal: “None of the group here was thinking commercial But thinking yet—no. about some demonstration that bac- teria could be used as factories to make proteins—yes.” ment] likement] the devil because I always hated the ideaof doing a demonstra- tion of anything,” he recalled. “If you are something, going for to go go thefor real thing.”

54 CHAPTER THREE 55 PROVING THE TECHNOLOGY Fol- rms rms 21 c. nally agreed agreed nally nally decided nallydecided rm’s survival and and survival rm’s c teams lined Swanson up, pressed arrangements for 19 High on Swanson’s list of priorities was establishing research research establishing was priorities of list Swanson’s on High 20 bility, submit patents, and try to publish the work. So he fi that since we could do somatostatin quicker [than insulin] and with a higher chance of quick success, that was the way So he fi to go. but we had to talk to him quite a bit. I think did Herb [Boyer] most of the arm-twisting. that did not have any proven commercial value. Swanson was very worried about that. I hadno real understanding the time] [at of how precarious the funding feasi- was, and how short a time establish that to Swanson was believed we had in order strategy the that agreed eventually He perform. to To negotiate a researchTo agreement with City of Hope the syn- for DNA With the scientifi the With to move swiftly so the research could begin. With the fi his own career stake, at he later admitted, was “I the one that was in a hurry.” They would somatostatin, for go Swanson grudgingly agreed, but only as a way station in the quest human for insulin. AGREEMENTS RESEARCH NEGOTIATING a partner at Lyon & Lyon, one of thea partner largest & Lyon, intellectual Lyon at property fi in the country. As Kiley the wit and raconteur tells Swanson it, called a clusive license under those patents and pay royalties to the university on products sold. Kiley, Thomas found thesis portion of the research, eventually Swanson decided to He secure the services Angeles. Los in attorney patent a of lowing standard the policy, university UC would hold title to and earn royalty income on any resulting patents. Genentech would receive an ex- provide to fund $35,000 research including in lab, Boyer’s the salaries of two postdoctoral researchers and university overhead, the for bacterial synthesis of various proteins, somatostatin and insulin in specifi ments would provide a legal framework in which the contract research could proceed andwould also outline the parameters intellectual for property protection and royalty payments. Soon after incor- Genentech’s poration, Swanson, working mostly without an attorney to legal avoid beganfees, to negotiate with the university. In August he and two 1976 university representatives signed an agreement that Genentech would agreements with the University of California and City of Hope. agree- The

22 First page of the August agreement 1976 between Genentech and the University of California. ates. Swanson followed the lead and contacted Kiley. But he insisted that Kiley’s previous representation of Miss Nude American and other odd- other and American Nude Miss of representation previous Kiley’s ball cases had endowed him with a quirky reputation among his associ- said later he held the away phone from his ear while Swanson was speak- ing on the esoteric subject of gene-splicing and said to himself, ‘Let’s see. Kiley represents lots of these weirdos; I’ll” send Swanson to him.’ Fig. 10. 10. Fig. (Chief Financialcer archives, Offi Genentech, Inc., copy courtesy of Robert A. Swanson.) attorney & Lyon andLyon explained business: Genentech’s partner “My

56 CHAPTER THREE 57 PROVING THE TECHNOLOGY amboy- dence despite despite dence 24 appable self-confi appable 23 rm’s future rm’s scientists, predictably naive in exible andattuned to a young company’s nancially strapped start-up the cost of a hotel room, edgling company in which the basic “products” were their Genentech’s thirdGenentech’s institutional collaborator was an afterthought. I admired his chutzpah in aiming with this controversial technology to mount barriers to entry that stood high around the pharmaceutical indus- try; admired his moxie in doing that on what seemed a very small amount of money—so small that I did everything I could to spare him expense. . . . Genentech was me] becoming [for a labor of love, if you will. Kiley turned out to be fl That meant forming a sponsored research agreement with Caltech. The Wishing to cover several bases regarding sources of synthetic DNA, Swanson enlisted Richard Scheller, a graduate student the at California Institute of Technology whom Itakura had schooled in synthesis. DNA protect and monetize this intellectual capital as patents and licenses. wasBut it not merely the sweet seductiontechnology of Genentech’s and the novel legal issues that drew him. Kiley was also impressed with Swanson, especially his seemingly unfl formidable odds. ant legal intellect and veneration all for things technical. would It fall him indoctrinateto fi to the business matters, on the central importance of patenting, especially critical a fl for own technical know-how and innovative was power. It crucial, then, to needs. To save the fi save needs. To he agreed on his trips to SanFrancisco pro- to sofa, sleep on Swanson’s vided his host treated him to a decent dinner. more than For a decade, representation of Genentech would give Kiley a venue his for fl ent applications. Easily convincing Riggsthat they could produc- work tively together, Kiley then negotiated an agreement between Genentech and City of Hope that, in notable contrast to the University of California agreement, Genentech gave exclusive ownership of any and all patents based on the and work paid the medical center a 2 percent royalty on sales research. the from arising products of Riggs accompany him to meetthe young attorney and decideRiggs whether he and the scientists were likely to comfortably work together. Swanson considered the compatibility of attorney and scientists essential full for disclosurethe of technical information necessary to write strong pat- The medical The 27 The twenty-two-year- cate] away, but it really but it away, cate] 25 It was It nonetheless a sad 29 ected a pervasive inattention Scheller’s attitude was a result in large rm’s earliest transactions. City of Hope Hope of City transactions. earliest rm’s 26 30 thancate. More two decades Scheller, later, by then a ed that Genentech would reimburse Caltech the $4,000 gure in the royalty dispute.) case The ended in a mistrial In the 2008 California Court Supreme struck down the award 28 Decades later the Genentech–City of Hope contract spawned a tangle fteen hundred Genentechshares. He appreciated the extra money but didn’t mean anything to me.” to anything mean didn’t fi not the stock certifi Genentech vice president and director of research, explained his cavalier attitude: had “I a ponytail halfway down my back. I smoked marijuana every I didn’t give a damn day. about money or stock or anything. I was a scientist.didn’t, I fortunately, throw certifi [the old would receive monthly a stipend of a few hundred dollars and around of punitive damages on technical grounds and to- reduced Genentech’s tal damages million from $500 million. to $300 of interrelated lawsuits that displayed the legal complexities and conun- 2000. drums through emanating from the fi Genentech claimed in a case initiated that from in was it 1999 entitled to royalties above received and beyond million the $285 on sales had of insulin and growth it hormone products part of youthful arrogance. But it also refl also it But arrogance. youthful of part or even ignorance to matters of stock ownership and equity participation among biologists the at time. document specifidocument already expended plus on Scheller’s any work, additional funding needed to complete his synthesissomatostatin of DNA. ending to a partnership of two institutions that, as the press “gave put it, birth to the biotech industry.” nitive damages alleged Genentech’s for concealment of the additional li- censing agreements. Genentech appealed, butupheld a judge the damage amounts. with Genentech. (Somatostatin never became a commercial product and hence did not fi in with 2001, the jury following The deadlocked favor. in Genentech’s 7–5 inyear, a stunning reversal in a new trial, jury a awarded City of Hope million$300 in compensatory damages and another million $200 in pu- center contended that was it due additional royalties from the twenty or and insulin on patentmore licenses arising from the insulin only and growth hormone work royalties to that Genentech had concluded with third parties. City of Hope calculated entitled was Hope that was it due unpaid royalties of in million the $500 range. Genentech City that argued growth hormone, the two proteins the medical center had co-developed

58 CHAPTER THREE 59 PROVING THE TECHNOLOGY cial gene cial 34 Assisted by by Assisted 32 Crea had just com- 35 The somatostatin The research could begin. month That Itakura 31 cial gene. Scheller, a neophyte in such matters, failed to make make to failed matters, such in neophyte a Scheller, gene. cial Although they applied only to recombinant research DNA receiv- 33 ve other ve funds to invest. By February Swanson had raised around ciently accurateand DNA dropped out of the project. In May 1977 the DNA chemistry component took a turn for the better. In May 1977 the DNA chemistrya turn for the better. component took Boyer, meanwhile,Boyer, had problems of his own. As director of the lab that Roberto Crea, an avid young Italian from the southern province of Ca- Crea, an avid young Roberto which City at of Hope to begin a postdoctoral fellowship, arrived labria, entirely supported. Genentech that he discovered and Tadaaki Hirose, a Japanese postdoctoral student City at of Hope, be- gan the chemical synthesis of the eight fragments that were to make up the artifi suffi project, he hadto deal with the NIH guidelines, formally issued in July 1976. Hirose, Itakura twelve-hour worked days, six days a week, struggling with the cumbersome chemistry of the day to make accurate and reason- ably pure synthetic DNA. wasto conduct the molecular biology component of the somatostatin experiments the guidelines designated as possibly dangerous. In Feb- In dangerous. possibly as designated guidelines new biohazards containment the recently lab, constructed conducting for experiments ruary Boyer 1977 signed a document holding himselfresponsible his for adherence to thelab’s guidelines in the somatostatin research. of public criticism. The decision meant that Herb Heyneker would be be would experiments involving recombinant regardless DNA, of funding source. Heyneker Herb Although the biosafety committee determined that the experiment low risk meant and performable under normal conditions, stipulated it higher physical decision The and biological containment levels, apparently trying to any criticism. avoid chance public of required to perform the cloning in work thebiochemistry department’s ing federalfunds—and the somatostatin research funding came from Genentech—the administration, UCSF ultra-cautious in light of the po- litical had decided fray, that its new biosafety committee would review all for fi for $850,000. MAKING SOMATOSTATIN MAKING nancing round. KleinerEarly & Swanson in 1977 launched a second fi Perkins took the lead and an invested inducement a second $100,000, though taken by the sunstruck Californian landscape, he wasted no time he wasted no time Californian landscape, sunstruck by the though taken an artifi enticed by a project to make down to work, in getting pleted a fellowship in organic chemistry in Holland, where he had had a of DNA synthesis. Al- cient method a more effi central hand in developing

40 36 ew ew ed us- ed Swanson also fl 37 cial using gene, rare kit of enzymes.the lab’s Itakura found the oversight irritating, particularly when it 38 Biological research, Itakura meant, did not advance in the pre- 39 Swanson all the while was breathing down necks, everyone’s nervous, The nextThe step was Heyneker for to stitch the synthetic fragments DNA close to neurotic, with so much at stake. He went regularly to UCSF to to UCSF to regularly went He stake. at much so with neurotic, to close interrogate Heyneker, who rememberedSwanson being “extremely im- patient and extremely anxious us for to results.” get dictable and timely manner a business mind expected. artifi an form to together lab, theylab, instead saw with sinkingsensitive hearts though that the assay, was,it detected not an iota of the hormone. onlookers The were devas- teria. idea The was that with the promoter turned gene on, the bacteria would express the somatostatin protein. would It count as a stunning breakthrough if protein expression Anticipating worked. success, Riggs invited Swanson, Boyer, Heyneker, and Bolivar to City of Hope to witness the detection of somatostatin in the bacterial colonies. Clustered in his Then the Boyer lab’s plasmidThen the Boyer expert, lab’s Francisco Bolivar, constructed plas- mids designed to express somatostatin. young The Mexican scientist at- tached the synthetic somatostatin to gene a bacterial “promoter” gene regulating protein expression and a genetic sequence coding a small for portion of a bacterial enzyme. He then inserted the plasmids into bac- He showed me that kind a table, of exactly scheduled, step by step.. . . I said, ‘Meaningless.’ I told him you never know when experiment works [or not].” came projected timetable to Swanson’s the for has research: “[Swanson] all kinds of schedule—DNAnish such synthesis and such; [somatosta- fi tin] expression such and such; and then fund-raising, such and such. well, particularly in regard to one recalcitrant fragment. Crea immediately Crea immediately fragment. to one recalcitrant in regard particularly well, he purifi which set of DNA fragments, to construct a new set to work liquid chromatog- (a high-performance apparatus a newly purchased ing Crea Within weeks knew how to operate. he alone in the lab that rapher) and purity. accuracy of improved gene fragments had constructed new but knowing nothing about recombinant DNA technology, not even the the not even DNA technology, recombinant about nothing knowing but with a English” “Dutch faltering in his to communicate Struggling term. English not a native from Itakura, likewise lilt, he learned decided Italian not going was gene fragments somatostatin synthesis of the that speaker, enough chemistry,” Riggs remarked, “to ask questions that were kind of annoying.” down periodically to check on the City of Hope scientists. Riggs and Ita- kura resented the was monitoring. very intelligent “[Bob] and knew just

60 CHAPTER THREE 61 PROVING THE TECHNOLOGY and— 43 44 nal step, the scientists 45 c considerations, had an incidental The next The morning Swanson, a guest of Riggs, 42 Riggs, characteristically Riggs, understated, recalled 41 !” fteen samples. Some samples some are ones control[s], are induc- His pallid complexion and stomach upset turned out to be due to

the radioimmune and assay, the printout clearly show[s] that the gene is expressed and somatostatin is there. I think Heyneker sent some samples to the and lab, [Riggs] then Art was checking the immunoassay of somatostatin. Then we have about ten, maybe fi of printout the at look we Then not. are some expression, gene the of tion The investigatorsThe put the new experimental plan into action and were The scientists,The accustomed to research setbacks and with less riding rather than in free and hypothetically dangerous form. dangerous hypothetically and free in than rather soon getting results. In August the 1977 City of Hope team, without their colleagues,UCSF assembled to repeat the assay somatostatin. for This time the experiment like worked a charm. Itakura recalled the scene: neered somatostatin running amok and risking infection, as some de- some as infection, until extracted risking from the bacteria and only then snipped free and to become amok running biologically active. There was little chance of bacteria containing engi- somatostatin neered criers of recombinant research DNA imagined. authors The of the sub- sequent publication, in a bow to recombinant politics, DNA pointed out the safety of the experiment in producing somatostatin as a “precursor” large the for bacterial enzymes to degrade. In the fi planned to chemically sever the somatostatin chain from the bacterial protein. If all went well, they would produce free-standing somatosta- tin. strategy, The based on scientifi political advantage: the hormone would remain safely nonfunctional on the experimental outcome, quickly recovered. Surmising that bacte- rial enzymes had destroyed the tiny somatostatin protein as soon as it was made, theycame up with a new experimental scheme. They would try to produce the hormoneas a short tail a much on larger portion of the bacterial protein. hybrid The protein, they speculated, would be too acute indigestion, accentuated by horror as he imagined his company, his career, and the money he had raised down “going the tubes.” tated and Swanson particularly His so. horror the at shattering result was still palpable some twenty years were down later: “We Art at lab Riggs’s Cityat Hope of looking somatostatin for [whispering theatrically] nothing—came—out being “not happy all.” at appeared deathly white and checked himself into a hospital emergency room. : Lillian 46 rst. As a delighted Boyer remarked, “We cial in gene bacteria and made a mammalian : Art Riggs, Herb Boyer, Keiichi Itakura, and Roberto Crea. Front row ed that indeed it had all the attributes of somatostatin. 47 UCSF and City of Hope scientists celebrating the successful somatostatin experiment, City City experiment, somatostatin successful the celebrating scientists Hope of City and UCSF not a bad place to be, to have your mind elsewhere, sort of contemplating miracles. . . . A whole world of opportunities suddenly became. . . much likely. more I remember going there, but remember I don’t anything about the game. I was thinking about all the incredible possibilities now that were likely to come a spectacular to be. It’s setting. a beautiful It’s stadium, and so was it Dazed by the sweeping implications, Riggs rushed off to a keep a date not keep his mind on the action: with his a baseball son for game Dodger Stadium. at He found he could Shih, Herb Heyneker, Paco Bolivar, Eleanor Directo, and Tadaaki Hirose. (Photographer unknown; photograph courtesy of Roberto Crea.) Fig. 11.Fig. row of Hope, Back 1977. that bacteria did not necessarily reject introduced genes and could man- ufacture a totally foreign protein using their own supposedly primitive cellular machinery. was It fi a played a cruel trick on Mother Nature.” The scientistsThe wereecstatic. Riggs sent a sample to a Salk Institute sci- entist, who verifi evidence dramatic was They had Here installed an artifi thing! real the like worked it protein—and

62 CHAPTER THREE 63 PROVING THE TECHNOLOGY c team c 49 rst commercial demonstration of our 48 rst research goal, the production of the human exciting time. I felt on top of the world. opened . . . It up c teams and academic laboratories because in them re- Management had cagily avoided investing precious start-up funds in ing the completion of our fi hormone somatostatin, and the fi new technology, was accomplished plan a total for to We ap- of $515,000. proach future growth in the same lean but effective manner. I am pleased to point out that the two year start-up of the includ- company, so many avenues [in applied research]; you could envision so many things you could do all of a sudden. It wasIt an incredibly For Genentech,For the achievement represented the critically impor- Somatostatin was by no means close to a marketable product and in leasing and equipping a laboratory facility and hiring a scientifi experiment bridged the between gap the basic research preceding it—the Cohen-Boyer experiments and decades of earlier life science research— and the practical applications that followed. Heyneker recalled the epi- sode with unalloyed pleasure: tant validationof its technology and consequent hope a future. for More experiment the proof-of-concept broadly, suggested a radically new pro- cedure making for hormones and other useful products in bacteria. The vantage of paying off handsomely in money and time saved. Swanson rst researchproudly results announced a meeting at fi Genentech’s of pri- 1978: April in shareholders vate Basic and applied research had become proximate in a manner new to molecular Furthermore, biology. experiment the proof-of-principle had been conducted with Boyer and notable Swanson economy. had utilized scientifi existing sided the rare and requisite body of knowledge and technical expertise. But as they and Perkins recognized, the strategy had the additionalad- fact would never become a commercial product Genentech. the for Yet research, contrary to predictions by reviewers of the Riggs-Itakura grant proposal, constituted a swift trajectory from the invention of recombi- to foreign protein production in bacterianant in in 1973–74 DNA 1977. Much remained to be worked out, at Genentech and elsewhere. But mo- But elsewhere. and Genentech at out, worked be to remained Much lecular biology had acquired a patently utilitarian dimension. rst ce— and impressed 50 cs, Kiley found he knowledge c and techni- Patent Offi thele at U.S. le applications domestic for and foreign pat- 51 Kiley had to move quickly to submit patent applications before Ge- before applications patent submit to quickly move to had Kiley One of the mistakes [Cetus] made was not to realize the enormous leverage you get from using a university laboratory. is . . . It enormously cost effec- usingtive. You’re labs and other goodies that are already there; you don’t have to raise money and spend money to establish them. With patenting the somatostatin methodology as top priority, Tom ndings are previously published. He called a meeting of both research research both of meeting a called He published. previously are ndings biology. He read Watson’s Molecular Biology of the Gene Watson’s read He property matters. Kiley his for part had to up to get speed in molecular biology. placed scant emphasis on patents and intellectual property protection. somatostatinThe research provided the impetus Kiley for to give his fi tutorial on the importance to Genentech of patenting quickly, broadly, and well. was It a message he would have to repeat many times over to successive waves of newly hired scientists, many naive in intellectual teams to discuss the proprietary claims. was It a learning experience on both sides. the Before group could down get to specifi had to explain the patent system to scientists unfamiliar with its pur- pose and requirements. Unlike physical scientists and engineers, life scientists of the period trained and in worked an academic culture that we needed the protection of patents in order to justify investment in our company.” public announcementnentech’s of the somatostatin results. Foreign patent law automatically invalidates patent applications if the research fi Kiley were all too aware. Furthermore, a patent portfolio—or, failing that, a collection of patent applications on fi a younggave company without the standard metrics of products or prof- its a measure of credibility and a stronger negotiating position in the business and investment spheres. Kiley succinctly: put it thought “We Kiley came in to write and fi ents. Withoutproducts to its name or even in the pipeline, Genentech’s scientifi of fund singular its were assets primary cal know-how making up its all-important intellectual property. Secur- ing timely legal ownership of its inventions wasurgent, as Swanson and before anyonebefore knew whether thetechnology had any chanceworking of as a productiveindustrial process. Cetus’sRon Cape later acknowledged much: as

64 CHAPTER THREE 65 PROVING THE TECHNOLOGY

54 Ki- 52 Kiley Kiley 53 cient cient eld and the at in December 1977, the names in December 1977, Science c publication withthe urgency of rst author. His native competitive- rst, with Itakura as lead author. rst to write downa concrete plan with suffi 55 ed an explicit protocol the for somatostatin experiment. For nd no evidence of “an inventive contribution part.” on Boyer’s made. Itakura and I were the ones that wrote and planned the NIH grant application. detail to support a patent and to support the idea that an invention was Well, the key . . . was that [Itakura] and I developed the somatostatin plan. were the . . . We fi Then a heated dispute over authorship out. Heyneker, broke claiming of the City of Hope chemists came fi determining inventorship, Kiley required evidence of a clear, detailed, and utilizable concept. He concluded that Riggs and Itakura had pro- vided exactly that in their NIH grant application. Furthermore, the Boyer use of recombinantlab’s technology DNA was not the novel invention; on the Cohen-Boyer procedurethe patent application Stanford-UC of 1974 years. three approximately by research somatostatin the predated tors on the patent applications. By the fall if not earlier, of 1975, Boyer had conceived of applying synthesis DNA and recombinant in making DNA hormones in bacteria, as his failed attempt to enlist the service of the German chemist attested. Nonetheless, Kiley determined that Boyer had specifinot ley then had to make a critical decision—whom to designate as inven- Not surprisingly, Riggs reinforced the point: ness fanned by the winner-take-all culture molecular of UCSF he biology, made a special trip to Los Angeles to discuss the matter with Itakura—to no avail. When the paper appeared in lic announcement. Patent law in the person of Kiley was imprinting the sometimes leisurely scientifi of pace proprietary protection. Itakura than rather he that asserted research, the of much done had he should have the honored place of fi everyone with his quick grasp of the subject. scientists The Kiley gave a draft of the manuscript they intendedto submit publication for and turned over their lab notebooks review. for They also needed to hurry to send off the manuscript journal for acceptance pub- Genentech’s before named Riggs and Itakura as sole inventors on the patent applications. A patent administratorUC strenuously protested. According to Kiley, her view was that Boyer was a leader in the recombinant fi DNA very least should be named Kiley’s a co-inventor. rejoinder was that he could fi ce lings were embar- were lings c conventions were at c and industrial poten- cant research. was But it not only c publication, on the other hand, is As it turned out, the U.S. Patent Offi Patent U.S. the out, turned it As 56 cally signifi led four patent applications, making claimsbroad Diamond Chakrabarty v. case on the patentability of living In this climate of opinion, success Genentech’s in somatosta- publicationc protocol tends to expand the few to the In many. 57 It wasIt a disquieting moment the scientists. for UCSF They they felt had sector. nology was in peril if Congress placed onerous restrictions on manu- on restrictions onerous placed Congress if peril in was nology facturing recombinant products in quantity. As early as March 1977, aside from any Genentech,before company, had actually taken up re- combinant research, DNA a federal committee had recommended leg- islation to extend the standards of the NIH guidelines to the private basic research that was stake; at future commercialization of the tech- on the somatostatin research. somatostatin the on vention are deemed inventors, and only their names appear on the patent application. Convention in scientifi to acknowledge every contributor to an experiment by listing them all as authors. Patenting protocol tends to reduce the many while to the few, scientifi November Kiley 1977 fi made essential contributions tothe somatostatin research. gener- More was it ally, an instance in which legal and scientifi cross-purposes. those In originating patent law, the concept the for in- did not begin to review these or anyother applications involving living organisms until the second half All of 1980. such fi goed while the things wended its way through the court system. or so bills and resolutions legisla- pending in Congress purporting to impose impose to not heavy restrictions on genetic engineering Congress experiments. biomedical The persuade to research community, Cohen and Boyer effort prominently included, mounted lobbying intense an tive controls on scientifi WIDER ISSUES There were other clouds on the horizon. recombinant For propo- DNA nents, the most ominous development mid-decade at was the dozen politicization. tin counted as than more a mere technological achievement. Advocates of recombinant research seized as upon it a political argument against passing legislation threatening to nip scientifi tial in the bud. An episode Senate in highlights the U.S. an early stage of

66 CHAPTER THREE 67 PROVING THE TECHNOLOGY

62 : It : It One One 61 E. coli E. Chemical rst order.” order.” rst Boyer had told 59 c triumph of the fi The stamp The politics of DNA on cant but rather “the practical “the practical rather but cant 60 c critics who claim that the technique nally pay off in practical applications of use owing. Paul Berg, the Stanford biochemist prominent 58 rst order” statement and commented on the ar- eld that had it inaugurated would thread promi- eld in which industrial prospects now seemed all , for example,, for noted that was it not the achievement Washington Post The occasionThe was a Senate subcommittee hearing on recombinant The pressThe picked up the Senate subcommittee story in a rush of ar- DNA inDNA November 1977. The of somatostatin per sethat was signifi products. useful many make could genes man-made that promise” to the American public and in so doing help to keep the spigot of public research funds open and fl future. industrial exciting ticles, giving an the it play proponents that DNA sought. Most quoted Han- with fi the of “triumph technology dler’s breakthrough a of rival ing of the risk of the United States failing to capitalize on the commer- fi a of applications cial nently through the political debate. incident The also planted a seed of hope in life scientists that molecular supported biology, decades for by government might fi money, recombinant research was hard to miss. now From on, arguments warn- in the political and debate, Philip Handler, president of the National Academy of Sciences, were scheduled presentations. for stance. But some general-interest articles also played up the industrial One could expect a pro-science publication to take a pro-science to describe the engineering as a “scientifi feat Berg, in similarly glowing terms, hailed as it “astonishing” evidence of the technology’s promise in “putting us the at threshold of new forms of medicine, industry and agriculture.” them privately successful of Genentech’s produc- but not-yet-published tion of somatostatin. All three recognized the achievement as a boon to their political cause—to help defuse congressional intent to pass crip- pling legislation on a fi the likely. more Handler and Berg decided the on spot to announce the so- matostatin achievement to the subcommittee. Handler then proceeded Works!” and went on to callWorks!” the somatostatin achievement vindica- “a tion of the utility of recombinant research DNA which should further defuse a tiny group of scientifi is potentially dangerous to laboratory workers and to the public.” trade publication addressed the biohazard The head-on. debate and Engineering News exclaimed in a headline, “Human Gene in

66 nan- On December 2, 1977, the so- On December 2, 1977, 65 or the annual meetings of the 64 c triumph via a Congressional hear- c announcement seems to be operating here: science editor had a different reaction. He c achievements the before research had been eld of science—then the rules of science by go the board, and 63 , were a violation of establishedprotocol in science reportage and San Francisco Chronicle ing rather than through the pages of Science of pages the through than rather ing American Society of Biological Chemists. The “orderly processes” of refereeing and publication remain in for force journalists andthe public. But when the political process is operating in Congress—in this case, apparently, the spectre of political regulation a newfor fi the public learns of a new scientifi A double standard double A scientifi of A Months earlier Swanson and the City depart- of Hope public relations the shift toward utility that the somatostatin research signaled: “The signaled: man research the shift toward utility the somatostatin that in science.” nally get a return on his investment in the street can now fi of scientists, and City of Hope offi hotel a Los Angeles cials assembled at of scientists, and City of Hope offi excited scientists were press. The to the waiting ndings to announce the fi experience. Boyer rst direct media most, it was their fi and on edge. For poured on the decades of federal funding in hand. Remarking took things he noted resulting, into molecular biology with nature little of practical , Swanson, the two teams Science, Swanson, the two manuscript safely in press at matostatin tantly postponed a press conference, deferring to the very concerns that to the very concerns that deferring tantly postponed a press conference, to be seen to follow anxious and Boyer, Riggs the Chronicle editor. worried protocol, had argued to delay publicity had been academic until the work for publication. peer reviewed and accepted peer reviewed and published would soon escalate as universities threw convention to the wind, seeking to capitalizeon the publicity and fi cial value of faculty discoveries, particularly regarding the cloning of genes, important results, had reluc- research eager to announce the somatostatin ment, The practiceThe of orchestrating press conferences and other forms of pub- scientifi announce to licity potential recombinant of making DNA, only passing to reference the safety issue. pronouncing them violation a of a long-standing code of practice in sci- ence journalism. Handler’s remarks, and Berg’s he protested in a letterto Science an overtly political maneuver: took indignant exception to the Senate subcommittee announcements,

68 CHAPTER THREE 69 PROVING THE TECHNOLOGY Only in in Only 67 rst demonstrated 68 Genentech had chosen the synthetic 69 c reasons; Berg noted a largely inadvertent urry of publicity over the somatostatin research led to t from recombinant “Virtually technology.” DNA identi- ] fi nds its way to the human gut andsurvives, ] fi its product has sic We’ve bypassedWe’ve the potential hazards in recombinant research. DNA The gene is manufactured in a test tube. clean It’s and has no contaminants. This [synthetic and DNA recombinant technology] DNA bridges the gap between chemistry and These biology. two disciplines are now married, and I think a marriage it’s made in heaven. The jointThe City Hope of and news UCSF release claim- concretely, put it In the subsequent media coverage, an exultant eager to Boyer, counter For Boyer, the Boyer, For fl little chance of doing any harm.” any doing of chance little Paul Berg, a highly visible spokesman in the recombinant contro- DNA venturedversy, to the press that the use of chemically synthesized genes “can completely change the whole picture estimating of risks. can You design the so gene that even if something does wrong go and the bac- teria [ ing a genetic engineering representing feat “the fi fermentation.” practical benefi industrial in cal techniques,” the releasewent on, “could used be used safely in bacteria to enzymes produce complex biological the substances ranging from insulin to and other hormones A return, he meant, measured in the purer, cheaper, and more plentiful more plentiful and cheaper, in the purer, measured he meant, A return, would technology DNA recombinant he believed that pharmaceuticals produce. critics decrying recombinant as a technology DNA of engineer- capable ing possibly perilous bacteria, described pioneering Genentech’s use of synthetic as a way DNA to any avoid suspicion of danger: the somatostatin research “was funded by Genentech, One can Inc.” only surmise the reason or reasons the for scant notice given Genentech. Hesi- tation in a roiling political climate to publicize the institutions’ relation- ship to a company formed to commercialize recombinant A reluc- DNA? tance to share credit? Or another reason entirely? the last sentence did the release mention Genentech, noting simply that notoriety as well as accolade. In the steamy politics and polemics of the recombinantnewsworthy political DNA he was debate, a prominent and DNA approach for scientifi for approach DNA reductionrisk- approach in convenient conformity with his stance statesmanence’s of responsibility as sci- in recombinant research. DNA ict- ned ting weight of col- t companies. Biochemistry Put simply, what was Put the simply, ap- 70 In 1981 he and a former student, student, former a and he 1981 In 73 ict of interest, if not a betrayal of academic rstcentury. Professors of biomedicine, the ideology went, 72 ed for effortsed for to commercialize a controversial tech- Two departmental Two members were particularly vocal in 71 74 rst in a long line of molecular scientists who would span aca- The outcryThe against the commercial trend was by no means confi Public knowledge corporate of Boyer’s ties brought to the confl fore As the fi t himself.” values and traditions. their profound disapproval. Such intimate corporate involvement, they they involvement, corporate intimate Such disapproval. profound their asserted, represented a confl fully attuned to the industrial prospects of their research on hepatitis B, would found the biotechnology company Chiron Corporation in nearby Emeryville. Genentech’s commercialGenentech’s prospects. But the publicity also spread word directof Boyer’s involvement up till in the company, then not broadly known. focal point—onthe one hand, lauded a revolutionaryfor invention, on crucifi other, the a scientist For nology. intent on having his research made practical and his company become a success, was it a boon to have the media play up they were not to engage directly in for-profi in directly were to dedicate themselves to research, teaching, and engage public service; to not were they chairman Rutter let the uncomfortable issue more or less ride, but it roiled his department into the 1980s. legial censure. UCSF’s campus newspaper reported that news of his ties ties his of news that reported newspaper campus UCSF’s censure. legial to Genentech caused “an uproar in the Department Biochemistry of at sinceUCSF appeared it that Boyer was wearing two hats in order to ben- efi seamless continuum? These questions racked university campuses as as campuses university racked questions These seamless continuum? discoveries in molecular biology—and the professorsmaking them— became increasing relevant to industry. demia and industry, Boyer the felt full and discomfi propriate relationship of a professor to industry? How directly, if all, at should a faculty member involve him- or herself Where in a company? wasthe appropriate line between academic and commercial activities? How indeed could one distinguish basic and applied research, when in the case of somatostatin and numerous other research projects was it a the Senate a month earlier, Paul Berg told a reporter that the commercial involvement of professors was “just not to my taste. This to criti- isn’t to UCSF. For example, For despiteto his UCSF. promotion of the somatostatin in work of-interest issuesof-interest that in various forms would rankle academics andpoli- twenty-fi the into cymakers

70 CHAPTER THREE 71 PROVING THE TECHNOLOGY

Boyer’s Throughout the 77 In Boyer’s case, In Boyer’s the 79 But in 1980 Berg himself himself Berg 1980 in But 75 The University of California likewise likewise California of University The 78 76 rst through the patent appli- Stanford-UC ict of interest? Then why, one might ask, was Then why, Boyer royally criti- 80 anded by a university Rutter’s administrator’s signatures on the Most likely was it his central in role the efforts to commercialize re- News that Boyer had performed research in his lab under UCSF a Ge- dual loyalties were commonplace and widely accepted. As his severest critics he was put it, “selling out to industry.” company. These were not thecompany. usual arm’s-length, part-time relationships with the business world that university faculties and administrators generally condoned. was direct, It Boyer’s substantial, and ongoing asso- ciation with Genentech, as well as his positionpatent application, as that academics inventor found troubling in an era such before on the suspect his position as inventor ona disputed corporateBoyer’s ties with renewed patent dismay and censure. heart The application, of his greeted newsproblem, as of they saw was it, that as a full-time, tenured professor he was simultaneously and inappropriately cofounder, vice president, board member, adviser, and stockholder major of a private company— combinant technology, fi DNA cation and then through Genentech. Detractors, already disapproving of monplace in American medical schools of the period. of university facilities to perform contract research for industry had had industry for research contract perform to facilities nentech contract added fuel to the gathering use a professor’s furor. Yet university of many precedents and, even with II War the risepost–World of federal waning research funding, remained of fairly industry com- support with the had a long history of industrial contracting, including a concurrent re- search agreement with Lilly on recombinant insulin. as verifi as contract document. research contract with Genentech had the stamp of university approval, cize Herb particularly, butI just see can’t it.” outlook had obviously evolved. stepped onto the corporate bandwagon. year That he, Arthur Kornberg, and a Stanford colleague cofounded DNAX, a private research institute thefor commercial application of molecular and cellular Berg’s biology. cized and accused of confl the twentieth century and with Harvard and the University of Rochester on liver extracts to treat anemia. twentieth century, pharmaceutical companies had time and again con- tracted with academic researchers to perform thebasic aspects of drug research and to run clinical trials. Historic examples are Eli Lilly’s agree- ments on insulin with the University in the of Toronto early decades of ts come come ts J. Michael 82 icts of interest. was It a nancial interest in a concern, The report The by no means ended fi 81 83 As he saw the it, somatostatin experiment was 84 dential committee UCSF noted the report dis- of 1979 might be done. So there were repercussions, particularly among the fac- ulty of UCSF—a hue and cry over potential confl harrowing time Herb for Boyer. oppositionThe caught Boyer by surprise. Facing critics on several Commercialization of biological discoveries was far from novel the at birth of Genentech: Pharma Big had been doing long a for it time. But for a member of the academic community to be so intimately involved, that wassea a change. No one had thought much about the rules how for this A low pointwas faculty a UCSF committee inquiry into the institution—he repeatedly argued that Genentech was a means to trans- form the invention of recombinant into DNA medical products useful to society. wanted “I he told a science “that to reporter see,” benefi the tech- in 1977, public that so industry private to transferred gets nology possible.” as soon as out fronts—in the general public and, more disturbingly, within his home chemistry department. advised It that “in the future would it be wise to refrain from making contracts in which will work be done by a univer- sity faculty member who also has a major Genentech-sponsored somatostatin research transpiring in Boyer’s lab. lab. Boyer’s in transpiring research somatostatin Genentech-sponsored resultingThe confi ruption and jealousy the contract research had evoked within the bio- would expend countless hours on creating policy ever-increasing for numbers of faculty interactions with industry while steadily multiply- ing their own institutional ties with the corporate world. the or elsewhere. matter, UCSF at In the future, research universities Bishop, a formerBishop, colleague Nobel and laureate, 1989 later summed up dilemma:Boyer’s suggesting that they purchase stock, appears to support this possibility. Looking this on back period, commented: he a test of that proposition and entirely appropriate pursuit for in his lab. Convinced that Genentech was set to contribute medical therapies the for well-being,public’s he may in his enthusiasm have interpreta- overlooked the possi- different a to come did, indeed and would, others that bility tion. His open promotion of Genentech among his colleagues, UCSF even as this amounts to a contract between the person and himself, with the incidental.” being only role university’s

72 CHAPTER THREE 73 PROVING THE TECHNOLOGY rst urry of corpo- of urry ected growing consen- article on the somatostatin research, research, somatostatin the on article exibility message The was to clear: move.” this piece went on to claim that as of late 1977 possibly possibly 1977 late of as that claim to on went piece Business Week A photograph accompanying the article reinforced 86 cult me. for had I a lot of anxieties and bouts of depres- nally begun exploratory research in its new state-of-the- eld is opening the article up rapidly,” quoted him, “and we fteen corporations were exploring the industrial applica- eld, and Upjohn planned to inaugurate a recombinant DNA 85 cult. diffi It was very diffi sion associated with this.Here I thought I was doing something that was valuableto society, and doing something that would make a contribu- tion, and then to have the accusations and criticisms, was it extremely While Boyer experienced a roller-coaster ride of professional and per- The pharmaceuticalThe industry had gotten the message and begun to corporate boards began to consider, could indeed be commercially pro- ductive. title The of a skepticism. That skepticism began to fade somewhat with Genentech’s Genentech’s with somewhat sonal highs and lows, fade the pharmaceutical to industry monitored recom- began binant science DNA and politics with skepticism a combination of fascination and That skepticism. making of somatostatin. Perhaps this radical and disruptive technology, As molecular biology’s pioneering professor-entrepreneur, the fi among his academic colleagues “to commercial,” go Boyer was some for years a lightning opponents for rod of the industrial interests entering molecular biology. rate activity inevitably provoked criticism. Jeremy Rifkin, who would would who Rifkin, Jeremy criticism. provoked inevitably nology could indeed produce marketable products. fl The activity rate tions of genetic engineering. Abbott Laboratories had reportedly begun inwork the fi tech- strange the that Cetuslab. had fi evidence conclusive art recombinant more research DNA facility. Hoffmann–La Roche had decided awaiting back, hold to new company with the high-tech name aimed immediate for impact on pharmaceutical production. act. The Business Week fi as many as the impression of a technology ripe application. for pictured It a grin- ning Boyer and Swanson standing a blackboard before diagram of the somatostatin experimental procedure. Boyer,what tamed, was with dressed in the suit, white explosive shirt, and tie of a man of com- curls some- “Themerce. fi Genentech] have the[at fl sus on the technology’s industrial relevance, especially in pharmaceu- in especially relevance, industrial Commercial refl “A Technology,” DNA Debut for technology’s the on sus manufacture. tical ed, he at lasted, he at had the scientists decrying the industrial trend and listing insulin—became the target in everyone’s everyone’s in target the insulin—became human Mother Jones 87 Genentech’s somatostatinGenentech’s successhad a wave of corporate provoked rm’s technology preliminarily verifi preliminarily technology rm’s fi behind him: insulin— interest in genetic engineering. the truth Yet was, the hormone had no assured clinical application nor a clear and certain market. was It a con- venient test substance and, as Swanson divined, not anything one could build a company upon. the From start, his bet had been on insulin, and he continued to hew to that view. With somatostatin achieved and the become a perennial burr in the saddle of biotechnology, had come out out come had biotechnology, of saddle the in burr perennial a become in article an with six major drug companies as engaged in or tooling recombinant up for research.DNA sight line.

74 CHAPTER THREE 4 Human Insulin: Genentech Makes Its Mark

Human insulin has been produced at last by genetically engineered bacteria in a California laboratory—an achievement that catapults recombinant DNA technology into the major leagues of the drug industry. 1 Science News, September 16, 1978

Swanson had impatiently endured the somatostatin project, with its heart-stopping low point and exhilarating fi nish. It served handsomely as a convincing proof-of-principle demonstration of Genentech’s core technology, reducing technical uncertainties and pointing toward a sweeping landscape of industrial possibilities. After the somatostatin success, the company could move on to a far more challenging project— making human insulin. Swanson’s urgent need, before the money ran out, was to show that the company could make substitutes for the larger and more complex proteins used in common medical practice. Human insulin was that test. The project placed Genentech in direct confl ict with two elite academic teams, already well advanced in their quest for insu- lin. The ensuing cutthroat contest became all the more so for the promise of concluding lucrative research agreements with a major pharmaceuti- cal company. The competition for insulin was forbidding enough. But it was a particular challenge for Genentech, which was little more than a virtual company existing largely on paper except for an inconsequential physical presence in Swanson’s rented offi ce in San Francisco. To launch the ambitious insulin project, Swanson urgently needed lab space and a re But it wasBut it 2 nancing. A basic nanciers and cor- and nanciers eld that fi That left Eli Lilly and Company 3 ! At the beginning his of 1978, pri- fast ts and starts of risk capital investment. staff, c them and needed he Early on Boyer had suggested that Genentech strike research and The pharmaceuticalThe giant, renowned since its for market the 1920s in development agreements with pharmaceutical companies. pharmaceutical with agreements development orities were to locate and lease a facility, hire scientists a trial-by-fi for attempt to make human insulin, and attempt to raise yet more private money. went so far as to send delegates to Genentech early in 1978 but, question- but, in early Genentech 1978 to send delegates far to as so went ing whether recombinant could DNA as work an industrial technology, decided against an alliance. Swanson also approached Hoechst, the Ger- man pharmaceutical and chemicals manufacturer. similar For reasons, partnership. a on back its turned also it drug to market, Genentech would need the pharmaceutical industry’s expertise in drug development, manufacture, and regulatory approval. Negotiating research contracts with established companies became yet another priority. Swanson, with probably Boyer and Perkins assisting, tried to interest Novo Industri, a Danish company dominating the Euro- pean insulin market, in forming a partnership on human insulin. Novo not only access to their deep pockets he and Swanson wanted. see a To interim, a young company could turn to contracts with established com- panies to supplement the fi Swanson, undaunted, concentrated his buoyant salesmanship on the the on salesmanship buoyant his concentrated undaunted, Swanson, task. Venture capital could creation and support early a start-up’s de- velopment but as a rule could not provide long-term fi premise of venture investment was prompt monetary return to inves- tors, either through a public stock offering or through acquisition. In the SEEKING CORPORATE CONTRACTS CORPORATE SEEKING Funding a start-up company was almost always an arduous all job, the somore in one a radically new biomedical fi porate executives had no background understanding for and evaluating. scientifi tives to extracting insulin from animal pancreases, a source not expected to keep up with the predicted expansion of the diabetic population. For with an 80 percent share of the North American insulin market as Genen- remainingtech’s best option a contract. for pig and calf insulin, was the venerable patriarch of North American in- sulin however, production. Lilly By the mid-1970s, was seeking alterna-

76 CHAPTER FOUR 77 HUMAN INSULIN rst ced while the ying out to San Francisco to nancing, providing $950,000 at at $950,000 providing nancing, nd a facilitynd Genentech. for The ed, perhaps through publicity on In May 1976 Lilly In May 1976 sponsored a sym- 5 nancial district had suffi had district nancial 7 The presentations The Lilly, and gave John- 6 agship kept product—it watchful a eye on But well aware that academics tended to denigrate 4 Genentech now had the means to move on to the next stage 8 ce in fi San Francisco’s eld attended, including Bill Rutter and Howard Goodman UCSF at operation from the rm’s Kleiner Perkins & suitein Menlo Park and then agement that to remain competitive Lilly needed to form alliances with the academic teams pursuing researchresponsibility,” he remarked, “was to make sure that Lilly was the fi on recombinant insulin.company to have human insulin.” “I felt my the quality and conditions of industrial an research, create he correctly to discerned decided management upper conservative Lilly’s if even man- that convince to aim internal research unit on recombinant vigorous insulin, the company his would not it made then succeed in hiring Johnson molecular biologistsengineering. with the required skills in genetic Swanson meanwhile was pressed to fi fi offi an from PROCURING A FACILITY AND STAFF PROCURING A FACILITY somehow acquire. good reason—togood protect a fl new methods making for the hormone. Irving Johnson, vice president of Lilly’s research laboratories, identifi somatostatin, recombinant asa technology DNA the drug maker should them to locate in “The Industrial City,” as block letters proclaimed on a a on proclaimed letters block as and Perkins met with the mayor of South San Francisco, who City,” encouraged Industrial “The in locate to them of corporate development. After considering various locations, Swanson the fi Harvard. at Gilbert Walter and posium on the genetic engineering of insulin. All theplayers major in keep close tabs on the insulin research feverishly pursued in and Rutter’s Goodman’s laboratories. He appears not to have had a close connection with the Harvard team, perhaps because Gilbert was considering com- mercial possibilities of his own. son in particular, a picture of current recombinant insulin research: the and HarvardUCSF teams appeared to be in the lead and clearly the ones to Johnson watch. By 1977 was periodically fl With Genentech’s technology With Genentech’s proven and the insulin pending, project it was high time to acquire lab space and hire scientists. In March Swan- 1978 son completeda third round of private fi $8 per share. company was essentially Swanson, a part-time secretary, and a telephone. In Feb- In 9 cient opera- cient Both claims 10 Swanson, resolute in his vision of Genentech as a self-suffi Swanson and Perkins also weighed the local politicalsituation. Un- ing valves and dials of an imposing biopharmaceutical fermenter. The cared to notice, that Genentech, was Inc., not a mere research boutique; plannedit to make pharmaceuticals in short But without order. a single scientist hired or a functional lab in place, that was far from the case. As soon as the facility was in vague working Swanson order, or one of his scientists made a habit of posing publicity for shots in front of the gleam- big. Late in 1977, before he had before leased spaceor hired Late inbig. 1977, a scientist, he had taken the premature step of employing a fermentation expert formerly theat pharmaceutical company Squibb & Sons, giving him the exalted title of vice president of manufacturing. There of course was nothing to manufacture. intent Swanson’s was to signal to the outside world, if it were enormous leaps of faith—the portion of the warehouse Swanson had more furniture—and, or equipment without shell, empty an was leased to the point, without scientists. Swanson was undeterred and thinking tion, had sought and found a site with potential growth. for He described toit private shareholders as “our new ‘world headquarters,’” grandly pre- dicting that would it great campus become “a someday.” ruary Swanson 1978 leased section a 10,000-square-foot of an airfreight warehouse Point 460 San at Bruno Boulevard on the bay in South San Francisco. trouble [with restrictive ordinances] and in they Berkeley, did.” favorable to geneticfavorable engineering, and its citizens were unlikely to take to the streets in protest. Leery Berkeley’s of history of political activism and the city council’s tough ordinances regulating recombinant DNA research, Perkins observed that they chose South San Francisco in part because perceived that “it was Cetus We not Berkeley. would havelot of a a short drive to Kleiner Perkins & and to other venture capital partner- ships around Stanford. Silicon Valley—with its high-tech industries, support services, and entrepreneurial culture—lay just to the south. like centers of unrest U.S. in San Francisco, Cambridge, Ann Arbor, and SouthBerkeley, San Francisco was not contemplating ordinances un- freeway hillside. A few miles south San of Francisco, the city offered rea- sonable rent and a quick commute and to UCSF Stanford,active centers of the science, techniques, and workforce the company needed. South San Francisco, Swanson noted, was also close to an international airport and

78 CHAPTER FOUR Fig. 12. Herb Heyneker regarding Genentech’s fi rst pharmaceutical fermenter, 1978. (Photographer unknown; photograph courtesy of Herbert L. Heyneker.)

11 A torrent of 12 edgling company. company. edgling , made much of the Time Yet despite the Yet fanfare, 13 ciency in the somatostatin experiment experiment somatostatin the in ciency rsthand experience were the ones adept in Boyer all along had tried to recruit scientists to the fl By that time recruitment Boyer’s effort had grown more urgent. The UCSF DepartmentUCSF of Biochemistry’s success as a major step toward the ultimate prize—production of human insulin. publicity, including an article and photograph in in photograph and article an including publicity, employed a new and still troublesome procedure called complementary cloningDNA to reproduce the gene. As rat technically adept as he was highly ambitious, Ullrich used a newly discovered enzyme to make a proxyDNA of the natural and gene then cloned in it bacteria. It countedIt as a sensational achievement a time at when any gene cloning greatprovoked excitement and particularly a substance one for as well known as insulin. Axel Ullrich, a postdoc in Howard Goodman’s had lab, purpose course of was to project the image of Genentech as an operating manufacturer. pharmaceutical previous had May mounted UCSF a gala press conference to announce the Rutter-Goodman success in team’s cloning the insulin. for gene rat and abundant enthusiasm practical for application, was an obvious can- didate. Sorely tempted as he was, the terms of his Dutch fellowship ob- ligated him to join the University of Leiden faculty when the fellowship ended. In October Heyneker 1977 and his young family returned to Hol- land, expecting to put down permanent roots. young people the at outset of their careers were more likely than their securely tenured professors inured in academicing in a job industry, and a high-risk tradition that. one at Boyer sev- approached to consider tak- Heyneker, Genentech. at employment about students postdoctoral eral profi keen demonstrated having sential bridge between academic and industrial domains, across which all manner of ideas, technical tangible know-how, materials, and man- power would migrate. His immediate plan was to seek out junior scien- tists, whom he knew from fi the latest genetic engineering techniques. He also suspected that these were prepared to synthesize thethe for insulin DNA project. But where was the the labor for molecular force biology Ancomponent? obvious hunting ground was own Boyer’s department. His inside track to the De- partmentBiochemistry’s of personnel and resources was of inestimable value to Genentech, an but at immediate cost to himself in sour collegial relationships. In the early company’s years, Boyer would serve as an es- Riggs and Itakura and their labs remained under Genentech contract and

80 CHAPTER FOUR 81 HUMAN INSULIN c As Swan- As 14 19 Boyer’s overtures Boyer’s to 18 All three signed consul- ciency and ambition. He 16 c adviser Cetus at and that becoming a princi- 17 t from the stature and insight of senior scientists, he Boyer also courted the Australian John Shine, an expert in DNA DNA in expert an Shine, John Australian the courted also Boyer 15 Of the group of people that understood what was going on cloning[in research] that at point in time, [Rutter and Goodman] were the leaders. But Boyer did not limit his recruitment effort to the young. Eager for To Boyer andTo Swanson, was it all too worrisomely apparent that the legislation restricting recombinant research. DNA Genentech to benefi tried without success to convince several professors to consult in or, for case, to join Genentech.Stan Cohen’s Cohen declined on the grounds that he was already a scientifi pal in a company was likely to jeopardize hislobbying activities against Ullrich—husky, headstrong, andambitious—was rightfully convinced of his competence and value. Seeburg, his lean accented face by a droopy mustache, was Ullrich’s equal in technical profi was attempting to clone and express the human gene for growth hor- mone. mise. Determined to acquire expertise in complementary cloning DNA Genentech,for Boyer invited Axel Ullrich and Peter Seeburg, the depart- expertsment’s in the technique, to become consultants. two The Ger- mans, both molecular geneticists, were friends as well as competitors in aiming to set molecular biology ablaze with their cloning prowess. UCSF teamUCSF possessed a competitive method making for human insulin and might relegate Genentech to the sidelines, if not to immediate de- son summarized: ment contract with Eli Lilly or one of itscompetitors. Rutter recalled that after publication of the insulin rat research, “Every company involved in insulinmanufacture came to see us. They wanted the clones.” Ullrich had not expressed insulin rat in the bacteria. Nonetheless, the Rutter-Goodman team, with theinsulin rat gene cloning as a scientifi trophy and the technical expertise backing appeared up, to it have a jump start on achieving human insulin and sealing a research and develop- tant contracts in 1977. sequencing and yet another of Goodman’s stable of talented young scien- tists. When the three expressed interest, Swanson followed up with con- tracts specifying the consultant amount fee, of support their for UCSF Genentech. in shares of number and research, Rutter and Goodman somewhat got further.and He Swanson to resolved secure them as consultants on complementary cloning. DNA

and ve scientists ve Swanson wanted the fi 22 20 Boyer’s recruitment Boyer’s effort in his home department had 24 ve UCSF biochemists came to naught. Rutter declined and and declined Rutter naught. to came biochemists UCSF ve He had placed the same demand on Ullrich, and doubtless also 21 Negotiations off several broke for reasons, including failure to 23 Perkins entered into the campaign consultant for expertise and the for forefront of that. I wanted to get thebest advice we could. . . . There was to this competitive and technology that to access technology, [complementary cDNA had cloning I DNA] technology. So I wanted progressed, it if that sure make to the leaders. And Goodman and Rutter and Ullrich and Seeburg were on the But it wasBut it not only the biochemists UCSF who worried Boyer and Swan- to enlist all fi Goodman and the three postdocs pulled out of their consultant agree- ments. and Goodman into accepting the terms of the consultant agreement. He made no bones about knowing next to nothing about the ins and outs of molecular science, but he appreciated the value to Genentech of enlisting two prominent professors—Rutter, an academic powerhouse, and Good- man, a master of the latest genetic technologies. In the end, the effort their precious gene. biological material the UCSF professors controlled. He hosteda high-end a restaurant dinner which at he did his persuasive at best Rutter to cajole In spring 1977 Swanson presented consultant agreements to Rutter and and Rutter to agreements consultant presented Swanson 1977 spring In Goodman, which he had made pointedly contingent upon “delivery to Genentech of plasmids containing the entire coding gene rat for insulin.” bert had already chalked up substantial contributions in regulation gene and sequencing. rapid DNA His lab used a complementary cloning DNA son. formidable The Wally Gilbert, directing Harvard’s recombinant in- sulin effort, was to reckon with. a force He directed a talented group of cocky young researchers, all well aware of their standing in one of mo- lecular biology’s hottest Gil- labs. Soon to become a Nobel laureate (1980), reached a dry and dismal end. on Rutter, Seeburg, on Rutter, and Shine. would surely diminish if not destroy the possibility a UC-Lilly for con- tract. Many years later Goodman de- and succinctly, [Rutter put it I] “We cided that a better partner [than Genentech] the for we wanted work to do was Eli Lilly.” agree on the number of shares to be allotted. Doubtless also on Rutter’s and Goodman’s minds was the likelihood of concluding a research and development agreement with Lilly. Becoming Genentech consultants

82 CHAPTER FOUR 83 HUMAN INSULIN

26 t for Genentech’s program. Genentech’s t for rebrand mayor had issued a A California lab. rst DNA-based c repute, corporate alliances, and the prestige The decree The brought Harvard’s insulin research 25 rst to clone a human a celebrated gene for medical substance. Hearing of the David offer, Goeddel, junior Kleid’s colleague SRI, at Then, wound as 1977 down, Boyer hiring and Swanson’s prospects duced a run of newsletters taunting Coast the West team. One issue— titled “Gilbert Hustlers Outmuscle Boyer Cartel in Dual Meet: Coast Crew Crumbles as Gilbert’s Gapes”—used the metaphor of a football game de- to put the teamfeat UCSF in its place as a sorry loser to Harvard’s elite. to a standstill. When the moratorium lifted in February Gilbert time and lost 1977, for up make to racing course, on more once were scientists his in their madcap attempt to express recombinant insulin and their beat competitorsUCSF tothe prize. let off steam, To the Harvard youths pro- had none of his supervisor’s doubts and hesitations. strapping The assured him, obliquely alluding to a contract he expected to conclude conclude to expected he contract a to alluding project. Money to support the research wouldbe no problem, Swanson obliquely him, assured with a pharmaceutical Caught off company. guard, Kleid hesitated. He had a responsible SRI. at job Why should he join a precarious venture without a laboratory or a scientist to its name? at both universities and got to know Heyneker Kleid1977 received a call from Boyer and agreed to join him and and Swanson others at UCSF. Late in dinnerfor a trendy at San Francisco restaurant. He learned that they were assumed, had he as SRI, at research contract arranging in interested not but instead wanted to recruit him to Genentech to on an work insulin and molecular biology seemed a perfect fi Fresh from postdoctoral fellowships MIT at and Harvard, Kleid in 1975 had joined Stanford Research Institute a contract (SRI), research organi- zation in as Silicon director Valley, of its fi native, the warmhearted Kleid was glad to settle in near the hotbeds of genetic engineering He began to attend Stanford at seminars and UCSF. test. At stake were scientifi were stake At test. of being fi took a turn the for better. Through Heyneker, Boyer and Swanson learned of Dennis Kleid, an organic chemist whose training in synthesis DNA But the barbed humor failed to disguise the ferocity of the con- east-west moratorium on all recombinant research within incensed the city, over its possible biohazards. method, similar to that of the team, UCSF inits intense effort to trounce all comers in constructing, cloning, and expressing an insulin gene. But in the summer politics had delivered of 1976, the Gilbert team a serious Cambridge The Cityblow. Council and its fi 28 You must complete You What he sawed crew. in the c reputation. He joined an organic He yearned to return to California and therock-climbing chal- 27 to be absolutely focused and confi rock. dent and just climb that and confi focused to be absolutely Goeddel,For Genentech at a job offered easy access to the outdoorac- While Dave worked at SRI, he climbed El Capitan [a 3,000-foot vertical rock rock vertical [a 3,000-foot SRI, he climbed El Capitan at worked While Dave to He explained thing. a one-week that’s and Valley], in Yosemite formation you get a certain distance, and af- a rope, and how he does this: you have me go the ground anymore, and you can’t reach doesn’t a day your rope ter about no way to go down. There’s to go up. have You down. back So you have off. you fall right sweat, ngers tripthe . If you get nervous, your fi Goeddel graduated in and his 1977 got wish. Willingly turning his edgling company was an opportunity, demanding all his considerable lented and agreed to join Genentech as a senior research scientist, but but scientist, research senior a as Genentech join to agreed and lented on the proviso that Swanson would also hire Goeddel.In the end, he was competing against Gilbert and his self-satisfi fl technical and psychic resources, to develop frontier science practi- for cal ends. Goeddel persuaded the still-wavering Kleid to back in get touch with Swanson and accept the offer job on both their accounts. Kleid re- pioneering applied research at the edge of do-ability—and the thrill of of thrill the do-ability—and of edge the at tivities he craved. But he was also inexorably drawn research to the challenge of applied pioneering thing done as fast as I could,” he recalled. “I wanted to graduate as fast as I could.” climbing centers than its for scientifi chemistry lab and tried his hand synthesis. DNA at was But it a course in molecular biology that and of the word caught his was It fancy. 1974, Cohen-Boyer method was trickling out. Goeddel Perhaps, thought, he could clone the synthetic he and his DNA lab partner Dan Yansura had struggled to make. As always,was he in a hurry. tried “I to every- get young Californian was a passionate climber rock and accustomed to tak- ing risks, often deliberately seeking them out. Some years earlier, Goed- delhad chosen the University of Colorado Boulder at graduate for work in biochemistry, its location more for great rock- in of the one world’s duced by the opportunities that northern California offered to a tech- nical climber. description Kleid’s of what these climbs entailed throws lightwinner-take-all on Goeddel’s mentality, whether applied to rock research: or climbing back on academia, he accepted Kleid’s invitation to join him at SRI, se- SRI, at him join lenges and to of Yosemite elsewhere in the Sierra Nevada. invitation Kleid’s accepted he academia, on back

84 CHAPTER FOUR 85 HUMAN INSULIN cations. c qualifi 30 he subsequently he asserted. Swanson to deferred 29 First page of the Genentech 1978 employment agreement. (Copy courtesy of Roberto Crea.) Boyer to size up twenty-six-year-old scientifi Goeddel’s science, no question,” science, Fig. 13. Fig. also seduced by the lure of doing cutting-edge research: went “I the for company from unauthorized disclosure of proprietary information, a labs. research industrial in practice routine Boyer immediately recommended hiring him—a remarkably wise de- cision, would it turn out. Kleid and Goeddel then signed employment agreements, giving Genentech title to all inventions and protecting the

34 fty-one amino fty-one Making the for DNA rm. surely It took all 33 By February John- 1978 31 Lilly had signed a similar 32 ed in the medical con- center’s The CityThe of Hope chemists, still under Genentech contract, had for vinced his dubious superiors Lilly at to keep all options open and reach into their deep corporate pockets to fund the improbable effort that the infant companyaimed to launch that spring.In June Lilly and Genentech reached a preliminary understanding in which Lilly agreed to support insulinGenentech’s a month. effort $50,000 at son and Swanson were in touch, Swanson pressing hard a research for and development contract with the venerable drug fi of his considerable promotional talent to represent Genentech, without a scientist inplace, as a credible enterprise, to outpace able its prestigious academic competitors and produce the vaunted hormone. Johnson con- grand plan to launch research on human insulin. human on research launch to plan grand GENENTECH’S HUMAN INSULIN PROJECT INSULIN HUMAN GENENTECH’S perhaps throughLate in 1977, the somatostatin publicity, Lilly’s Irving Johnson learned of a new contender—an unprepossessing start-up with a and, guided by the genetic code, selected sequences DNA chemical for machinery. cell bacterial with compatible believed they that synthesis thesize two sequences, DNA each one for chain. Itakura and Crea spent several days designing the chemistry. As in the somatostatin research, they were not aiming to make an exact copy of the natural gene. In fact, the complete sequence of the human insulin gene wasunknown. Instead, they from back worked the amino acids composing the insulin molecule human insulin was no easy endeavor. molecule The is considerably larger and complex more than somatostatin’s—as mentioned, fi acids compared to somatostatin’s fourteen. consists It of two amino acid chains, the so-called A and B chains, which required the chemists to syn- somatostatin, the next day they started on insulin. with any institution without strong evidence of its capacity to make hu- insulin. man some months been hard work on at the synthesis fragments of DNA cod- ing insulin, for the second hormone specifi tract with Genentech. As Riggs remembered one night it, they celebrated agreement with the University of California the previous March, but on growth hormone as well as insulin. Lilly’s contracts with two competing institutions suggested how badly wantedit a human insulin product. Al- though Lilly was intent on covering all bases through modest research support, was it of no mind to sign a formal long-term agreement R&D

86 CHAPTER FOUR 87 HUMAN INSULIN Kleid recalled. He and 37 rst resident scientists. They rst and fast. didn’t spare We oor,” Genentech’s laboratory Genentech’s one at 36 After a number of frustrating attempts, 38 35 rm had acquired its fi nd alternate lab space, and quickly. Riggs, coming to ciency and productivity. ter molecule in a frenetic race to get there fi anything. put our We heads down, and we created a beautiful episode of effi There was so much excitement inthe lab that even occasional episodes of solvent spills did not bother were us. cranking, We literally, molecule af- In Goeddel mid-March 1978 arrived to begin Genentech. at work Kleid Crea led the chemistry, DNA withseveral postdocs and technicians nished the chemistry within six months, remarkable speed consider- end of the warehouse was completely a hollow empty, shell. talk- “I’m ing the four walls, the ceiling, and the fl a “crazy hard worker,” toilinga “crazy hard worker,” as much as twenty hours a day and ap- tenacity. or-die plying his do- over the shift. Itakura, no slouch himself, observed that Goeddel was was Goeddel time. Within weeks they that had the A-chain genetic sequence assembled observed and inserted into plasmids cloning. for B chain The was another mat- himself, Goeddelter. slouch labored obsessively to clone but made it little progress. no Itakura, He paused only to eat and drop into exhausted sleep when Kleid took shift. the over Goeddel had to fi rescue, arranged their for use of a closet-size City lab at their of Hope. twoThe immediately headed south, determined to make lost up for found the fragments DNA from City of Hope waiting But assembly. for what formidable obstacles they faced. Late runners in the contest for insulin, scientists, Genentech’s north and south, lagged well behind the accomplished teamsand Harvard, UCSF at already considerably advanced in a contest each other to out-compete and capture the cash and kudosmaking for human insulin. fi ing the arduous and noxious labor required the before advent of gene- synthesis machines. then work The shifted to Genentech. fi The April. in came He was living to up his name: Crea in Italian means team The “he creates.” cals and toxic fumessynthesis of DNA to create and purify the fragments the sequencesfor DNA coding the for two insulin chains. Crea recalled intensity: feverish the It wasIt a strategy designed a utilitarian for purpose—to bacteria force to produce a human protein. assisting. team The endured long days of exposure to the noxious chemi- ngers[tips]; ngers[tips]; 39 eld, creatingsituation a close rst director of molecular biol- He and Heyneker fell into a sponta- a into fell Heyneker and He 40 cult to swallow. . . . It was something which I had at my fi I had at which . . . It was something cult to swallow. We worked so wellWe understood together. [Dave] exactly what I wanted to anddo, I understood quite well what he wanted to do. we took So turns der those conditions. I was at the forefront of this technology in the United in the United the forefront of this technology der those conditions. I was at and my colleagues that knowing and to stop this line of research, States, was off, on from where I left continue and move would other researchers diffi to do. what I knew exactly years; I had done it for two It really became clear to me that I didn’t want to stay in the Netherlands un- want to I didn’t that clear to me It really became Heyneker’s unexpected visit to California in May was to attend a con- Late in May 1978 Herb Heyneker turned up unexpectedly on a visit visit a on unexpectedly up turned Heyneker Herb 1978 May in Late rst or you might as well be last.” nish line: was “It not going either to pay to come incame second. You in nally paid off. Wining and dining him in Amsterdam they late in 1977, neous rhythm of groundbreaking research done under exceptional pres- sure. Heyneker recalled: fi fi cloner, Heyneker sidelined his house hunting and made a beeline to City of Hope. He and Goeddel, their young male energy peaking the at thrill of the chase, urged each other on, intent on surmounting the problem and showing their mettle as cloners. ace Failure them for was out of the question. Goeddel later remarked on his many subsequent sprints to the He agreed to join Genentech in September 1978 at an annual salary of of salary annual an at 1978 September in Genentech join to agreed He after$40,000, his wife had delivered their third child. andference buy a house in the Bay Area. Instead, he learned from Goed- del of the in problem cloning the B-chain sequence. A more experienced to a research moratorium. On no account was Heyneker,competitive to the bone, prepared to lose his pioneering position in genetic engineer- ing, as he explained: fi had pressed him fi to become Genentech’s Thisogy. time Heyneker had jumped the at He had offer. found himself entrapped in the Byzantine coils politics,DNA of all but unable to con- ductrecombinant research DNA in Holland. A Dutch government advi- sory cautioned against experiments in the fi they discoveredthat the cloning lay problem in a mistake in the B-chain sequence. from Holland. Boyer standingand Swanson’s offer to join Genentechhad

88 CHAPTER FOUR 89 HUMAN INSULIN insulin, insulin, lm only only lm lm that we so ve days. And we He was young—twenty- 44 insulin—not human insulin—not rat rm and with work him on insulin. 41 cient can you be! With Gilbert’s insulin research in full gear, Biogen chose chose Biogen full gear, in research insulin Gilbert’s With 43 cant step forward, to actual production of insulin. Yansura was was Yansura insulin. of production actual to forward, step cant Using a complementary they approach, DNA had done what the 42 sible. We hadsible. a bunch We of [B-chain clones] within a week or fi suc- were we and sequenced, were they Area], Bay the [to home them took cessful in getting the right B chain. . . . The experience was fantastic, very effi exciting—how molecularGenentech’s biology research was no sooner up and going sleeping, to speed up things. When we had to [radioactively] label the DNA fragments, we were so much ina hurry that we exposed an fi X-ray asfor short a time aspossible and looked an at angle the at fi better could see a slightly darker position—everything to be as fast as pos- Inthird June Genentech’s scientist signed on in the modest person of than came it toa grinding halt. Rumor was that Wally Gilbert and his Harvard team had produced proinsulin, an inactive precursor of insu- lin. ible. It was It ible. an opportunity, Goeddel insisted, to take their earlier work a signifi hooked: “That I thought was an incredible challenge,” he explained, the opportunity still bright in his mind years later. Daniel Yansura. Goeddel had relentlessly pestered his former University of Colorado lab partner to jointhe fi Goeddel admitted,Yes, there was a chance failure—of for the research, of the funding, of the entire venture. But the science itself was irresist- human insulin as one of its prime targets and began to underwrite his research Harvard. at Lilly, anxious to appropriate any and all promising methods insulin for production, tried and failed to license Gilbert’s insu- lin technology. Not surprisingly, the license went instead to Biogen. demia and joining a highly speculative enterprise. Additional perks thefor Detroit native were the California lifestyle and a higher salary— seven—unattached, and, like Goeddel, blithely unfazed leaving at aca- molecular biologists and venture capitalists had founded in Switzerland early in 1978. further information to be a precursor of the prize all of prizes. Coast West The scientists sighed with relief. They had panicked on false news that the Harvard group had made human in- sulin. Shortly after announcing the result, Gilbert struck a deal with Bio- gen, a genetic engineering company he andEuropean a number of leading UCSF teamUCSF a year earlier had not accomplished: they had produced a pre- liminary form of recombinant insulin in bacteria. turned it But out on But for Yan- But for ed, he hesi- 45 The practice The 46 at. Baffl at. If any one of them 48 47 rst taste of corporate proce- 49 nings during the week by herself, and that I would come in around nine or ten. . . . I wouldeat, sleep, and get going the next morning. Five days plus part of Saturday were expected. Everybody else was working hard so you just fell in. Everybody the at time was fairly numb, and we worked long hours. . . . My wife, Patricia, reminds me that was it very long, that she spent most eve- Yansura joined Kleid and Goeddel in the warehouse by midsum- lab, Swanson offered Yansura, as he had done Kleid for and Goeddel, a mer 1978 marginallymer 1978 serviceable. three The labored under the delusion that Swanson had wrangled a contract with Lilly. in the 1970s academicsin the 1970s like Yansura were often oblivious to the value of stock ownership. Yansura, For getting his fi offerdure, to Swanson’s purchase cheap shares fell fl tated overnight deciding before to invest $300. wasanything but commonplace in Pharma, Big where as a rule only top management held stock and/or stock options.thinking The behind the practice entrepreneurial at companies was that employees would remain loyal and harder work if they owned However, a piece of the company. moving an exciting technology to the ultimate in useful productivity, productivity, useful in ultimate the to Motivation technology came exciting from an the youngmoving men’s singleness of purpose, of together “Don’t worry Anything“Don’t about money. got.” need, you you’ve $18,000, compared to the earned he $12,000 in Swanson Colorado. made $18,000, clear that Genentechscientists, the cream of his budding enterprise, would free be of the endless grant writing and fund-raising that bur- dened academic life. “This is told he recruits. a science-driven company,” Swanson’s goading;Swanson’s they were already obsessively focused on making the hormone. Yansura recalled: had the slightest doubt that they were entrenched in a hell-bent race to achieve human insulin, Swanson was there constantly to remind them, pointedly dropping Gilbert’s name to egg them on.three—eager The to the prove and technology, themselves—did the company, not need rent for decadesrent for in high-tech Silicon Valley companies. sura, what was uppermost was the prospect doing of pioneering research to make useful products. He accepted the position. chance to buy stock low-cost and acquire part ownership in Genentech. customThe of offering employees stock or stock options had been cur-

90 CHAPTER FOUR 91 HUMAN INSULIN rst to rst It was It a 52 insulin. human July passed worrisomely with with worrisomely passed July 51 c literature and found a chain-joining 50 andsh out the B-chain A- proteins from the welter of bacterial ma- What remained Riggs for and his lab to accomplish was the challenge That summer Goeddel, of 1978, with Kleid and Yansura assisting, set durance he displayed in scaling a Sierra served rock face him equally well science. in of uniting the two chains to form lab. an intact insulin molecule. his He had me- to on scientifi the researched ticulously passed he that procedure them free. With no protein chemist to help them out, the three struggled fi to terial. Fortunately, they could call City on Crea at of Hope, who had the necessary instrument purify to the material. Goeddel in Then succeeded a marathon onslaught to isolate the insulin chains. tenacity The and en- ferred the hybrid plasmid into bacteria for cloning. As with somatosta- with As cloning. spliced and B-chain each A- for sequence into separate plasmids and trans- bacteria into plasmid hybrid the ferred tin, the bacteria did not produce the chains free and clear. Rather, they were fused to a much larger bacterial enzyme as minute tails of insulin A or B chain. Goeddel then harvested the chains by chemically clipping about to clone and express the two sequences DNA coding the for A and B chains. Using the somatostatin experiment as a rough model, they golden moment. Two teamsgolden moment. of unknowns Two supported by an obscure com- pany had come from behind, encountered problems several at turns, and in a race,” Yansura recalled, “and we knew we would have to be fi be to have would we knew we “and tech folk, however, the competition was all recalled, too knew clear. “We we were Yansura race,” a in survive as a company.” and the camaraderieof the like-minded drive success. for imme- The diate motivator, however, was the contest with the Gilbert and Rutter- Goodman teams, which the for moment were either dismissive or largely unaware of the newest entry into the human insulin contest. Genen- For hand the material over to Goeddel. Ignoring hunger and sleep, Goeddel Goeddel sleep, and hunger another spate of exhausting Ignoring hours to remove the impurities and then Goeddel. to over material the hand nonstopworked around the clock. Finally, in the small, lonely hours of August 21, he succeeded in reconstituting the two chains into the in- sulin molecule. Genentech had made insulin, no positive results. Finally, a frantic Swanson, with Perkins breathing down his neck, ordered Goeddel down to City of Hope and him forbade from returning till he had assembled the two chains into an insulin mol- ecule. Someone discovered that bacterial proteins had contaminated the B chain and obstructed the joining procedure. then It fell to Crea to toil ned ce, August/September 1978. and ciency, relentless drive defi gured in the success.company’s Because the original c ingenuity, technical profi Keiichi Itakura, Art Riggs, Dave Goeddel, and Roberto Crea at a blackboard with a diagram Scientifi managed two to out-compete elite academic teams in making a human form of a celebrated hormone. the For youthful that crew, was supreme exhilaration. Fig. 14.Fig. of the human insulin experimental scheme, Riggs’s City of Hope offi (Photographer unknown; photograph courtesy of Arthur D. Riggs.) complementary and DNA contained no explicit reference to chemically synthesized City The DNA. of Hope chemists could therefore perform Genentech’s triumphGenentech’s over rivals. political Yet circumstanceand govern- fi also policy ment NIH guidelines applied only to recombinant experiments funded by the federal government, privately Genentech’s funded research was techni- cally exempt. Furthermore, guidelines the 1976 concerned natural and

92 CHAPTER FOUR 93 HUMAN INSULIN

Although Boyer and 53 There Ullrich isolated and cloned the human proinsulin and cloned the human isolated There Ullrich 54 On top of the extreme inconvenience of performing experiments experiments of performing inconvenience On top of the extreme extracts. So we didn’t need to do much actualwork in a closed-up c and technical reasons—an they approach had adopted before 55 The UCSF and Harvard insulin researchers were not so fortunate. Be- not so fortunate. and Harvard were The UCSF insulin researchers On the very day when we were announcing success in insulin, [Gilbert] [Gilbert] insulin, in success announcing were we when day very the dipping On airlock, an through trudging past, days many for had he as was, E. coli E. logical lab in Alameda, California. Neither UCSF nor Harvard nor California. Neither UCSF in Alameda, could obtain logical lab went teams therefore the two of members In mid-1978 to either lab. access than in less stringent the guidelines were to countries in which abroad, in a to Strasbourg, France, to work went Axel Ullrich States. the United safety to French for human standards had hastily adapted Eli Lilly that lab DNA research. to the full weight of the guidelines and their mandated safeguards. The guidelines and their mandated of the to the full weight to conduct their experi- was the requirement roadblock cant most signifi conditions available of biological containment, level the highest at ments one such States, In the United labs. only in a handful of biological warfare bio- Maryland, Detrick, the navy’s at and another facility Fort existed at political advantages: Genentech was not burdened by the crippling and costly early guideline restrictions on experiments involving natural hu- man genetic material. they subjected used human genetic material, were their approach cause publication of the NIH guidelines in July 1976—their use of synthetic turnedDNA out to have important competitive as well as technical and gene but did not achieve expression. Gilbert and members of his Harvard and members expression. Gilbert did not achieve gene but militaryteam gained permission from the British a scant one to use, for biological warfare facility Porton high-containment at month, England’s Down. Riggs had adopted thesynthetic DNA to construction gene approach Riggs had for scientifi of [physically and biologically secure] laboratory.” the synthesis gene under work ordinary lab conditions. As turned it out, the molecularbiologists could also conduct much their of research with only the usual precautions.As Kleid explained: of the [insulin] “99% waswork done basically with chemicals: synthetic plasmid DNA, DNA ditions, Gilbert’s team returned home, greatly frustrated, having failed to having frustrated, greatly team returned home, ditions, Gilbert’s Theyobtain clones of the human insulin gene. re-cloned had mistakenly their preparations contaminated having material rat insulin DNA, the rat air and hyperbole: in transit. Kiley with customary recalled the situation fl in the sterile regalia and awkward conditions of high-level biosafety con- conditions of high-level in the sterile regalia and awkward rm barely barely rm ew to Los Los to ew For a fi For 57 56 Middleton,nance, Fred greeted cult and delicate process the for wasce. It a diffi agreementve-year on the complementary cloning DNA his shoes in formaldehyde on his way into the chamber in which he was obligedto conduct his experiments. While out Genentech at we were sim- ply synthesizing andDNA throwing into it bacteria, none of which even required compliance with the NIH guidelines. But Lilly had done than more contract with Genentech. Unbeknownst days after insulin Goeddel’s chain-joining two feat—the parties signed a agreement. development and research twenty-year multimillion-dollar, anFor upfront licensing Lilly what of $500,000, wanted: got it fee exclu- siveworldwide rights to manufacture and market human insulin using technology.Genentech’s Genentech was to receive 6 percent royalties and City of Hope 2 percent royalties on product sales. Angeles, at long last prepared to sign an agreement. Swanson, Boyer, Boyer, Swanson, agreement. an sign to prepared last long at Angeles, Kiley, new and director Genentech’s of fi them Kiley’s at law offi Californians, determined to stand up to the powerful multinational and technology,protect its Genentech’s vital asset. On August 1978—four 25, insulin in material and measurable form. Thatdone, Lilly rushed after months of dawdling to secure a research and development agreement, fearing that Genentech might license a competitor exclusive for use of its technology. Lilly’s executive vice president, Cornelius Pettinga, and a patent attorney immediately boarded a corporate jet and fl THE ELI LILLY CONTRACT THE ELI LILLY Swanson,For the insulin success meant immediate resolution of the in- terminable negotiation with Lilly. Genentech had accomplished what Johnson and his superiors had allalong required: production of human a $1.3 million,a $1.3 fi and expression of human insulin and human growth hormone. Lilly had the map. the days 1978—eight 17, August On to Genentech, California. the pharmaceutical of giant had previously sealed an agree- University the with ment thebefore Genentech-Lilly contract signing—Lilly and concluded UC off the ground, the agreement provided an immediate supply of much- needed cash, a likely income stream through benchmark payments, and an alliance with a prestigious pharmaceutical company with the know-how and worldwide repute in manufacturing and marketing in- sulin. In the eyes of the pharmaceutical industry, Genentech was now on

94 CHAPTER FOUR 95 HUMAN INSULIN nancial nancial gure out out gure 59 ed quantity and pu- and quantity ed Years later Boyer Years commented on 58 c dates. Lilly would provide periodicc dates. Lilly would provide ed a series of research benchmarks that that benchmarks research of series a ed 61 He and Kiley managed to negotiate a contractualcondition limit- 60 The contractThe stipulated that Genentech was to develop and provide to For Swanson,For doing his dogged best to protect the interests of his bets. . . . I think Lilly’s approach was, well, we’ll give these [Genentech] guys some and money, if they can do not it, good. a big hit It’s our for budget. If turnsit out to be successful, ourselves got we’ve covered. What Lilly would be concerned about was if we could have demonstrated that was it possible to make insulin this they way, would have a major competitor. You know, ifthe You got you’ve money and you can afford it, coverall your rst option to license the technology. edgling company and above all retain control of its technology, core Lilly’s simultaneous contracts with two competing institutions: unproductive research, it specifi it research, unproductive Genentech was to meet by specifi Lilly bacteria producing human insulin of a specifi ensure To rity. that Lilly what wanted got it without wasting money on “I was“I in this Swanson negotiation,” later remarked, “trying to fi how a tiny company like ourselves could protect the technology, because obviously going to give to someone it else you’re to make the product, but they could steal thoughtPeople . . . it. I was a little paranoid about it.” propriate technology, Genentech’s its crown jewel, and in it apply its own Swansonprojects. also Yet fully recognized that without Lilly’s fi resources and manufacturing and marketing acumen, the human insu- lin experiment was likely to remain little than more dem- a basic-science onstration. In that future case, Genentech’s appeared dismally bleak. fl negotiations with the pharmaceutical giant were harrowing.the A youthful-looking thirty-one-year-old facing pharmaceutical executives far senior in and age experience, his worst fear was that Lilly would ap- fi Genentech’s insulinGenentech’s technology in making its own human growth hor- product. mone nentech’s property, or so they expected. As it turned out, the contract, contract, the out, turned it As expected. they so or of recombinant insulin alone. technology The itself would remain Ge- property, nentech’s and that clause in particular, became a basis litigation. prolonged for In the courts1990 awarded Genentech million over $150 in a decision deter- miningthat Lilly had violated contract the 1978 by using a component of ing Lilly’s use engineered of Genentech’s bacteria to the manufacture ve with the the with ve For the For Genen- 62 Failure to reach the 64 c production goals. t an industrial timetable was a rm would the go way of many an nancing without diluting equity by 63 sible. I don’t want to hear that word impossible. Just tell me what you you what me tell Just impossible. word that hear to want “Dennis, this is possible. What are you talking not impos-It’s about?! don’t I sible. to accomplish it.” need threeThe scientistswere excruciatingly aware,although Swanson outlook, they were talking about my future. They had signed something that said these people [Lilly] were going to be able to[if] we couldn’t walk make a certain off [amount of insulin] with by a certain this date, [an bug amount] that was sixty times away from where we were. Sixty times! . . . I wasvery upset. this I said, “Wow, is impossible.” Bob [Swanson] said, [The negotiators][The had a very rosy outlook about what was going to hap- pen. When I looked this at they [agreement], were not talking about a rosy Looking back on the agreement after many years, participants dif- urry of media attention. shoulders as well as that of their own salaries and security. job “Each time we reached a benchmark,” Yansura remarked, “we would more get money Lilly]. [from Of course, that was our salaries.” did not hesitate to remind them, that they on their fate Genentech’s bore fer on whichfer side negotiated a tougher deal. Perkins believed that the achieving production goals. the For scientists, swelled to fi arrival of Heyneker and Crea in September that searing 1978, possibility and the pressure of producing results to fi sobering comedown from the exhilarating insulin press conference and fl benchmarks time on could mean the fi entrepreneurial after to fold forced start-up, burning up capital without sealed did they learn what the agreement committed them to achieving. Kleid remembered his distress: techresearchers, saddled with rigorous deadlines and quotas, they were a rude awakening. Only after the deal with Lilly had been signed and derly, time-dependent toward specifi progression derly, Genentech in turn received crucial fi selling stock. Johnson remembers the benchmarks as straightforward and a standard part of corporate research agreements. milestone (progress) payments—but only if Genentech reached the benchmarkstime. on If failed it Lilly to doso, had the option toterminate the agreement. system The Lilly gave control over theextent towhich it sunk money intoa commercially uncertain and project outlined an or-

96 CHAPTER FOUR 97 HUMAN INSULIN Any Any 68 Johnson 65 On the other hand, eld advanced, mak- 66 The big company–small The 69 rms like would it function 67 cer, felt that felt cer, Lilly did extraordi- nancial offi 70 rst [with human insulin].” at when they opened it. the champagne was fl In hindsight, the contract represented than more a legal seal on a busi- was saying [during the negotiations], “Oh, you [Genentech] guys are such tough negotiators.” He just complained and complained. “Lilly never paid so much anything, for blah, blah, blah.”was He so upset the at terms, he couldn’t enjoy the toast. Swanson had gotten some champagne. He told me the next day was it a bad omen the . . . for relationship with Lilly because [Lilly] such got an unbelievably good deal on it, in retrospect. They paid three million dollars in milestones and a high single-digit royalty per- (8 Theycent). made billions of dollars on the deal. I remember Neil Pettinga biology would become a prominent organizational form in a coming biotechnology industry. company template that Genentech and Lilly promulgated in molecular son proclaimed have bridged “We the academic in 1979: and industrial worlds and a network forged designed to help biology.” us maintain our demon- molecular of strated applications position of technical leadership among academic and commer- pursuing are that groups cial ance. Genentech and future small research fi as entrepreneurial sites in which biology-based technologies were de- veloped large-scale for manufacturing. As intermediaries spanning the university-industry divide, scientists entrepreneurial at start-ups would perform research generally too utilitarian a university for environment and too early stage the for average pharmaceutical As Swan- company. ness deal. signaled It the presence of a new organizational arrangement in the pharmaceutical industry—the big company–small company alli- Middleton, fi Genentech’s concurred: “It was kind of an exorbitant royalty, but we agreed anyway—Lilly was anxious to be fi 8 percentroyalty rate was unusually high, a time at when royalties on pharmaceutical products were along the linesof 3 or 4 percent. search and applied corporate research was fast evaporating. link- The wouldages grow in complexity and extent as the fi ing commercial biotechnology the most intricately intertwined with sector. industrial any of research university putative distinction in genetic engineering between basic academic re- narily well: narily uous bacterial The San The Francisco 72 ew Cal- down Southern to tted, were in no state to handle the media. research. Swanson elbowed Goeddel to take nesse a query about the safety of recombinant in- Swanson hurried to the podium. At that instant, the room 71 The pivotalThe moment was the announcement that Genentech had made broadcasting achievement Genentech’s and provoking investor inter- est. was “He very Goeddel that,” at good reminisced. plunged into darkness. drain The of the media lights had tripped an elec- trical circuit breaker. press The conference came to an abrupt and thank- ful end. But Swanson had gotten the publicity he sought—a platform for losing control of the presentation] could you see him steaming,” Goed- del recalled. made a fusion protein. Only in clipping off the superfl the off clipping in Only protein. fusion a made insulin the on capitalize to protein, maintained, he had thescientists actually made the hormone. determined Swanson, wasIt a convoluted point meant to allay the questioner’s concern over biohazards. possible achievement and ethical avoid issues all at costs, was furious “so [over Genentech contingent was annoyed—a stranger unassociated with the research was explaining their Overcomeover. with stage fright, the intrepid rock climber froze and re- fused. Kleid in rose his stead and began addressing questions fromthe audience. Trying to fi sulin, he claimed that Genentech had not actually made insulin; had it but intimidating experience. intimidating but human insulin and signed an agreement with Eli Lilly. City of Hope’s diabetes expert then reeled off a list of human insulin’s supposed thera- peutic advantages and launched into a description of the research. The separate rows, faced an audience of thirty including or forty, Lilly repre- sentatives, television network personnel, and newspaper reporters. Flus- tered by a battery of cameras and lights, Riggs was so nervous that after- ward he could not recall much about the occasion. Goeddel was likewise overawed. the For scientists, the media limelight was a new and thrilling press conference. was It to held be City at of Hope since Genentech’s headquarters, still being outfi On the day of the press conference, the September San Francisco 1978, 6, contingent—Swanson, Kleid, Goeddel, and Yansura (Boyer was abroad), dressed the up for occasion in suits and ties—fl ifornia. Genentech The and City of Hope scientists, arranged on a stage in PUBLICITY AND EXPANSION AND PUBLICITY Swanson, hell-bent on establishing priority Genentech’s in human in- sulin and advertising the Lilly contract, lost no time in scheduling a

98 CHAPTER FOUR 99 HUMAN INSULIN

75 c le c credit San Francisco Proceedings of the Na- ndings published in in published ndings to publish. He recalled: Swanson,single-mindedly promoting his 74 ndings in scholarly journals. Swanson, they ling them only days before the media event. media the before days only them ling until October 2 and almost 3, a month after the nd theyhad made thethe of front page ndings secret to protect the intellectual company’s 73 ndings, fi ndings, . A banner headline proclaimed, “New Insulin Diabetics: for Bay ew home to fi Any proprietary information would have to be covered by patents. I felt this was extremely important attracting for the outstanding young I insisted that we have the scientists publish their research in journals. But not everyone was pleased.Bystanders pointed out that the insu- Boyer stepped in and settled the dispute: Genentech scientists would Pressed by the rapidly approaching news conference, Kiley had hur- Examiner Swanson later orderedArea paperweights Labs Lead the with Way.” rep- licas of the page. cloning by press conference.” lin press conference had preceded peer reviewthe of research itself. The two insulin papers were not communicatedto the tional Academy Science of public announcement. One critic, similar aware of UCSF’s transgression in announcing the insulin rat success, bitingly labeled the trend “gene and professional status. publish; in fact, they were to be encouraged keep experimental fi property from possibly being stolen and copied by competitors. sci- The entists were dismayed. They wanted their research fi time-honored academic tradition as contributions to the open scientifi literature and a primary means to achieve individual scientifi tellectual property protection would soon make the frantic dash to fi patent applications public before presentations a common feature of the new science, whether in industry or academia. scien- Genentech’s tists, steeped in academic tradition, assumed all along they would pub- lish the insulin research fi found, was resistant. Cultured in business practice, his instinct was to The rapid pace of gene-cloning rapid pace The research and the perceived in- need for group fl UCLA theUCLA day the before press conference. claims include to applications patent somatostatin the expanded riedly on the insulin fi company, was considerablycompany, interested more in Genentech capturing me- dia and investor attention than in conforming to the niceties academic of protocol. Riggs, however, had again been uneasy. At his behest, Itakura in a hasty bow to scholarly convention had presented the insulin at work dential 77 rm to achieve prior- achieve to rm cant concession to corporate norms, Kiley would 78 76 I also wanted to bring in scientists that were outstanding and have le patent applications, if warranted, and review manuscripts be- Genentech was not unique in granting its employeespublication best and the brightest from academic centers, where traditionally they’d been chary of industry because of the perception, not inaccurate, that in secrecy trade industry, pharmaceutical the in particularly and industry publication. trumped tion publication brings. acted It as quality control, that being one of the great points of refereed journals. If you can pass muster with the referees and get published in a reputable journal, doing you’re good science. It helped to validate the company in the eyes of potential customers. If you will, enhanced it our celebrity. And greatly it aided us in recruiting the One of Herb Boyer’s great contributions was insisting that Genentech publish its work. helped It us attract scientists who crave the peer recogni- But Boyer’s mandateBut Boyer’s open for publication came with a hard-and-fast recognition. So we triedto set up an atmosphere which would take the best from industry and the best from the academic community, and put them together. scientists in the community that were interested in doing research in an an in research doing in interested were that community the in scientists setting. industrial them have an opportunity to establish their own reputation, get their own rst fi rst privileges. Such rights were more or less common in high-tech compa- high-tech in common less or more were rights Such privileges. requirement. In a signifi a In requirement. fi monality of values was especially important in an era in which academ- ics tended to ignore or even denigrate industrial research. ployed would expect and demand. was It also farsighted. Publication in peer-reviewed journals was a prime means the for fi ity of discovery and to display the high-quality and pathbreaking nature of itsresearch. a business For with exceptionally close ties with univer- sity science and scientists, establishing credibility and a certain com- Boyer’s decisionBoyer’s was in line with his academic training and professional orientation and what he knew any university scientist Genentech em- fore theyfore went to proprietary press for information and confi disclosures. Although intellectual charged with protecting Genentech’s property, Kiley came decision to appreciate Boyer’s as the years rolled by:

100 CHAPTER FOUR 101 HUMAN INSULIN

79 82 rm’s sci- rm’s rm’s contribution to to contribution rm’s rms elsewhere. An open- 80 c commons. c ciency and commercial potential. Looking on his back initial 81 c community ultimately it reaped. He was also well aware that led, to the detriment of staff morale and the fi c profi c Swanson soon came to publication appreciate Boyer’s not be- policy, Yet despite insistence Boyer’s Yet that Genentech would publish its work, No, it wasn’t an argument or anything. It was rather, hey, we have to get get to have we hey, rather, was It anything. or argument an wasn’t it No, the best people. How do we get them? allSo it came from the philosophy, get and keep the very best people. And they were all in the academic world; how are we going to get them to Well, come? Herb said, “I know them. If we come.” they’ll publish, them let resistance publicationto Boyer’s mandate, Swanson remarked: to attract and the dividends in industrial productivity and prestige in the fi a of measure one as scientifi counts citation used analysts Street Wall entifi cause he had an impulse to instillacademic values Genentech at or a learned he Rather, science. of progress the to contribute to driving wish over time that the policy paid off in the high-caliber scientists helped it as the insulin research progressed. a man, To they appreciated his in- put. But Boyer adamantly refused all entreaties to be made an author. he himself refused to appear as an author on its scholarly publications. Boyer had consulted frequently with Riggs and the molecular biologists the shared scientifi shared the Yet in the pharmaceuticalYet industry,intellectual property concerns and trade secrecy tended to dominate drug research, with company scien- tists by and large reticent toreveal research details to outsiders. A few drug companies were knownto delay publication years for after patents were fi Herb at theHerb at other. And somewhere in the middle was how the company worked.” Yet, according to Goeddel,Yet, Swanson never completely lost his reserva- tions about publishing research results: “Bob was always a little more worried than Herb about publications and other people knowing what we were doing. was There a healthy probably tension—Bob one end, at publication as a means to attract, and keep, motivate their scientists. nies in Silicon Valley and some research-based fi publication policy traced back in somecases to the early twentiethcen- tury, to the research laboratories of corporations such as General Electric, and even theAT&T, relatively secretive DuPont, all of which recognized rst and rst rm had rm had fac- bacterial cient cient to meet Lilly’s Newsweek example,, for 85 cance triumph, of Genentech’s c publications. Boyer explained 83 84 86 c diseases.” c gurehead overshadowing anything they did. So it was a con- a was it So did. they anything overshadowing gurehead ve overtaxed scientists were clearly insuffi c press played up the medical signifi In the wake of the insulin success, dire Genentech’s need was to hire As Swanson hoped, a spate of news coverage in the popular and sci- want my fi my want scious decision, and think I a good one. One is [reason] I wanted to continue research, my own [UCSF] which I couldn’t do the at company. . . . Another reason was I didn’t want to manage a large group of scientists. I had enough a taste of doing of that a small at level to know that I didn’t like it. And third, . . . I wanted to make sure that the young scientists the at company were getting the recognition. I didn’t planned. Boyer and Swanson, intent as ever on acquiring complementary expertise,DNA had continued to pressure Ullrich, Seeburg, and Shine benchmarks and also take on the new research projects the fi that human insulin was far enthusiastic from market ready, media ac- counts tended to ignore or downplay that point. heralding human insulin as a boon to diabetics. Much of the coverage state to care repeated took the claim that the hormone, produced in effi Swanson Although tories, would be purer, insulins. more plentiful, and less allergenic than animal the cur- marketed rently staff. Its fi entifi other vital proteins, such as growthand thyroid hormones, as well as an- tibodies against specifi forecast the production of recombinant pharmaceuticals as though a sure and inevitable outcome: “The success with insulin means that re- combinant technology DNA can undoubtedly be used to make scores of tion generosity for in giving credit, especially to younger colleagues. But there is also the possibility, which Riggs acknowledged, that in light of the current barrage of criticism over his involvement with Genentech, Boyer was not anxious to further advertise his corporate ties by appear- ing as an author on its publications. Boyer’s explanationBoyer’s conforms with hisas fi in self-image the 1970s foremost a professor and academic scientist and also with hisreputa- In fact, decided he that after the somatostatin research, he would never again directly engage inresearch Genentech’s allow or his name to ap- pear as author on the company’s scientifi the decision:

102 CHAPTER FOUR 103 HUMAN INSULIN c exible exible c staff c ict of interest—was clearly rst protein biochemist and cantly to the work—in fact, con- rm’s fi rm’s For them, it was the fi nal straw in a them, For was it the fi 87 ling. led a patent application on the production of A research organization was emerging, distinct 90 efdom with research the a professor at Genentech’s top, Ullrich bitterly recalled. All three made a joint decision to The complex The entanglement of university and corporate re- 88 89 rm conducting top science. Shine subsequently backed out, his his out, backed subsequently Shine science. top conducting rm In the fall the trio of 1978, learned that some months earlier theUni- By the end of 1978, Genentech’s totalBy the Genentech’s end administrative of 1978, and scientifi at UCSF. wife insisting that the family return to Australia. But Seeburg and Ull- full-time torich become agreed Genentech in Seeburg No- employees, vember and Ullrich 1978 in January Despite their 1979. commitment to Genentech, in October Ullrich and Seeburg signed yearlong consulting agreements with Lilly and continued under Lilly sponsorship to pursue their respective human insulin and human growth hormone projects join Genentech, affronted by their treatment but also UCSF at attracted to a fi animal protein in bacteria, based on the biochemistry department’s rat insulin and humangrowth hormone research. Although Ullrich, See- burg, and Shinehad contributed signifi ducted it—they found to their consternation that they werenot named as inventors on the patent fi company, they began to look upon the job offers with more favor. But it it But favor. more with achievements.up’s Overcoming offers their initial job resistance the to working a for upon look to began they company, was a culminating event in a string of distressing events that UCSF at disposed them to act. versity of California had fi to accept offers of full employment. founders The nowhad the insulin research as incontrovertible evidence that Genentech could successfully perform breakthrough science with results as or better good than any- thing academia offered. three The postdocs indeed took note of the start- series of turbulent events at UCSF in which they felt denied of scientifi of denied felt they which in UCSF at events turbulent of series credit and possible patent royalties. “That [patent application] tipped the balance,” and egalitarian divisions—molecular nucleic acid biology, chemistry, and proteinchemistry—all three oriented to cooperatively work to a in form and function from that of the university. Instead of academia’s independent and sometimes competing university laboratories, each a hierarchical fi beginning around this time was loosely structured into three fl several lab technicians. search and alliances—and potential confl for evident. numbered twenty-six, including the fi ed its its ed Recalling 93 91 rst, and stay- c time. c cant start-up. Genen- start-up. cant c and business coups, nancing and corporate con- The array The of guests the foretold 92 c reputations to prove—rumbled cient industrial potential to war- eld of commercial biotechnology. rst year as an operating company. Genen- company. operating an as year rst For Genentech,For the consequences of making human insulin and part- We allWe had a very similar goal, of being successful, of being fi ing ahead of the game, and not because we had to do it; because we wanted wereto incredibly do it. We proud of Genentech and what was going on. We were very excited about the technology. was . . . It a terrifi We were really,We certainly in the early days, a very collegial group people. of In December everyone 1978 took a brief break from the mad intensity. new technology by the leading producer of insulin in the gave world. It our company overnight credibility in the commercial world.” rant forming an partnership R&D with an insignifi magnifi enormously giant pharmaceutical the with alliance tech’s visibility and boosted its chances of future fi tracts. As Middleton later observed: “That relationship [with Lilly] put Genentech on the That map. was the idea. was It an endorsement a for nering with Eli Lilly were substantial and far-reaching. two The achieve- interpretedments, broadly scientifias decisive validated the company as the proprietor of a promising new technology and showcased the fact that a corporation of Lilly’sstature considered recombinant technology DNA of suffi major participants in the new fi achievement had attracted to a radically new to making approach phar- maceuticals. Among the sixty or so invited were pharmaceutical indus- try representatives, venture capitalists, investment bankers, academic scientists, attorneys, and accountants. It had beenIt a momentous fi tech, its laboratories completed, held an open house to inaugurate, as the invitation announced, “its newly expanded headquarters.” guest The list provided a snapshot of the various constituencies that the insulin interdisciplinary rivalries—inevitable in an extraordinarily competitive competitive extraordinarily an in rivalries—inevitable interdisciplinary groupyoung of men with their scientifi just below the surface. As Genentech hired organic and protein chem- ists, shop talk was that the molecular biologists, the lauded and “cloners” more kudostop got dogs, and credit than their fair share. Though there clearly was teamwork and collegiality, interpersonal and common purpose: making marketable products. Heyneker, with cus- with Heyneker, products. marketable making purpose: common era: the recalled enthusiasm, tomary

104 CHAPTER FOUR 105 HUMAN INSULIN gure gure eld they asserted, asserted, rm’s stunning stunning rm’s cant ownership ownership cant ts has led to a steady Science News With the investment window window investment the With Heeding these developments, 95 nancial worlds that showed in- showed that worlds nancial 97 98 n, head of Lubrizol’s venture group, joined joined venture group, Lubrizol’s of head n, cance was its meaning a phenomenon for ve companies—Cetus, Genentech, Biogen, Genex, dence in the business US community that the development ve small private companies most deeply involved to a fi 94 For example, For Innoven, Monsanto’s venture capital subsidiary, 96 reported: rm, and Donald L. Murfi ow of venture capital to support research. No one has yet made very much fl but highmoney, commercial expectations have helped raise the value (on of thepaper) fi estimated at more than $150 million. Growing confi of recombinant technologies DNA promises large profi Important as human insulin development was Genentech’s for and But it wasBut it not only the business and fi dustries. achieving human insulin “catapults recombinant technology DNA into the major leagues of the drug industry.” opening after in the late 1970s successive reductions in the capital gains tax, venture capitalists stepped up investment in a nascent fi hoped would to prove be as lucrative as the electronics and computer in- reputation, of wider signifi about to enter popular parlance as fi The “biotechnology.” synthesis of a major drug and its pathbreaking partnership with Lilly riveted the pharmaceutical attention. sector’s As the fi modestGenentech’s board of directors. with Genentech’s record in human insulin, Lubrizol Corporation, a a Corporation, Lubrizol insulin, human in record bought shares in Genex, and a biology-based start-up founded in 1977, International Nickel and Schering-Plough invested in Biogen. Impressed Genentech’s with chemical and lubricant manufacturer, million made a $10 investment in began to buzz with the applied opportunities foreseen in their research, the patents and licenses likely to result, and the chance institutional for The articleThe referenced fi and Bethesda Research Laboratories. All except were founded Cetus (1971) andbetween 1978. 1976 terest in genetic engineering. Leading molecular biology departments of Genentech.” that human insulin “began the real fund-raising Genentech,” for Perkins went on to comment: “We were ablehigher [after prices. high So that Kleiner and I made only tokeninvestments insulin] af- to raise moneyter that, because Kleiner & Perkins at already much had signifi a Nature As As 100 nancial gain. was It a simultaneously exciting and troubled Bill Rutter tried without luck to convince UCSF administrators to to administrators UCSF convince to luck without tried Rutter Bill 99 established Hybritech with cofounder and venture capitalist By- Brook ers. tion. Following Wally the lead Cetus’s of Boyer, Cape, Ron and Biogen’s Gilbert, a few entrepreneurially minded university scientists founded small biology-based companies in the general mold of Genentech, Cetus, and Biogen.David Jackson lefta tenured position in biochemistry the at University of Michigan to cofound following The Genex in 1977. Ivor year, Royston and Howard Birndorf of the University of California, San Diego, and personal fi time transition of in molecular biology as the new genetic techniques swept university biomedical departments, supplanting previous experi- mental procedure and running up against academic policy and conven- ations. In this reorientation, Genentech was already having a noticeable effect. 1978 drew1978 to a close, the audiences genetic for engineering had consider- expandedably and molecular biology was starting to lose its image of a purely academic discipline. was It entering an industrial phase in which the research direction and cultural norms of American biomedicine would be realigned to more utilitarian ends and proprietary consider- form a technology-transfer laboratory facilitating commercialization of campus research results. taking In 1981, matters into his entrepreneurial hands, he cofounded Chiron Corporation, a biotechnology start-up.

106 CHAPTER FOUR 5 Human Growth Hormone: Shaping a Commercial Future

The laboratory production of human growth hormone is . . . probably most signifi cant for what it implies about the future possibilities in this [genetic engineering] fi eld. If Genentech can make HGH, what else can it make? 1 New Scientist, July 12, 1979

After insulin, Genentech moved on without a pause to an assault on hu- man growth hormone. The substance had fi gured from the start in the fi rm’s research plans. It was on Boyer’s mind as the company took shape and specifi ed in the research and development agreements with the Uni- versity of California and City of Hope. But the hormone took second place to human insulin in the fi rm’s initial priorities—the molecule was far larger than insulin’s and the current market vastly smaller. With insu- lin achieved, growth hormone moved to the top of the target list. Once again, Genentech scientists found themselves contending with UCSF in a fast and furious race to clone a medically relevant gene. Peter See- burg, the UCSF postdoc destined for Genentech, was a linchpin in both growth hormone projects. He was also a disaffected participant in an explosive event—a secret midnight raid and fl y-by-night escape—that would have immediate and lasting repercussions for Genentech. The in- cident was a high-drama outcome of the strains and stresses building at UCSF and other bastions of early recombinant DNA research as scientists glimpsed new opportunities for applied research and the fame and for- tune that might attend them. Although rocked by research and personnel c project project c Quite obviously, su- Seeburg’s 2 le project and a scientist with ciency. John Baxter, a self-assured physician UCSF with dual appointments messenger RNA essential making for complementary copies. See- DNA burg spent his days doing experiments in Goodman’s At night, lab. with the technical skills to drive He became it. the young German’s enthusias- See- tic and supplied accommodating sponsor. He But Baxter, one of the principles in Eli support. psychological Lilly’s contract with the University than of California on insulin more and growth provided hormone, burg with pituitary rat tumor cells, a rich source of the growth hormone pervisor was not fully supportive, a precarious situation a postdoc. for in medicine and biochemistry, had a diametrically different response. Learning ambition of Seeburg’s to clone the growth hormone Bax- gene, ter immediately recognized a high-profi to construct Finding it. himself odds at with he transferred Boyer, to Howard Goodman’s where he fell lab, in with the young scientists jos- tling recognition for the at forefront of genetic engineering. seemed It a perfect environment his for growth hormone project—except one for problem. Goodman told him in no uncertain terms that the project was “too risky” and that “it might not work.” in mind, to clone and express a synthetic was gene. It in fact the that gene Boyer expected the chemist in Germany to synthesize and send to him that fall.But disillusionment set in almost immediately. When the ar- rangement collapsed, Seeburg settled on growth hormone as the gene to try planning for, to use the newly breaking complementary method DNA to a department fast rising to molecular heights despite the precarious political environment recombinant for research. Like his fellow post- docs, he was drawn to biochemistry the UCSF department by opportuni- ties to make a name and perhaps an academic career in a new and exciting discipline. Angular and intense, Seeburg arrived with a specifi dence and self-suffi GROWTH HORMONE COMPETING FOR HUMAN Peter Seeburg had lab joined in Boyer’s the spring to begin a post- of 1975 doctoral fellowship. He was one of a number of young scholars attracted problems, Genentech managed tohold to a steady keel and keep steely focus on its objective—to make human growth hormone. An entirely unexpected disaster was to advance the companytoward a marketed hu- man growth hormone product goal and of corporate Swanson’s indepen-

108 CHAPTER FIVE 109 HUMAN GROWTH HORMONE ew ew nd a nd sm, the Their visit occurred 6 ciently intriguing war- to ciently table product. But because human pitu- rst learnedof recombinant technology DNA in a dis- cient to treat only the severest cases of pituitary dwarf- Kabi leading was the world’s commercial supplier of 4 3 ying to San Francisco late to in discuss 1977 a possible joint project There was There obvious market room for expansion—if Kabi could fi 5 While Seeburg was celebrating publication of the research, Swan- Like Lilly’sIrving Johnson, Sievertssonhad his eye any out for new nant advisory DNA committee. Sievertsson, colleague Bertil Åberg, and their team of scientistsexciting” Kabi found at the “fantastically work and wondered if recombinant might DNA be a method producing for other hormones. on human growth hormone. Hans Sievertsson, the director of research research of director the son and Boyer were deep in negotiations funds for to support a project Sievertsson, Hans hormone. growth human on KabiVitrum—aat pharmaceutical company owned by the Swedish government—had fi cussion somatostatin of Genentech’s experiment recombi- in Sweden’s extracted from the pituitary glands of human cadavers. was It a scarce and costly drug. In high demand treating for pituitary dwarfi hormone most profi was Kabi’s itary glandswere often in the short worldwide supply, stock of growth hormone was suffi ism. human growth hormone—the only form effective in humans—which it mosphere in biochemistry UCSF of this soon after period. In Rutter 1977, and Goodman announced their in feat cloning the insulin, rat for gene Seeburg and Martial succeeded, in another high point of early genetic en- gineering, in cloning (but not expressing) the growth for gene hormone rat. the in on growth hormone with Baxter’s postdoc Joseph Martial. This aberra- This Martial. Joseph secretly working to postdoc took he encouragement, and permission Baxter’s Baxter’s with hormone growth on tion in academic protocol was a breach Goodman’s of authority as See- supervisor,burg’s of a series one missteps of in the pressure-cooker at- during the heady week of the Nobel Prize ceremony in December. Roger Guillemin was one of the laureates thatyear his for research on peptide on recombinant growth hormone. Genentech Since lacked a laboratory and staff the at time, Swanson must have been extraordinarily persua- sive and Sievertsson extraordinarily interested, Kabi. they for came to a tenta- with tive negotiations agreement to collaborate. Boyer and Swanson then immediately fl continue to Stockholm to means to make the hormone in greater quantity. and plausible methodmaking for the banner company’s product. He found the new gene-cloning technology suffi fl rant The 7 rm. Yet because Yet rm. The contract The also 11 Furthermore, unlike unlike Furthermore, rst anywhere between 10 On August the two 1978, 1, companies 8 The Genentech-Kabi contract predates the 9 rst agreement R&D but the fi rm reportedly teetering on the brink bankruptcy. of table abundance. table ed research benchmarks. research ed That December of 1977, GenentechThat December and Kabi signed of 1977, a letter of intent, Although the full contract has not been publicly released, as is com- nancial straits and desperate need to retain control product. of a major an established corporation and a genetic engineering fi Kabi was not one of the pharmaceutical giants well-known in the United theStates, Lilly-Genentech contract is usually taken as the original model contractualfor relationships in biotechnology. avenues terminating for the relationship if Genentech failed to meet specifi outlining the terms of a possible contractual agreement and setting out Genentech-Lilly contract by more than three weeks. is It therefore not only fi Genentech’s somatostatin, what impressed Åberg in particular was vivid Boyer’s de- piction of bacteria replicating exponentially and spewing out copious amounts of recombinant proteins. An abundant supply of human growth hormone in a market desperate the for substance meant an almost cer- tain increase sales in and Kabi’s revenues. latter The was particularly urgent a fi for hormones, includingsomatostatin. fact The that his isolationof natu- ral somatostatin had required grinding up tissue from almost a million sheep brains did not augur well as a basis commercial a for process. In contrast, even though Genentech had made onlya minute amount of concluded a formal long-term research and development agreement for the use technology of Genentech’s in engineering bacteria to produce hormone. growth human position to know) that Kabi agreed to pay Genentech million $1 engi- for growth human hormone. producing bacteria neered monplace in business practice, certain details have come to light over time. Its terms Genentech gave twenty-four to thirty months from the August signing 1978 to develop bacteria producing human growth hor- mone. Åberg later reported as a signatory (and to the agreement was in a Lilly, Kabi was willing to commit to a formal contract Genentech before had made the recombinant protein, perhaps an indication dire of Kabi’s fi more charitably, perhapsOr, Sievertsson and Åberg had greater faith in the industrial potential technology. of Genentech’s draw Kabi was for not recombinant technology DNA per se, but ratherits potential making for a scarce hormone in purer, greater, and ultimately profi more

110 CHAPTER FIVE 111 HUMAN GROWTH HORMONE Boyer Boyer 13 dence grew that the the that grew dence c applications. But he Lilly’s contracts with Genentech 12 rst kept secret its collaborationwith In September Seeburg signed recruit- Swanson’s 14 nally convinced him to With join Ge- the company. In the summer Seeburg and of 1978, his colleagues UCSF achieved an- With Sweden’s controversy overWith recombinant Sweden’s research DNA rising to Wasting no time, Genentech’s still-skeletal scientifi c team and its Wasting no time, still-skeletal Genentech’s scientifi other milestone, actual expression growth of hormone in the rat. and the University of California, contract with Kabi’s Genentech, and contracts withBiogen’s Harvardand other universities show commercial interests overriding contrary politics and adverse public opinion. was It a trend that would soon gain momentum. than an academic one.” academic an than nentech’s humannentech’s insulin coup that August, his confi company provided the proper environment applied for research in biol- Swansonogy. concisely: put it think “I both and [Seeburg Ullrich] that felt Genentech was the best atmosphere to actually the get thing done, that they could move more quickly that at point in a corporate environment and Swanson immediately stepped up their effort to recruit him, plying him with sailboat rides and barbecue picnics to entice him. Seeburg’s disgruntlement with circumstances and UCSF the at opportunities he Genentechsaw at fi application of a suspect technology. a crescendo, Kabi’s managementa crescendo, fi Kabi’s at Genentech and adoptiongenetic of engineering. spun it Then in off1978, the technology into a new and separate company called KabiGen, in part to the avoid tension inside and outside the parent company regarding production process. Swanson insisted that the contract made clear that Kabiwas engineered to Genentech’s apply bacteria solely the for purpose of making growth hormone. As in the Lilly contract, he was willing to specifi for material biological and sell know-how adamantly refused, as a hard-and-fast rule, to sell Genentech technology otherfor than the uses the contracts spelled out. gave Kabi exclusivegave foreign marketing rights, but with Kabi and Genen- tech sharing rights in the United States. Kabi was to provide Genentech with human pituitary source materialand send protein chemists and fermentation experts to South SanFrancisco to collaborate in creating a City of Hope colleagues had moved instantly from human insulin to the new on growth project hormone. On September 12, less than a week ment letter and the gave university notice of his departure the at end of October. Genentech had acquired in the persons of Seeburg and Ullrich the much sought-after expertise in complementary cloning. DNA c groups plus Swanson The methodology The of the 15 The patent application of July 5, 1979, nonetheless patent The application of July 1979, named 5, 16 thinkcult I don’t to say. I can name one particular person that Dennis Kleid, Dave Goeddel, Art Levinson, Herb Heyneker, Peter Seeburg, Dick Lawn, and The scientists then proposed a highly original concept: they would at- an inordinate amount of time and labor. Crea later estimatedthesize that the complete gene using to the syn- technology of that era would have taken one to one and a half years—far too long and costly a company for premised execution speed on of and frugality. UC employees, also attended. (Goeddel was rock climbing—his manner manner Genentechmet at to devise a research climbing—his plan. Seeburg and John Shine, rock still was (Goeddel attended. also employees, UC of relaxing after the ardors of the insulin Because contest.) the growth hormone molecule is almost four times larger than insulin’s—191 amino acids compared to insulin’s 51—the scientists concluded that chemical synthesis of the coding DNA that for many amino acids would require Fig. 15. 15. Fig. Axel Ullrich, Pajaro Dunes, California, September 1982. (Photographer unknown; photograph cour-tesy Herbert of L. Heyneker.) after the insulin news conference, both scientifi this is diffi is this idea.” this had hormone. tempt to build a semi-synthetic gene coding growth for hormone, using synthesisDNA and complementary methods. DNA Asked in litigation two decades later who came up with the strategy, Seeburg replied, . . . “Oh human insulin experiment was clearly impractical making for growth

112 CHAPTER FIVE 113 HUMAN GROWTH HORMONE

17 The impetus The for eld of molecular 19 cally requested the cial gene, including including gene, cial rst 24 amino acids. That accom- nal preparations to go to Genentech. Genentech. to go to nal preparations atly refused. Three months later, tension Goodman fl 18 icting alliances. icting A letter may have inadvertently set the ball rolling. In November 1978 A strategy in place, Itakura’s lab immediately began the tedious work The incidentThe or “midnight as raid,” Ullrich referred to occurred it, on Swanson and Kleid wrote to Goodman, requesting the transfer of See- burg’s biological materials to Genentech. They specifi precious human growth hormone complementary that DNA Seeburg had made UCSF. at Everyone expected Seeburg, with his arrival Genentech at in November, to start immediately constructing the complementary component. DNA Instead, the project rapidly unraveled. What happened next speaks to the raw intensity and extraordinary competitiveness of recombinant DNA research of the late 1970s. of synthesizing the coding DNA the for fi plished, the research devolved to the Genentech molecular biologists. Goeddel and Heyneker linked the synthetic fragments DNA the for front of the and gene began to constructplasmid a to express the hybrid gene. Seeburg and Shine, along with Howard Goodman, were also consulting on growth hormone Elifor Lilly, just as Goodman, Rutter, and Ullrich were consultants Lilly for on insulin. biochemists UCSF The had clearly grasped the applied potential of their research and appeared willing to confl on take growth hormone protein. plan The was to clone the synthetic and com- plementary piecesin DNA separate procedures and then join the two to form a hybrid gene. Making a functional semi-synthetic was gene a tall hadorder; it never been done and before would require a new level of tech- nical sophistication. days after Two the meeting, Swanson sent Seeburg, and presumably also John Shine, checks their for consulting services. Goeddel and Heyneker as inventors. City The of Hope chemists were to construct a short segment the for front the of artifi the bacterial signal system controlling expression. gene Seeburg was to make a long complementary segmentDNA coding most for of the human New Year’s Eve 1978 as he made fi made he as 1978 Eve Year’s New the letter was very likely an extraordinary event, extraordinary even in in even extraordinary event, extraordinary an likely very was letter the a decade of extraordinary events in the formerly staid fi biology. terials removed without the university’s authorization and used in ex- periments violated policy UC and the NIH guidelines. rising, Goodman and John Baxter warned Seeburg that any research ma- Fig. 16. First page of the 1982 patent on Genentech’s semi-synthetic growth hormone method, 1982. United States Patent and Trademark patent databases. 115 HUMAN GROWTH HORMONE ash- The escapade The was 22 c prestige, industrial contracts, Around midnight, the two entered the cant issue in light of the university’s 21 23 Ullrich agreed, being “not very sympathetic” to Good- 20 t company. They soon foundt company. themselves trying to justify their ce at the University of California demanded the return of the materi- anything exclusively. Whatever I took I left some behind. So we all had the same starting point after that. wasn’t It that I had any edge except I knew in my head what experiments I would do next. I feel I just went to another lab and continued my work. I had largely started the growth hormone project and worked on since it Why shouldn’t1975. I take material which I had acquired? I didn’t take It wasIt not uncommon the at time scientists for to take their research At issue was far more than an investigator’s right to take research ma- man the at time because of what and he Seeburg were instances felt of misappropriated credit, particularly the failure toinclude application. them as inven- patent the on tors for-profi actions to astonished colleagues and the press. In February a defen- 1980 sive Seeburg told a journalist: materials with them to a new institution, often without higher authori- zation. Nonetheless, was it a gray area of academic practice with few clear guidelines. Adding further complexity was the fact that Ullrich and See- burg had taken the specimens not to another university, but to a private, a stunning expression of the stresses rife in recombinant research of the period as participants battled scientifi for royalties. patent future and more important was the question of proprietary rights to the transferred material, a particularly signifi Goodman, Baxter, and the patent administrator in the Board of Patents Offi als in a chain of increasingly threatening letters. Much issue. an was indeed that although institution, another to terials ing their employee they badges, breezed past a security guard, entered the building, and deposited the materials in a freezer. deserted lab and removed various research specimens, including some of Baxter’s human pituitary material and a complementary clone of DNA human growth hormone. They drove straight to Genentech, where, fl rich to remove some biological samples and take them to the company company the Seeburg, to whom Goodman had banned from the premises them after a furious take and samples dispute in November over his ties to Genentech, biological asked toaccompany Ull- some remove to rich across the bay. It was It a 28 27 patentsle for its on growth rm were unauthorized. issue The It was It one of several warnings by the 25 He showed up at work for a few He showed hours for work up at best at 26 c community whether he took with him more In the April university’s 1979 patent administrator 24 de human race for growth hormone. All the while, rumors circu- To rescueTo the stalled project, Swanson turned to Goeddel, fast becom- While Genentech and the university wrangledover the transferred ment. was It tough One going. was problem the unsatisfactory condition of the human pituitary material that Kabi provided as a source of RNA for ing prized Genentech’s cloner. In February Goeddel, with 1979 Heyneker assisting, set out to construct and clone the complementary seg- DNA the growth gene, and wherever hormone Peter [cDNA] went the growth hormone gene went. That would be a bonus to our competitor.” tricky situation, as Yansura recalled: “[Swanson] didn’t want to irritate irritate to want didn’t “[Swanson] recalled: Yansura as situation, tricky Seeburg or push him out because Peter Seeburg had skill [the to make] as he later admitted in court. materials, scientists Genentech’s had problems of their own. growth The hormonehad project ground to a standstill. Seeburg made little if any progress after several months of on-again/off-again attempts to clone the complementary sequence. DNA novelty The of the science was not the only problem; he was overcome by drug, alcohol, and marital problems, burg and Ullrich had brought to the fi would simmer ominously almost for two years, coming to a temporary settlement in in run-up 1980 Genentech’s to a public stock offering, as chapter 6 relates. university that any uses Genentech made of the biological materials See- patent application and plan Genentech’s to fi hormone research. applications and belonged to them “intheir personaland capacity only, not to any commercial fact entity. The that Drs. Seeburg and Ullrich are currently employed by Genentech, Inc. shall not construed be as giving Genentech any interest in said materials whatsoever, absent express per- Regents.” mission from [UC] The wrote to Swanson, statingin no uncertain terms that the materials See- burg and Ullrich had removed to Genentech were the subject of patent by questions in the scientifi tangible substances than the knowledge of recombinant techniques that he acquired while working a publicly for funded institution.” and made little progress. Swanson, fretting over the stalemate, imagined the Baxter-Goodman team pulling ahead and winning what had become a bona fi lated ominously in the biomedical community. As one publication put it: “[Seeburg’s] recent move from UCSF to Genentech has been accompanied

116 CHAPTER FIVE 117 HUMAN GROWTH HORMONE

29 A nagging 34 cient model making for Goeddel then enzymatically then Goeddel cant amount of growth hor- 30 nally bringing to a halt months of frus- It was strikingly clear, as Heyneker recalled, recalled, Heyneker as clear, strikingly was It 31 Pandemonium erupted when they showed the 32 Kabi had bet on a dark horse and won. 33 rst two projects had fallen short of establishing that its rst sign of success was whoop Goeddel’s as he checked the scin- ves with the triumphant team. Genentech had made a complicated To GenentechTo scientists, worried that somatostatin and human insu- The fi The proteins. Everyone recognized the fusion-protein approach as cumber- as approach fusion-protein the recognized Everyone proteins. some and restricted to making a narrow range of substances. lin might be mere fl ashes in the pan, achievinglin might growth fl be mere hormone meant more than the successful synthesis of another recombinant substance. fi company’s The technology was widely applicable the for bacterial production of useful trating work. Whether they used the growth hormone complementary SeeburgDNA had would made UCSF at becomepoint a bitter of litigation between and UC Genentech in the 1990s. Heyneker observed. In July Goeddel and Seeburg succeededin cloning the complementary segment,DNA fi according to Goeddel. results to Swanson. streamed People in from all directions, exchanging fi high gene and induced bacteria to churn out pure human growth hormone in quantity—200,000 molecules per bacterium, under optimal conditions, mone right off the bat.” that the bacteria were making “a signifi “a making were bacteria the that seemed within eventual grasp. One perceptive reporter remarked, “The “The remarked, reporter such as the blood-clotting factors with perceptive genes too large to synthesize One now grasp. eventual within seemed sion protein; was it not a precursor; was it a pure and freestanding sub- stance, and was it produced in relative abundance. Lab tests showed to it be biologically active and identical to the natural hormone. all It added up to the creation of a seemingly versatile and effi the larger and more complex proteins in common clinical use. Substances concern was that Genentech could not build a sustained business on the limited utility of the fusion-protein approach. concern That evaporated with the growth hormone triumph. hormone Genentech’s was not a fu- making the complementary segment.DNA “Goeddel struggled because he tried to make high-quality cDNA with poor-quality messenger RNA,” tillation pinned!”—shop pinned! counter: It’s talk “It’s meaning the reading the for radioactively tagged growth hormone protein had soared completely off the chart. linked the synthetic and DNA complementary pieces, inserted DNA the hybrid genes into expression plasmids, and transferred them to bacteria cloningfor and expression.

39 eld. eld. cant what for it In short, the mak- Genentech’s notice Genentech’s 35 37 rm to prepare a press notice. The Although a notable achievement, he had produced 36 It was one-upmanship worthy of playground rivals playground but of worthy was one-upmanship It 38 With the élan typical of corporate announcements, and increasingly Swanson engaged a public relations fi The elationThe sweeping Genentech that day might have fallen a notch if a day, to July 11. July to day, a announcement disintegrated. Alertedby reporters immi- to Genentech’s report verbal rushed a made Genentech, 10 July on Baxter John hormone. announcement, nent growth human of production team’s UCSF the on counterednot to be out-competed, the same day with its own oral report. Swanson then moved the release of the written press announcement up was scheduled public for after release on July 12, a patent applica- 1979, tion and a paper journal for publication were in the mail and Goeddel had reported a symposium. the at work Then suddenly the timing of the The authorThe of the release took pains to distinguish the product from the fusion proteins made in the somatostatin, insulin, and UCSF growth hor- with far higher stakes. also of university news publicity, Genentech’s release declared the pro- duction of growth hormone in unattached major milestone.” form “a growth hormone as a fusion protein that remained biologically inactive until stripped of the attached bacterial protein. laboratoryproduction most is signifi. . . probably of HGH implies about the future possibilities in this [genetic engineering] fi If Genentech can make what else HGH, can make?” it growth hormone. growth the stringent more restrictions U.S. on recombinant research. DNA The NIH guidelines, designed to reduce perceived hazards, served paradoxi- cally in these and a few other cases to move experiments and their hypo- thetical dangersto other countries. Martial By June 1979 had succeeded in cloning and expressing a complementary segment DNA human for detours and impediments, to a viable commercial future. the group had known growth that UCSF’s hormone team was close on its heels. summer That Baxter, with Eli Lilly’s had sent Mar- Joseph money, tial to the same Lilly-owned laboratory in France in which Ullrich had cloned the human proinsulin gene. Once again, the aim was to escape ing of growth hormone indicated a far clearer path, albeit with inevitable plete with a sketch of the research procedure and a diagram of the growth hormone molecule coiling sinuously around the its lengthy page, string of amino acids sequentially laid out as labeled beads. result was the usual promotional text.But in this instance came it com-

118 CHAPTER FIVE 119 HUMAN GROWTH HORMONE rst The com- 43 eld. , in an article callously c achievements and prac- In fairness, the objectives in 41 Economist The 42 governmentalcantly, bodies created to cacy of that substance is completely un- completely is substance that of cacy ight biology was no longer the sole province More signifiMore 44 44 Baxter countered, his competitivestreak in plain evidence. He cient to treat children failing to grow normally. Putting his na- 40 Reporters focused on the growth hormone research as a pharmaceuti- to gaining product approval. FDA cal breakthrough, seeking to appeal to a readership interested in medical for- overcoming “factories” bacterial of much Articles made advances. mer hormone shortages, but devoted less ink to noting a manufactur- ing process yet to out and be worked a product far from the marketplace. Genentech that public the cautioning as quoted was however, Swanson, and Kabi had yet to develop a production process, let alone come close gene clonings—somatostatin,gene human insulin, and growth hormone— had demonstrated that top-fl of academe. Genentech Clearly, had moved into the hallowed circle, with other upstart companies to follow. the competing projects were slightly different. Genentech wanted fi and foremost a commercial growth hormone product; group, the UCSF in no way adverse to producing a marketable hormone, was nonetheless primarily concerned to elucidate the mechanisms behind mammalian gene expression in bacteria. However interpreted, Genentech in its triple observed to the press that supplies of natural growth hormone had never been suffi tive southern charm aside, he took a stab at Genentech,[growth hormone] is a hormone we really remarking, need, unlike insulin”—which “This he considered in adequate existing supply. known.” mone work. Genentech’s aggressivemone work. Genentech’s new marketing manager delighted in telling a reporter: producing “What we’re is human growth hormone. What John Baxter’s lab is producingthing else. And the clinical effi is growth hormone attached to some- as “medical products” when the long industrial development stage and uncertainty approval of FDA yawned them. before media The that a few years earlier had tended to dwell on the possible hazards of genetic engi- scientifi its extolling increasingly were neering contributions. tical pany had indeed succeeded in cloning three genes faster than anyone expected. was But it a leap of faith to to refer the recombinant proteins monitor DNA research were beginning to lament regulatory roadblocks to full basic-science and industrial exploitation of the fi titled Dwarfs,” “No More commented on the speed with which Genentech had created “three new medical products in as many years.” sm. sm. 45 A more realistic ap- 46 fty employees. fty t, government-supported National Pitu- rm remaining solely a contract research operation; he had Taking on drug development, approval, and marketing was a monu- that treats a disease, you have to be able to make and sell that drug your- drug that sell and make to able be to have you disease, a treats that self, inpart to control the distribution of it, not relying on someone else; and in part because you capture greater rewardsby selling yourself. it Over the long run, unless you capture those rewards, you cannot invest as much in R&D thatallows you to develop the second and third products. Over the long run—and really the timing is when you can achieve it—in order to capture all the value from the research that develops a new drug For severalFor reasons, growth hormone seemed an appropriate project mental challenge a start-up with for no products generating income, no deep investor pockets, and just over fi selling its own pharmaceuticalscould Genentech capture full monetary value from the heavy cost of pharmaceutical research and development. As observed two later: he decades cess and a likely future product. He believed that only by making and and making INTEGRATION by CORPORATE TOWARD MOVING only that believed He product. Swanson soon came to see growth future hormone as than more a cloning suc- likely a and cess advantage. Genentech should to by get be able with a small sales force since only a few physicians (largely pediatric endocrinologists) currently physicians treating children with severe forms of pituitary dwarfi pituitary of the United the States: nonprofi forms severe with itary created in Agency, to the collect 1960s pituitary glands from coro- children ners and private donors, dispensed growth treating hormone free of charge to physicians Swanson saw the circumscribed distribution of growth hormone as an in bringing a pharmaceutical to market. Swanson Clearly, had no inten- tion of the fi expansivemore ambitions and little patience tarrying. for scheme. hormone The Swanson’s hadfor no entrenched competition in research project by research project. With an incremental approach, Ge- approach, incremental an With project. research by project research nentech might build up its own manufacturing capacity and break away from reliance on a pharmaceutical company product for development and approval. He reasoned that creating a comprehensive internal re- search and development program would compel Genentech to obtain the knowledge and resources to practice the full range of expertise entailed proach, Swansonproach, decided, was to tackle corporate integration stepwise,

120 CHAPTER FIVE 121 HUMAN GROWTH HORMONE rst 50 sm, he began The agency The be- rm could avoid 47 rm’s toilet paper. toilet rm’s Perhaps there was room for 48 lled unending requests from from requests unending lled rm strove to improve hormone purity cient current for treatment but welcomed the With the American market now exclusive Genentech’s nancial windfall likely to result from growth hormone 49 Hutton that rm achieving E. F. a genetically engineered form His mind Swanson made up, Kabi approached about amending the By then, Swanson had come to a different opinion about the potential Genentech to sell recombinant growth hormone in the United States. In return, Genentechreduced the royalty rate Kabi was to Genentech pay on foreign sales. contract. In 1980 he succeeded in licensing from Kabi exclusive rights for lion if these additional indications materialized, he told the analysts as isthat it called, “HGH, may turn out to be one of the most important sales. told In he a group September of stock market 1979 analysts the at fi brokerage of human growth hormone in the unprecedented quantities expected would allow investigation of its uses in treating wounds, bone fractures, and other medical conditions. Predicting a marketmil- of over $100 hormone. What had started as aimed a project primarily advancing at the technologicalcompany’s capacity and corporate evolution, he now came to regard as having substantial commercial potential. Anticipatingical applications beyond the treatment of pituitary clin- dwarfi to publicize the fi size of growth hormone sales. As early as the he began fall to pre- of 1979, dict an expansive market with a variety of potentialclinical uses the for modest market expansion after including the all. no one at company, Yet Swanson, anticipated a large market growth for hormone. An inside joke was that sales revenues might cover the cost of the fi was already fully “a integrated company engaged in the research, de- velopment, manufacture and marketing of commercially valuable sub- stances by specially produced engineered microorganisms.” the other groups synthetic for sequences DNA and probes; the molecu- lar biologists labored to increase growth hormone yields; and the fi close, a to protein drew chemists to arrive the 1979 at fi As trials. clinical for required standard high the to Genentech that exaggeration, little a than more with claimed, Swanson purview, the pressure was once again on the scientists.and up lab, Crea’s running Genentech at by fi the end of 1978, prescribed the hormone. By selling directly to them, the fi the immense cost of drug promotion and distribution. research on new applications could proceed. possibility of additional low-cost growth hormone so that exploratory exploratory that so hormone growth low-cost suffi be to supplies lieved additional of possibility Swanson, it was 51 Integrating laboratory- 53 rst pharmaceutical manufactur- pharmaceutical rst 52 manufacturing process. cient c staff was already contending with the nitesimal quantity. In comparison, the growth menting wasn’t beer. making It antibiotics. was It completely different. It was engineering organisms to make a unique protein, which, in turn, could The absolutely amazing thing to me was the manufacturing component of the industry which had to be developed. was It totally wasn’t It new. fer- ble [to developble [to recombinant products commercially], and if wasn’t it pos- sible then we were all in this dream job that wasn’t going to last. Our job in the industry wasbased on the fact that we could make proteins in a large enough scale to be able to sell them. There was a period where we were wondering whether was it really possi- mentation experts to handle the development and scale-up of insulin and growth hormone. was It they and technologists Lilly at and Kabi who were responsible developing for the fi ing systems recombinant for pharmaceuticals. Swanson had begun to hire in a cadre 1979 of process engineers and fer- tech could develop laboratory-scale procedures into a platform man- for ufacturing proteins in the amounts and puritymeeting and market FDA requirements. Yansura recalled the worry: produced only an infi an only Achieving the hormone had been remarkable, but the experiment had produced hormone procedure expressed the hormone in relatively substantial amounts, but even fell so it far short of constituting anything close to an industrial production process. An open question was whether Genen- SCALING UP INSULIN AND GROWTH HORMONE SCALING UP INSULIN Genentech’s modest scientifi development of human insulin to meet Lilly’s stringent requirements. substances yet to be produced via genetic engineering.” anything requiring but easy, innovation and radical adaptation of exist- ing procedures. As Boyer recalled: scale into approaches viable development and production processes was dure into a productive and effi obvious, no longer regarded growth hormoneas in his a opinion, small-market now it had signs sales of huge potential. that For actually product; to materialize, Genentech needed to transform a small-scale lab proce-

122 CHAPTER FIVE 123 HUMAN GROWTH HORMONE At 55 54 rm to to rm aunting A year later 56 rst company to industri- ed quantity and purity, his pri- rm as a responsible corporate citi- eld. ed and expressed in large quantities by the organismthat was en- With the pharmaceutical industry routinely employing microbial microbial employing routinely industry pharmaceutical the With be purifibe gineered, and to provide this in large enough quantities to do the clinical studies and eventually to make available it to physicians clinical for use. Swanson from the start had found prudent it and politic the for fi As Genentech’s insulinAs Genentech’s and growth hormone projects began to ex- 57 rst, the guidelines had minimal impact on the research; company’s its projects involving natural DNA, including complementary DNA, sub- DNA, complementary including DNA, natural involving projects mitted proposals review. for Swanson signed off on approvals. As NIH policy evolved, the committee added a mandatory external member. was the eager for public to see the fi zen totally in compliance with the guidelines. Swanson had asked Den- nis Kleid to establish a biosafety committee modeled after the one he had founded the at Stanford Research Institute. Kleid then proceeded to form a committee of Genentech personnel to which scientists with But trouble lay ahead. It was in the course of increasing the volume of the volume increasing in the course of lay ahead. It was But trouble collided head- Genentech process that cultures in the scale-up bacterial up till then it had largely avoided. on with the NIH guidelines, which institutions to only applied they though even guidelines the with comply receiving NIHresearch funding. In light of the political he controversy, alize recombinant Swanson DNA, thought “it important to set ex- a good guidelines. the with compliance voluntary strict in ample” guidelines shifted. At the time of the somatostatin announcement in in announcement lines did not cover. somatostatin the of time the At pand beyond experiments, bench-top ideas regarding Swanson’s the shifted. guidelines he had stated publiclyDecember that adherence 1977, Genentech’s to the guidelines was a top corporate priority. As the fi fi experiments involved primarily synthetic thatDNA the original guide- obvious roadblock to industrial manufacturing in and commercializa- tion of a promising new fi cultures many times the guideline limit, the ten-liter maximum was an aspects of the guidelines. He and Boyer had even to gone Washington, DC, to lobby against legislation regulating recombinant research, DNA arguing that the industrial prospects of the research should not be reined in. Swanson had changed his mind. with Faced providing Lilly with bacte- specifi in insulin producing cultures rial ority had become meeting the benchmarks—even if meant it fl

62 that that cance. Post 60 61 noted that the escalation Swanson was indeed impatient. Shrewdly 59 The Washington Post 58 All the while, Lilly’s Irving Johnson, a level but forceful in voice oppo- Because been we’ve leaders in this technology, had we’ve to deal with the problem of how to get theinsulin out to the diabetics in this country. now workingWe’re as fast as can we to produce enough animal for tests in the fall. have to do You things on a larger scale to make the test. In June 1979 SwansonIn brought June his 1979 objection to the ten-liter limit out in combinant Advisory DNA Committee to remove the ten-liter batch-size limitation and make other procedural changes favoring industry. Gov- ernment he argued, policy, should not cripple through restrictive poli- cies and time-consuming procedures the industrialization of a technol- ogy with impressive evidence of medical and economic signifi sition to stringent federal controls, petitioned the NIH through the Re- the NIH guideline limit. the open—perhaps hoping to play eagerness on the public’s new for and more effective drugs. He pointedly informed the media that Genentech’s current volume of insulin cultures was around sixty liters—six times strictures—lowering or removing containment requirements for many many for requirements containment removing or strictures—lowering types of experiments. NIH The now permitted large-scale experiments By 1980 U.S. regulatory clamps were loosening. Washington had turned turned had Washington loosening. were clamps regulatory U.S. 1980 By to technology-based companies as lifting one avenue for the nation out of recession and placing on a competitive it footing on the international stage. As an element in a general reduction of industrial regulation un- der the Reagan administration, the NIH that year relaxed guideline in size batch without formal NIH approval “emphasizes industry’s impa- guidelines.” the with tience and Kabi employedless a confrontational strategy to circumvent the ten- liter limit—and the Swedish government’s similar and mandate. Kabi’s process engineersGenentech’s adjusted schedules work to run ferment- ers in continuous cycles a maximum at of ten liters. Swanson’s remarksSwanson’s had an obvious political subtext: the health and wel- fare of the diabetic population trumped any other consideration, includ- ing what he saw as ill-conceived federal policy restricting the manufac- Genentech growth to hormone, regard In products. recombinant ture of stressing medical rather than business priorities, he told the Genentech had an urgent obligation to provide human insulin to the dia- population. betic

124 CHAPTER FIVE 125 HUMAN GROWTH HORMONE

69 64 rst The report, The published in 63 Swanson had predicted in 67 70 rst of a series of clinical trials in human He was largely right. regulatory The approval pro- 68 66 But industry could claim a victory of sorts: the Recombi- 65 nite advantages. In approved October the the sale FDA 1982 of the The developmentThe of human growth hormone into a commercial prod- With theway now clear to produce substantial quantities of human In January NIH 1980 director Donald Fredrickson took special action uct took a longer and more erratic course. In January 1981 Genentech uct took a longer and more erratic course. In January Genentech 1981 manufacturing the recombinant hormone. insulin, in Lilly 1980 began the fi volunteers and also launched construction of two immense factories for The trajectoryThe from lab bench to product had taken a mere four years— less than half the time onlookers had originally predicted commer- for cializing recombinant technology. DNA As Irving Johnson took pleasure in remarking, must “We all be impressed with the speed with which the technology has progressed since 1974.” Not everyone was pleased. Some expressed alarm over the prospect of Lilly and other corporations mass-producing vats of recombinant organ- isms in the absence of meaningful government oversight and regulatory enforcement. made large-scale fermentations permissible without the NIH director’s prior approval. nant DNA Advisory Committee agreed in mid-1980 to amendments that that amendments to mid-1980 in agreed Committee Advisory DNA nant perience with shepherding the animal insulins and other biologicals through the plus its FDA, long-term ties with drug regulators, were also defi Genentech-Lilly insulin, under the trade name Humulin. was It the fi recombinant pharmaceutical human for use to reach the marketplace. cess insulin for went forward without a major hitch. But Lilly’s long ex- (above tena case-by-case on liters) (above basis if,as a government report re- iterated, the recombinant was DNA “rigorously characterized andthe harmfulabsence of substances established.” could now be performed the at lowest containment levels—essentially ordinary lab conditions. to approve the seven requests Genentech and Lilly had submitted for conducting cultures of engineered organisms above ten liters.Human insulin and growth hormone were conspicuous among the approvals. 1981, went on to claim1981, that percent 85 of recombinant experiments DNA the 1976 businessthe 1976 plan that insulin would not undergo long regulatory delays because, as “insulin he put it, is not a new He predicted drug.” that should it consequently sail through the clinical testing and FDA approval processes. rst 75 What But to 71 But the 79 74 In light of the medical 78 dent that had it a growth To his To mind, the company 80 The setback The introduced another pe- 72 The FDA and several FDA The European regula- 76 Genentech swiftly issueda press release 77 ng, was close to completing a 72,000-square- edged pharmaceutical reporter, The company.” acknowledged that Genentech had taken “the fi By winter Genentech, 1982 confi rst receive injections of growth hormone to test safety. for 73 Business Week Then the entirely unexpected occurred. In spring 1985 four adults who Even as youngsters had received injections of cadaver-derived growth hor- mone died disease, of Creutzfeldt-Jakob an incurable neurological syn- drome akin to mad cow disease. withdraw the natural hormone, suspected to be contaminated with an agent. unknown pathogenic tors reacted to the calamity by requiring distributors, including Kabi, to in the United States under the trade name Protropin. Genentech almost entirelyits on own had engineered, developed, and won regulatory ap- proval of what would become an immensely lucrative product. emergency, the FDA precipitously theemergency, FDA dropped its reservations. On October human approved the Genentech’s FDA 1985, growth18, hormone sale for sponse to approval: the FDA “When things right Genentech go at the Inc., scientists have a novel way of expressing their excitement. They off, face had met goal a major its set foundation. at step to becoming a full-fl obviously impressed, went on to describe the exuberant company’s re- to assure the public that its recombinant growth hormone was not de- rived from human tissue and was pure and safe. road aheadroad proved rocky indeed. balked FDA The the at information that recombinantGenentech’s hormone was not identical to the natural mol- eculeand had elicited adverse antibody responses in clinical trials. hormone product in the offi manufacturingfoot facility in its South San Francisco complex. announced approval FDA to proceed with human clinicaltrials. riod of intense labor to achieve a purer product. That attained, Genentech reported in September that ten 1981 medicalinstitutions were set to run clinical trials. clinical trials in humans.) Recipients suffered soreness and fever, found found fever, and soreness suffered Recipients clinical trials humans.) in bacterial to subsequently due be to contaminants in the formulation, so the clinical trials were postponed. the announcement didn’t mention wasthat a handful of Genentech em- ployees would fi safety(A study inemployees would violate today’s far-stricter protocol for founding—to market our own products.” an elated Swanson, the company had done than more that: “With today’s approval, Genentech achieves a major milestone we established our at

126 CHAPTER FIVE 127 HUMAN GROWTH HORMONE

84 81 reworks that 87 eld set up in one In another unanticipated unanticipated another In 85 later pictured Swanson on ves himself lately.” ed grin on his against face, the The demands The of these projects, 88 As the cadaver-derived hormone slipped cent than Swanson originally projected. projected. originally Swanson than cent 83 86 Business Week

82 c. Swanson announced that all employees, ex- cers, would receive options to purchase one hundred The companyThe had been proactive in taking steps to move quickly into Eight daysafter the public announcement, Genentech pulled out all cials neighboring at San Francisco InternationalAirport momen- the market Protropin once was had approved: it stockpiled the hormone closefor to a year and, having mined the pharmaceutical industry for seasoned salespeople, had a marketing team assembled and ready to go. shares of Genentech stock. stopsin a lavish celebration. entire The company assembled to dine and dance under an enormous tent the size of a football fi of itsparking lots. So brilliant were the accompanying fi offi tarily suspended air traffi cept corporate offi to hospital pharmacies around the country. the around pharmacies hospital to Within approval, a week of FDA Genentech began to ship growth hormone project on theproject hormone thymosin. As the 1970s drewAs the to a close, 1970s Genentech was undergoing expansion in scale and complexity. By the second quarter the company had four of 1979, new projects all under way, but one sponsored by corporation: a major Hoffmann–La Roche on interferon; Monsanto on animal growth hor- mone; Institut Mérieux on hepatitis B vaccine; and a Genentech-funded CORPORATE EXPANSION CORPORATE jump in the air, exchange overhead . . . The hand-slaps, and ‘DNA!’ cry, co-foundercompany’s and chief executive, Robert A. Swanson, happily admits that he’sbeen throwing a few high-fi event, in December 1985 Protropin receivedOrphan Drug act seven-year The gave Act marketing of 1983. orphan exclusivity drug status under the and generous tax credits to companies making drugs rare for disorders with limited potential. market its cover in a white lab with coat, a satisfi background a manufacturing of facility. Block letters above the photo and slightly modestly more underneath, Superstar,” blasted, “Biotech “Wall Street Loves Genentech.” on top of Genentech’s obligationson top of Genentech’s to Lilly on insulin and thein-house turn out to be far magnifi more Within two decades, Protropin sales billion. reached $2 from favor, revenuesfrom favor, from recombinant human growth hormone would ect 92 rm, guaran- rm, rm full-time as exibility, impro- exibility, rmly the at helm and holding Genen- Despite Lilly’s every attempt to keep him, he found the 90 Rigid business organization and sharply delineated func- (The precaution (The proved unnecessary; Kiley of his own volition 91 89 rst full management team was in place. exible . . . and not overly concerned aboutwhat do you day-to-day— Young as SwansonYoung was—younger than his management team and The newThe hires soon learned that titles job fell short of describing the rst vice president of sales and marketing. Byrnes had decided to leave a at Genentech. retired from Genentech in in several 1988, ways far richer the for expe- Later Bill inrience.) 1980 left Young the security longtime of a position manufacturing of director become to Lilly Eli at engineering process in most of the scientists—he was fi tech to a tight rein. He kept everyone focused on product-oriented re- the actual company’s organization. disparity That became in a problem when Hoffmann–La1990 Roche, engaged in percent a 60 acquisition of Genentech, demanded a formal organization chart. Byrnes had to hustle to create a chart more accurately depicting corporate reality. that Genentech’s business charts, if they existed at all, failed to refl to failed all, at tions existed had Genentech, no place at a company in which fl they if charts, visation, and quick business action were essential. later Bob Byrnes Years recalled Genentech’s that teed to reinstate if his & Lyon him position Lyon Genentech at at failed to work out. sion at Genentech. Tom Kiley, succumbing to infatuation with Genen- with infatuation to succumbing Kiley, thefor singular Tom opportunity to build an entirely new marketing divi- Genentech. at sion tech technology and the legal issues raised, it joined the fi general legal counsel in February He was the 1980. only individual to be- thecome employed at early company ostensibly his risk-free: former law partners, apparently fearing his for future the at renegade fi manufacture growth of hormone, called enlargement for the at manage- mentlevel. In Robert January Byrnes 1979 arrived to become Genentech’s fi executive marketing Supply American Hospital an as position well-paid of vice president in a negotiation. matter. doesn’t It point The a is, I’m resource.” full scope of their responsibilities. They found themselves performing any and all tasks required to keep research and the company moving. Byrnes described what he learned to expect, a far cry from the circum- scribed descriptions job of the pharmaceutical industry: have to “You be fl whether running it’s out to a liver get a scientist for or playing the role chance the to be at forefront of creating manufacturing procedure for recombinant pharmaceuticals irresistible. arrival, With Young’s Genen- fi tech’s

128 CHAPTER FIVE 129 HUMAN GROWTH HORMONE - 93 rst full fi edged” was a du- aspect to what we we what to aspect tability, even as a ad hoc ad “Full-fl 98 nancial condition was sound, xed business shifted model. We nancial solvency a start-up but for rm’s fi rm’s His goal-directed management style 94 In comparison, Genentech stood out as a nose- operation— product-oriented xed-on-the-goal, 96 xation on product focus was his insistence that The company The reached that goal in surprisingly 97 ict. edged ‘revenue-producing’ business.” Biogen, with Biogen, its research parceled out among several presti- 95 A few years his before premature Swanson death in remarked, 1999, Second only to his fi his to only Second focused on making a product.” “I think“I one of the things I did best in those days was to keep us very to-the- grindstone, grindstone, to-the- eyes-fi basic businessSwanson’s philosophy writ large. and productive interactions, littleand concentrated executive authority. Bio- common, coordinated game plan was a sure lack guarantee of a gen’s of confusion and confl gious European and American laboratories—eachgious headed by a strong personality—had no centralized decision-making structure, no regular ance of $950,000. Swanson couldance of $950,000. now claim to potential investors, as he that the to do, fi promptly proceeded bious appellation a company for barely out of infancy. All the strik- more ing, then, was Middleton’s claim of fi three years old. He asserted that, despite the rapid expansion company’s and heavy research expenses, Genentech had been operating in the black since the third quarter and had of 1978 ended that year with a cash bal- rectly to producing marketable goods. Focus on products had become a mantra that everyone could repeat in their sleep. Dan Yansura put it in a nutshell: were interested “We in making something usable that you could turn into a drug, inject in humans, take to clinical trials.” search, meeting benchmarks, and creating corporate value through al- liances, investment, products, and patents. His initial objection to the somatostatin was project not an aberration; he continued to have scant tolerance spending for time, effort, and money on research not tied di- short in In what April order. may have fi been 1979, Genentech’s nancial analysis, Middleton Fred reported that the company had become “a full-fl from [projects to Chevron with] Schering[-Plough] and Amoco because whatthat’s showed . . . There was up. a certain differed markedly from that of Genentech’s close competitors. Cetus, a a Cetus, competitors. close Genentech’s wanted it of that exactly from what of unsure markedly seemed differed visions, multiple of company to become. Its president Ron Cape admitted were looking as much: “We credibility,for and we didn’t have a fi Genentech achieve break-even earnings, if not profi struggling start-up. did.” 100 c author- c c sounding board. “Okay, “Okay, board. sounding c cient to cover operating ex- red up and to coordinate between 102 nancial solvency three years into its existence xity corporate of Swanson’s goals and bulldog tenacity, Swanson would continue this highly personal practice well well practice personal highly this continue would Swanson c details. He did that very well. ow positive, andits revenues suffi Genentech’s fi Genentech’s 101 99 The other thing Herb did in those early days was wander around the Although early on Genentech utilized an array of paid consultants, the and to act as cheerleader to get people fi groups; his was, in a sense, act a scientifi [to as] how approachinghere’s I’m this.” So he was somebody to talk to about the scientifi questions of which projects we should work on were decided. He had a a had He decided. were on work should we projects which of questions clear insight of what the technical feasibility was, and where you couldn’t push the science too ready it That far. was now? Was a big contribution. Boyer was always the one. I think his judgment calls werecritical. . . . labs, as I did. Where where my job was are “Okay, we on this [project]?” Herb was always interactive, primarily the at board level where the basic Despite the fi At executive board meetings and on periodic rounds of the labs, Boyer perience many for of them, accustomed to being under the thumb of the successes theprofessor at head of the three The lab. quickgene-cloning fact remained that many for years there was no senior scientifi ity regularly on site with the formal responsibility to direct and oversee research. As a result, the scientists had unusual latitude in making deci- sions about the conduct and direction of experiments. was It a new ex- on when results disappointed. was It a form of hands-on management that one of his heroes, David Packard of Hewlett-Packard renown (and “management-by-walking- called 1981), of as director Genentech a around.” his management style was conspicuously informal and interactive. In he up, picked dealings he with the scientists, what was he mainly except a facilitator and cheerleader. biology molecular in background no With could only reassure and applaud from the sidelines. he delighted Yet in popping unannounced into the labs, looking over the scientists’ shoul-everyone goading results, positive over exulting questions, asking ders, was also casually contributory and helpfully communicative. Swanson recalled: into until the 1980s, the company grew too large. itscash fl penses. was Swanson for a point of pride and a sign of corporate discipline.

130 CHAPTER FIVE 131 HUMAN GROWTH HORMONE

103 The 104 ll it. ll cant, and sustained ties with rms of Silicon Valley and along rst generationof scientists. Only rm’s fi rm’s dence in the fi ne the biotechnology industry Virtually of today. every But the absence a formal of research director prior to that timehad a shabby restaurant, which only added to the meeting’s subversive feel. cern over lack of representation in corporate decision-making. Early Early decision-making. corporate in representation possible downside. A director providing structured of interaction between lack management and scientists might have allayed the early scientists’ con- over cern worried a in Dennis 1979 Kleid rounded up the ten or so scientists with doctoral degrees to discuss the issue in private in an upstairs room of a eventualresult was greater transparency between management and re- search, although Swanson remained of a general mind that business was businesspeoplefor and scientists should stick to science. After the meeting, Kleid asked Swanson least to place at one scientist on the management committee and one on the board directors. of Swanson immediately agreed to the former request but adamantly refused the lat- mostter, likely because board members are traditionally outsiders. insistence, the scientists were encouraged to publish and engage in the wider community of science. policy The resulted in collaborations and upon decade of accumulated knowledge basic-science generated in aca- demic labs. Boyer and the early scientists were the medium, the very em- bodiment, of the knowledge and techniques upon which Genentech was built. Inevitably, along with the science and technology, came the cul- tural values, expectations, and conventions of academic life. At Boyer’s tor that for matter, lacked the close, signifi university research that Genentech drew upon from the start and that continue to defi element inthe research company’s endeavor—from its scientists to its intellectual and technological foundations—had originated in decade A culture was taking shape Genentech at that had no exact counterpart in industry or academia. high-tech The fi Route 128 in Massachusetts shared itsemphasis on innovation, fast- moving research, and intellectual property creation and protection. But the electronics and computer industries, and every other industrial sec- AN EMERGING CULTURE indicate that this latitude paid off in fostering ingenuity, productiv- ingenuity, fostering in off paid latitude this that indicate and self-confi ity, didin Genentech 1983 create the formal position of vice president re- of search and appoint professor of molecular a UCSF biology to fi ex- c intensity, male adrenaline, and ju- ndings and mounting record publica- of ected, in one way or another, ethic a work fteen names on them, and was it always viewed His prosaic statementdoes not begin to capture c journals. c 105 culturet. Genentech’s was in short a hybrid of academic 106 Inned, industry, but often you need the goals are more clearly defi Goeddel was an extreme expression of concentrated energy and unfal- by academe as a funny way of doing science. I found the contrary; was it a very different way of doing science, because this was a demonstra- tion that you can accomplish a lot by working together with different disciplines. again, the goal is very personal. “What contribution can I make to a certain understanding of whatever.” It can be very individualistic. different disciplines to reach them. indeed, fi So, out of Genentech or came twelve with articles In academe, the motivation is quite different. Graduate students are there to get a PhD thesis, so they focus on their little aspect. all That’s there is to it. They have don’t to integrate into a bigger project. The postdocs are there to make a name for themselves because theyfessors, so they have want to publish. Those are the to most productive become years. But assistant pro- The environmentThe of the novel enterprise inSouth San Francisco com- But academic values had to accommodate corporate realities: Swan- at tering drive. But everyone refl everyone But drive. tering energy and electricity. young The scientists banded together into fl multidisciplinaryible teams that exhibited inexhaustible engagement, camaraderie, and a willingness to pull together to reach common ends. Heyneker contrasted Genentech’s endeavor: individual rewarding toward evident teamwork with academia’s bias the over-the-top dynamismthe over-the-top early Genentech’s of culture. prised a distinctive mix of scientifi venile letting off steam. Visitors were immediately struck by the air of focus and resources.” son’s insistence, research was to lead to strong patents, marketable prod- ucts, and profi was, It practices. and objectives commercial with line in brought values to turn a phrase, a “recombinant culture” in ways that the biotechnology industry of today continues to manifest in one way or another. As Swan- have providedson “We put it, an academic atmosphere with industrial competition with university scientists and the kudos and status accru- ing research from Genentech’s fi tions in major scientifi

132 CHAPTER FIVE 133 HUMAN GROWTH HORMONE Even 110 eet of foot. 107 108 The scientists, little The needed however, prompt- 109 x a leakywater fountain. rst; we have to beat everybody else. were small, . . . We Go get it; be there fi undercapitalized, and relatively unknown to the had world. to perform We better than anybody else to gain legitimacy in the new industry. Once we did, we wanted to maintain the leadership. Bob wanted everything. He would “If you have don’t say, more things on your plate than you can accomplish, then not trying you’re hard enough.” He wanted you to have a large enough list that you couldn’t possibly get everything done, and yet he wanted you to try. Fledgling start-ups pitted against pharmaceutical giants could com- admitted to being seduced unswervingly by Genentech’s committed, culture: can-do Ullrich, despite European discomfort with raucous American behavior, Venture capitalist Perkins, after a decade and more of working closely with Swanson, observed succinctly: “Bob would never be accused of lack- ing a sense of urgency.” of a facilities tour to fi tour to facilities a of pete mainly by being more innovative, aggressive, and fl Early Genentech had those attributes in spades. Swanson expected— demanded—a of everyone. lot His attitude was, as Roberto Crea recalled: Visitors were sometimes taken by aback the pervasive informality and irreverence seniority. for Touring the premises, they sometimes had to clustersavoid of scientists bowling dollars for in hallways or playing foosball while waiting experiments for to run their course. A delegation from was Japan visibly disconcerted when Swanson stopped in the midst that had no tolerance for slackers or less than complete dedication and and dedication complete than less or slackers for tolerance no had that willingness to long hours. work Swanson was the supportive but insis- tent slave driver, urging on employees beyond their perceived limits. As Dan Yansuraremembered: scientists an inferior bunch. Crea again: “We as the scientists were very very were scientists the as “We again: Crea bunch. inferior an scientists much concerned that the quality of the science Genentech at would be as high or higher than of] any [that academic laboratory, because we didn’t want to be perceived as mercenaries or second-tier scientists.” superior, to their academic peers, many of whom considered industrial industrial considered ing. whom From of the many start,peers, they were academic motivated their to to show themselvessuperior, equal, if not 115 Swanson, the The scene The was 114 a no- rst Ho-ho, 113 in ts. I recall being Kiley retains a mental 112 111 rm divisions and sharp demarca- rst-name basis.rst-name Kiley described one Ho-ho, rm’s “Ho-hos,” all-company beer fests “Ho-hos,” on Fridayrm’s afternoons, line at the cash register with Bob when we were shopping for the Ho-ho— shopping were the cash register withline at Bob when we nature—telling of that peanuts, things bananas, had forgotten we him that “Monkeys—don’t—need—plates.” he replied, to which plates, the paper When the right monkeys lived and the right monkeys died in an experiment monkeys died in an experiment and the right monkeys lived When the right the “Combined Simian Me- involving interferon, Swanson and I declared gorilla outfi wore we to which Ho-ho” morial and Revival doing something important and exciting. fi The Even though I was not the prime example of such a [fervent]employee, I was justpulled were in. very We excited about Genentech and this feel- ing of were belonging—very we that and way right the on were we important. that conviction of stream Rationallythis or not, I was just pulled into The egalitarianismThe was even mapped onto the physical landscape: ces were designed to be of roughly the same size and appearance to to appearance and size same the roughly of be to designed were ces requirement to drink least at one glass of beer. provide a window on its exuberant early culture. fi The tably modest affair, occurred a fewdays in after June 1978, the company’s labs opened. All six employees, plus Kiley, attended, prewarned of the of established corporations with their fi tion between management and staff. As the the company Ho-hos grew, remained pointedly egalitarian and a time for wildly raucous, untamed occasions where everyone socialized and decompressed. image of CEO Swanson, salami and clutched bread in one hand and a glass of beer in the other, indistinguishable from thecircle of young em- ployees except his for lack of running shoes and jeans. distantlight-years from the top-down management and rigid hierarchy as CEO—he left in 1990—kept his modest cornerce in Building offi 1. The egalitarianism so evident Genentech at may have been an at extreme end cum of the decorum appropriate a maturing for company. there were no reserved parking places and, as Genentech expanded, of- fi anyavoid visible sign of seniority. Even Swanson throughout his tenure By the Genentech late 1980s, had reined in the antics, assuming a modi- mixed and kibitzed on a fi which struck his eccentric fancy: management team, and sometimes all Boyer, tie-less and in shirtsleeves,

134 CHAPTER FIVE 135 HUMAN GROWTH HORMONE at organization, at ecting the cultural norms norms cultural the ecting Refl 119 A female scientist, a postdoc Genen- at 117 But in comparison to the average pharmaceutical 116 exibility, and no-holds-barred cocky, inventiveness c accomplishments and corporate major alliances. More rm. It was It not only women who noticed the heavily masculine nanciers noticed. They saw a company with an impressive 118 But in a culture the of young, the spirited, the ambitious, and the irrev- of the 1970s, a decade less sociallyof the 1970s, conscious and inclusive than a later cultureera, Genentech’s of extremes included a strand that observers to- day would label socially unacceptable. was But it blem- not Genentech’s ishes that fi line of scientifi and approached, they as more, 1980 wanted a piece of biotech action. ignored. Pranks and high jinks released tensions bred in the hothouse hothouse the in bred tensions released jinks high and Pranks ignored. climate of science-to-win. atmosphere The was overwhelmingly, aggres- inescapably masculine.sively, company, Genentech’s culture Genentech’s company, was stunningly Its fl new. fl turn-on-a-dime were a study in contrast to Pharma’s Big executive-lunchroom culture, proprieties and measured and pace, stodgy regimentation. crossed occasionally than more were boundaries erent, of the spectrum, was but it notunique in the business world, particularly foundin many Silicon 1970s The industries Valley. adopting nonhierar- chical organization aimed greater at employee participation and dedi- cation tothe fi culture. Laurence Lasky, a molecular biologist who arrived Genentech at commentedin 1982, that the a place with company was pin- “macho city,” ups on the wall and “no thought police.” outrageous, no poker bet was too high, and no woman was part of the in- ner circle.” tech in the early observed: 1980s, “The company seemed to operate like a boys’ locker room, and the place reeked of testosterone. No prank was too

6 Wall Street Debut

“Genetic Firm’s Stock Starts Wall St. Frenzy.” 1 Los Angeles Times, October 15, 1980

BIOMANIA

As the 1970s drew to a close, public appetite skyrocketed for news of the latest genetic engineering accomplishments. The media enthu si as ti- cally—and often uncritically—fanned the fl ames, reporting what won- ders recombinant DNA might accomplish in making a cornucopia of new products in the medical, energy, and nutrition fi elds. In one of many pos- sible examples, a Wall Street Journal article conveyed the impression that biotechnology was about to bear abundant fruit:

At the beginning of the 1970s, it sounded like the further reaches of sci- ence fi ction: turning microbes into factories of “superbugs” producing ev- erything from food to energy to medicine. Now, judging by the publicity emerging from a number of companies in the fi eld, it is fast approaching reality.2

In November 1979 an article in Science, evocatively titled, “Recombinant DNA: Warming Up for Big Payoff,” reported on the infl ux of money from giant multinationals and fi nancial institutions into the scattering of genetic engineering companies created in the late 1970s.3 The previous August, an investment analyst at E. F. Hutton had arranged a seminar on biotechnology featuring talks by executives of Genentech, Cetus, Biogen,

5 ber The history The 10 elds like fi like elds The unalloyed The Policy makers ing American 4 8 A year or so later, a a later, so or year A 6 During the Carter presidency of the the of presidency Carter the During 9 “Biomania,” a term coined this at time, was sweeping 7 ve hundred, mainly institutional investors interested interested investors institutional mainly hundred, ve nancial and corporate worlds. A shift in the national environment high for technology and small business fueled the craze. A rising chorus complainedent laws, restrictive taxes and onerous regulations” of stifl “outmodedpat- ingenuity and willingness to take investment risks in fi came to recognize that stiff environmental and health and safety regu- lations hampered technological development and commercial exploita- discoveries.tion basic-science of By late summer venture capital of 1979, andcorporate investment inin- dustrial biology totaled an estimated million. $150 optics, semiconductors, computers, and biotechnology. the fi and Genex. participants,ve Instead of the expected the confer- thirty-fi ence attracted fi in learning about this latest technological phenomenon. federally funded research and in so doing foster technology transfer to to transfer technology foster doing so in and research funded federally the private sector and stimulate productivity. How U.S. responsible such legislation was sparking for commercialization is debated. In 1980 Congress followed suit with the Stevenson-Wydler Technology Technology Stevenson-Wydler the lation prompted investors to move out of tax shelters and into with the stock suit followed market, where the hunt was attractive on for investment opportunities. Congress 1980 In Innovation Act and Patent and the Trademark Bayh-Dole Act, both de- signed to ease and encourage patenting and licensing of the results of in a sweeping change of stance, passed number a of pro-business, pro- technology initiatives aimed stimulating at a sagging national economy and fostering international competitiveness. in an In effort 1978, to en- courage investment, Congress had cut the tax on long-term capitalgains, and a year later relaxed the so-called prudent man rules restricting pen- fundsion investment in high-risk/high-return new legis- The endeavors. late 1970s and continuinglate 1970s full under force Reagan in Congress, the 1980s, government report calculated that one hundred companies U.S. were currently conducting or evaluating recombinant or other DNA tools of the new biology. array of alliances with corporations major reinforced that assumption. message was thatmoney big awaited to be made. Cetus’s and Genentech’s by several years. At the very least, passage of pro-business legislation legislation pro-business of passage least, very the At years. several by around indicated 1980 a decided turnabout in Washington policy from recounted here documents a rising preoccupation with technology trans- andfer patenting Stanford, at and UC, Harvard that preceded Bayh-Dole

138 CHAPTER SIX 139 WALL STREET DEBUT Biotechnol- 12 ts stemming from from stemming ts nancial return to its investors, and sooner ts, the argument went, far outshone the risks. The benefi The 11 rms counted prominently among the centers of American high National attitudes toward recombinant research DNA were likewise Kleiner Perkins and Tom had assumed that within a few years either an established corporation would acquire the better company or, yet, Creating human insulin and human growth hormone had indicated the power and technology. scope of Genentech’s But a company substantially supported by venture capital needed more than technological achieve- to provide needed ment; it fi rather than later. In committing venture funds to Genentech, Eugene EXIT STRATEGIES possible biohazards. Prominent scientists drummed home the mes- thatsage a half dozen years of genetic engineering research had dem- onstrated no clear evidence of danger to human healthor the natural environment. though not entirely absent from public debate, were giving way to ex- to way giving were debate, public from absent shifting. Earlier concerns about health and environmental al- safety, entirely not though pectations the for technology paying off in novel products in major in- dustrial areas. Visions of the myriad practical benefi the new genetic technologies were fast overcoming previous worry over earlier preoccupation with technological danger and risk toward promo- tion of industrial productivity and research-based helpingfor torestore the nation to its rightful businesses position as leader a world as vehicles technology. high in tech business that Genentech began to consider a consequential change in corporate status. ogy fi technology that Washington now in favored its strategy restoring for the United States to an international position of innovative power and competitiveness. was It in this propitious new environment high- for sions to protect proprietary information and permitting large-volume, organisms. recombinant of cultures manufacturing-size few biotech companies existing around enjoyed greater 1980 regulatory and bureaucratic latitude: the threat of federal legislation restricting re- combinant research DNA had passed, the revised NIH guidelines were notably lenient, more and the Recombinant Advisory DNA Committee had made several concessions to industry, including holding secret ses- In a nation bent on preserving its leadership in the new genetics, the ll ll t it it t Imposing though 14 . As chairman of the surroundings.ed Goeddel Genentech would take one or if rm’s impressive corporate alliances, he con- he alliances, corporate impressive rm’s Flummoxed by a new kind of company with an sh out Goeddel of water, apologized to Swanson 15 theoated idea of a purchase price million. of $80 The Thus, it was Thus, it never a question at. Fred Middleton, Fred at. present the at negotiations, speculated 13 Hoping to move negotiations along, Perkins hosted a dinner party party dinner a hosted Perkins along, negotiations move to Hoping meeting, Perkins fl Perkins meeting, offer fell fl didn’t clue have as “a tothat what to J&J do with this [recombinant DNA] technology—certainly didn’t mold.” know Band-Aid a into what it was worth. They couldn’t fi the occasion was, did qualms it not dispel about J&J’s acquiring an un- orthodox company with a strange technology. Testing the wind a later at themselves their original investment, hopefully many at times the ini- stake. tial Genentech would stage a public stock offering. Through the one or other of these “exitstrategies,” as venture capitalists called them, Kleiner & Perkins and its co-investors could and in in,” “cash so doing fulfi their primary responsibility: to their recoup for fund investors and for for hisfor informal attire. Swanson told him privately with obvious delight, look“You likea scientist. This is great”—a scientist so engaged in his ex- periments that he could not spare time to dress up. did, particularly Swanson, and Boyer, one or two Genentech managers, all feeling somewhat intimidated in the rarefi Ge- at research of Saturday long a from straight coming late, up showed nentech. Dressed in his usual jeans, and T-shirt, running shoes, he had trouble getting pastthe tuxedoed butler until Perkins to word let gave him in. Feeling like a fi for the J&J president and thefor other J&J executives his at elegant Marin County, California, estate. With its sweeping views San of a ga- Francisco Bay, fullrage of restored vintage automobiles, and an elegant yacht moored in nearby Sausalito, the occasion—complete with formal attire and a staff of uniformed servants—was clearly meant to impress. And impress it cluded moment that had Genentech’s come. He advocated a buyout by an established corporation and, with Swanson and others, approached Johnson & Johnson, the venerable maker of Band-Aids and other familiar items in American medicine cabinets. the other exit strategy; the question was solely when board of directors, Perkins had considerable power in deciding such mat- ters.In light of the glowing media attention to the insulin and growth hormone successesand the fi unfamiliar approach to making drugs, J&J executives were unsure how how unsure were executives J&J drugs, making to approach unfamiliar to value Genentech, there being no standard comparison for or history

140 CHAPTER SIX 141 WALL STREET DEBUT rm—the rm—the nanciers, nanciers, After sev- After 16 The market, The for 18 But it might But it also be that 17 directors Genentech’s buyer, nd a concluded that culty of integrating a technology involving large nancial markets with the aura of miracle cures and rm would offer shares purchase for on the stock market. money—more than was generally available through venture- big nancing. Furthermore, he pointed out, the stock market was rm’s reputation for relying primarily on internal research and only only and research internal on primarily relying for reputation rm’s 19 But it wasBut it not only the increasingly auspicious economic climate After the failure to fi Perkins and Swanson made attemptone more to sell Genentech. Late nally turning to favorable initial public offerings. march to the public fi big money. that prompted Perkins to advocate an IPO. He regarded Genentech’s in- Genentech’s regarded He IPO. an advocate to Perkins prompted that terferon research, with its projected billion-dollar market, to be a major assetin bringing public attention to the company and in endowing its fi ventional a conservative for pharmaceutical industry to adopt whole- heartedly. Perkins then broached the idea of a public stock offering in which the fi An offering, Perkins forcefully insisted, was a means to raise money— perhaps capital fi human insulin-producing clones. Whatever the case, one possible route development—acquisition—wasof Genentech’s closed the for foresee- able future. the technology company’s was too novel, too experimental, too uncon- Lilly the for moment had all that wanted it from the upstart fi in 1979 Perkins,in 1979 Swanson, Kiley, and Middleton boarded a plane India- for napolis to meet with Eli Lilly’s CEO and others in top management. Fig- uring that insulin Genentech’s and growth hormone clones were its aces in the hole, Perkins suggested a selling price million. of $100 of earnings. They doubtless alsoworried about thelack of immediate products andthe diffi biological molecules into traditional small-molecule pharmaceutical manufacturing practice. year. most of the 1970s inmost the of the doldrums, 1970s was on the rise and in fi 1980, encouraged by the newly tax favorable and investment laws, were eager to invest. A result was that in the 1980 total amount of capital invested in new business ventures an rose estimated percent over 50 the previous of a deal fell through. Middleton’s view is that Lilly was hamstrung by a conservative “not invented here” mentality, an opinion supported by the fi drug contracts. outside into entering reluctantly eral subsequent meetings, the negotiations petered out and any chance 23 ated pub- ated magazine magazine Time broblast,leukocyte, ected the hype the media The Finnish The Cross Red adopted 21 Interest in the mysterious substance substance mysterious in the Interest 20 ghting cancer. Finnish The virologist Kari ’s overwrought refl coverage ’s Time

22 Pharmaceuticals with the aura of immense market potential but as the scientists referred to them, recombinant replacements natu- for ral hormones with well-documented medical uses and public demand. regarded the at time as the ultimate challenge andhigh-stakes payoff of recombinant research. DNA the From start, Genentech had considered interferon a possible research target but had resisted jumping on the bandwagon until had it made better-understood proteins with exist- ing markets. Insulin and growth hormone were the low-hanging fruit, handicapped by impurity, minuscule quantity, and high cost were obvi- ous candidates genetic for engineering. formation was in 1978 Biogen’s and research, interferon recombinant on premised part considerable in investigators Cetus, at DuPont, Hoffmann–La Roche, Harvard, Caltech, and elsewhere were also competing to clone the interferon genes— riously extracting minute quantities of natural interferon from human human from interferon natural of quantities minute extracting riously white blood cells grown in cell culture. soared during in the 1970s the Nixon administration’s Cancer on War with its underlying assumption that viruses caused many types of tumors. A prevailing expectation was that if interferon suppressed viral infections, shouldit prove effective in fi Cantell had devoted a professional lifetime to devising methods labo- for brought to a suspected Although cancer remedy. was it clear by this time that three major subtypes of interferon existed—fi and immune interferon—precisely how they and worked what therapeu- tic value they had, if any, remained clinically unsubstantiated. produce it.” lic expectations a cancer for cure and stoked an intensely competitive labora- industrial and academic of dozens involving effort international drug “The production. interferon to pursuingtories various approaches companies know that there mine is a gold in interferon,” reported in a March cover “They story. 1980 are scrambling like mad to his methods and became the main distributor of the precious but im- pure and exorbitantly costly substance. the In marginally the late 1970s, resultsfavorable of clinical trials of the Finnish interferon infl thought to prevent virus infection. INTERFERON: THE NEW WONDER DRUG? WONDER THE NEW INTERFERON: anyone followingBy the late 1970s, commercial biotechnology was entranced by news about interferon, protein a discovered and in 1957

142 CHAPTER SIX 143 WALL STREET DEBUT dential broblast One of those products dent as a result of the 25 rm Hoffmann–La Roche Confi 24 own to Geneva Christmastime at to At a splashy press conference, Weiss- 27 The synthesis The of an interferon with its 28 le a patent application a week the before an- Indicating the hot commercial prospects expected for 26 nancial support, Genentech needed the experience and clout of a rm was set to develop, as Swanson announced to stockbrokers that Genentech had just signed the contract when the news on Jan- broke, On January Hoffmann–La 1980, 6, Roche and Genentech signed a for- nouncement. By fortunate happenstance, Genentech had concluded its contract with Roche in the nick of time. As Kiley recalled, “Had [Biogen’s] announcement come just a week I doubt sooner, very much we would our made have deal with Roche.” uary that Charles 16, lab the Weissmann’s at University of Geneva, in a supported, Biogen project had cloned and expressed a precursor of leuko- cyte interferon. interferon, attorney a Biogen had fl meet with Weissmann and fi ence. Sidney Pestka, a respected protein biochemist working on natural interferon New Jersey Roche’s research at institute, possessed several interferon-producing cell lines, invaluable sources of the messenger RNA that Genentech would need to make complementary copies of DNA interferon genes. Roche alone would be responsible marketing.for Aside from the requi- fi site major pharmaceutical company to develop a new and purportedly enor- mous market the for interferons—if indeed their many predicted indi- cations materialized. But Roche provided more than money and experi- was to be recombinant interferon. mal agreement to collaborate in researchon leukocyte and fi interferon. Both parties were to develop and manufacture products, but conclude research and development agreements, signed a confi fi pharmaceutical Swiss the with intent of letter to develop bacteria producing interferon. Interferon, whose protein sequence was unknown and which for no es- tablished market existed, was in a far riskier category and hence, Genen- scientisttech’s deemed, an inappropriate initial target. Nonetheless, in November Swanson, 1978 never loath to push the envelope and eager to fall, “new products entirely . . . for new markets.” growth hormone that work could it make complex proteins in quantity, Genentech to launch was research ready by mid-1979 in riskier directions. fi The promote the achievement, company’s describing interferon protein as “a of dramatic medical interest.” mann and Harvard’s Wally Gilbert, both directors, Biogen went all out to - For- 29 Yet to Yet As the the As 31 30 Achiev- 32 nancial possibili- nancial c and clinical signifi An immediate practical problem 33 restorm of publicity about genetic engineering.” ed and published a partial sequence an of interferon gene. reporter Nicholas tartly Wade remarked regarding fan- Biogen’s nancial community, the questionable scientifi magazine commented that interferon Weissmann’s discovery “added Unfazed by Biogen’s announcement,Unfazed by Biogen’s Goeddel and colleagues focused But theelation was not universal. Critics immediately attacked Weiss- However, making recombinant interferon presented exceptional c achievement and expected market bonanza. Making interferon with mercial point of view the one with the largest potential payoff.” nology’s reach. nology’s on cloning and expressing interferon, refusing to let the stiffcompeti- tion intimidate or distract them. Goeddel, For the very competitiveness and import of the had project immense appeal. Interferon was, as he later “theput it, ‘sexiest’ possible cloning, project for sure and I’m from a com- cance of the discovery seemed article, scarcely to with matter. Wade’s its telling title, “Cloning Gold Rush Turns Basic Biology into Business,” Big conveyed the overblown reaction to the medical and fi ties of interferon and other pharmaceuticals touted as within biotech- Science major announcementfare, “A in molecular biology this was not.” lishment had not to come terms with the commercialism increasingly apparent in its ranks. the Moreover, previous year a Japanese team had identifi mann performing for commercial research in his university lab—a re- prise experience of Boyer’s withsomatostatin. Observers also noticed rushedthat announcement—its Biogen’s directors feared Genentech would scoop them—came the before Weissmann lab had determined the sequence of its interferon. the biomedical Clearly, research estab- making problematic it Crea to for construct the synthetic probes DNA necessary to identify the interferon sequence. Then, in a stroke of good was that interferon’s complete protein sequence remained unknown, unknown, remained sequence protein complete interferon’s that was problems. Goeddel recalled discussions characterizing kind as it “a of magical substance” whose biological mechanism was unknown and whose very existence was in question. ing interferon would mean to more the company than celebrated scien- tifi its projected billion-dollar market would provide a launching Ge- for pad nentech public. to go Much obviously success. rode on the project’s the fi mystique a cancer of cure worldwide prompted headlines and drew fur- ther attentionto biotechnology as an exhilarating high-tech arena. tune a lot of fuel to the fi

144 CHAPTER SIX 145 WALL STREET DEBUT - In In 35 rm’s rm’s The fi The

eld’s intense eld’s c meeting in rst to identify 37 Rumors of an imminent Ge- imminent an of Rumors 36 nd the interferon messenger RNA in the 34 ling patent protection, for Genentech announced rm to manufacture more interferon in a week than con- cient quantity of pure interferon would not be available sh out the interferon messenger RNA constructing for broblast and leukocyte interferon and within weeks had expressed In June 1980, afterIn June 1980, fi ventional means could produce in a year. the announcement in closed concession session to industry (a demands corporate recommended secrets), approving ap- Genentech’s to protect plication to produce interferon in 600-liter batches, multiple times the original Times limit. noted New that York ten-liter decision The the RAC’s would allow the fi caution that suffi that caution clinicalfor trials in humans until only 1981 whetted public expectation of an imminent Mindful cancer remedy. of that possibility, the NIH Re- combinant Advisory DNA Committee meeting (RAC), a few days after production in collaboration with Roche the of two interferons, not- ing reports of their potential activity against tumors and viruses. three monkeys and claim protection against virus challenge. gibes aimed the Biogen, at announcement made much of the fact that the collaboration had produced complete, active, and pure forms of the interferons and in higher yields than anyone had previously reported. Genentech had, in fact, made enough of the rare substances to inject into nentech public offering immediately soared. a bacterial colony thought to contain interferon. Using the partial se- quence Pestka retrieved, Goeddel cloned full-length sequences DNA for both fi the two types of interferon. welter of biological material. In another round of onerous Goeddel labor, constructed a “library” of thousands upon thousands of bacterial cells containing a multitude of complementary sequences. DNA He and his ones seeking cells, the through searched painstakingly then colleagues with theinterferon gene. Pestka, happened, it was the fi telephoned the information to Goeddel, who instantly relayed the se- quence order to Crea. With the invaluable information, Crea immediately started to construct the required probes. Genentech The scientists now had a means to fi the complementary sequence DNA of the itself. gene took But it day af- ter day of tedious screening to fi fortune, Heynekerand a colleague attended a scientifi which the speaker—to everyone’s astonishment given the fi competitiveness—projected a slide a partial of protein sequence of fi broblast interferon. Elatedlyjotting down the chemical structure, they

41 - — Fortune rm went went rm nanciers nanciers Biotechnology 42 nancial windfall. nancial 39 re.” News rst issue of BioEngineering The fi The 40 predictions,ated the interferons did not for Genentech of course had neither. If the fi 43 In 2005 interferon products garnered for their various various their for garnered products interferon 2005 In 38 elds of the new decade.” rm staged another raucous celebration. Jubilant partygoers cos- partygoers Jubilant celebration. raucous another staged rm Intoxicated by Genentech’s and Biogen’s interferonIntoxicated successes, and by Genentech’s Biogen’s the fi Following close on the heels the of growthhormone achievement, published in autumn as the 1980 self-proclaimed “newsletter of the ge- netic engineering industry”—stated that an estimated billion $1 had been invested in commercial development of recombinant technology. DNA magazine reported in June that the paper value of the four leading bio- companies—Cetus,tech Genentech, Genex, and Biogen—had doubled in six months to a total million. of $500 article The went on to comment that “recombinant has DNA suddenly emerged as one of the hottest invest- fi ment nancial ardor sector’s biotechnology for peak a approached If in 1980. biotechnology could produce substances as rare and valuable as the in- terferons, there seemed no limit to its commercial potential. high expectations and infl some time live up to the forecasts of miracle cures and fi Only after years of research—and discovery of a large family of distinct interferon proteins—were some transformed from orphan drugs into therapy certain for FDA-approved kinds of cancer, multiple sclerosis, and other diseases. the fi tumed as monkeys—reminders of those used in the pre-clinical trials of interferon—brandishedbananas to toast another triumph. But despite was fast becoming the new glamour sector, closely tracked by fi and investors willing to take risks anticipated for high returns. manufacturers an estimated billion $5 in global sales. that could be as important as electricity, splitting the atom, or going toback the invention of the wheel or discovery of fi An E. F. Hutton stock market analyst prone to over-promotionnology asan investment of biotech- area remarked: “You can justin feel the air. Here we are sitting the the at of a technological edge excitement breakthrough near the market and least at a semblance of sales revenues stag- before ing a public offering. RUN-UP TO AN INITIAL PUBLIC OFFERING By common standards of conventional business practice, Perkins was jumping the gun in pushing Genentech for public. to go Companies at the time usually waited until they had products one or more on or very

146 CHAPTER SIX 147 WALL STREET DEBUT nance nance aky ll his dream of 45 rst, that it would would it that rst, we could use our public nancing, which we did do suckeld, up all we’d the oxygen, and we rst. Swanson and I really quarreled about this. nancing would a price—rigorous come at Secu- 44 cient to support corporate development and to fi tability. Swanson stubbornly resisted Perkins’s proposal, t like Cetus were to be fi tional work him. for My telephone wasn’t going to ring from irate invest- ment analysts and shareholders. His was, andhe knew that. He knew that we needed to be public, but it was a huge amount of addi- of amount huge a was it but public, be to needed we that knew He The only major quarrel ever and [Bob I] had was over when to take the com- pany public. I felt very strongly that we should be the fi nail down Genentech’s position as the leader. would It be horrible if a fl outfi But public market fi I was very keen on taking Genentech public because I thought—I was right—we would dominate the fi would be to able use our new celebrity status to hire the best peoplein the world to help us All grow. of which we did. And price to set the stage subsequent for rounds of fi and which we had to have, in [negotiations in] Japan and Europe and all kinds of places. costly clinical trials. Swanson, he argued, could not fulfi a fully integrated, independent Genentech by limping along on periodic risk-capital infusions and corporate benchmark payments. And then there was Perkins’s compelling obligation to satisfy his venture-fund investors by a return in cold, hard cash. also He saw robust competitive advantages for an immediate IPO, as he recalled years later: forward with a stock offering, meant it asking public for investment ear- lier in thecorporate life cycle than was customary. Perkins Yet believed that Genentech had sooner to go than later to the public markets, where money was suffi formation to competitors in thedetailed prospectus general for distribu- tion that the required SEC of companies going public. dispute The be- came a standoff between the forceful venture capitalist and the obdurate thirty-two-year-old. As Perkins recalled: rities and Exchange Commission reporting (SEC) requirements, stock- holder and analyst scrutiny, and public pressure to achieve milestones and reach profi leery of the early timing and resistant to having to manage company a in the full glare of public and regulatory surveillance. most But Swanson’s strident objection was to revealing sensitive product and contractual in- c rst 50 The specifi 49 le lawsuit. Diamond The nitively resolved, Genentech and n was would absent)—Boyer’s be the Yet even with Yet Swanson on board, the way ce had rejected GE’s application, arguing arguing application, GE’s rejected had ce 48 He was adamant that Genentech the be fi 46 Over lunch with Swanson the Perkins next day, con- 47 ce could not issue a patent on a living microorganism, case the on patentability of living organisms was on the Until the patentability issue was defi Perkins persisted in campaigning forcefully executive for board ce to review all patent applications involving living organisms or their agreement to stagean IPO. “I want you to he know,” told board members, “that timing the [market] this?” is perfect. All the on planets are lined Are up. go to ready we was not clear. Two legalwas issues not clear. Two loomed large and forbidding, threatening the offering. the spot, asking howintended he to vote. Hesitating a moment, Boyer with always His “I vote friends.” my replied, wily the answer ice— broke everyone laughed. biotech company to reachWall Street and the reap considerable public- relations advantage of being the front-runner in a sizzling industrial continuedarea. Swanson’s resistance pushed an irked Perkins to demand a vote. With only three board members Perkins, present—Boyer, and DonaldSwanson Murfi (Lubrizol’s deciding vote. Perkins and Swanson, in heated argument, put Boyer on As was everyone associated with commercial biotechnology, Swanson Swanson biotechnology, commercial LEGAL IMPEDIMENTS with associated everyone was As was concerned about the outcome of a high-profi v. Chakrabarty Court’sSupreme docket argument for in the spring of 1980. Genentech to Wall Street. did That according it, to Perkins; he convinced Swanson to commit to an IPO. tinued his campaign. Playing strong on Swanson’s competitive streak, above all with Cetus, Perkins again raised the specter of a rival beating considered a product of nature and therefore not patentable under the Constitution.U.S. commissioner The then refused to allow the patent of- fi components until the courts arrived a decision. at result The was a back- log in of a hundred 1980 more or applications, included. Genentech’s legal questionconcerned whether General Electric could patent a bac- terium that Ananda Chakrabarty, biochemist, a GE had constructed by non-recombinant means to degrade crude oil. commissioner The the at Patentand TrademarkU.S. Offi offi patent the that other companies dealing with living organisms or their components had

148 CHAPTER SIX 149 WALL STREET DEBUT Swanson 51 cationsbeyond In time-honored time-honored In 53 eld of genetic engineering, rms desperate investment, for case. was It among the nine briefs observed, “The pending patent applications bio- [in to young biotech fi ecting potential investors, dubious of Genentech’s 54 52 Chakrabarty Wall Street Journal that system would be best strengthened . . . by the grant patents of on microorganisms. best be done by a strengthened patent system, as both Congress and the the and Congress both as system, The encouragement of domestic patent innovation is important, and that can strengthened a by done be best President have agreed. In the important fi viously, the more you can wrap patents around what doing, you’re the bet- ter off you are. fellIt Kiley to Tom to write a friend-of-the-court brief the for Supreme I was worried about a lot of things. I was worried most of the time. But you sort of put well, a brave face on and it say, maybe if the organism itself isn’t patentable, maybe some of the genes that made you’ve are patentable. Ob- technology] have become a central issue that has ramifi research.eld need small the The exclusivity companies littering the fi that patents afford to attract the capital they need to expand.” the the ried about the Court’s Supreme decision, Swanson replied: fretted thata ruling forbidding the patenting of life forms might derail a stock offering by defl ability to legally protect its living inventions. Asked if in he had 1996 wor- incentive did, and doubtless elsewhere will, it prove to be an important factor in attracting support life-giving for research.” submitted, all but one from institutions with an economic stake in the patentability of living organisms. Kiley’s brief, listing im- Genentech’s pressive run of gene-cloning successes—each pointedly noted asbut- tressed by patent applications—underlined the importance of intel- lectual property protection in attracting patent investment “the in a pathbreaking wrote, he case,” Genentech’s “In research. biomedical of area Court’s deliberation of the Chakrabarty to rely on trade secrecy or patent applications on the product and/orpro- impor- the Noting itself. organism engineered the on than rather cess, tance of national leadership in high technology: by highlighting an issue on many minds, the nation’s declining inter- declining nation’s fashion, he was the playing upon the justices’ presumed sensitivity to the minds, many on economic and social consequences issue their of decisions. concluded He an highlighting by ow ow The 57 Religious 58 The justices’ The 55 ce was process- ve-to-four decision that would become a cornerstone of cant milestone in the commercialization Chakrabarty As of December 1980, the Patent Offi Patent the 1980, December of As 56 Out of the public spotlight, Swanson and colleagues rejoiced that 59 Jeremy RifkinJeremy and his organization, Business the People’s Commis- In the June Court 1980 Supreme ruled in a fi elds of research, the Court has assured this country’s technology fu- ture.” sion as a positive sign biotechnology. for A corporate news release quoted an expansive Swanson: “The Court’s decision should accelerate the fl of investment capital high into new, technology ventures. . . . By extend- ing the of patents reach to encompass than more merely ‘traditional’ fi leaders around the world viewed the ruling as a terrifying incursion of commercial interests into the naturalworld of heavenly creation and a Genentech heralded the deci- Predictably, property. sacred denial life’s of as diametrically opposed to the public interest and argued that Congress never meant living things, engineered or not, to be patented. Supreme CourtSupreme decision in biotechnology law anda signifi of biology. sion—which had submitted the sole brief arguing against the patenting of life forms—were appalled. Their brief presented the patenting of life the decision had removed a potentially formidable legal and psychologi- Kiley had shrewdly linked the patentingliving of things to the resump- proper thetion place at of the international nation’s forefront techno- of logical invention. The patent system henceforth could be—and indeed soon was—used was—used soon indeed be—and could henceforth sibility system of proprietary ownership and subsequent commercialization. patent The securingfor private ownership of all manner of living organisms and their components. ruling removed any inherent differentiation patent law between in U.S. living and nonliving matter and opened the biological world to the pos- ing approximately two hundred applications on microorganisms. or not, and human-made inventions. buttress To its decision, the Court cited a memorable line in a Senate report maintaining that “anything under the sun made by man is patentable subject matter.” Chakrabarty’s organism was not a product of nature but instead a novel invention of his own ingenuity and hence patentable under the Consti- tution as a new composition of matter. justices The decided in a narrow statutory interpretation, deliberately eschewing consideration of related moral arguments, that the distinction was not between living and in- animate things, but rather between products of nature, whether living

150 CHAPTER SIX 151 WALL STREET DEBUT ob- cult Genentech for to go 60 cient zeal. They “aggres- asked for ] stepping up research in biotechnol- in research up stepping ] “Wall Street brokers,” Business “Wall Street Week brokers,” 62 ce of failing to pursue the matter of the the of matter the pursue to failing of ce said you could patent the microbes them- sic nancial sector avid to invest in biotechnol- Under threat of legal action, Genentech had to the resolve commented: “Now that the Court Supreme has cleared the 64 dence, was the last thing management wanted in the run-up Despite the white-hot market biotech for issues, a troublesome 63 A preoccupation of a fi 61 out [with an and IPO] others for to follow. decisionThe had an immediate effect. Corporations that had previ- selves, that was why, famous a decision—famous because intrigued it the public, amazed the public—patents on new life forms! And so turnedit a spotlight on the industry. The decision was regarded as positive the for industry and undoubtedly was a boon to the public offering. Had the case gone the other one supposes way, the emotional reaction would have been very negative, and might it have been quite diffi When the Court in Chakrabarty Ullrich’s and transfer Seeburg’s of research materials to Genentech Business Week way patenting for life forms made in the virtually lab, every big drug along withcompany, such disparate companies as Revlon, Brunswick, and Johnson & Johnson, are [ ogy.” ously held back because of patenting uncertainties now began to leap in, adopting genetic engineering techniques in one form or another. As the ownership company’s of key research materials and shaking inves- confi tors’ issue quickly. A legal confrontation with a major university, questioning served, beating “are the bushes ways for customers can a piece get of the action.” cal Looking IPO. to roadblock Genentech’s the on back memorable deci- sion, Kiley remarked: sive actionsive on the part of the University Genentech to force to compensate university][the these for unfair acts” and to establish clear “a policy con- cerning the removal the [from university] of materials that are of com- mercial use.” loomed as a formidable threat. Legal action by the University of California In February Baxter, Goodman, real possibility. a be to 1980 and appeared Rutter wrote to the chancellor UCSF accusing the university attorneys and its patent and licensing offi materialUCSF Genentech at with suffi legal obstacle to taking Genentech public remained. ogy became how to acquire equity in the privately held start-ups, now swelled by several new entrants.

65 paper to hide to paper Witnesses the for Nature 72 Why, a university at- 70 nancial reward. At a spectacular ed that he and Goeddel had made a The case, The as a journalist “rocked put it, 67 The settlement The avoided an immediate lawsuit 66 nally boiled to the surface when in the 1999 Uni- atly denied any secret pact. secret any denied atly 71 A prominent university had sued a leading biotech 68 Seeburg also testifi 69 ed vehemently and repeatedly that he and Seeburg ed technical data 1979 in Genentech’s rst annual report as a public company obliquely described one- “a Goeddel testifi Goeddel The long-standingThe problems of legal ownership of research materi- hormone and project fl never used the complementary growth in made Genentech’s UCSF at DNA the biotech world.” regarding the unauthorized transfer of insulin and growth hormone ma- terials. Subsequent negotiations raised Genen- the payment to $350,000. fi tech’s time to the payment Regents of the University of $350,000 of California in connection with restructuring a of the Company’s obligations arising research.” funded from In Kiley June 1980 metwith a university attorney and proposed that Ge- nentech make a cash payment to settle of $250,000 university grievances versity of California’s suit against Genentech infringing for trial. to its growth came patent hormone that would have set back, if not destroyed, plan Genentech’s a public for offering. company The had escaped disaster by the skin of its teeth. But the underlying legal issues would fester years. for als and patent validity fi company corroborated testimony Goeddel’s and claimed that lab note- to the “These IPO. are not circumstances,” Kiley remarked in a deliberate understatement, “in which one expects reception a good on Wall Street.” turning point in the legal proceedings, Seeburg, by then an acting direc- tor of the Max Planck Institute Medical for Research in Heidelberg, Ger- reversed hismany, sworn testimony in previous cases. He now claimed under oath that he and in Goeddel 1978 had used the complementary DNA clone he and John Shine had to express made UCSF at human Genentech’s hormone. growth company, revealingcompany, unsavory rivalries among former partners in- for tellectual property rights and major fi iment] work accordingiment] work to our plan; and then the other reason was that we didn’t want . . . anyone else instance, for to know U.C., at because might it get us into problems.” torney queried, had he and Goeddel decided Seeburg on secrecy? replied: “We felt embarrassed that we couldn’t make [the growth hormone exper- secret pact to conceal their use of the university material and that he and coauthors falsifi the UCSF originthe UCSF of the complementary clone. DNA

152 CHAPTER SIX 153 WALL STREET DEBUT

74 73 ed data. ed But Enzo’s prospec- But Enzo’s The building, The chris- 78 75 76 categorically denied ac- Seeburg’s and Nature and Science In June the group began the complicated task of com- 77 ercely attackedcredibility Seeburg’s and maintained that the In 1980 all this bitter litigation was of course in the unforeseeable fu- unforeseeable the in course of was litigation bitter this all 1980 In cusation growth that the 1979 hormone paper contained falsifi ture. board What Genentech’s the saw at time was a clear path to a public stock offering. was It then up to Swanson, Middleton, Kiley, and a bevy of outside attorneys and underwriters to prepare the preliminary prospec- tus the for IPO. closure requirements. prospectus Genentech’s was a particular challenge to write: no useful model existed, and rumor was that the would SEC fo- cus close scrutiny on a publiceld. offeringEnzo in Biochem, a virgin a fi company producing restriction enzymes went and probes, public DNA out. sold quickly that offering an with June, that posing a document that had to describe the business, company’s serve Genentech as stock a marketing tool, and also follow exacting dis- SEC UCSF’s new MissionUCSF’s Bay campus in San Francisco. The juryThe was unable to reach a verdict; the court scheduled a second trial Januaryfor In 2000. the interim, the two parties came to a settlementin that ended1999 the drawn-out and exorbitantly expensive legal proceed- ings. Genentech agreed to pay the university million $150 and to make a million$50 contribution toward construction a research of building at Seeburg’s letter,Seeburg’s published in the two journals alongside Genentech’s, repeatedhis charge that a plasmid he and Shine constructed UCSF at wasthe source of the growth in DNA Genentech’s hormone experiment. nentech’s heavilynentech’s guarded contracts. preliminary The prospectus last at completed and submitted to the on August SEC, Genentech 19 issued a tus was of little attorneys help, Genentech for concluded, inadequately describing the emerging biotechnology industry and its risks. With no model no to protocol due follow, diligence, for no industry standards to guide them, the group quibbled among themselves and with the SEC over which risks should it disclose and how much had it to reveal of Ge- his reversal in testimony. Eight Genentech scientists in subsequent let- ters published in books showed the independence of the research. company’s A Genentech attorney fi personal fortune in legal damages likely to ensue to him the (and other inventors if the on the patent) UCSF university won the case motivated tened Genentech Hall, stands today the at center of campus, a symbolic reconciliation—or so both sidespointedly portrayed—of two long-term research. biopharmaceutical of protagonists

85 cials. cials. nitely delayed delayed nitely rst six months Promise and pos- 81 Fred Middleton Fred inad- 80 79 The SEC was SEC The incensed and rm in the fi nancial world was ecstatic. 82 The outside The attorneys sprang 83 84 uence the value of its stock. Middleton elding telephone calls from the press and The prospectusThe disclosed that the fi

On October 8 the approved a share SEC a surprising price of $35, $5–$10 The preliminary prospectus anticipated an offering in September September in offering an anticipated prospectus preliminary The Wade’s skepticism was notWade’s the rule; the fi higher than the previous range, and set an IPO date of October 14, 1980. high price given immaturity Genentech’s and notable lack products of sales. and 1980 of one million1980 shares, priced per between and share—a $30 $25 were out there actively hyping the deal.” nothing publicly that could infl was aghast, panicked that IPO Genentech’s would indefi be as the waited SEC the for publicity’s effects to what fade. us “That’s got into hot water with the SEC—the so-called gun-jumping claim,” Middle- ton recalled. “Because of all the stories in the media, the thought SEC we placed an immediate hold on the pending Publication IPO. of such specu- lations was a clear violation of the SEC-mandated period” “quiet before and immediately after a public offering during which a company is to say tional sleuthing and reiterate in the article a statement falsely attributed to goals Swanson million to have were revenues that $100 Genentech’s of in the and late a staff 1980s of one thousand. panting investors, all wanting more details of the public offering. He tried to abide by dictum SEC that all Genentech personnel were to re- strict public comments to information contained in the prospectus. Yet Middleton agreed—naively as he later admitted—to an interview with a addi- do would reporter the that anticipate failed to He local newspaper. sibility, rather than products and earnings, fueled the speculative mo- mentum building over the Genentech offering. Middleton spent his days fi value of our company is based on its future potential.” vertently agreed: think “I he toldjournalist, a fair it’s to say,” “that the into action, one in particular playing on his close ties with offi SEC After a rough period in which the IPO came close to disintegrating, their arguments had the desired effect: the relented, SEC lifted the hold, and offeringallowed to proceed. Genentech’s brief press release announcing registration its of securities withthe SEC, a mandatory preliminary toa public offering. of 1980 had earned $81,000 on revenues of $3.5 million, a disheartening disheartening a million, $3.5 of revenues on Science a in $81,000 observed earned bitingly had Wade 1980 of Nicholas As ratio. earnings price-to- editorial, “The company mine.” is not yet a gold

154 CHAPTER SIX 155 WALL STREET DEBUT ling ling —let the buyer 89 Caveat emptor Caveat

87 nal prospectus made Genen- ecting current qualms about the . Genentech. expected issued to be patents, Furthermore, with universities also fi also universities with Furthermore, 86 Chakrabarty Here for the public to see was clear evidence, so it seemed, 88 cally for human use. The media picked up on Genentech’s seeming seeming up on Genentech’s picked cally for human use. The media In September Swanson, Perkins, Middleton, Boyer, and three repre- Four pages of glossy colored photographs and a diagram inserted mid- and a diagram inserted colored photographs pages of glossy Four theprospectus stated, but cautioned that “there can no be assurance as to the breadth or the degree of protection which these patents, if issued, will afford the Company.” tor meetings called they shows,” “road pitched Genentech to the money managers in resolute efforts to sell blocks of stock. City after city, country sentatives of the lead investment banks, Blyth Eastman Paine Webber and Hambrecht & Quist, made the rounds of American and European stockbrokers and pension and mutual funds. In a grueling series of inves- to Middleton, developed the pending IPO “into a frenzy.” the pending to Middleton, developed stricted by a conservative SEC, told an unremittingly cautious story. The story. cautious unremittingly stricted by a conservative SEC, told an on company appeared told another: this pioneering and diagrams photos tailored a revolutionary of producing class of pharmaceuticals the verge specifi ability to carry promise and, according through on this groundbreaking of tangible recombinant drugs, bottled, labeled, and apparently ready for and apparently recombinant drugs, bottled, labeled, of tangible The prospectus text, restrained and re- treatment. sale and use in patient maceutical fermenter and a fi nal shot of “the Company’s products”—six nal shot of “the Company’s and a fi fermenter maceutical Human lled with substances and labeled white bottles partly fi labeled Interferon, Human Proinsulin, Growth Hormone, Human Leukocyte and so on. sketches of research materials, led the reader step-by-step through images led the reader step-by-step materials, of research sketches and ended stages, and manufacturing development of pharmaceutical bedside over by a patient’s and nurse standing a physician by picturing The last page in the insert, titled “Health Care Applications.” the caption Process,” depicted a scientist dwarfed by a huge biophar- “Manufacturing beware—was the message on every page. dia- two-page A sophisticated belied the warnings. way in the prospectus “The with Process” began gram under the heading Product Development the decision in the Conforming to requirements, SEC the fi tech’s high degree of risk abundantly clear. Inerty regard protection, was it equally dour, to refl intellectual prop- unsettledstatus of patent rights in biotechnology, above and beyond warned, to a “highly volatile” share price. for patentsfor in biotechnology, Genentech unknown faced if fees had it to license outside patents. numerous The risks theadded prospectus up, , in nancial side, Bob gave the 90 nancial expectations—to soar. Economist The nding an overwhelmingly enthusiastic response everywhere it it everywhere response enthusiastic overwhelmingly an nding Diagram of “The Product Development Process.” (Initial public offering prospectus, Genen- didn’t know what to ask. There were no experts, there were no analysts. analysts. no were there experts, no were There ask. to what know didn’t Everybody was just amazed. the beads and showed how you spliced genes together. A very simplistic little model. The fact that professor a UCSF was up there explaining had it everyone mesmerized. I gave the talk on the fi talk on the strategy, Herb gave the talk on the technology. was It pretty elementary. Every time we asked questions, for there People weren’t any. People just listened and gaped. up and got Herb did [Boyer] his trick with the pop beads, showing how recombinant works. DNA . . . Basically, we had a little clear plastic box with pop beads in it—the baby toys that popped together. was box] [The supposed to represent a bacterium.He took out drugs. A simple model and straightforward presentations allowed imaginations—and fi The lengthsThe to which the team went to explain the technology were laughable, but the pitches in worked conjuring up images of miracle went. Middleton recalled: Fig. 17. 17. Fig. tech, Inc., October 14, 1980.) after country, the team trotted out an story upbeat pros- of Genentech’s pects, fi

156 CHAPTER SIX 157 WALL STREET DEBUT Unfazed by Genen- 92 A Hambrecht & Quistbanker com- 91 93 Fred Middleton and Herb Boyer, on a break during the IPO road show, Zurich, Switzerland, going through Europe. did two We cities From Tuesdaya day. through Fri- day we did Paris, Geneva, Zurich, Edinburgh, ar- London. Glasgow, We’d rive tell a city] [in and we’d my wife, “We’ll be back in two hours. . . . Have fun looking around.” Judy and married I got in Florida on September 2, a Thursday, I think. We had a weekend together in Paris, and then we were joined by seven men for the road showthrough Europe. was It Snow White and the Seven Dwarfs For Swanson,For the timing show’s road was far from perfect. He had situation: tech’s shakytech’s valuation, lack products, of and multiple risks, and brokers investors snapped up all available shares, leaving many empty-handed and vociferously disappointed. married in September and, with the found IPO his delay, honeymoon un- expectedly intersecting with He described the show. road the improbable September 1980. Compare this image of Boyer the entrepreneur with the image of Boyer the scientist on p. 14. (Photographer unknown; photograph courtesy of Fred A. Middleton.) Fig. 18.Fig. an article entitled “Frenetic Engineering,”commented that the “mys- tique of geneticengineering” to create “medical wonders” had built an extraordinary market the for shares. mented, “We’ve neverseen interest like this before.” cer a at called it called it It was It reason 103 t of nearly mil- $70 rm 22 years. I have have I years. 22 rm rst boy millionaire Twenty-six-year-old, The explosive The run-up 97 102 nanciers were impressed. The founders’ The initial in- $500 99 101 gain rst-day in Wall Street history. Swanson, “the fi “the Swanson, rst investor, shares its 938,000 pur- 100 But not only fi Even the staid Wall Street Journal 98 96 It was, It Perkins recalled, “the hottest stock of- 95 ung the stock market on its back heels, the ac- magazine dubbed him, hurried home to celebrate celebrate to home hurried him, dubbed magazine , titled “Gene Splicing Company Wall Street,” Wows Based on the closing price, the value company’s was an 94 Esquire Science Boyer and Swanson, holding shares 925,000 became apiece, instant ected the science community’s astonishment investors’ at stampede cates and found he was worth more than a million. major brokerage commented,major brokerage have “I been with the fi anything this.” like seen never and frenzied response fl celeration in share price prompting headlines worldwide. An offi multimillionaires, each reaping a one-day paper profi lion. whose Boyer, salary as a full rushed professor was around $50,000, out to purchase a Porsche Targa. airplane mechanic to an inconceivable peak of fame and fortune. For For fortune. and fame of peak inconceivable an to vestments in Genentech had vaulted the sons of a railroad mechanic man and an airplane Kleiner & Perkins, fi Genentech’s chased a reported at each were, in average of $1.85 the baseball terms Perkins appreciated, a phenomenal home run. estimated $532 million. $532 estimated An article in in article An $10,000-a-year graduate student$10,000-a-year Richard Scheller dug out his stock cer- tifi fering in history to that time.” of investor demand. A minute after the opening bell, the share price sky- to $80—therocketed from $35 fastest fi priceThe peaked within $89 at twenty minutes, rose and fell over the course and of the ended market $71 at day, at close. Genentech had raised million. $36 over By October excitement over imminent Genentech’s offering had reached fever pitch. Investors breathlessly awaited a chance to buy a piece of hot biotech action. On October 14, shortly after market opening, Genentech, under stock the symbol NASDAQ GENE, million offered 1.1 shares sale. for last-minuteThe increase in shares from 1 million indicated the strength The unpropitiousThe start to wedded life could have carried a dire warning, but a happy marriage and the birth of two beloved daughters ensued. THE IPO of biotech,” as of biotech,” with his new and much wealthier bride. “one of the most spectacular debuts in memory.” in debuts spectacular most the of “one refl to buy stock in a genetics-based company.

158 CHAPTER SIX 159 WALL STREET DEBUT

106 With

oat had oat eld. of- The The only The black cloud 105 Some speculate that Boyer’s 107 104 eld day covering the stunning public entrance of a understand was that everyone expected gene cloning to be “the did Prestigious though the Lasker was, was it not the Nobel Prize. 108 The mediaThe had a fi For GenentechFor employees, the IPO was a startling revelation. their To Colleagues wondered how the Nobel committee came to ignore Cohen and far Boyer’s more seminal invention. colleague Dale Kaiser, received the Albert Lasker Basic Medical Research laying work for Award, the technical foundation genetic for engineer- ing. “going commercial’“going in founding and advising Genentech may have upset committee members and killed his chance, and consequently Cohen’s, receivingfor the prize. In November Cohen, Berg, Boyer, and Stanford for eightfor thousand dollars. . . . After had we public, gone the stock price went and up up and At some point, up. these eight hundred shares were worth more than a million dollars. And I bought a used that, for Rabbit a god!” Oh Rabbit. million-dollar to celebrate with another everyone, Not reefer. however, made a killing. Ullrich was among the few who lost out. had “I this car that I bought for which was$250 breaking down all the time.So I decided I would buy a used VW the I sold, I think, So [before Rabbit. IPO] eight hundredshares by surprise and perhaps put a temporary damper elation. on Boyer’s was announcement, Stockholm’s by strange coincidence on the very day of the of the IPO, award of a Nobel Prize in Chemistry to Paul Berg, Wal- ter Gilbert, and Frederick manipulation Sanger DNA for and sequencing. prize—andThe its glaring omissions—caught a nonplussed Stan Cohen runner in what could now be seen as an emerging industrialfering’s roaring success awakened them to the realization that the stock fi 1988 and 1990, respectively, and both and received1988 1990, the National Medal of Tech- nology in 1989. amazement, the struggling start-up they had labored to keep afl gained an instant trove of cashand become theacknowledged front- the singular power and reach of their method more evident with each passing Cohen year, and Boyer received the National Medal of Science in cornerstone future of a billion-dollar industry.” of a new industry. Reporters and camera crews—CBS anchorman Walter Cronkite and the among BBC them—packed into the unprepossessing “world” headquarters of Genentech, doubtless Inc., unimpressed with the setting and only vaguely understanding the technology. What the media company with the aura of revolutionary medical cures and premonitions - nancial nancial Following 110 109 eld. . . . Of course the last thoughts decision, approval the patent’s and ce issued on a “Process for patent 4,237,224 nancial reap the for stockthat I owned. This was 111 rst major patent in biotechnology. The very fact that it issued issued it that very fact The in biotechnology. patent major rst rstthought on that day the was [of IPO] that Genentech went from Public demand to own shares in the expected biotech bonanza re- The endThe of the year brought another encouraging event. On Decem- cushion to rest on a bit. . . . There was also an excitement and pride about being the at cutting edge of thisnew fi were own about [my] fi more money that I ever thought of attaining that at point in my life. And just like that,there it was—kind of shocking. My fi being a research boutique to becoming a “real company” with publicly traded stock. Up till that point, money supplies for or our for paychecks was not a guaranteed thing. . . . Now all of a sudden we had a fi mained a time for sky-high and had a spill-over effect on other indus- dure, the fi (after six trying years of major political and legal obstacles) built confi dence that the government would indeed grant patent protection broad on fundamental inventions at theseventy-two companies, heart including Genentech, had licensed the of technol- biotechnology. By Decemberogy from Stanford, a relatively for low annual 15of $10,000. fee ber 2, 1980, the U.S. Patent Offi the U.S. ber 1980, 2, Producing Biologically Functional Molecular Chimeras.” was It the now- famous pioneering patent on the recombinant Cohen-Boyer proce- DNA and legal standing of patents in biotechnology were far from completely wideresolved, the patent’s Cohen-Boyer scope, dominant position, and reasonable licensing were stabilizing fee and reassuring factors in the heady but uncertain business and legal environment of biotechnology in the early 1980s. within six months of the Chakrabarty its rapid licensing further gave reassurance that intellectual property in biotechnology could be legally protected and successfully licensed. More than that, the patent Cohen gave and invention Boyer’s legitimacy and potency in the eyes of the Although law. problems regarding the viability recalled his reaction: they had so casually accepted suddenly hadto real sink in that Genentech monetary was not only a place to do frontier science but value. It began also where a scientist could had make perhaps DNA big money. money, acquired highly visible dollar signs in more ways than one. Dan Yansura

160 CHAPTER SIX 161 WALL STREET DEBUT

115 By By 113 Here 116 cant cant departure eet of entrepreneurial In the wake of Genentech’s Genentech’s of wake the In 114 Appetites were indeed whetted. In- were Appetites 112 rms of lesser note—all inspired by Genen- predicted—correctly, it turned predicted—correctly, it the out—that rst industrial multimillionaire. admiring For sci- Cetus cofounders Ron Cape and Pete Farley avidly took note. Farley But not only institutions were transformed. IPOtrans- Genentech’s ceutical research. the Before IPO window closed eleven in 1983, biotech companies, in addition to Genentech and Cetus, had public. gone The 1980–81 period 1980–81 The would see the creation of a fl biology-based companies—Amgen, Chiron, Calgene, Molecular Genet- ics, Integrated Genetics, and fi exampletech’s of a new organizational model biological for and pharma- of going public until least at mid-decade. then stock Genentech’s price had dipped nearer below the $45, offering But the companyprice had of $35. already made its mark as a trailblazer and inspiration others. for had stated as recently as August that 1980 his company had no thought from conventional business practice. A few abruptly changed their busi- ness plans. Economist The lively action in Genentech stock would “whet appetites other for glamor- ous share offerings expected soon.” ial, research-based companies took note of this signifi this of note took tries. blazing Genentech’s good fortune exhibited to rapt a audience that companies a company without products and substantial revenuescould nonetheless raise impressive amounts of public Executives money. of entrepreneur- research-based ial, vestors were reported to be “positively salivating” over Computer, Apple which, following lead, Genentech’s went public in December 1980. ful company with all the rewards and renown that entailed, why couldn’t media The they? reinforced image Boyer’s of thesuccessful astoundingly entists laboring at meager academic salaries in relative obscurity, he he obscurity, relative in salaries academic meager at molecular biology’s fi laboring entists became a conspicuous inspiration how for their own research might be reoriented and their reputations enhanced. If unassuming Herb—just a guy from Pittsburgh, as a colleague observed—could found a success- was the rush gold Nicholas predicted. Wade formed Herb the Boyer, small-town guy blue-collar of origins, into nology company, raisenology obscene company, amounts hire of money, employ- good ees, sell stock to the public. Our competitors started doing all of that.” precedent-breaking IPO, he and Cape had a sudden change of heart; sudden of a change had they and Cape he IPO, precedent-breaking precipitously dropped the previous timetable and rushed out plans a for PerkinsMarch IPO. 1981 noted the fertileseeds Genentech had sown: “[Ge- established IPO] nentech’s the idea that you could start a new biotech- His His eet of eet 118 was new It was It not 121 122 Two months Two 117 nancial invest- nancial ung, interactive net- interactive ung, But for the But for outside world of ip side of the icon was merce- was icon the of side ip cover, accompanied cover, by the by- 119 Time cance of such connections in biomed- Although university-industry associations associations university-industry Although 120 t and in doing so gain possible riches and the satis- rst time in the history of their discipline, molecular biologists had a Genentech’s triumphalGenentech’s public debut was neither predictable, pre- Not everyone was happy with the new commercialism, or with Boyer A path had the been for broken growth of a far-fl determined, nor inevitable, whether taken from the standpoint of tech- later portrait Boyer’s appeared a on line, “Shaping Life in the Boom Lab—The in Genetic Engineering.” mercial and personal gain. contention The was but an early stage in an issue still debated in biotechnology: how bestto balance basic and com- research? academic in interests mercial beaming and face mop of unruly curls fading into a background of DNA helixes suggested his close and lucrative link with the genetic substance. Boyer had become an icon of biotechnology. and colleagues themselves. some, the com- To fl private into public the by funded research turning scientists nary on the new commercialism entering American life science was as varied as the individuals expressing them. One thing, however, was certain: for the fi plethora of discoveries that might be commercialized and the incentives of theto do age The so. entrepreneurial biologist had arrived. a situation that every academic took lightly. variety The of perspectives scientist-entrepreneur. In 1981 he was one of four runners-up to Presi- to runners-up four of one was he 1981 In scientist-entrepreneur. Time magazine’s man of the year. in Reagan Ronald dent that riveted imaginations and stoked dreams. Academic scientists from now on would increasingly seize opportunities to put basic research to practical social benefi faction of seeing their research made useful to society. 1980, it wasit the1980, dazzling vision of what commercial biotechnology might accomplish in medicine, agriculture, energy, and chemical production as 1983, an observeras 1983, an of emerging biotechnology industry could claim with some accuracy: “Just about every leading molecular biologist in the fi industrial of consultancy, form some has States United ment in a new biotechnology or direct salaried involvement.” were in no way new, either in the United States or abroad, what what abroad, or States United the in either new, way no in were was the explosive growth and signifi ical research from the onward. 1980s In this, Genentech, in the persons of Boyer and Swanson and their young acolytes, had As led the early way. work of relationshipswork between academic biology and an expanding fl biotechnology companies.

162 CHAPTER SIX 163 WALL STREET DEBUT centered not On the contrary, as this history illustrates 123 magazine cover of Boyer, March 9, 1981. (From TIME © March 9, 1981, TIME, Inc. All cance a new for industrial sector were emphatically Time solely upon its technology. nology, politics,nology, cultural precedents, social norms, or the variable fac- tors of human motivation and performance. Important as recombinant techniquesDNA early were, Genentech’s evolution, social impact, and signifi Fig. 19. 19. Fig. rights reserved. Used by permission and protected by the Copyright Laws of the United States. The printing, copying, redistribution, or retransmission of the Material without prohibited.) is expressmission written per- time and again, Genentech and the origins biotechnology of were far nancial, and business decisions molded, shaped, stymied, c, fi to emerge. to market future debut. company’s The would roller-coaster be a ride of business ups and downs, vanguard medical achievements and disastrous decisions, aggressive patenting and incessant litigation. drew as But 1980 to a close, Genentech counted asa technological, corporate, and cultural experiment that against the odds had turned out well enough to serve as a bellwether and malleable template of a biotechnology industry about more than the successful industrial applicationa novel of technology. A concatenationof political, social, and economic factors and strategic scientifi and encouraged rise Genentech’s to the temporary pinnacle of its stock

164 CHAPTER SIX Epilogue

Genentech’s sensational public offering conveyed more than the arrival on a spotlit stage of a transformational technology. The fi rm was the clear and acknowledged front-runner in commercial biotechnology. On signifi cant fronts, Genentech had gotten there fi rst and led the way—in fi nancing and industrializing a basic-science procedure, organizing a new kind of business and legal structure around it, and winning scien- tifi c, corporate, and public investment and acclaim. Its founding genera- tion had reaped the advantages of pioneering a virgin industrial fi eld— free choice of research projects, fi rst option on hiring appropriately trained scientists and managers, no intimidating wall of biotech patents to scale, and an identity and set of accomplishments setting it apart from competitors. In so doing, the company created a new and expansive so- cial and cultural arena for economic activity in biomedical and pharma- ceutical research. Genentech exemplifi ed a novel corporate form and milieu for busi- ness in biology, notably different from anything the pharmaceutical industry offered: the small, fl eet, entrepreneurial fi rm in which innova- tive, close-to-basic research—often equal or arguably superior in quality to that of top academic labs—was the dominant focus and effort. Its cul- ture, melding academic and corporate attributes and penetrating tradi- tional institutional boundaries, bespoke biotechnology’s uniquely close conceptual, material, and human interconnections with the research university. The fi rm’s scientifi c successes helped to erase the stigma as- sociated with industrial research and inspired a long line of academics to create, join, or consult for biotechnology companies.

1 rm’s rm’s cant ingre- cant rm headed to- headed rm 2 led a lot of patent applica- agging insistence on product product on insistence agging And because research was the 3 rm’s freewheeling, go-for-broke freewheeling, go-for-broke rm’s The fi The 4 ts. While Cetus and executives Biogen rst generation of scientists who were singu- rm’s success andrm’s future viability. Again, was it ned, in a sense, the intellectual property landscape ung talent, time, and money over a range of diverse scal responsibility kept industrially inexperienced scientists scientists inexperienced industrially kept responsibility scal Underlying achievements Genentech’s was the prime importance would eventually cross ourselves. They had fi defi had they so tions, biotechnology].[in They had raised so a lot they of money, proved could it be done. They had recruited outstanding scientists. There’s no questionThere’s [Genentech] was a model many for of us. First of all, Genentech had already successfully traversed a lot the of ground thatwe Genentech’s imprintGenentech’s the on shape of the biotechnology industry larly important to the fi Swanson who commented: “If the research goes well, we can handle the rest of the problems of the world.” heart the of the basis company, upon which the early enterprise would sink or swim, was it the fi of its people. As Swanson profoundly appreciated, they were the fi most valuable resource. of our “Most he was wont to technology,” repeat, “walks out every night in tennis shoes.” When cofounding Amgen in 1980, George Rathmann recalled that he he that recalled Rathmann company with a seata stock on exchange. Genentech George provided organi- 1980, in zational prototypes and cultural practices that entrepreneurs and sci- Amgen entists could use as starting points loose emulation for and adaptation. cofounding When turned to Genentech inspiration for “how for heed- the you get done,” job ing its templates raising for money and forming corporatealliances. to was come and broad consequential. had it blazed By 1980 a trail that manyyoung companies would follow: from venture capital–supported to contract-researchstart-up, organization, and, if fortunate, to public Edward Penhoet, cofounder Chiron of likewise in 1981, acknowledged its trailblazer: and exemplar as status held a loose rein and fl managers coming to Genentech but also counted as a signifi dient and treasured asset. unfl Swanson’s focus and fi supported and in line with business objectives and the fi ward products, patents, and profi culture—an electric distillation of individual high energy, creativity, and creativity, scientists energy, keep high to helped individual of only distillation hubris—not and electric culture—an competitiveness,

166 EPILOGUE 167 EPILOGUE ckle and ckle cult transi- cult Those compa- impos- or cult 5 nancing round, nancing often fi ne chemicals, and pharma- cult science of making novel and eld, its scientists had plucked the nancinground by fi nancial problems and diffi cult to realize, fi realize, to cult ight of university biologists into biotechnology companies, uctuating and undependable. Genentech itself foundered in the By 1985 the biotechnologyBy 1985 industry had attracted billion over $3 in capi- The troublesThe accompanying therise of a new industry were not only company, the fundamentalcompany, centrality of science wouldendure as a dis- tinguishing characteristic of Genentech and the biotechnology industry generally. more tal, and industries as diverse as agriculture, fi ceuticals had least at some geneticengineering capacity. projects, Swanson sailed close to the wind, keepingthe early company steadily track on and advancing, fi byproject corporate project, alliance by corporate alliance. Although business and governance would assume ever-greater roles in the public and licensing that began in earnest in continue the (and 1980s full force bonds that Genentech had formed with the University of California in and thatthe later 1970s start-ups would duplicate with other universi- ties sent both expectant and anxious tremors down the corridors of aca- deme. fl The the surge in faculty consulting, and acceleration in university patenting Hoffmann–La Roche rescued the company in percent 60 a buyout, with a future option to purchase the entirety. internal. One of the most immediate was the relationship the of budding biotechnology industry and the American research university. tight The short-term, regulatory agencies more demanding than expected, litiga- tion commonplace and and public costly, policy and the economic cli- fl mate mid-1980s, undergoing profound fi tions the at executive level. Swanson wasout, Kirk forced Raab stepped and its overhypedup, failed tPA to meet market projections. In 1990 to its competitors, and to itself, the diffi complicated pharmaceuticals, stimulant such Epogen (a as Amgen’s of blood cell formation) and tissue Genentech’s plasminogen activator (tPA, a dissolver of blood young The clots). industry found that marketable products were surprisingly diffi nies premised on pharmaceutical manufacture found 1970s Genentech’s production of one recombinant protein after another diffi sible to emulate and sustain did Genentech (as itself). With the advantage virgin a in fi position front-runner a of low-hanging fruit—replacement proteins existing for drugs—and left

As As 6 The Nation c openness c erce competition, competition, erce ts, worrying ethi- rst time, but in the table but also the pro- rst century) generated long-winded anddebate conten- In the decades ahead, Genentech would misstep, suffer failed projects, American research universities, particularly those with strong pro- strong with those particularly universities, research American focus on pharmaceutical manufacture human for application, encour- agement of individual creativity, and a university-like culture—remain over-promote products, endureover-promote press, see bad its libertine culture tamed, and undergo the challenges of corporate expansion, fi and near-constant litigation. the fundamental Yet principles upon which Boyer and Swanson created the company—the primacy of research, a academia, industrial, economic, and proprietary interests would breach the fortress of academic biology to an extent and intensity previously unknown, carrying social benefi practical numerous cal concerns, and profound cultural and attitudinal changes that society continues to both welcome and debate. As such ties became commonplace and widely accepted in American capitalists—built American bridges between molecularfervidventure science in industrial world,they experiencedand the accepted the exhilaration of making widely their and research practical and sometimeshighly profi fessional and personal trials of plowing commonplace commercial ground which for guidelines. inadequate had institutions research became biomedical American ties such As tions they work for, they have clear economic interests to protect.” to have traditionally defended interests the purity of their research, can nolonger economic with clear have claim to be white-coated keepers of objective they truth. lockstep Like the institu- in for, often work they tions entrepreneurs, academic the of Boyers, Gilberts, and Weissmanns—to be followed in the by an 1980s string interminable Although university-industry associations were in no way new, either either new, way no in were associations ing the mounting industrialization of theAmerican research university-industry university. Although in the United what States or abroad, was 1980s. new was the the explosive of growth research biomedical U.S. in connections such of observed, just among one voice the many: biologists, “Academic who 1980s with1980s an energy and pervasiveness that was entirely new to the discipline. grams in molecular a time were for biology, in turmoil as they struggled to develop policies to balance academic traditions of scientifi and exchange with the privatization andproprietary claims accompany- in the twenty-fi the in tion within and outside academia asthe traditional walls between the two spheres grew increasingly porous. ivory The tower of academic bio- medicine was being scaled, certainly the not for fi

168 EPILOGUE 169 EPILOGUE cult- rst-century company operates. to-treat diseases. In 2009 Hoffmann–La Roche acquired the remaining 40 percent billion. of the company $47 for the foundationupon which the twenty-fi Under the direction of Arthur Levinson, third chairman and chief ex- ecutive, Genentech could on thirty-some back look years of productivity and a current line of much-used therapies cancer for and other diffi

Notes

CHAPTER 1

1 Boyer oral history, 1994, 41. 2 Boyer, transcript of talk, 1992. “Winding Your Way through DNA” symposium, University of California, San Francisco, September 25–26, 1992. 3 Cohen oral history, 2009, 2. 4 Boyer interview, 2009, 3. 5 Boyer interview, 1975, 4. 6 Ibid. 7 J. Michael Bishop, introduction to Boyer oral history, 1994, x. 8 Cohen oral history, 2009, 8. 9 For a history of the laboratory use of restriction enzymes, see Roberts 2005. 10 Boyer interview, 1975, 9. 11 Boyer interview, 2000, 20. 12 Much early work in molecular biology focused on bacterial viruses (bacteriophage). See Cairns, Stent, and Watson 1966. 13 For a history of bacterial drug resistance, see Creager 2007. 14 For a history of the use of plasmids in research, see Cohen 1993 and his oral history, 2009, 25–30. 15 Cohen oral history, 2009, 18. 16 Kornberg oral history, 1997, 22–25. 17 Berg oral history, 1997, 113. 18 Cohen, e-mail message to author, June 28, 2010. For fi rsthand accounts of the science and culture of Stanford biochemistry in the 1970s and 1980s, see the Kornberg oral history, 1997, and Berg oral history, 1997. For Cohen’s views on his relationship with Stanford biochemistry, see his oral his- tory, 2009, 19–20. 19 Cohen, e-mail message to author, June 28, 2010. ce correspondence, Stanford c sequences from prokaryotic hrough undated DNA,” transcript [1994], DNA intoDNA independently replicating bacterial plasmids.” Cohen oral history, Boyer 2009, 55. remarked: remember “I don’t that ar- Cohen oral history, 2009, 51. Boyer interview, 15. 1975, Cohen et al. 1973. The relevant sentence is: “The general procedure described here is potentially useful insertion for of specifi [microbial] or eukaryotic [animal] chromosomes or extrachromosomal Boyer oral 34–35. history, 1994, Cohen oral history, 2009, 49. accountsFor of this and the two subsequent experiments, see 49–52, ibid., and Cohen 1975. The Boyer quotation comes Beginnings: from “Biotech’s Genenlab by produced humorous laboratory notebook facsimile a a of Notebook,” Genentech on its twentieth anniversary. Boyer, videotaped interview produced an for educational series, t Way “Winding Your tape 9, p. 3. Cohen oral history, 2009, 48. Quoted in Boly 1982. Sharp et al. 1973. University. Cohen oral 43–48. history, 2009, Cohen and Boyer concur that the walk to the deli occurred after a day of conference presentations. Stanley Falkow, a participant in the walk, believes that it happened on the evening before the conferenceBoyer, e-mail message to author, January began. Falkow, 2010; e-mail 18, message to author, August 1, 2009; Falkow 2001. For Cohen’s work on drugFor Cohen’s interactions, see his oral history, 2009, 22–23. Cohen et 34–36; al.Ibid., 1972. Mertz and Davis Sgaramella 1972; 1972. Hedgpeth et al. 1972. For a history of this work, see Berg oral and Yi 2008. history, 1997, Cohen to Boyer, October offi Cohen’s 24, 1972, Boyer interview, 2000, 53. For Rutter’s strategyrevitalizing for the biochemistry UCSF department, see his oral history, 20–43. 1992, WilliamRutter, J. Annual Report, Department 1970, of Biochemistry molecular For and Biophysics, UCSF. biology’s orientation to the study of higher organisms, see Morange 1997. Boyer oral history, 25. 1994, Jackson et al. 1972. 70. oralBerg history, 1997, 1982. Boly For a history of social accountability in genetics, see Weiner 1999. Boyer interview, 19–21. 1975, 49 45 46 47 48 41 41 42 43 44 37 37 38 39 40 35 35 36 29 29 30 31 32 33 34 25 25 26 27 28 20 20 21 22 23 24

172 NOTES TO 8 –17 173 NOTES TO 17–21

E. coli E. , May 21, ribosomal that DNA genes specifying , November 24, 1980. E. coli E. San Francisco Chronicle ce of Technology Licensing, Stanford culties that might entail. Contrary to , May 1974. 20, Wall Street Journal Paul Berg and Janet Mertz remarked: 2010 “The sociology among most U.S. lifescientists prior was to the to eschew 1970s patents, believing that they , June 17, 1974, 54.“The Gene Transplanters,” Newsweek 1974, , June 17, Treatment here of the Cohen-Boyer patenthistory is based on the more comprehensive history in Hughes 2001. Victor K. McElheny. “Animal Gene Shifted to Bacteria; Aid Seen to Medi- cine and Farm,” Times New York Cohen 1982. Morrow et al. 1974. News release, Stanford University News Service, patent May 1974, 20, correspondence S74-43, 1974–80, Offi University. See, example, for Hotchkiss 1965. Genes,” Manufacture to Bacteria “Getting 1974, 6. Berg repeated his claim in Berg and Mertz 2010. Cohen, e-mail message to author, October 5, 2009. Quoted in Kathryn Christensen, “Gene Splicers Develop a Product: New Breed of Scientist-Tycoons,” Boyer, “Winding Your Way through DNA,” tape 8, p. 8. Boyer oral 46–47. history, 1994, “Actually that at conference I talked to John Morrow about cloning eu- karyotic [animal] and DNA the diffi the recent article by Berg and Mertz, he [Morrow] did not approach me but rather shared the information that EcoR1 laevis cut X. he had received from [his adviser] Don Brown. He offered to provide some to me and suggested I that he should be a coauthor if the experiment should be successful.” Boyer, e-mail message to author, October 5, 2009. Boyer oral Some history, thirty 107–10. 1994, years later, Berg and Boyer hotly debated whether Boyer or Morrow suggested the frog experiment. Paul Berg contended that was it Morrow, having who, found that EcoR1 cut the frog once,DNA approached Boyer about “inserting the [frog] samplesrDNA into plasmid.” Cohen’s Berg, e-mail message to author, 2008.October Boyer, after 27, reading e-mail Berg’s assertion, responded: The sentence reads: “The replication and expression of genes in thathave been derived from a totally unrelated species . . . now suggest that interspecies genetic recombination may be generally obtainable. Thus, mayit be practical to introduce into metabolic and synthetic functions photosynthesis, (e.g., antibiotic production)indigenous to other biological classes.” Chang and Cohen 1033. 1974, rangementwith Stan. However, Stanley was reasonably secretive about what he was Boyer doing.” oral history, 102. 1994, Falkow interview, 73–74. 1976, Betlach oral history, 14. 1994, 70. 1978, Lear in Quoted 67 63 64 65 66 59 59 60 61 62 55 55 56 57 58 54 54 53 53 50 50 51 52

le 74-134-1, le The Story DNA ce of Technology ow of information and reagents and impede the ce of Technology Transfer, University of California. c research, see Vettel 2006, chaps. 5–7. of cloning from of DNA all kinds of organisms. was It like the Boyer oral history, 71. 1994, Boyer interview, 2000, 9. doing a lot Betlachzoo.” oral history, 16. 1994, Boyer interview, 2000, 9. Bill Carpenter memo Herbert re: Dr. to File Boyer, September S74-43, Offi patent correspondence S74-43, 1974–1980, 1974, 18, Licensing, Stanford. and General Standards,” March Arthur 11, 1977, Kornberg Papers, SC359, Green Library, Stanford.box 5, folder: “1977,” Cetus archive, folder: “Consultants: box C0120181581, Stanley Chi- Cohen,” ron Corporation (Chiron acquired Cetus Author’s access to in Cetus 1990). andChiron documents Chiron at Corporation courtesy of William Green, former Chiron general counsel. Mary Betlach, a technician in the Boyer laboratory, remarked, “I was For Cape’s biographyFor Cape’s and account Cetus’s of foundation and development, see his oral history, 2003. Quoted in Lewin 1978b, 19. For Stanford’s long-standing industrial connections, see Lowen 1997. Lederberg 33. 1975, “Policy on Consulting by Members of the Academic Council: Principles the United States and the United Kingdom, see Wright 1994. Cohen oral 89–92. history, 2009, Boyer oral history, 46. 1994, Berg interview, 71. 1978, Cohen, telephone call to 1994. author, November 17, For discussion of the growing public demand greater for practical value scientifi from (1981) consists of a collection(1981) of contemporary documents with commen- tary on the recombinant controversy DNA and gene cloning. role inFor Berg’s the political controversy, see his interview, and 1978, oral 1997. history, Cohen oral history, 2009, 69. For a comprehensive history of recombinant research DNA regulation in Donald R. Helinski to Josephine Opalka, July 1, 1975, patentCohen, fi S. et al., Offi Helinski went on to describe the patent application asbecause “ill-conceived” disregarded it “the contributions of other scientists and is very basic in its concepts and applications.” For the history of the recombinant controversy DNA and the debate over research regulation, see Krimsky and Watson 1985. Tooze’s would restrict the free fl pace of discovery” (15). For a history of controversy over university patenting in biomedicine, see Weiner 1986. Boyer oral 116. history, 1994, 89 89 90 87 87 88 85 85 86 80 80 81 82 83 84 75 75 76 77 78 79 72 72 73 74 70 71 68 68 69

174 NOTES TO 21–26 175 NOTES TO 29–34 eld & eld rm, see Perkins 2007 gures, see Lécuyer 2006. ce of Technology Licensing, ce correspondence, K & E Management, San zer, Smith Kline & French, Ciba, and Burroughs 19, no. 23 (June 1976). The (June pharmaceutical no. 23 19, 1976). companies repre- Mateo, California. Mateo, 16. Swanson oral history, 1996/1997, Swanson oral history, 1996/1997, 21. Swanson oral history, 1996/1997, 10. Ibid., 13. Ibid., Quoted in Rothenberg 1984, 370. Robert Swanson, “Stanford draft Speech,” of speech accepting an Entre- preneurial Company of the Award to Year Genentech, Stanford Business School, Swanson’s offi 1983, “Recombinant Research DNA Guides Worry Drug, Chemical Industry,” SheetBlue sented were Eli Lilly, Roche Institute of Molecular Merck, Biology, Up- john, Wyeth, Abbott, Pfi Wellcome. Cetus also attended. Perkins oral 3. history, 2001, Perkins oral 3. history, 2001, For information onCetus’s RecombinantMolecular Research Division, see Gelfand passim; interview, 55–58, and 34–39, Rabinow 1978, 1996, 41–44. Cohen tried without success to interest Cetus in trying “to express genes human for hormones in bacteria.” Cohen oral history, 111. 1995, Cape interview, 30. 1978, Perkins oral 3. history, 2001, laterYears Perkins recalled that Kleiner & Perkins’s investment in Cetus was “probably half a million. Which was a big deal in those 4. Ibid., days.” Ibid. Also see Perkins 119–25. 2007, For Glaser’s opinion of Cetus’s missed opportunity in recombinant DNA technology, see his oral history, 2003–4, 107–8. Perkins oral history, 2009, 45. Ibid., 5. Ibid., Ibid. For Silicon Valley’s history, culture, and major fi In the Kleiner late 1970s, & Perkins became Kleiner Perkins Caufi Byers, its current name. For the early history of the fi and his two oral histories, 2001 and 2009. Boyer oral history, 72. 1994, 3. Swanson oral history, 1996/1997, Kenneth Morse, P. introduction to ibid., x–xiv. 2. Swanson oral history, 1996/1997, Boyer interview, 35. 1975, Ken Imatani to Reimers, memo, “Discussion with Boyer Dr. Future for Development Recombinant for Work Process,” DNA August 1975, 6, patentS74-43, correspondence Offi 1974–1979, Stanford. 24 24 19 20 21 22 23 17 18 14 14 15 16 9 10 11 12 13 5 6 7 8 CHAPTER 2 CHAPTER 1 2 3 4 91 92 cer ce of Technology les, Genentech, Inc. Publiced Accountants,” cer fi cer le. “JKP to S74-43,” ce of Technology Licensing quoted ce of Technology Licensing, Stanford les, Genentech, Inc. cer fi cer les, Genentech, Inc. cer fi cer rst generation venture of capitalists in California, see les, Genentech, Inc. ce of Technology Transfer, University of California. cer fi cer les, Genentech, Inc. Correspondence 1974–1980, Offi 1974–1980, Correspondence University. Licensing,” Chief April 1976, Financial 19, Offi Boyer and Swanson to “Gentlemen, Stanford University, University of folder: “Cohen-Boyer, Exploitation,” California,” 74-134-1, April 1976, 19, Offi John K. Poitras of Stanford’s Offi Farley in a memo to the Cohen-Boyer patent fi 1976) to December with1976) 31, 1976, Report of Certifi Chief Financial Offi Perkins oral history, 2001, 24. Ibid. Perkins resigned as board chairman in and 1990 as a director in 1995. The description of the microbiology department comes from the Rutter 18. oral history, 1992, “Genentech [Business Plan], Meeting, Stanford Offi Eugene Kleiner to Nathaniel box 342652,folder: 1976, May I. Weiner, 7, Corporation. Chiron “Genentech,” Quoted in Sylvester and Klotz 87. 1983, Speech.” Swanson, “Stanford “Genentech, Inc., Business Plan, December, 1976.” “Genentech, Inc., Financial Statements, Period from Inception (April 7, One estimate placed the cost of moving in 1975 a candidate drug through the development and approval million. process $138 at Jones 2005, 2:545–46. Perkins oral 4–5. history, 2001, For history of the fi the oral history series by the author, includinginterviews with Perkins, http://bancroft.berkeley.edu/ROHO/projects/vc/.at Swanson unsuccessfully pitched venture investment in Genentech to Charles Crocker. “Outline Discussion, for Crocker Capital, March 12, Chief Financial1976,” Offi Quoted in Sylvester and Klotz 87. 1983, “Outline Discussion, for Kleiner & Perkins, Chief April Financial 1, 1976,” Offi Ibid., 71.Ibid., 72.Ibid., Ibid. Speech.” Swanson, “Stanford See, example, for Marx 1976. “Genentech, Inc., Business Chief Plan, Financial December, 1976,” Offi fi Swanson, “Stanford Speech.” Swanson, “Stanford Ibid. Boyer oral history, 72. 1994, Quoted in Rothenberg 1984, 371. Boyer oral 95–96. history, 1994, 51 51 52 47 48 49 50 42 42 43 44 45 46 39 39 40 41 36 36 37 38 30 30 31 32 33 34 35 25 25 26 27 28 29

176 NOTES TO 35 – 45 177 NOTES TO 45 –53 ce of Technology cially join the department until ce of Technology Licensing, Stanford University. Riggs oral history, 34. 2005, Sidney Brenner, quoted in Wright 1986, 323–24. “Synthetic Put DNA in to Living Work Cells,” October AR86-7, 1976, 28, carton 2, News Services: Library UCSF Records 1976–1986, and Center of Knowledge Management. Boyer, e-mail message to author, January 8, 2010. Boyer oral history, 73. 1994, Itakura oral 18–19. history, 2005, December 1975. Boyer, e-mail message to author, January memory Riggs’s 11, 2010. of the episode differs. He recalls that he telephoned Boyer,vide who his linkers. agreed DNA Riggs, to e-mail pro- message to author, January 2010. 8, Heyneker et al. 1976. Heyneker oral 57. history, 2002, Ibid. Greene et Howard al. 1975; M. Goodman, associate professor of bio- chemistry, and Herbert Boyer, associate W. professor of microbiology, Annual Reports, Department 1974, of Biochemistry and Biophysics, UCSF. Because Boyer and Goodman had a cooperative research arrangement, Boyer’s research was included in the Department of Biochemistry’s an- nual reports, even though he did not offi Handler quoted in untitled announcement of somatostatincember 2, 1977, UCSF research, News Services/Publications, De- University Francisco. San nia, of Califor- symposium “The Business,” Herbert of “The Emergence Boyer, paper, Biotechnology: toGenentech,” DNA Chemical Heritage Foundation, Philadelphia, 80–92. 1997, June 13, 1976) to December1976) 31, 1976.” 1976.” December Plan, Business Inc, “Genentech, Ibid. Ibid. Perkins oral history, 2001, 8. In August Stanford 1981 announced the avail- ability of licenses on the Cohen-Boyer invention. Genentech was among the seventy-two companies to obtain licenses by the end of that year. 2001. Hughes Perkins oral history, 2001, 24. 15. Kiley 2000/2001, oral history, “Financial Statements, Genentech, Inc., Period from inception (April 7, “Genentech [Business Plan], Meeting, Stanford Offi Licensing.” CorrespondenceReimers to Robert S74-43, Augsburger, July 1976, 19, 1974–1980, Offi 34–35. Swanson oral history, 1996/1997, 12 12 13 8 9 10 11 4 5 6 7 3 1 2 60 60 61 62 CHAPTER 3 56 56 57 58 59 53 53 54 55 ., , Federal ,” Febru- San Francisco E. coli E. nnova, and nnova, Technologyce of Biotechnology Law (UCSF campus (UCSF newspaper) 23, , April 2008. 25, les, Genentech, Inc. cer fi cer , 20 Cal. Andrew Rptr. (2004); 3d 234 Pollock. , June 11, 2002. 41 (July 1976): 7, 27911–43. 24, no. 1 (February 51–54. 2005): les, Genentech, Inc. eld Fund, International Nickel, Innoven Capital, Sofi cer fi cer Copy courtesy of Crea. “Guidelines Research for Involving Recombinant Molecules,” DNA Register “Expression of Synthetic Memorandum In DNA Vivo,” of Understand- ing and Agreement, carton February AR86–7, UCSF 2, folder 76, 1977, 9, Library and Center Knowledge for Management. Rachmiel Levine, Executive Director, City of Hope, to Crea, 1977. May 16, Hambrecht & Quist invested per $2.89 at share. “Genentech, Cor- Inc., 1979 porate Chief Plan,” Financial Offi Itakura oral 21–22. history, 2005, tive Damages Could Double Jury’s Award to Medical Center,” Chronicle InSwanson addition 27. oral to Kleiner history, 1996/1997, & Perkins, the Mayfi August 2001. For a summary 29, of the case, see Rimmer 2009. “Appellate Court Upholds Award to City of Hope,” Report Bob Egelko and Bernadette Tansey, “Court Reduces Genentech Damages in Royalty San Francisco Suit,” Chronicle Bernadette Tansey, “Genentech Loses Million $300 Royalty Battle: Puni- Kiley oral history, 2000/2001, 17. Kiley 2000/2001, oral history, “Sponsored Research Agreement by and between Genentech, Inc., and California Institute October Chief of Technology,” 1, 1976, Financial Of- fi 55. Scheller oral history, 2001/2002, City of Hope v. Genentech “Medical Center Seeks More Payments from Genentech,” Times New York Transfer, University of California, Berkeley; Michael Bader, “Scientist Synapse Splices Private UCSF,” Company, no. 9 (November 1978). 9, 9. Kiley 2000/2001, oral history, City to appended Contract of Hope National Medical Center v. Genentech, Inc (2003). Cal. 2, B161549 2d, App. Div. Michael I. Goldberg to Itakura, November 3, 1976. Copy courtesyDrs. Itakura and Riggs. of 26. Swanson oralhistory, 1996/1997, Riggs oral history, 46. 2005, 22. Swanson oral history, 1996/1997, Sponsored Research Agreement, folder: August “Good- 77-064-1, 1, 1976, man et al., Rutter et al., Deposit of Microorganisms,” Offi Riggs oral history,33. 2005, Keiichi Itakura, “Human Peptide Hormone Production in grantary 1976, application, 26, Departmentof Health, Education, and Welfare. Copy courtesy of Arthur Riggs. Riggs oral history, 30. 2005, 33 33 34 35 32 32 31 31 28 28 29 30 24 24 25 26 27 22 22 23 17 18 19 20 21 14 14 15 16

178 NOTES TO 53 –59 179 NOTES TO 60 – 67 les, Ge- les, San Fran- cer fi cer eld 2003, especially 152–54. , December 3, 1977. , 95th Congress, 1st serial session, For a synop- 1977, no. 95-52. University of California, San Francisco. San California, of University son 2001, 170–76. “Testimony by Paul Berg,” Subcommittee on Science, Technology Paul NovemberSpace, Berg Papers, box 2, 1977, 1, folder: and SC 358, “Senate testimony,” Green Library, Stanford University. Handler and Berg quoted in untitledannouncement of the somatostatin research, release for News UCSF December Services/Publications, 2, 1977, Statement by Donald Fredrickson, S. Director, MD, National Institutes of Health on Recombinant DNA, before the Subcommittee on Science,Technology, and Committee Space, on Commerce, Science, and Trans- portation, United States Senate, November 8, 1977. U.S. Senate, Report on Regulation of Recombinant Research, DNA November 2, and8, 1977 10, sis of the hearing from the perspective of the NIH director, see Fredrick- I thank Henry Bourne this for point. 37. Kiley 2000/2001, oral history, Riggs oral history, 49. 2005, Genentech eventually obtained eleven and U.S. more than a hundred foreign patents on the technology—the important Riggs-Itakura patents, which are legal mainstays of the biotechnology industry. Heyneker oral 62. history, 2002, Swanson to shareholders, April Chief 1978, 6, Financial Offi Inc.nentech, 32. oralCape history, 2003, Kiley oral history, the For 90. 2000/2001, central role of patents in biotech- seenology, Dutfi Itakura et al. 1977. a precursor, which would be expected to be relatively inactive.” Itakura 1063. et al. 1977, Itakura oral history, 35. 2005, Engineering,” Genetic in ‘Triumph’ “A Petit, Charles in Quoted cisco Chronicle Riggs oral 42–43. history, 2005, For details of the somatostatin research, see Heyneker oral history, 2002, and the44–50, published paper Itakura et al. 1977. 36. Swanson oralhistory, 1996/1997, Riggs oral history, 41. 2005, 37. Swanson oral history, 1996/1997, The sentence reads, in a stretch of the truth: “The experiment was deliber- ately designed to have the cells produce not free somatostatin but rather For Crea’s arrival For Crea’s and research City at of Hope, see his oral history, 2002, 19–30. Heyneker oral 44. history, 2002, Riggs oral history, 63. 2005, Itakura oral 32–33. history, 2005, 59 59 60 57 57 58 53 53 54 55 56 48 48 49 50 51 52 45 46 47 40 40 41 42 43 44 36 36 37 38 39 Wash- , Novem- ce of Technology 198 (November 198 25, nanced research in their their in research nanced Science , December 2, 1977, D1. , December 2, 1977, New York TimesNew York c Announcements,” c : It Works!” Chemical Works!” : It and Engineering News cial Gene Makes Copy of Brain Hormone,” , December 2, 1977. , November 3, 1977. Brain Hormone and Insulin,” Victor Cohn, Artifi “An ington Post “Human Gene in coli E. 4. 1977, ber 7, See, example, for Victor K. “Coast McEleny, ConcernPlans Bacteria for Use 1986. Sheldon Wolff, Chairman, Committee on Rules and Jurisdiction, to Laurel E. Glass, Chairperson, Academic Senate, Augustletter “Report for 6, of Committee 1979, cover on Rules and Jurisdiction,” submitted by Genentech, carton AR86-7, Wolff, 2, folder Library 94, UCSF and Center Knowledgefor Management. For a critique of such phenomena in and the see 1980s, Kenney 1970s mechanical” Greenberg 83. arts.’ 2007, SwannBliss chap. 1988, 131–39; 5. 1982, Chapter 4 treats the UC-Lilly contract on insulin with the Rutter and Goodman labs. Sponsored Research Agreement, folder: August “Good- 77-064-1, 1, 1976, man et al., Rutteret al., Deposit of Microorganisms,”Transfer, Offi University of California, Berkeley. academe: “The amount of activity has increased, and so has the complex- ity of the deals, but nothing there’s new about professors selling their expertise off campus or performing industry-fi university laboratories. They have been doing least at it since the Morrill Act and of 1863 follow-on legislation established the nationwide system of land-grant colleges, each with a mandate to promote ‘agriculture and the Rutter 101–7. oral history, 1992, For the foundation of Chiron, see Penhoet oral history, 1998. Charles Entrepreneurs “The Bold Petit, Gene of Engineering,” San Fran- cisco Chronicle For the history of DNAX, see Kornberg chap. 2; Kornberg 1995, oral his- and Bergtory, 1997; oral history, 1997. A journalist remarked in 2007 on industry contracts with American San Francisco, and City of Hope publicity. Hope of City and Francisco, San Engineering.” Genetic in ‘Triumph’ “A Petit, in Quoted ibid. in Quoted See, example, for Bok 2003. Bader, “Scientist Splices Private UCSF.” Company, Yamamoto 1982, 195–201. David Perlman, “Scientifi 1977): 782. Riggs oral history, 47. 2005, Engineering.” Genetic in ‘Triumph’ “A Petit, in Quoted Untitled announcement of the somatostatin research, release for Decem- ber 2, 1977, UCSF News Services/Publications, University of California, 61 62 63 81 82 78 78 79 80 73 73 74 75 76 77 68 68 69 70 71 72 64 64 65 66 67

180 NOTES TO 67–72 181 NOTES TO 72– 82 ce of ce cer ow of of ow les, Ge- les, les, Genen- les, , September cer fi cer , December 12, cer fi cer Science News Business Week , June 6, 1977, 68. , June 1977, 6, , February–March 1977, 23–26, 39. , February–March 23–26, 1977, ce of Technology Transfer, University of California. les, Genentech, Inc. The author has not located contracts Seeburg for nentech, Inc.nentech, Untitled news Rutter, UCSF UC-1, release, 77-064-1, release for May 1977, 23, et al., Offi W., tech, Inc. tech, Perkins oral history, 2001, 24. After a few years in Berkeley, Cetus relocated to neighboring Emeryville, a city with an industry-friendly history. Swanson to shareholders, April Chief 1978, 6, Financial Offi Swanson oral history, 1996/1997, 25–26. Swanson oral history, 1996/1997, Ullrich oral history, 1994/2003, 21. Ullrich oral history, 1994/2003, Robert A. Swanson to Axel Ullrich, Chief April Financial 1, 1977, Offi fi Shine. and 155. Cohen oral history, 1995, Rutter oral 175. history, 1992, 54–55; Swanson oral history, 1996/1997, biology’s central dogma: makes DNA RNA makes protein. the Time Gene for Engineers,” “One Rutter oral history, Josephine 185–86; 1992, Opalka,patent UC adminis- trator to A. R. Whale, Esq., Eli UC Lilly CU-6, 1977, and Company, July 7, box 52, folder: “Science(System), & Technology: Research,” rDNA Offi California. of University Transfer, Technology Chapter 5 discusses Seeburg’s growth hormone research. Using the enzyme reverse transcriptase, scientists make copy a DNA from messenger RNA, the unstable transcript of genes. The backward fl genetic information from RNA to constitutes DNA a reversal of molecular As mentioned Gilbert below, and colleagues founded Biogen in 1978. Middleton to Swanson, Chief April Financial 1979, 6, Offi Boyer oral history, 88. 1994, Middleton oral history, 2001, 17. Johnson 1983. Johnson oral history, 2004, 26. Rutter oral history, 111; 1992, Rutter, e-mail message to author, February 5, 2010. 16, 1978, 195. 1978, 16, Jeremy Rifkin, Have “DNA: the Corporations Already Grabbed Control of New LifeForms?” Mother Jones “Human Insulin: Seizing the Golden Plasmid,” J. MichaelJ. Bishop, introduction to Boyer oral history, vii–ix. 1994, Entrepreneurs “The Bold Petit, Gene of Engineering.” Boyer oral history, 98. 1994, Commercial“A Technology,” Debut DNA for 1977, 128, 132. 11 11 9 10 20 20 16 17 18 19 13 14 15 12 12 7 8 2 3 4 5 6 87 87 CHAPTER 4 1 83 83 84 85 86 Bos- les, Genen- les, cer fi cer Chemistry & Engineer- ., 119 3d F. 1559 (1997), (newsletter) 1, no. 2 (May 1977). A subsequent note of , June 25, 1978. For the 1978. , June foundation 25, of Biogen, see Weissmann 1981. , June 19, 1978, 4–5. , June 1978, 19, rsthand accounts of the moratorium andits effects, see the Re- Heyneker oral 73–74. history, 2002, “Bacterial Insulin Production Nears Reality,” 4–5. Robert Cooke, “Clone Business: Growing It’s Growing Fast, It’s Fast,” ton Globe at theat University of Chicago, Saran Narang in Canada, and Ray Cor- at Wu nell. “Bacterial Insulin Production Nears Reality,” ing News 39. Kleid oral history, 2001/2002, Itakura oral history, 2005, 86. Heyneker oral 69. history, 2002, 26. Goeddel oral history, 2001/2002, nentech, see Hall 1987. Kiley,Tom letter to author, February 2004. 1, Riggs oral history, 56. 2005, Riggs 1981. 27. oralCrea history, 2002, Others working on human insulin this at time included Donald Steiner Goeddel oral history, 2001/2002, 11. Goeddel oral history, 2001/2002, 25. Kleid oral history, 2001/2002, Kleid, telephone conversation with author, October 2, 2007. Since the early twentieth century, major American industrial research laboratories had required their scientists to assigncompany. See Wise 1980. research rights to the For a lively account of the contest insulin for Harvard, at and Ge- UCSF, Walter Gilbert’s laboratory, Biological Laboratories, Harvard University, The Midnight Hustler informedJune 1, 1977, Boyer lab tech Mary Betlach that she was in arrears herfor newsletter subscription. The Gilbert “Circulation lab’s Manager” (Forrest Fuller) asked her to remit “$4,000,000.00 or one insulin produc- ing clone immediately.” Copies courtesy Mary of Betlach. Rutter oral history, 1992, 175–76; Swanson oral history, 1996/1997, 25; Ull- 25; Swanson oral history, 1996/1997, Rutter 175–76; oral history, 1992, 21–22. rich oral history, 1994/2003, Regents of the University of California Lilly Eli & Co v. Goodman cross-examination, August 1235–36. 1995, 29, For fi combinant Controversy DNA Oral History Collection, MIT Libraries, Cambridge, MA. Also see, Krimsky 1985. tech, Inc. The author has not found contract letters Seeburg for and Shine. Lécuyer 2006, 265. Yansura oral history, 22. 2001–2, Yansura oral history, 25. 2001–2, Quoted in Rothenberg 1984, 134. Swanson to Howard M. Goodman, Hormone April Research 1, 1977, Institute documents, The author has UCSF. not found a contract letter for Rutter. Swanson to Axel Ullrich, Chief April Financial 1, 1977, Offi 41 41 42 43 37 37 38 39 40 32 32 33 34 35 36 27 28 29 30 31 26 26 23 23 24 25 46 46 47 44 44 45 21 21 22

182 NOTES TO 82–90 183 NOTES TO 90 –101 Los Los (1990) rst-century biotech- rst-century uenced the evolution of the , October 1. The title 1978, 29, quotes Bill , August 2001. 28, San Francisco Chronicle 370. 57. Swanson oral history, 1996/1997, nant proteins. They are fundamental to the biotechnology industry. Boyer oral history, 87. 1994, For a discussion of similar issues in early twenty-fi nology, see Kleinman and Vallas 2005. 19. Kiley 2000/2001, oral history, Wise Hounshell 1980; 195; 118–20, 110, Reich 1985, and Smith 301–4, 1988, biopharmaceutical industry the for next thirty years.” Pisano 2006, 86. 51. Goeddel oral history, 2001/2002, Ibid. 275. Hall 1987, Andreopolos 743. 1980, The enormous family of Riggs-Itakura domestic and foreign patents is- suing in the covers and 1980s basic ’90s processes producing for recombi- in Molecular unpublished Biology,” presentation Hutton, to E. New F. Swanson 1979, September correspondence,York, 17, Management, K&E San Mateo, CA. For a study of such early interactions, see Kenney 1986. A Harvard Business School professor contends: “The Genentech-Lilly agreement . . . created a template that infl Johnson oral history, 2004, 39. 101. Kleid oral history, 2001/2002, Yansura oral history, 69. 2001–2, Perkins oral history, 2001, 22. 33–34. 2004, history, oral Johnson Middleton oral 16–17. history, 2001, Achievement of Record Commercial “Genentech—A Swanson, A. Robert Angeles Times Genentech, Eli Lilly and Inc. v. the Regents of the University of California 90-1676C. Boyer oral history, 79–80. 1994, 122. Swanson oral history, 1996/1997, 64–65. Kiley 2000/2001, oral history, Kleid, e-mail message to author, March 2007. 26, 29–30. Ullrich oral history, 1994/2003, Richard Saltus, “Genetic Research—‘I wouldn’t ahead say we’re in the ” race,’ Rutter. 35–36. Kiley 2000/2001, oral history, Denise Gellene, “Cancer Center, Drug Firm Fight over Biotech Riches,” Kleid oral history, 2001/2002, 44. Kleid oral history, 2001/2002, Yansura oral history, 28. 2001–2, 59. Ibid., Riggs oral 59–60. history, 2005, Crea etal. Goeddel 1978; et al. 1979. 80 80 76 76 77 78 79 71 71 72 73 74 75 69 69 70 62 63 64 65 66 67 68 58 58 59 60 61 53 53 54 55 56 57 48 48 49 50 51 52 rms rms eld eld (1990) C-90- ], July 11, 1980, rming Genen- rming sic nnova, and Ham- t corporation to com- UCSF at led a patent application, “Synthesis of a Eucaryotic Pro- ce of Technology Transfer, University of California. rms. at Berkeley,at Stanford, and and UCSF its relationship to biotech spin-off fi Kenney 1986, 96–97. For Hybritech’s formation, For Hybritech’s Kenney 96–97. 1986, see Jones 2005. For Rutter’s failed effort to form a nonprofi mercialize biotechnology products, see Rutter oral history, 187–90. 1992, For Chiron’s foundation and early development, see Penhoet oral history, 1998. Interviews with Rutter on Chiron history areSee Jong 2006 a comparison for in progress of biochemistry as department of 2010. organization In 1978 Congress,In 1978 as an inducement to investment, reduced the capital gains tax rate from 48 to 28 percent. Robert A. Swanson to the Lubrizol Corporation, August Shirley 1979; 28, Liu Clayton to Fred Middleton, (confi September 1979 13, receipt of Lubrizol’s check million).tech’s $10 for Documents courtesy of Middleton.Fred Dickson 494. 1979, Fund, International Industrial Development, Sofi brecht & Quist; and the pharmaceutical companies Institut Mérieux, Hoffmann–La Roche, KabiGen, and Eli Lilly. Middleton oral history, 2001, 17. Perkins oral 7. history, 2001, “Human Insulin: Seizing the Golden Plasmid,” 195. of Robert Cook-Deegan. “The Genen100: First 100 to Join Genentech,” unpublished list courtesy of Kleid. Dennis Heyneker oral 89. history, 2002, “Invitation and Open House Invitation December List,” copies 1, 1978, courtesy of Roberto Crea. Among those invited were the investment fi Kleiner Perkins, & Innoven Capital, the Hillman Company, the Mayfi M. Goodman, and William Rutter J. to Roger Dietzel [ box 60: BoardCU-6, of Patents Meeting, September (System), UC 22, 1981, Offi 21. Ullrich oral history, 1994/2003, Ibid., 29–30; Regents of the University of California v. Genentech 2232, Seeburg testimony, Seeburg April 1028. transcript 1999, 20, courtesy Nelkin 1995. Clark 1978. The university fi tein by Microorganisms,” on August citing 11, 1978, Rutter, Goodman, and John Baxter as inventors. A 1980 agreement, after the postdocsgave the scientists conducting protested, the insulin and growth hormone research a percentage share in any future patent royalties:Baxter, John D. Howard Goeddel oral history, 2001/2002, 24. Goeddel oral history, 2001/2002, Goeddel, e-mail message to author, December 8, 2008. Boyer oral history, 89. 1994, Riggs oral history, 66. 2005, uentialFor the role in infl press’s science and technology coverage, see 99 99 100 96 96 97 98 93 93 94 95 90 90 91 92 88 88 89 86 86 87 81 82 83 84 85

184 NOTES TO 101–106 185 NOTES TO 107–116 New York TimesNew York Maga- (1990) C-90-2232, Seeburg (1990) C-90-2232, Seeburg (1990) C-90-2232, Seeburg fty to a hundred human atly: “The Genentech-Lilly agree- uenced the evolution of the biophar- ce of Technology Transfer, University of of University Transfer, Technology of ce ce of Technology Transfer, University of of University Transfer, Technology of ce ce of Technology Transfer, University of California. , July 86. 12, 1979, , February 1980. 17, Deposit of Microorganisms,” Offi Microorganisms,” of Deposit California. Regents of the University of California v. Genentech testimony, April 1048. 1999, 20, William Stockton, “On the Brink of Altering Life,” zine Bill Rutter made explicit the threat to the UC patent applicationto an attorney representing in the a university. note William Rutter J. to Lorance Greenlee, folder: “Goodman 77-064-1, March 1979, 8, et al., Rutter et al., California. John D. Baxter and Howard M. Goodman toPeter Seeburg, folder: “Goodman 77-064-1, February et al.,1979: Rutter et al., Deposit of Microor- 22, ganisms,” Offi For details the of Seeburg-Goodman dispute, see 281–83. Hall 1987, 32. Ullrich oral history, 1994/2003, Regents of the University of California v. Genentech 985. testimony, 1999, April 17, SeeburgIbid., testimony, April 1023. 1999, 20, Robert A. Swanson and Dennis G. Kleid to Howard Goodman, November 9, 1978. 77-064-1, folder: “Goodman et al., Offi Rutter Microorganisms,” of et al.,posit De- ment . . . created a template that infl maceutical industry the for next thirty years.” Pisano 2006, 86. 139. McKelvey 1996, 143.Ibid., Seeburg et al. 1978. 55. Swanson oral history, 1996/1997, 54. oralCrea history, 2002, pituitaries. Elkington 83. 1985, Boyer, e-mail message to author, December 26, 2009. 120. McKelvey 1996, 121.Ibid., I thank Dennis Kleid providing for the contract date. A Harvard business professor stated fl testimony, April 17, 1999, 937. I thank 937. Roberttestimony, 1999, access for Cook-Deegan April to 17, transcripts of Seeburg’s testimony. Seeburg et al. 1977. informationFor on KabiVitrum, I am indebted to McKelvey chaps. 1996, 6, 7. According to one source, a standard two-year treatment with natural growth hormone required extraction fi from Louise Kehoe, “Genetic Engineering’s Growing Commercial Importance,” New Scientist Regents of the Universityof California v. Genentech 22 22 23 24 19 20 21 16 17 18 11 11 12 13 14 15 6 7 8 9 10 3 4 5 CHAPTER 5 CHAPTER 1 2 116 116 les, Ge- les, cer fi cer ; see Goeddel et al. Science News Nature (1990) C-90-2232, Seeburg , July 87–88. 14, 1979, , July 11, 1979, C1–C2., July 11, 1979, ce of Technology Transfer, University of California. dent about this—it is a very strong com- Wetzel’s memory.” New York TimesNew York , August 20–21. 1979, 6, ce correspondence, Management, K&E San Mateo, CA. For the timing of thevarious announcements, see Saltus 1979. “First Successful Bacterial Production of Human Growth Hormone Announced.” 701. 1979, Gonzalez John Noble Wilford, “Human Growth Hormone Is Produced intory,” Labora- Heyneker oral history, Ron 2002, 98; Wetzel comment on a chapter 5 draft, June 2009. 10, 86. Kehoe 1979, Martial et al. 1979. “First Successful Bacterial Production of Human Growth Hormone An- nounced,” release for Corporate July 11, 1979, Communications, Genen- Inc. tech, 1979. of 1979. “The Genen100:of 1979. First 100 to Join Genentech,” unpublished list courtesy Kleid. of Swanson, “Stanford unpublished Speech,” manuscript, Swanson’s 1983, offi Swanson quoted in, “First Successful Bacterial Production of Human Growth Hormone Announced.” “No More Dwarfs,” Economist For a critique of over-optimistic media coverage of genetic engineering, see Goodell 1980. 78. Swanson oral history, 1996/1997, According to Dennis Kleid’s list, Genentech had employees 53 the at end pretty confi ment ona chapter 5 draft, June 2009. 10, Heyneker oral 100. history, 2002, Quoted in “Labs Tie Human for Growth Hormone,” 22. The formal 1979): (July report 17, appeared in “Rival Claims Staked over Gene-Spliced Growth Hormone,”News Medical World Yansura oral history, 82. 2001–2, Heyneker oral 101. history, 2002, 6. chapter in summarized is litigation The The biochemist Ronald Wetzel recalled hearing Goeddel’s whoop. Not- ing that the scintillation counter was next to his Wetzel lab, added: “I’m Roger G. Ditzel, UC patent administrator, to Robert folder: A. “Goodman Swanson, 77-064-1, et al.,1979, Rutter et al.,Deposit of Microor- April 18 ganisms,” Offi Regents of the Universityof California v. Genentech testimony, April 1035. 1999, 20, “1979 Corporate“1979 Plan, Genentech, Chief Inc.,” Financial Offi Inc.nentech, U.S. CongressU.S. 67. 1981, 114. Swanson oral history, 1996/1997, 38 38 39 40 41 34 34 35 36 37 47 42 42 43 44 45 46 32 32 33 27 28 29 30 31 25 25 26 50 50 48 48 49

186 NOTES TO 116 –121 187 NOTES TO 122–126 , , July cer , September Medical World Washington Post Chemical Week rst marketed recombinant ce correspondence, Man- K&E School of Management/ Massachu- Management/ of School (magazine) (Winter 1982): 2–4. 1982): (Winter (magazine) , December 26, 1977, 17–18. , December 1977, 26, les, Genentech, Inc. setts Institute of Technology 88–89. Kleid oral history, 2001/2002, 30, 1981, 41. 1981, 30, “Molecular Biology: The Industry Is Real!—an for Interview with Robert Swanson, President, Genentech, Inc.,” 1981, Corporate1981, Communications, Genentech, Inc. oral history,Young 17–19. 2004, “Tests Are Set Synthetic for Growth Hormone,” ministration,” release for October Corporate 1982, 29, Communications, Genentech, Inc. According to one source, the fi product was a vaccine and pigs for calves made by the Dutch subsidiary Intervet. 89. 1983, Yoxen Johnson 219–20. 1983, Clinical“FDA-Approved Tests on Humans Begin Today with Human Growth Hormone Made by Recombinant release for DNA,” January 12, Walgate 1980. Yanchinski 1980. For a summary of Lilly’s human insulin trials, see Hall 299–301. 1987, Genentech, Inc., Business Plan, December Chief Financial 1976, Offi fi “First Recombinant Product DNA Approved by the Food and Drug Ad- Katherine Ellison, “Firm Pushes Ahead in Genetics,” A9. 5, 1979, Ibid. McKelvey 1996, 191. Johnson 1983. 218. 215, 1981, Congress U.S. Gartland 1981. Kleid oral history, 2001/2002, 97–99. Kleid oral history, 2001/2002, Quoted in “Gene-Splicing Factory Set to Produce Hormone,” News 41. Swanson oral history, 1996/1997, Times New York Guidelines,” DNA on Debate Raises Research “Insulin A18. June 1979, 29, For details of the scale-up of recombinant insulin and growth hormone, see Johnson 2003 and Genentech’s scale-up Croninprocess 1997. represents another instance of what John Lesch and others have termed the industri- alization of pharmaceutical innovation. Lesch 2007. unpublished “The Business,” presentation, of “The Emergence Boyer, Biotechnology: DNA to Genentech” symposium, ChemicalFoundation, Heritage 80–92. Philadelphia, 1997, June 13, PA, Robert A. Swanson, “Genentech—A Commercial Record of Achievement Achievement of Record Commercial “Genentech—A Swanson, A. Robert in Molecular unpublished Biology,” presentation Hutton,to E. New F. Swanson’s offi 1979, September NY, York, 17, CA. Mateo, San agement, Yansura oral history, 23. 2001–2, 75 75 74 72 72 73 70 71 65 66 67 68 69 59 59 60 61 62 63 64 55 55 56 57 58 53 53 54 51 51 52 cer 284 (June 1, Science , April Later 9. 1985, research 20, les, Genentech, Inc. cer fi cer New York TimesNew York ce correspondence, Management, K&E San Mateo, CA. ed a prion as the causal agent. les, Genentech, Inc. Swanson, “Genentech—A Commercial Record of Achievement in Mo- in Achievement of Record Commercial “Genentech—A Swanson, lecular Biology.” Cape oral history, 2003, 62. oralCape history, 2003, D’Andrade interview, 7–8. 1998, Robert A. Swanson, Presentation “A to Henry Swift April F. 27, & Co.,” offi Swanson’s 1983, Fred A. Middleton to Bob Swanson, Chief April Financial 1979, 6, Offi fi porate Plan, Chief Financial Offi 50. Kiley 2000/2001, oral history, oral history,Young 12–17. 2004, Quoted in Benner 1981, 68. Gower oral history, 2004, 48. Yansura oral history, 83. 2001–2, 36. Swanson oral history, 1996/1997, hormone—today marketed by a raft of companies in addition to Genen- tech—see Cohen and Cosgrove 2009. Genentech was not blame-free: in the1999 company admitted that between had and it 1985 marketed 1994 Protropin short for but normal children, in violation rules of FDA against promoting drugs unapproved for uses. Cohen and Cosgrove 2009, 188–89. “Genentech Product Development Summary,” Genentech, Cor- Inc., 1979 Kirk Raab to all employees, “HGH Project Team Organization,” Corporate1985, Communications, June 20, Genentech, Inc. Glasbrenner 1986. “Genentech Awarded Orphan Drug Status Growth for Hormone,” for Corporaterelease 1985, December Communications, 17, Genentech, Inc. Marcia Barinaga, “No Winners in Patent Shootout,” cial and For the nefarious 1752–53. benefi 1999): uses of human growth for releasefor October Corporate 1985, 18, Communications, Genentech, Inc. 108. 1985, Hamilton Bill Higgins to all employees, “Update on Upcoming Events/Employee Stock Option,” internal correspondence, October Corporate 1985, 23, Inc. Genentech, Communications, 1986. Hamilton “Genentech’s Answer to Pituitary Derived Growth Hormone:nant release for Technology,” DNA April Corporate 22, 1985, Recombi- Communica- Inc. Genentech, tions, Within a year, patients were paying as much as $10,000 to $15,000 a a drugfor year that the government had earlier distributed no at cost. Hall 2006, 248–49. “FDA Approves Genentech’s Drug to Treat Children’s Growth Disorder,” More than two dozen patients eventually died ofCreutzfeldt-Jakob ease. Hall 248. 1987, dis- HaroldM. Schmeck Halts “U.S. Jr. Distribution of a Growth Hormone as Precaution after 3 Deaths,” identifi 99 99 95 95 96 97 98 89 89 90 91 92 93 94 88 88 84 84 85 86 87 81 82 83 78 78 79 80 76 76 77

188 NOTES TO 126 –130 189 NOTES TO 130 –138 , May 10, Los Angeles fty-three employees fty-three rst female scientist with a rm’s fi rm’s ecting president Robert democratic Noyce’s , October 1980. 15, activator (tPA), a treatmentactivator blood for (tPA), clots. See Pennica oral history, 2003. Gitschier 2004, 383. Lasky oral history, 2003, 26. doctorate. persevered She in cloning and expressing tissue plasminogen Times Robert E. Dallos, “Genetic Stock Firm’s Starts Wall Frenzy,” St. and no reserved parking places, regardless of status. Berlin 191. 2005, onlyAt the end nine of 1979, women of a total of fi Genentech: Genentech,” “The at Genen100: Join to employed First 100 were unpublished list courtesy of Dennis Kleid. Diane Pennica, who arrived Genentechat in was May 1980, the fi For a descriptionFor of the bizarre Ho-hos of the see 1980s, 49–50. ibid., The gatherings were later toned down, particularly after Hoffmann–La majorityRoche’s acquisition of Genentech in 1990. Ibid., 48–49. For commentary on the phenomenon of “fun” inShapin science, 2008, see 217–29. For example, early Intel, refl outlook, offered employees a stock-option plan, almost identical cubicles, Crea oral history, 2002, 48. oralCrea history, 2002, 43–44. Ullrich oral history, 1994/2003, The six employees were Bob Swanson, administrative assistant Sharon Carlock, Brian Sheehan, Dave Goeddel, Dan Yansura, and Dennis Kleid. Kleid, e-mail message to author, March 2009. 18, 48. Kiley 2000/2001, oral history, Kleid’s comments on a chapter 5 draft, April 2009. 23, “Molecular Biology: The Industry Is Real!—an for Interview with Robert 2–4. Swanson, President, Genentech, Inc.,” Heyneker oral 93. history, 2002, Yansura oral history, 28. 2001–2, 56. oralCrea history, 2002, Perkins 118. 2007, Goeddel, e-mail to author, April 14, 2009. For earlierPackard 27. theories 1995, research of management in indus- trial laboratories, see Shapin 2008, chap. 6. 63. Swanson oralhistory, 1996/1997, Ronald comment Wetzel’s on a chapter 5 draft, June 2009. 10, Cetus had alliances with Standard Oil of California were and Indiana and Genentech’s Corporation; Chemical and Distillers National with Marilyn Chase, “Industry Sees a Host of New Products Emerging from Its Wall Street Transplantation,” Gene on Journal Research Growing 1979. Wade 1979. Teitelman 26. 1989, 118 118 119 CHAPTER 6 1 117 117 114 114 115 116 110 110 111 112 113 104 104 105 106 107 108 109 100 101 102 103 5 2 3 4 , Newsweek , January For a 1980. 17, ce correspondence, Man- K&E , March 61. 31, 1980, Time subsequently renamed alpha were interferon broblast dential letter is not publicly available, but the later formal Newsweek, June 4, 1979. page articlepage by Harold Schmeck, “Natural Virus-Fighting Substance Is Reported Made by Gene Splicing,” Times New York Kleid, e-mail message to author, July 24, Achievement of 2009. Record Commercial “Genentech—A Swanson, A. Robert in Molecular unpublished Biology,” presentation Hutton, to E. New F. Swanson’soffi 1979. September NY, York, 17, CA. Mateo, San agement, Newspapers worldwide carried the story. See, example, for the front- 1998. in IF Cancer,” “The Big Leukocyte and fi andbeta interferon, and immune interferon became known as gamma interferon. This book uses the older terms, current around 1980. The confi agreement references a letter intent of dated November Dennis 1, 1978. Perkins oral history, For a description 2001, 20. of IPO strategy, see South- wick 2001, esp. chap. 1. Glick 1982. Interferon is technically a glycoprotein, a protein with carbohydrate attachments. For the pre-genetic engineering history of interferon research, see Cantell some controls, arguing that abandoning the guidelines invited local intervention. For these and other venture capital practices, see Wilson 1986. 127. Goeddel oral history, 2001/2002, Middleton oral history, 2001, 29. Perkins oral 19–20. history, 2001, Middleton oral history, 2001, 29. Health, California Cohen correspondence, April State Assembly,” 1977, 25, Department of Genetics, Stanford University. For a contemporary ac- count of government regulation, risk assessment, and public perception of recombinant research DNA theat outset of the see 1980s, Weiner 1982. concessions RAC’s for See Wright 395–400, to 1994, industry. But Wright also maintained that industry and RAC members wished to keep Merrill Sheils with Gerald C. Lubenow, William J. Cook,Jeff B. Copeland, Ronald and SylvesterMonroe, Henkoff, “Innovation: Has America Lost Its Edge?” For federal policy changes circa see Dickson 1980, and 1981. Noble For reservations concerning the effect of the Act Bayh-Dole on stimulating commercialization, see Mowery et al. and 2004 chap. Greenberg 3. 2007, “Statement of Stanley N. Cohen, M.D. Prepared for the Committee on with Eli Lilly, KabiGen, Hoffmann–La Roche, Monsanto, and Institut Mérieux. BegleySharon with Pamela Abramson, Industry,” “The DNA August 53. 1979, 20, Statistic cited in 76. Weiner 1982, 25 25 26 22 22 23 24 18 18 19 20 21 13 14 15 16 17 12 12 8 9 10 11 6 7

190 NOTES TO 138 –143 191 NOTES TO 143 –150 , December 1980. 3, ts in Gene Splicing Bring the Tangled , June 1980. 18, , 447 U.S. 303 (1980). For a discussion (1980). 303 , 447 U.S. of the ce issued a patent on an animal, the so-called 1, no. 1 (1980): 1. 1, no. 1 (1980): , June 11, 1980. case and the history of patenting living things, see Kevles products. or ts cal Tests Fibroblast for and Leukocyte Interferon,” release for June 4, 1980, Corporate Communications, Genentech, Inc. The research was published GoeddelV. etas al. D. and 1980a 1980b. Harold M. Schmeck, “Exception to Ban on Genetic Material TimesNew York Is Backed,” Bylinsky 145. 1980, Taniguchi et al. 1979. Wade 1980a. 31. Goeddel oral history, 2001/2002, 30–31.Ibid., Ibid., 32–36; Goeddel, e-mail message Biologi- Preliminary and to author, Production July Successful Announces 25, 2009. “Genentech contemporary interferon accountof Biogen’s research,see Weissmann 1981. 86. Kiley 2000/2001, oral history, Gilbert, quoted in Schmeck, “Natural Virus-Fightingported Substance Made Is by Re- Gene Splicing.” Issue of Ownership Wall to Fore,” Street Journal Middleton oral history, 2001, 29. Diamond Chakrabarty v. Chakrabarty 1994. Harold M. Schmeck, to Process “U.S. 100 Applications Patents for on Liv- ing Organisms,” Times New York Hal Lancaster, “Rights to Life: Profi As usual there were exceptions. Syntex, example, for staged an IPO with- profi out Perkins oral history, 2009, 52. Perkins oral history, 2001, 12. Quoted in Middleton oral history, 28. 2001, Quoted in Perkins oral history, 2001, 12. In 1981 GenentechIn 1981 announced Goeddel’s expression of “immune” inter- feron. Untitled news release, release for October 22, Corporate 1981, Com- munications, Genentech, Inc. Pieters 172–73. 2005, Bylinsky 45. 1980, News BioEngineering Nelson Schneider, quoted in McAuliffe and McAuliffe 11. 1981, Wade 1980a. Harvard mouse, engineered by Harvard and Genentech scientists for susceptibility to breast cancer. See ibid., chap. 7. Swanson oral history, 1996/1997, 46. Swanson oral history, 1996/1997, Kiley 3. 1979, 18. Ibid., Quoted in Jasanoff 1995, 144. In 1988 the Patent Offi 36 36 29 29 30 31 32 33 34 35 27 28 48 48 49 50 51 43 43 44 45 46 47 38 38 39 40 41 42 37 37 52 52 53 54 55 56 , May ined Ge- San Francisco , July 71. 1980, 28, (1990) C-90-2232. Ge- (1990) C-90-2232, Seeburg (1990) C-90-2232, Seeburg San Francisco Chronicle Business Week , 26. Copy, 26. courtesy of Dennis Kleid. 284 (May 28, 1999): 1465. 284 (May 1999): 28, inventorsve on the growth UCSF hormone patent Science Brief Business of the People’s Commission. Decades later , November 1999. 20, 284 (May 28, 1999): 1465. For the complexities 1999): 284 (May 28, in patent law that the ve lawsuits of the late and 1980s early with 1990s, many of the same For the critical role of the outside attorneys, see Stewart chap. 3. 1980, “The Hunt Plays for in Biotechnology,” 71. Science lawsuit evoked, see Barinaga 1999a. Barinaga The fi 1999b. each million received $17 in the settlement. Abate, “BitterTom Genentech Suit Finally Put to Rest,” Chronicle “UC-Genentech Trial,” letter signed by Dennis Henner, David Goeddel, Herbert Heyneker, Keiichi Itakura, Daniel Yansura, Michael Ross, and Giuseppe Miozzari, Seeburg’s statement [the plasmid reads: “Not pHGH31 specifi but a functionally paper], 1979 nentech’s equivalent plasmid previously constructed by Shine was used and me UCSF, as at the source of cloned complementaryHGH in DNA the construction of the expression vector.” testimony, April 1087–96. 1999, 20, Hagmann 1999. Regents of the University of California v. Genentech testimony, April 1094. 1999, 20, GoeddelIbid., testimony, Legal 2786. May tran- 2411, 4 and 5, 1999, 2547, scripts courtesy of Goeddel. in fi in repeatedly testifying.people lawsuits eventually The were consolidated, Genentech settled with Lilly, and the UC-Genentech claims were reduced to patent validity and infringement. Rimmer 2010. Abate, “JuryTom GetsPurloined Case,” DNA 21, 1999. Regents of the University of California v. Genentech Sooy, Chancellor, FebruarySooy, UCSF, folder: “Genentech,” 4, 1980, Hormone Research Institute records, University of California, San Francisco. 22. Kiley 2000/2001, oral history, Genentech, Inc., 1980 Annual Report Regents of the University of California v. Genentech nentech, and UC, Eli Lilly, in various combinations, were participants Kiley oral history, 2000/2001, 39. Kiley 2000/2001, oral history, “The Hunt Plays for in Biotechnology,” The biotech companies Biogen, Hybritech, Collaborative Research, Mo- lecular Genetics, Monoclonal Antibodies, Amgen, and Calgene formed in period.the 1978–80 “The Hunt Plays for in Biotechnology,” 71. Baxter,John D. Howard M. Goodman, and William Rutter J. to Francis A. U.S. Congress 1981, 246. Amicus Curiae Rifkin continues to oppose patents on genes. See Rifkinchap. 2. 1998, “Supreme Court Decision Will Spur Genetics Industry,” Inc. Genentech, Communications, Corporate June 16, 1980, 77 77 78 75 75 76 73 73 74 70 71 72 68 68 69 65 66 67 60 60 61 62 63 64 57 57 58 59

192 NOTES TO 150 –153 193 NOTES TO 154 –159 287 287 San Francisco Francisco Francisco

, October 1980. 16, 209, no. 4461 (Sep- [Harvard Business School] Science HBS , 26. , October 108. 1980, 18, , October 1980. 16, , April 1980. 8, , October 1980. 15, 1981 Annual Report Los Angeles Times , August The statement 1980. 20, came from Genentech promo- e, October 1980. 15, , October 55–62. 1982, Quoted in Timothy C. Gartner, Amazing “Stock’s San Day,” Chronicl “Genentech Files Registration Statement with Its SEC for Initial Public Offering,” release for August Corporate 1980, 19, Communications, Ge- Inc.nentech, “Gene Splicer W[ade], GoesN[icholas] Public,” tember 5, 1980): 1102. Wall Street Journal Perkins oral history, 2001, 10. Charles Elia, J. “Genentech’s Final Prospectus Shows Revenue Comes Pri- marily from Health-Care-Firm Jobs,” Wall Street Journal Middleton oral history, 2001, 30. 31.Ibid., Engineering,”“Frenetic Economist Quoted in Middleton oral history, 32. 2001, 101. Swanson oral history, 1996/1997, Inc., Genentech, “New Genentech Issue Trades Wildly as Investors Seek Latest High-Flier,” Ibid., 147. Ibid., Final Prospectus, Genentech, Inc., October 14, 5. 1980, 5–6. Ibid., The three remaining bottles are labeled Human Somatostatin, Human Thymosin Alpha-one, and Human Fibroblast Interferon. Final Prospec- tus, Genentech, Inc., October 14, color insert, 1980, fourth image page, D. Mike Johnson, “Behind Genentech’s Decision to Go Public,”Examiner tional literature, not directly from Swanson. Middleton oral 30–31. history, 2001, Stewart 137–38. 1980, Wade 1980c. Susan Regan and Robin Stahl, “Herb Boyer: Hard Paid Green- Off,” Work burg Tribune-Review Quoted in “New Genentech Issue Trades Wildly as InvestorsHigh-Flier.” Seek Latest Watson, “Inexplicably neither Stanley Cohen nor Herbert Boyer has been so honored [with a Nobel Prize].” Watson 2002, 108. lionaire,” lionaire,” 38. Ullrich oral history, 1994/2003, David Dickson, “Genentech Makes Splash on Wall Street,” Nature 669–70. (October 1980): 23, and reactionsFor Cohen’s Berg’s to the award, see Cohen oral history, 1995, and Berg130–33; 122–26. oral history, 1997, Rothenberg 1984. John March, “The Fascination of the New,” Bulletin Judith Michaelson, “Genentech Soars: in $300 Stock Turns Buyer into Mil- 81 79 80 96 96 97 89 89 90 91 92 93 94 95 85 85 86 87 88 82 82 83 84 99 99 100 98 98 107 107 104 104 105 106 101 101 102 103 ed ed Inc., May San Francisco Exam- ce of Technology Licensing, Stan- magazine, January 38. 5, 1981, entrepreneur “as one who is both a qualifi c , October 1980. 19, Time magazine, March cover. 1981, 9, scientifi nes the nes Los Angeles Times , November B4. 1980, 20, Kenney 4. 1986, Gurin and Pfund 542. 1980, Rathmann oral history, 36. 2003, 16, Penhoet 110. oral history, 1998, Quoted in U.S. Congress 1988, 128. Quoted in Susan Brenner, “Genentech: Life under a Microscope,” 1981, 62–68. scientist and, like all commercial entrepreneurs, a risk taker.” Shapin, 2008, 210. For the notion applied to biotechnology of “creative destruction” fueling innovation as popularized and progress Schum- economist by Joseph peter, see and McKelvey 4–6; Orsenigo 1996, 4–5. 1989, Biogen, Chiron, and Immunomedics. Robbins-Roth 2000, 21. “Man of the Others Year: Who Stood in the Spotlight: Herbert Boyer: Shap- ing the Future of Life,” ening,” ening,” Farley statement in Johnson, “Behind Genentech’s Decision to Go Public.” Perkins oral history, 2001, 10. According to one source, the companies staging IPOs were Genetic Systems, Ribi Immunochem, Genome Therapeutics, Centocor, Bio- Technology General, California Biotechnology, Immunex, Amgen, ford University. Two additional University.ford Two Cohen-Boyer patents were issued in the 1980s. When the three patents expired as a unit they on December 2, 1997, had earned million over $250 in royalties and license fees, the at time the highest income from any academic patent. 2001. Hughes Engineering,”“Frenetic 108. James Flanigan, Computer “Apple Looks Tasty but Its Market Needs Rip- “Lasker Awards by Scientists 4 Won from Bay Area,” iner Yansura, e-mail message to author, September 2009. 28, Stanford University News Service, advance release for August 3, 1981, S74-43, correspondence 1980–1982, Offi life as an academic and/or industrial scientist, seeAccording Shapin to one source, alone 1980 2008, saw the foundation chap. of twenty-six 7. biotechnology companies and more than forty in Then 1981. came an economic downturn with only twenty-two formed 49. 1983, inYoxen 1983. Bud 1993, 193. Shapin defi “Shaping Life in the Lab: The Boom in Genetic Engineering: Genentech’s Herbert Time Boyer,” A large literature exists on commercialism in the university. In addition to see Greenberg Bok 2003. For multiple 2007, perspectives on late modern 5 6 1 2 3 4 123 123 EPILOGUE 117 117 114 114 115 116 111 111 112 113 108 109 110 120 120 121 122 118 118 119

194 NOTES TO 159–168 Bibliography

Andreopoulos, Spyros. 1980. “Gene Cloning by Press Conference.” New England Journal of Medicine 302 (March 27):13. Barinaga, Marcia. 1999a. “No Winners in Patent Shootout.” Science 284 (June 11): 1752–53. ———. 1999b. “Genentech, UC Settle Suit for $200 Million.” Science 286 (Novem- ber 26): 1655. Benner, S. 1981. “Genentech: Life under the Microscope.” Inc. (May): 62–68. Berg, Paul, and Janet E. Mertz. 2010. “Personal Refl ections on the Origins and Emergence of Recombinant DNA Technology.” Genetics 184 (January): 9–17. Berlin, Leslie. 2005. The Man Behind the Microchip: Robert Noyce and the Invention of Silicon Valley. Oxford: Oxford University Press. Bliss, Michael. 1982. The Discovery of Insulin. Chicago: University of Chicago Press. Bok, Derek. 2003. Universities in the Marketplace: The Commercialization of Higher Education. Princeton, NJ: Princeton University Press. Boly, William. 1982. “The Gene Merchants.” California Magazine 7:76–79. Bud, Robert. 1993. The Uses of Life: A History of Biotechnology. Cambridge: Cam- bridge University Press. Bylinsky, Gene. 1980. “DNA Can Build Companies, Too.” Fortune (June 16): 144–46, 149, 152–53. Cairns, John, Gunther S. Stent, and James D. Watson. 1966. Phage and the Origins of Molecular Biology. Cold Spring Harbor, NY: Cold Spring Harbor Laboratory of Quantitative Biology. Cantell, K. 1998. The Story of Interferon: The Ups and Downs in the Life of a Scientist. Singapore: World Scientifi c. Chang, Annie C. Y., and Stanley N. Cohen. 1974. “Genome Construction between Bacterial Species In Vitro.” Proceedings of the National Academy of Sciences 71 (4): 1030–34. Clark, Matt, with Joseph Contreras. 1978. “Making Insulin.” Newsweek (Septem- ber 18): 3. .” 69 216 216 Escheri- . Wash- In Vitro 82, no. 8 82, Journal of Pediat- . New York: Jeremy. New York: c American no. c 1 233, Studies in History and Virginia Law Review From Genetic Engineering to Bio- to Engineering Genetic From 70, no. 11 (November): 70, 3240–44. Normal at Girls, Any Short Cost: Tall 97, no. 2 (December): 177–231. 97, . New York: Carroll. New York: & Graf. The Hidden Election: Politics and Economics in the . Aldershot, UK: Ashgate. , edited by Thomas Ferguson and Joel Rogers, 260– 67: 555–9. 38, no. 1 (March): 38, 159–90. 75, no. 12 (December): 5765–69. 135 (1–2): 67–76. 278 (April 5): 494–95. 278 (April 5): Nature , edited by W. J. Whelan, edited J. by and W. Sandra Hoboken, Black, NJ: John 213–16. by R-Factor DNA.” Proceedings of the National Academy of Sciences DNA.” R-Factor by 131 (1): S5–S7. eld, Graham. 2003. Intellectual Property Rights and the Science Life Industries: ington, Press. ASM DC: Transfer in Government-Sponsored Research.” Research.” Government-Sponsored in Transfer (November): 1663–727. News the ASM Clone.” ence and Technology Policy.” 1980 Presidential Campaign 312. Pantheon. New York: Law Yale Journaltechnology Research.” A Twentieth Century History rics 158. (April 155–56, 9): Eyebrows.” “Chemical Synthesis of Genes Human for Insulin.” Proceedings of the National Academy Sciences of in the Postwar Debates over Bacterial Drug Resistance.” Philosophy of Science turing: Pounds Produced Per Mile Supplement of Height.” 1, (8):2110–14. Boys, and the Medical Industry’s Quest to Manipulate Height Tarcher/Penguin. chia coli lar Genetics.” Gene “Construction1973. of Biologically Functional Bacterial Plasmids Proceedings of the National Academy of Sciences somal Antibiotic Resistance in Bacteria: Genetic Transformation of (July): 24–33. (July): technology Wiley & Sons. Fredrickson, Donald S. 2001. The RecombinantFredrickson, 2001. Donald S. Controversy: DNA A Memoir ———. 1996. “Public 1996. Research———. and Private Development: Patents and Technology Elkington, John. The 1985. Gene Factory Falkow, Stanley. 2001. “I’ll Have Chopped Liver Please, or How I Learned to Love Dutfi Eisenberg, “Proprietary Rebecca 1987. S. Rights and the Normsof Science in Bio- Culliton, Barbara “Pajaro 1982. Dunes: J. The Search Consensus.” for Science Dickson, David, and David “By Noble. Force of Reason: 1981. The Politics of Sci- Dickson, David. “Recombinant 1979. Research: DNA Private Actions Raise Public Creager, AngelaCreager, or Selection?: “Adaption Old Issues H. N. 2007. and New Stakes Cronin, “Pioneering Michael 1997. J. Recombinant Growth Hormone Manufac- Cohen, Susan, and Christine Cosgrove. 2009. Crea, Roberto, Adam Kraszewski, Tadaaki Hirose, and Keiichi Itakura. 1978. ———. 1993. “Bacterial 1993. ———. Plasmids: Their Extraordinary Contribution to Molecu- Cohen, Stanley Annie N., Chang, C. Y. Herbert Boyer, and RobertW. B. Helling. Cohen, Stanley Annie N., Chang, C. Y. and Leslie Hsu. “Nonchromo- 1972. Cohen, Stanley N. 1975. “The Manipulation StanleyCohen, Scientifi 1975. Genes.” of N. “The 1982. Stanford———. Cloning In Patent.”

196 BIBLIOGRAPHY 197 BIBLIOGRAPHY

is is . Red- Science Nucleic .” 255, no. 5 255, n, H. W. W. H. n, USA 76, no. 1 76, USA 19, no. 4 (No- 19, 242, no. 8 (Au- cation of a Self- , edited by John L. L. John edited by , , vol. 1, edited by Melissa by edited 1, vol. , RI Substrate.” Journal of Substrate.” RI 28, no. 5732 (October 18): 28, no. Nature 2 (3): 383–87. 2 (3): Columbia Journalism Review 287 (October 2): 411–16. 287 (October 2): Science for Sale: The Perils, Rewards, and Delusions of Cam- Journal of the American Medical Association (November 542–48. 22): . Chicago: University Chicago: . Chicago of Press. 8 (18): 4057–74. 8 (18): The Nation gust 24/31): 701–2. 24/31): gust vember/December): 41–45. Capitalism pus Acids Research H. Seeburg. “Humanand 1980b. P. Leukocyte Interferon Produced by coli E. Biologically Active.” Nature Growth Hormone.” iel G. Yansura, Roberto Crea, Tadaaki Hirose, Adam Kraszewski, Keiichi Ita- kura, and Arthur “Expression Riggs. D. 1979b. in Escherichia coli of Chemically coli E. by Synthesized Proceedings Genes.” of the National Academy of Sciences Interferon (January): 106–10. Fibroblast Human of “Synthesis 1980a. Pestka. Keenberg, 13–18. Reston, VA: International Reston,Keenberg, 13–18. VA: Conference on Genetic Engineering. Crea, Roberto Giuseppe Miozzari, Ross, J. Michael Itakura, Daniel G. Yansura, “Direct Expression in Escherichia coli of a DNA Se- 1979a. Seeburg. H. and Peter for Human Growth Hormone.” quence Coding 544–48. Journal of Thrombosis and Haemostasis Journal of the American Medical Shortage.” Association Ends Problem, (February 581–87. 7): Proceedings, 1981 Battelle Conference on Genetic Engineering nology: Conduct under the National Institutes Guidelines.” Health of (U.S.) In Insulins,Growth Hormone, and Recombinant Technology DNA Gueriguian, Raven 177–81. New Press. York: Complementary Octanucleotide ContainingComplementary Octanucleotide Eco the Molecular Biology2 (December no. 237–61. 99, 5): Lab.” no. 5448286, (December 2249–50. 17): Boyer, and H. M. Goodman. “Restriction 1975. and Modifi mond, WA: Tempusmond, Books WA: of Microsoft Press. Greene, P. J., M. S. Poonian, A. L. Nussbaum, L. Tobias, D. E. Garfi E. D. Tobias, L. Craze.” Gene “The Nussbaum, 1980. Rae. Goodell, L. A. Poonian, S. Greenberg, M. Daniel S. 2007. J., P. Greene, Goeddel, D. V., E. Yelverton, A. Ullrich, H. L. Heyneker, G. Miozarri, W. Holmes, Holmes, W. Miozarri, G. Heyneker, L. H. Ullrich, A. Yelverton, E. V., D. Goeddel, Gonzalez, Elizabeth Rasche. “Teams 1979. Vie in Synthetic Production of Human Goeddel, DennisDavid V., G. Kleid, Francisco Bolivar, Herbert L. Heyneker, Dan- S. and Sloma, A. Crea, R. Leung, D. Yelverton, E. Shepard, M. H. V., D. Goeddel, Goeddel, David V., Herbert L. Heyneker, Toyohara Hozumi, Rene Arentzen, Keiichi Keiichi Arentzen, Hozumi, Rene Toyohara L. Heyneker, Herbert Goeddel, David V., Gitschier, 2004. J. “Remembrances of Factor VIII. Part The 1: Race to the Gene.” Glasbrenner, Kimberly. “Technology 1986. Spurt Resolves Growth Hormone Glick, Leslie. J. “Genetic 1981. Engineering and Small Business Opportunities.” In Gartland, William “Large-Scale 1981. J. ApplicationsRecombinant of Tech- DNA Genentech, Inc. 1981. Annual Report. Hall, Invisible Stephen 1987. S. Frontiers: The Race to Synthesize a Human Gene Gurin, Joel, and Nancy E. Pfund, “Genetic 1980. Engineering: Bonanza in the Bio Hagmann., Michael. “Researcher 1999. Misdeed.” Rebuked 20-Year-Old for

. . New Haven, Business Week Journal of Heredity Historical Studies in in. (April 14): 68–72. Operator DNA Is Functional in Functional Is DNA Operator lac 69:2904–9. 25:111–36. . Boston: Houghton Miffl . Cambridge: Cambridge University Press. University Cambridge Cambridge: . 69, no. 11 no. (November): 69, 3448–52. 263, no. 5580 (October 28): 748–52. of a Chemically Synthesized Gene the for Hormone Somatosta- 198 (December 1056–63. 198 9): 219 (February 219 632–37. 11): Nature Science .” 92:541–75. (February 251–83. 2): New Scientist (July 86. 12): Press. University Yale CT: gineered Drug.” Nature Reviews 2 (September): Drug.” gineered 747–81. PhD diss., University of California, San Diego. Firms: The Biochemistry Departments of Berkeley, Stanford, and and UCSF the Birth of the Biotech Industry.” Industrial and Corporate Change no. 2 15, the Biological and Physical Sciences Physical and Biological the Cambridge, MA: Harvard University Press. Science for Insertingfor New Genetic Information into of Simian DNA Virus Proceed- 40.” Sciences Academy of National the of ings Heyneker, Francisco Bolivar, “Expression and Herbert Boyer. 1977. W. in Es- cherichia coli tin.” vivo Leaguer—and Wall Street Loves Business It.” Week otide Sequence Restricted by the R1 Endonuclease.” Proceedings of the National Academy Sciences of Rosenberg, Richard E. Dickerson, Saran A. Narang, Keiichi Itakura, Syr-yaung Lin, and Arthur Riggs. “Synthetic D. 1976. Boys—and the Men They Become (October 28):108. Biotechnology and the Commercialization of Molecular 1974–1980.” Biology, Isis 56 (5): 197–202. Du Pont R&D, 1902–1980 Kehoe, Louise. “Genetic 1979. Engineering’s Growing Commercial Importance.” Kenney, Martin. Biotechnology: 1986. The University-Industry Complex Kevles, Daniel “Ananda 1994. J. Chakrabarty Wins a Patent.” ———. 2003. “The Trials———. and Tribulations of Producing the First Genetically En- Jones, Mark Perfect Peter. 2005. “Biotech’s Climate: The Hybritech 2 vols. Story.” Jong, Simcha. 2006. “How Organizational Structures in Science Shape Spin-off Jasanoff, Sheila. Science 1995. at the Bar: Science, Law, and Technology in America Johnson, Irving “Human 1983. S. Insulin from Recombinant Technology.” DNA Itakura, Keiichi, Tadaaki Hirose, Roberto Crea, Arthur Riggs, D. Herbert L. Jackson, David Robert A., H. Symons, and Paul “Biochemical Berg. 1972. Method Hotchkiss, Rollin “Portents 1965. D. a Genetic for Engineering.” Hedgpeth, Howard J., M. Goodman, and “The Herbert Boyer. Nucle- 1972. DNA W. Heyneker, Herbert John L., Shine, Howard M. Goodman, Herbert Boyer, John W. ———. 2006. Size———. Matters: How Height Affects the Health, Happiness, and Success of Hamilton, Joan. “Genentech 1985. Gets the at a Shot Big Time.” First “Biotech’s Superstar: 1986. ———. GenentechIs Becoming a Major- Hounshell, David and A., John Kenly Smith. Science 1988. and Corporate Strategy: Hughes, Sally Smith. 2001. “Making Dollars Out The First DNA: of Major Patent in

198 BIBLIOGRAPHY 199 BIBLIOGRAPHY

. , Es- Sci- The Prism , edited , ts?” ts?” New Scientist . Sausalito, CA: 71, no. 5 (May): . New York: Coward,. New York: New Scientist (September 28): . New York: Crown.. New York: Life for SaleLife 205 (August 205 602–7. 10): Evolutionary Innovations: The Business of Biotechnology of Business The Innovations: Evolutionary le of a Genetic Engineer.” The Golden Helix: Inside Biotech Ventures The First Miracle Drugs: How the Drugs Sulfa Transformed Medi- Proceedings of the National Academy of Sciences . Cambridge, MA: MIT Press. Recombinant The DNA: Untold Story .” . Cambridge, MA: MIT Press. 69:3370–74. . Berkeley: University of California Press. 191 (March 19): 1160–62. . Oxford: Oxford University Press. Ivory and Tower Industrial Innovation: University-Industry Technology Transfer 19:369–93. R. B. Helling. “Replication 1974. and Transcription of Eukaryotic in DNA cherichia coli 1743–47. with Higher Organisms, 1960–1980.” History and Philosophy of the Sciences Life 1960–1980.” Organisms, Higher with 1979. “Human1979. Growth Hormone: Complementary Cloning DNA and Expres- Science Bacteria.” in sion ence 924–26. Oxford: Oxford University Press. University Oxford Oxford: ProceedingsEndonuclease Ends.” Generates Cohesive of the National Academy Sciencesof McCann & Geoghegan. (October 5): 18–19. Stanford November 33–37. cine Tech, 1930–1970 Tech, by Scott Frickel and Kelly Madison: Moore, 35–62. University of Wisconsin Press. preme Court of the United States, October Term, no. 79–136. Convergence: Universities and Industry in the Biotechnology In Field.” New Political Sociology of Science: Institutions, Networks, and Power University Science Books. Controversy Morrow, J. F., S. N. Cohen, A. C. Y. Chang, H. W. Boyer, H. M. Goodman, and and Goodman, M. H. Boyer, W. H. Chang, Y. C. A. Cohen, N. S. F., J. Morrow, Mowery, David Richard C., R. Nelson, Bhaven Sampat, and Arvids Ziedonis. 2004. Morange, “TheMichel. Transformation 1997. Molecular of Biology on Contact Marx, “Molecular Jean L. 1976. Cloning: Powerful Studying for Tool Genes.” McAuliffe, Sharon, and Kathleen McAuliffe. 1981. Lewin, Roger. 1978a. “Profi “Modern 1978b. Biology———. the at Industrial Threshold.” Goodman. M. Howard and Baxter, D. John Hallewell, A. Robert Joseph, Martial, McKelvey, Maureen.McKelvey, 1996. Mertz, Janet and E., Davis. Ronald “Cleavage by R1 of DNA W. 1972. Restriction Lowen, Rebecca S. 1997. CreatingLowen, University: the Cold War Rebecca 1997. The S. Transformation of Lederberg, Splicing: “DNA Joshua. 1975. Will Fear of Its Benefi Rob Us 2007. E. John Lesch, Lécuyer, Christophe. 2006. Making Silicon Innovation Valley: and the Growth of High Kornberg,Arthur. 1995. Kiley, Thomas D. 1979. “Brief on Behalf of Genentech, Inc., Amicus Curiae.” Su- Curiae.” Amicus Inc., Genentech, of Behalf on “Brief 1979. D. Thomas Kiley, Kleinman, Daniel Lee, Vallas. and Steven P. 2005. “Contradictions and Krimsky, Sheldon. 1985. Genetic Alchemy: The SocialHistory 1985. of the Recombinant DNA Sheldon. Krimsky, Lear, John. 1978. . . , 4, 4, . New . New Esquire . London: 102, no. 17 no. 17 102, cer.” cer.” Diabetes Care Diabetes . New York: Gotham.. New York: /genentech-and-the- . Chicago: University of . Stanford,CA: Stanford (accessed March 3, 2010). 16011 cation in Bacteria of Struc- 84 . New York: St. Martin’s. St. . New York: efde (August): 464–71. 8 270 (December 486–94. 270 8): fc 3 . Cambridge: Cambridge University _ (December http://pharmalicens 7). Nature Proceedings of the National Academy of Sci- 1070133214 , February–March, 39. 23–26, From Alchemy to IPO: The Business of Biotechnology of Business The IPO: to Alchemy From The Emergence of Biotechnology , July 11: 8. Science Business: The Promise, the Reality, and the Future of Bio- 276 (December 276 795–98. 21): 69, no. 11 69, (November): 3389–93. . Boston: Harvard Business School Press. Before and After the Bayh-Dole Act in the United States Business Books, 2004. H. Freeman. W. New York: New Life Forms?” Mother Jones Tarcher/Putnam Inc. P. Jeremy York: Chicago Press.Chicago Science and Business at GE and Bell, 1876–1926 Press. York: HarperYork: Business. Routledge. tech DNA andDNA of Linear Simian Virus 40.” ences Goodman. “Nucleotide Sequence 1977. and Amplifi Bacteria.” by Hormone tural Gene Rat for Growth Hormone.” Growth of “Synthesis 1978. Goodman. M. H. and ter, Nature Molecular Proceedings Biology.” of the National Academy of Sciences 5905–8. (April 26): December: 366–74. Examiner Francisco neer Inventions.” Bioscienceneer Inventions.” Law Review ing.com/public/articles/view/ stolen-gene-patent-law-and-pioneer-inventions#f MA: Perseus. Cambridge, no.1 (January–February): 64–68. (January–February): no.1 ———. 1998. The Biotech 1998. Century:———. Harnessing the Gene and Remaking the World Packard, David. 1995. The How HP BillHewlett Way: David. 1995. Packard, and I Built Our Company Nelkin, Selling Science: 1995. Dorothy. How the Press Covers Science and Technology Orsenigo, Luigi. 1989. Rifkin, Have “DNA: the Corporations 1977. Jeremy. Already Grabbed Control of Insulin.” Human of Production “Bacterial 1981. D. Arthur Riggs, Rabinow, Paul. Making A Story 1996. PCR: of Biotechnology Reich, Leonard The 1985. Making S. of the American Industrial Research Laboratory: Reimers, “Tiger Niels. by 1987. the Tail.” Chemtech Perkins, Thomas A. 2007. Boy: Valley The Education Perkins of Tom Interferon: The Science 2005. and Selling of a Miracle Toine. Drug Pieters, Pisano, 2006. Gary P. Seeburg, H., P. J. Shine, J. A. Martial, R. D. Ivarie, J. A. Morris, A. Ullrich, J. D. Bax- Sgaramella, Vittorio. “Enzymatic 1972. Oligomerization of Bacteriophage P22 Rothenberg, Randall. 1984. “Robert A. Swanson, Chief Genetic Offi Saltus, Richard. “Bay Scientists 1979. Find to Synthesize Way Hormones.” San Seeburg, Peter John Shine, H., A. Martial, Joseph Baxter, John D. and Howard M. Robbins-Roth, Cynthia. 2000. Roberts, Richard 2005. “How J. Restriction Enzymes Became the Workhorses of Rimmer, Matthew. 2009. “Genentech and the Stolen Gene: Patent Law and Pio

200 BIBLIOGRAPHY 201 BIBLIOGRAPHY . . e . New Scienc 206 (No- 210 (Octo- 210 . New York: . New York: . Philadelphia: 208 (June 27): 283 (January 283 10): Science Science Nature Impacts of Applied Genet- Using Analytical Agarose- Analytical Using 12:3055–63. ce. DNA: The Secret of Life of Secret The DNA: uenzae . Baltimore: Johns Hopkins Univer- The Gene Age: Genetic Engineering and cation Bacterial of a Plasmid Con- . Washington, Government U.S. DC: Biochemistry Science, Technology, and the Issues of the Eighties: A Moralc Life: History of a Late Modern Vocation . New York: Charles. New York: Scribner’s Sons. The Kingmakers: Venture Capital and the Money behind the The Scientifi 197 (September 30): 1342–45. 55B: 461–69. Biotech: The Countercultural Origins of an Industry ce of Technology Assessment. Technology of 1981. ce , edited by Albert H. and Teich Ray Thornton the for American ce. . San Francisco: H. Freeman. W. Science . New York: Basic. New Books. York: . New York: John Wiley. New York: & Sons. University of Pennsylvania Press. periment.” Washington, Government U.S. DC: Printing Offi 208 (May 16): 688–89,208 (May 691–92. 16): 1441. vember 665. 663, 9): nology ics: Micro-Organisms, Plants, and Animals Offi Printing Chicago: UniversityChicago: Chicago of Press. Hemophilus in parainfl Activities donuclease Electrophoresis.” Bromide Ethidium Case of Recombinant In DNA.” Policy Outlook Knopf. ber 31): 506–7. ber 31): the Next Industrial Revolution Next the “Construction Sudo. 1979. T. and Identifi taining the Human Fibroblast Interferon Gene Sequence.” Proceedings of the Japanese Academy Net Simon & Schuster.York: America Twentieth-Century in Research tive Press. sity 126–27. Cloning Gene Vettel, Eric 2006. J. “Recombinant Nicholas.Wade, 1977. NIH DNA: Rules Broken in Insulin Gene Ex- “Recombinant 1979. Warming———. DNA: Science Payoff.” Big Up for U.S. Congress,U.S. Offi Biotechnology in Investment U.S. Biotechnology: in Developments New 1988. ———. ———. 1980a. “Cloning 1980a. ———. Gold Rush Turns Basic Biology into Business.” Big “New Horse 1980b. May Lead———. Interferon Race.” 1980c. “Gene———. Splicing Company Wall Wows Street.” Teitelman, Robert. Gene 1989. Dreams: Street, Wall Academia, and the Rise of Biotech- Southwick, Karen. 2001. Shapin, Steven. 2008. B. Sugden,Sharpe, A., and Sambrook. J. P. “Detection 1973. Restriction of Two En- Weiner, Charles.Weiner, “Relations 1982. of Science, Government and Industry: The Walgate, Robert. “How 1980. Safe Will Biobusiness Be?” Sylvester, Edward and Lynn J., C. Klotz. 1983. Taniguichi, M. Sakai, Fujii-Kuriyama, T., Y. M. Muramatsu, Kobayashi, S. and Stewart, James The B. 1980. Partners: Inside America’s Most Powerful Law Firms Academic Scientists 1988. and the Pharmaceutical P. John Industry:Swann, Coopera- Watson James D., and JamesWatson John Tooze. D., The Story: 1981. DNA A Documentary History of withWatson, James D., Andrew Berry. 2003. New 21, 3 no. , edited William by , cers: Does Cost Out- 41:589–636. Technology and Culture . Chicago: University Chicago: . Chicago of Press. , edited by Anders Nordgren, 51–64. Uppsala, 2, 2nd series, 303–60. From Genetic Engineering Biotechnology to (February/March): 33–43. , vol. 3, edited by Ion Gresser, London: 101–34. Academic Press, t?” In t?” Gene Therapy and Ethics . Reading, MA: Addison-Wesley. (June 26): 574. 26): (June York: Oxford University Press. Eukaryotic Biology and the Advent of Recombinant Research DNA and Tech- Journal of the History 1967–1980.” nology, of Biology for Genetic Engineering, 1972–1982 WhelanJ. and Sandra John Wiley New York: Black, & Sons. 195–201. entist weigh Benefi trial Research General at Electric, 1900–1916.” (July): 408–29. Osiris tion, 1972–1982.” tives.” tives.” Upsaliensis. Universitatis Acta Sweden: Interferon 1981 1981. Capital Associationthe for Advancement Boulder, of Science, CO: 71–97. Westview Press. Technology Review Yoxen, Edward. The 1983. Gene Business: Who Should Control Biotechnology? Yamamoto, Keith. “Faculty 1982. Members as Corporate Offi Yanchinski, Stephanie. Freedom “More 1980. Genetic US for Engineers.” New Sci- Yi, 2008. Doogab. “Cancer, Viruses, and Mass Migration: Paul Venture Berg’s into ———. 1994. Molecular 1994. Politics:———. Developing American and British Regulatory Policy Wise, George. 1980. “A New Professional Role for Wise, George. “A 1980. Scientists in Industry: Indus- Wright, Susan. “Recombinant 1986. Technology DNA and Its Social Transforma- Weissmann, Charles. “The 1981. Cloning of Interferon and Other Mistakes.” In Wilson, The 1986. New Venturers: John Inside W. the High-Stakes of Venture World ———. 1986. “Universities, 1986. ———. Professors, and Patents: A Continuing Controversy.” “Social 1999. Responsibility———. in Genetic Engineering: Historical Perspec-

202 BIBLIOGRAPHY Oral History Bibliography

The oral histories for the Bancroft Library at the University of California, Berkeley, can be found in a searchable collection on bioscience and bio- technology at http://bancroft.berkeley.edu/ROHO/projects/biosci/.

Berg, Paul. 1978. Interview by Rae Goodell. Massachusetts Institute of Technol- ogy, Oral History Program, Oral History Collection on the Recombinant DNA Controversy, MC 100, box X. Massachusetts Institute of Technology, Institute Archives and Special Collections, Cambridge, Massachusetts. ———. 1997. A Stanford Professor’s Career in Biochemistry, Science Politics and the Biotechnology Industry. Oral history conducted by Sally Smith Hughes, Regional Oral History Offi ce, Bancroft Library, University of California, Berkeley, 2000. Betlach, Mary C. 1994. Early Cloning and Recombinant DNA Technology at Herbert W. Boyer’s UCSF Laboratory in the 1970’s. An oral history conducted by Sally Smith Hughes, Regional Oral History Offi ce, Bancroft Library, University of Califor- nia, Berkeley, 2002. Boyer, Herbert W. 1975. Interview by Rae Goodell. Massachusetts Institute of Technology, Oral History Program, Oral History Collection on the Recombi- nant DNA Controversy, MC 100, box X. Massachusetts Institute of Technol- ogy, Institute Archives and Special Collections, Cambridge, Massachusetts. ———.1994. Recombinant DNA Research at UCSF and Commercial Applications at Ge- nentech. An oral history conducted by Sally Smith Hughes, Regional Oral His- tory Offi ce, Bancroft Library, University of California, Berkeley, 2001. ———. 2000. Interview by Sally Hughes and Arnold Thackray, draft. Chemical Heritage Foundation, Philadelphia. ———. 2009. “Wonderful Life: An Interview with Herb Boyer.” Interview by Jane Gitschier. Public Library of Science Genetics5(9): e1000653. Cape, Ronald E. 1978. Interview by Charles Weiner. Massachusetts Insti- tute of Technology, Oral History Program, Oral History Collection on the . Oral ce, Ban- ce, . Oral history . Oral history ce, Bancroft Li- ce, Bancroft Li- ce, Bancroft Li- . Oral history con- Bancroftce, Library, Univer- . An oralhistory conducted by Genentech Legal Counsel and Vice President, 1976–1988, Science, Biotechnology, and Recombinant A Personal DNA: DNA ChemistryDNA at the Dawn of Commercial Biotechnology . Oral history conducted by Eric Vettel, J. Regional Oral His- . Oral history conducted by Sally Smith Hughes, Regional Oral . Oral history conducted by Sally Smith Hughes, Regional Oral . Oral history conducted by Sally Smith Hughes, Regional Oral His- ce, Bancroft Library, University of California, Berkeley, 2006. ce, Bancroft Library, University of California, Berkeley, 2006. ce, Bancroft Library, University of California, 2009. . An oral history conducted by Sally Smith Hughes, Regional Oral His- brary, University of California, Berkeley. California, of University brary, in Biotechnology ce, BancroftHistory Library, University Offi of California, Berkeley, 2004. conducted by Sally Smith Hughes, Regional Oral History Offi History Offi Historyce, Bancroft Library, Offi University of California, Berkeley, 2002. ducted by Sally Smith Hughes, Regional Oral History 2006. Offi Berkley, California, of University brary, Entrepreneur and 1982–1992 Offitory conducted by Sally Smith Hughes, Regional Oral History Offi brary, University of California, Berkeley, 2003. and Neurobiology and Offitory Massachusetts. tute of Technology, Oral History Program, Oral History Collection on the Recombinant Controversy, DNA box 100, X. MC Massachusetts Institute of Technology, Institute Archives and Special Collections, Cambridge, Massachusetts. Hughes and Leo Slater, Chemical Heritage Foundation, Philadelphia. tute of Technology, Oral History Program, Oral History Collection on the Recombinant Controversy, DNA box 100, X. MC Massachusetts Institute of Technology, Institute Archives and Special Collections, Cambridge, history conducted by Sally Smith Hughes, RegionalOral History Offi croft Library, University California, of Berkeley, 2004. Recombinant Controversy,DNA box 100, X. MC Massachusetts Institute of Technology, Institute Archives and Special Collections,Cambridge, Massachusetts. sity of California, Berkeley, 2006. History Offitory Sally Smith Hughes, Regional Oral History Offi Johnson, Irving S. 2004. Eli Lilly and the Rise of Biotechnology 2004. S. Irving Johnson, Molecular Geneticist at UCSF and Genentech, Entrepreneur Entrepreneur Genentech, and Heyneker, UCSF at Geneticist Herbert L. 2002. Molecular Itakura, Keiichi. 2005. Synthesis DNA at City of Hope for Genentech Kiley, Thomas D. 2000/2001. 2000/2001. ThomasKiley, D. Goeddel, Scientist 2001/2002. David V. at Genentech, CEO at Tularik Gower, James M. 2004. Business Development and Marketing Strategy at Genentech, Gelfand, David. Interview 1978. by Charles Massachusetts Weiner. Insti- Glaser, Donald. 2003–4. The Bubble Chamber, Bioengineering, Business Consulting, D’Andrade, Hugh Typescript A. 1998. of an interview conducted by Sally Smith Falkow, Interview Stanley. 1976. by Charles Massachusetts Weiner. Insti- Crea, Roberto. 2002. ———. 2003. Biotech Pioneer———. and Co-Founder of Cetus Cohen, Stanley N. 1995.

204 ORAL HISTORY BIBLIOGRAPHY 205 ORAL HISTORY BIBLIOGRAPHY . Oral . Oral . Oral . Oral ce, Ban- ce, ce, Ban- ce, Ban- ce, ce, Ban- ce, . Oral his- ce, Bancroft ce, . Oral history Bancroftce, Li- ce, Bancroft Li- . Oral history con- . Oral history con- ce, Bancroft Library, cer at Genentech, 1978–1984 California, San Francisco

ce of Technology Licensing and the Cohen/Boyer ce, Bancroft Library, University of California, California, of University Library, Bancroft ce, . Oral history conducted by Sally Smith Hughes, ce, Bancroft Library, University of California, Berke- California, of University Library, Bancroft ce, Biochemistry at Stanford, Biotechnology at DNAX at Biotechnology Biochemistry Stanford, at . Oral history conducted by Glenn E. Bugos, Regional Oral . Oral history series conducted by Sally Smith Hughes, Re- Stanford’s Offi . Oral historyconducted by Sally Smith Hughes, Regional Oral ce, Bancroft Library, University of California, 1998. . Oral history conducted by Sally Smith Hughes, Regional Oral His- . Oral history conducted by Sally Smith Hughes, Regional Oral His- ce, Bancroft Library, University of California, Berkeley, 2001. ce, Bancroft Library, University of California, Berkeley, 2002. Library, University of California, Berkeley, 1998. conducted by Sally Smith Hughes, Regional Oral History Offi brary, University of California, Berkeley, 2002. tory conducted by Sally Smith Hughes, Regional Oral History Offi history conducted by Sally Smith Hughes, RegionalOral History Offi croft Library, University California, of Berkeley, 2005. ley, 2010. http://bancroft.berkeley.edu/ROHO/projects/vc/. 2010. ley, University of California, Berkeley, 2004. Genentech, 1976–1999 ce, BancroftHistory Library, University Offi of California, Berkeley, 2002. Industrial Landscape Offi History Oral gional of Three Industry Insiders Offi History Oral Regional Berkeley, 2001. ducted by Sally Smith Hughes, Regional Oral History Offi history conducted by Glenn Bugos the for Regional Oral History Offi croft Library, University California, of Berkeley, 2002. tory Offitory 1976–1996 History Offi history conducted by Sally Smith Hughes, Regional Oral History Offi croft Library, University of California, Berkeley, 2006. to Biomedicine at the University of history conducted by Sally Smith Hughes, Regional Oral History Offi croft Library, University of California, Berkeley, 2004. Cloning Patents brary, University of California, Berkeley, 1998. Genentech Offitory ducted by Sally Smith Hughes, Regional Oral History Offi Lasky, Laurence. 2003. Vaccine and Adhesion 2003. Laurence. Molecule ResearchLasky, at Genentech Kleid, Dennis G. 2001/2002. Scientist and Patent Agent atGenentech 2001/2002. G. Dennis Kleid, Kornberg, Arthur. 1997. First Chief Financial Offi Financial Chief First 2001. A. Fred Middleton, Rathmann, George B. 2003. Chairman, and 2003. President CEO, B. of George Amgen,Rathmann, 1980–1988 Perkins, Thomas J. 2001. Kleiner Perkins, Venture Capital, and the Chairmanship of 2001. J. Thomas Perkins, Early Bay 2009, 2010. Area Venture Capitalists:———. Shaping the Economic and Regional Characteristics of Biotechnology: Perspectives Perspectives Biotechnology: Characteristicsof Regional 1998. E. Edward Penhoet, Pennica, Diane. and 2003. TPA Other Contributions at Genentech Co-founder, CEO, and Chairman CEO, Co-founder, of Genentech, Inc., 1996/1997. A. Robert Swanson, Riggs, Arthur. 2005. City Contributions of Hope’s to Early Genentech Research Rutter, William The 1992. Department J. of Biochemistry and the Molecular Approach Reimers, Niels. 1997. Scheller, Richard. 2001/2002. Conducting Research in Academia, Directing Research at . Oral history Bancroftce, Li- . Oral history con- ce, Bancroft Library, . Oral history conducted by Bancroftce, Library, Univer- Director Manufacturing of at Genentech sity of California, Berkeley, 2002. ducted by Sally Smith Hughes, Regional Oral History Offi 2006. California, of University conducted by Sally Smith Hughes Regional Oral History Offi brary, University of California, Berkeley, 2006. Sally Smith Hughes, Regional Oral History Offi Young, WilliamYoung, 2004. D. Ullrich, Axel. Molecular1994/2003. Biologist at and UCSF Genentech Yansura, Daniel G. 2001–2. Scientist Senior Genentech at

206 ORAL HISTORY BIBLIOGRAPHY Index

Page numbers in italic type refer to illustrations.

Abbott Laboratories, 73, 175n17 Bolivar, Francisco, 60, 62 Åberg, Bertil, 109–10 Boyer, Herbert W., 3, 14, 37, 60, 62, 67, Adair, Dick, 12 98, 106, 140, 157, 159; background, 2; Amgen, Inc., 161, 166, 167, 192n62 Cohen, collaboration with, 11–20; and Anderson, Larry, 37 commercialization, 26–27; confl ict- angiotensin II, 27 of-interest controversy, 70–73; and antibiotic resistance, 7, 10, 17–18, 23 Congress, 66; early career, 5–7, 9–12; Asilomar conference, 23–24, 34 education, 3–5; fame, 161–62; and AT&T, 101 Genentech, 41–44, 47, 94, 130, 134, 168; Genentech shares, 158; on going Baxter, John, 108–9, 113, 115, 118, 119, 151, public, 148; and human growth 184n87 hormone project, 107, 109; invention of Bayh-Dole Patent and Trademark Act, 138 recombinant DNA technology, 11–20; Berg, Paul, 8–9, 19; Nobel Prize, 159; on and patenting, 22, 65; and Perkins, patenting, 24; and politics, 67, 68; 40–43; personality, 13, 17; and publica- quoted, 8, 9, 24, 67, 69, 70–71, 173n54, tion, 99–102, 131; and publicity, 68–70; 173n67; safety committee, 23 quoted, 1, 29, 50, 51–52, 68, 69, 73, 95, Bethesda Research Laboratories, 105 99–100, 102, 122–23, 148; recruitment Betlach, Mary C., 17, 174n86, 182n26 efforts, 80–83, 85, 88, 102, 111; on re- BioEngineering News, 146 search contracts, 76; Riggs, collabora- Biogen, Inc., 89, 105, 106, 111, 129, 137, 142, tion with, 50–52, 54–55, 93; and risk, 143–44, 145, 146, 166, 181n7, 192n62 23–24; and secrecy, 17; social activism, biohazards. See safety concerns 9, 24; stock-selling trip, 155–57; and biological warfare laboratories, 93 Swanson, 34–37, 41. See also Boyer labo- Biomania, 137–39 ratory; Cohen-Boyer technique biotechnology industry, 1, 36, 70, 74, 97, Boyer, Marigrace Hensler, 4 104–10 passim, 131, 132, 137–55 passim, Boyer laboratory, 10–11, 26, 43, 48, 49–50, 160–68 passim 55, 59, 65, 71, 108 Birndorf, Howard, 106 Brenner, Sidney, 177n13 Bishop, J. Michael, 72, 171n7 Brown, Don, 173n54 Blyth Eastman Paine Webber, 155 Burroughs Wellcome & Co., 175n17 recombinant , 112; insulin 92 , , 66, 148–51,, 66, 155, See alsoSee ; genesis 11–20; of, 62 plasmids; recombinant sm, pituitary, 109, 119, 120, 121 , 16, 17, 53, 67, 93 53, 67, 17, , 16, ict-of-interestissues, 103 70–73, insulin 89, 122, 86, project, 71, 76–77, 93, France, in laboratory 126; 125, 123, 118; lawsuits, symposium, 192n67; 77; and University of California, 94–95, 108 160 112; 92–93, 69, 86–87, cloning of, 11–20, 80–83, passim,50–52, 87–91 59, 58, liga- 159; 144, 118, 117, 111, 109, 94–95, tion, politics 50; 8, 22–24, of, 33, 45–46, 78, 88, 92–94, 83, 111; probes, 66–74, 61, sequencing121, 153; 144–45, 11, of, 43, 48, 89, 144, 81, 82, staining 145, 159; also See 13. of, DNA technology 184n92; consultants,175n17, 113; 103, and Genentech, 104, 102, 141, 94–97, 86, and190n5; governmental regulation, 118; 113, project, growth124; hormone diagram 15 of, patenting of, 160. DNA technology passim, 54,passim, 66–73 47, 46, 45, passim, 104–25 143, 144, 138, 97, 96, 77, 150, 159, 162 interferon 96; 91, project, 86–87, proj- 121; quoted, laboratory, 144–45; ect, 133 87, Cronkite, Walter, 159 diabetes, 124 98, 102, 76, 37, Diamond Chakrabarty v. Eleanor, Directo, chemicalDNA: synthesis 50–52, of, 59–64, DNAX Research Institute, 71 DuPont Co., 101, 142 dwarfi coli E. E. Hutton F. & Co., 121, 137–38, 146, 190n25 electrophoresis, 14–16 13, Eli Lilly and Company, 128, 93, 90, 81, 82, Collaborative Research, Inc., 192n62 commercialization, passim, 21–27 32–37 confl consultancy, industrial, 162 Crea, Roberto, 62 59–60, Creutzfeldt-Jakob disease, 126 Francis, 4 Crick, , 67 , 159, 190n11;, 159, 18 18 , Diamond v.

Cohen-Boyer technique , 73, 126–27, 151 , 73, 126–27, case. See case. DNA: cloning of See See alsoSee mercial potential foreseen, 20–27; 129, 137–38, 142, 146, 147, 148, 161, 166, 166, 161, 148, 147, 146, 142, 137–38, 129, 175n17; advisory 43, 81; 27, board, 25–26, and Kleiner & Perkins, 33 31–32, 142; research agreements,57–58 83 moratorium, tion, 25–26, 27; and 27; tion, Congress, 25–26, 66; early career, education, 10; 7–8, and 5; Genentech, 81;and patenting, 21–22; personality, quoted, 25; 13, and 8; risk, 23–24; and secrecy, social 17; activism, 24. reactions, 126 collabora- Boyer, background, 2–3; tion with, and 11–20; Cetus Corpora- growth hormone project, 111–13; insu- 111–13; project, growth hormone lin press conference, 98; insulin proj- ect, lawsuit, 86–89, 91–93; and 58; Lilly, 94; and publicity, 68–69; research somatostatin 107; 55–57, agreements, 65 60–62, 59, project, Chakrabarty 174n85 Cohen-Boyer technique, 84; 65, com- 63, Carter administration, 138 Cetus Corporation, 44, 64, 73, 78, 106, 105, Chakrabarty, Ananda, 148, 150 Chakrabarty Cambridge, Massachusetts: research Massachusetts: research Cambridge, 146 145, 144, 142, interferon, and cancer: Cantell, Kari, 142 Cape, Ronald, 33, 129, 31–32, 64, 106, 161 25, Carlock, Sharon, 189n112 Business Week 106 Brook, Byers, Byrnes, Robert, 128 192n62 161, Inc., Calgene, California Institute of Technology, 50, clinical trials, 121, 125, 126, 145; adverse adverse 145; 126, 125, 121, trials, clinical cloning. Cohen, Joanna 5 Wolter, Cohen, Stanley 1, 6 N., City of Hope National Medical Center, 50; Chang, Annie, 13–14, 17, Chemical and Engineering News Chiron Corporation, 70, 106, 161, 166, Ciba, 175n17 Citibank, 30–31

208 INDEX 209 INDEX . human, 127; human growth growth human ; and Genentech, DNA; recombinant 112 , recombinant DNA cial, semi-synthetic, 52–55; 77, 87, 89, 93; patenting 89, 93; 87, and77, licensing, 138 85, 87, 132, 140, 189n112; 132, 87, growth85, and 118; 116–17, 113, project, hormone Heyneker, 88–89; and patent HGH dis- pute, 192n73; insulin 152–53, research project, 90–91, 94; and interferon project, and 191n38; 144–45, press conference, 98; quoted, 84, 144; 101, and Stanford Research Institute (SRI), 83–84 Boyer, 43, 177n3; 11, 10, 19, and Eli Lilly Genentech, and 113; Company, and 81–82; growth hormone project, 113; laboratory, 11, 108–9; 43, 80, quoted, 82; and Seeburg, 115 also See 111. 108–9, rat, hormone 184n92 insulin research, 84, 89–94 82–83, 77, passim; Nobel Prize, 159 versity of California, women 151–53; at, 135 also See 117. 112–13, DNA technology passim,73–83 passim, 105–11 88, 89, 97, 118, 121, 122, 139, 146, 137, 162, 157, 167; health, social, and ethical implica- tions 9, 22–24; of, and the media, 69, 119, 142, 137, 144, 159; and patenting, also See 151. 149, technology growth hormone: animal vs animal hormone: growth Guillemin, Roger, 109–10 Hambrecht 178n31, & Quist, 157, 155, Handler, 68 Philip, 67, 49, 191n56 Harvard mouse, Harvard University, 142; insulin research, Goodman, Howard, 184n87; 151, and 77, Gordon conferences, 23 19, 17, Genex, Inc., 105, 106,146 138, Gilbert, Walter: and Biogen, Inc., 143; 106, Glaser, Donald, 31–32 92 David, Goeddel, General Electric Company, 101, 148 genes: artifi genetic code, 4 genetic engineering, 46, 38, 32, 33, 1, 20, 37,

see ; and publication, 99–102; publicity, 41, 44, 58, 77, 90, 127, 158–59; and 158–59; Uni- 41, 127, 44, 90, 77, 58, 98–99, 118–19; research agreements, 110–11; 76, research55–58, culture, research 166–67; 130–35, structure, 103–4; salaries, 88, 89–90; scaling up production, 122–27; share price, 154, 178n31; 161, 158, somatostatin project, 58, 59–66, 72,52–55, 109,110, 123; stock, laboratory building, 104; 90, 77–80, 87, lawsuits, 117; manufacturing facility, 126; as model, naming 165–66; 161, of, 41; and patenting, 114; 64–65, and poli- tics, proof-of-concept 69–70; experi- ment, 49–65; prospectus, 155, 153–54, 156 and governmental regulation, 124, and125; Hoffmann–La Roche ( Hoffmann–La Roche: and Genentech); human 134; “Ho-hos,” growth hor- mone project, insulin 107–27; project, 86–94; interferon project, 134, 142–46; IPO, 158–64; and KabiVitrum, 110–11; integration, 120–22; earnings, 129–30, egalitarianism,154; and Eli 134–35; Lilly 102, and Company, 94–97, 86, 104, 141, employment 190n5; agree- ments, exit 85; strategies, 139–41; fundamentalprinciples, 168–69; genesis of, 34–44; going public, 153–61; committee, 123; board of directors, business105, 130; plan developed, celebrations, 47–48; 38–39, 44–45, 146; consultants,126–27, 130; 113, 81–82, corporate expansion, 127–31; corporate 90, 96, 97, 106,90, 161, 96, 162, 165, 97, 168 Genentech: advisory board, biosafety 43; Farley, Pete, 25, 31–32, 44–45, 161 Farley, Pete, 44–45, 31–32, 25, 146 127, 126, 125, 122, FDA, Finnish Red Cross, 142 Fredrickson,Donald, 33, 125 19–20 DNA, frog 182n26 Forrest, Fuller, fusion proteins, 118 98, 117, entrepreneurialism, 21, 30–31, 48, 73, 46, Enzo Biochem, Inc., 153 Epogen, 167 Falkow, Stanley, 172n36 Kleiner & Diamond v. ; biosafety com- See alsoSee , 169 , 149–50; and going public, Eli Lilly and Company See eld Fund, 178n31, 184n92 Chakrabarty 64, 93–94, quoted, 134, 100, 153; 57, 56, 152 151, 149, 143, mittee, 123; and Genentech, 90–91, 87, 186n46, 189n112; 131, 113, and press conference, 98; quoted, 96 93, 84, 87, quoted,40–41, 139–40; 41; and Swanson, 31, 32, 33. Perkins and Genentech, Corporation, 31–32; 184n92 78, 140, 105, 158, 40–41, 77, 59, laboratory, and 113; 80, patenting, 65; quoted,somatostatin 87; 61, 52, 60, project, 65 60, 59, 125 quoted, 97, 77, 184n92, 190n5; foundation of KabiGen, 111; and Genentech, 109–11, 121; and 125 124, regulation, governmental 99, 128, 141, 177n58; on Kleid,Dennis, 112 83–85, and Genentech, 105; Kleiner, Eugene, Kleiner & Perkins, and 38; 31–33, Cetus Kornberg, Arthur, 24, 7–8, 71 159 Award, Lasker 135 Laurence, Lasky, Lawn, Richard, 112 lawsuits, 148–53 117, 95, 58, Lederberg, Joshua, 20–21, 25 23, 187n53 John, Lesch, Levinson, Arthur, 112 licensing, 121, 58, fees, 55, 94, 138; 160 Lilly. Jackson, David, 106 Johnson, Irving, 94, 124, 86, 96, 125; Johnson & Johnson, 140–41 KabiGen/KabiVitrum, 119, 122, 126, 116–17, Kaiser, Dale, 159 Kiley, 94, 95, 64–66, Thomas, 55–57, marketing rights, 111, 121 Martial, Joseph, 118 109, Mayfi Merck Inc., & Co., 175n17 Mertz, 173n67 Janet, Lubrizol Corporation, 105, 148 Lyon & Lyon LLP, 55–56 ,

79 , 62 , 192n73; 92 , 62 safety concerns , 145, 192n73; and Genentech, 80, See 112 . human, commercial 37; produc- insulin 99; project, 52–54, 87, 86, 142–46; sales, 146; subtypes of, 142; 142; of, subtypes 146; sales, 142–46; volumes produced, 145 184n92 structure, rat, 86; 80–81, 47–48, 89, 82, 93 projects, UCSF 103; 87, 93, 77, patenting vs tion culture 125; of, volumes, 124–25; molecular 86–94; Genentech project, 103, clinical 107–27; applications pro- commercial 121–22; anticipated, duction Genentech 125–27; of, project, patenting,107–19; 114, 112–13, 152–53; 118–19 111, 107–9, project, UCSF Genentech, 127, 128, 143, 145, 169, 167, 189n114, 190n5 83, and Goeddel, growth 96; 88–89; 88–89, quoted, 116–17; 113, hormone project, somato- 132; 88–89,51, 63, 104, 60, 117, statin project, 61 60, 59, International Industrial Development, Development, Industrial International International Nickel, 178n31 105, 187n69 Intervet, Itakura, Keiichi, 51, 57, 50, Integrated Genetics, Inc., 161 Intel Corporation, 189n116 intellectual property protection. See interferon, 127; Genentech project, 134, Innoven Capital, 178n31, 184n92 105, Institut Mérieux, 127, 184n92, 190n5 insulin, 44, 52, 37–38, 71; 49, 26, animal Humulin, 125 Hybritech, Inc., 192n62 106, Hirose, Tadaaki, 62 59, Hoechst 76 AG, Hoffmann–La Roche, 73, 142, 184n92; and Honolulu plasmid conference, 11–12 10, human growth hormone, 95, 81, 86, 36, Heyneker, Herbert, 61, 50–51, 59, 184n92 Hillman Company, hazards. hazards. Helinski, Donald 174n70 R., Helling, Robert, 14 11, 13, 192n73 Dennis, Henner, 127 B, hepatitis 130 Company, Hewlett-Packard

210 INDEX 211 INDEX nition 7; sticky of, Kleiner Perkins & safety concerns DNA, politics of See alsoSee See See alsoSee growth hormone, rat; insulin, rat See 126 defi 153; 117, 113, 93, ends, 11–12; supplying, 43, 82; as 26, transport vehicles, 12, 10, 8, 24 122–23, 119, 118, 117, passim, 108–13 94, 152 145, 144, 143, authorship131–32; disputes, 65 ment efforts, 82; stock-selling trip, 155–57. passim, 71–75 57, 94, 90, 105, 95, 47, 109, 110, 123, 127, 133, 135, 143, 167; big alliances, company company–small stock,97; 90; and trade secrecy, 100, 101 104, 119–28 102, 80, 69, 78, passim, 79, 161 155, 144, 141, 153; EcoRI, 10–12, 17; supplying, 26, 43, 51 23, 124, 125, 139, 145 139, 125, 124, 23, Nobel 11–20; of, Prize, regulation 159; 118, 113, 92–93, 123–25, 66, 59, 33,of, 45, 139. zer, Inc., 175n17 Inc., zer, probes, DNA, 121, 153 144–45, proinsulin, 89, 93 protein chemistry, 104, 111, 103, 91, 121 protein expression, 52, 53, 60–61, 93, 91, Protropin, 127 126, publication, scholarly, 64–66, 99–102, 118, publicity, 68–69, 98–99, 118–19 Raab, Kirk, 167 rat. pharmaceuticals, 44, 40, 51, 27, 21, 20, 26, Pisano, 185n10 183n70, Gary P., 120, 116–17, 115, 111, human, 109, pituitary, plasmids, passim, 91, 7–19 87, 43, 51, 60, 23, politics. Porton Down, 93 Pestka, Sidney, 143, 145 Pettinga, Cornelius, 94, 97 Pfi pharmaceutical industry, 32, 39, 33, 38, Reagan administration, 124, 138 Recombinant Advisory DNA Committee, recombinant technology: DNA invention Reimers, Niels, 21–22, 44–46 restriction 60, 50, 17, enzymes, 9, 16, 5–7, Rifkin, 150 73–74, Jeremy, Rathmann, George, 166 licensing ; and going Recombinant Advisory DNA National Institutes of Health See n, Donald L., 105, 148 grant applications, 53, 54; guidelines, 118, 139. 113, 92–93, 123–25, 66, 59, 33, 45, alsoSee Committee 21, 22, 43, 50, 59, 63–73 passim, 63–73 21,22, 59, 80–84 43, 50, passim, 144, 113, 103, 168; 88, 89, 97, industrialization 161 of, 105–6, public, 104, quoted, 129, 154; 153, 97, trip, stock-selling 156; 154, 141, 140, 155–57 43, 105, 133, 147, 148, 158, 161; recruit- business plan, and 47; Genentech, on go- 139–41; 77–78, 76, 63, 40–43, 46, ing public, 146–48; insulin project, 91, 96–97; quoted, 41, 40, 33, 31–32, 38, 42, 99, 100, 103, 112–13, 114, 115–16, 118, 138, 138, 118, 115–16, 114, 112–13, 103, 100, 99, legal 167–68; disputes, 160, 143, 145, 155, 148–51,58, also See 152–53. National Pituitary Agency, 120–21 Netherlands: politics, DNA 88 NIH. National Institutes of Health (NIH), 23; National Medal of Science,159 National Medal of Technology, 159 Morrow, John, 19 multiple sclerosis, 146 Murfi 182n36 Saran, Narang, National Academy of Sciences, 23 National Institute of Medicine, 23 molecular 20, 16, 9, 10, biology, 1, 2, 4, 7, Molecular Genetics, 192n62 Inc., 161, Monoclonal 192n62 Antibodies, Inc., 190n5 127, 105, Monsanto Company, messenger RNA, 108, 117, 143, 145, 181n12 Middleton, Fred A., 94, 157 Miozzari, Giuseppe, 192n73 Pennica, Diane, 189n117 Business Commission, 150 People’s Perkins, Thomas: and Boyer, 40–43; and Packard, David, 130 Packard, patenting, 20–24, 44–46, 55–58, 64–66, 71, Penhoet, Edward, 166 Nixon administration, 142 Novo Industri AS, 76 Orphan Drug Act 127 of 1983, , 73, 127; 42 , , 80, 142,, 80, 163 162, 189n117 tion Act, 138 Act, tion background, and 29; Boyer, 34–37, 41; business goals, 108, 120, 128–30, 132; business plan, 44–45, 47–48, 125; early Genentech, 34–44; co-founds career, 30–34; education, and 29–30; Eli Lilly and Company, 94, exit 86, 95; strategies, 140–41; fund-raising, 59, Genentech76–77; shares, and 158; go- ing public, and 154; 153, growth 147–48, 116, 111–13, 109–10, project, hormone 120–23; insulin117, press conference, 98–99; management style, 128–34 pas- and 168; NIHsim, guidelines, 166–67, on patenting123–25; and licensing, 64, 149; and44–46, publication, 101; and publicity, 68–69, 118–19; 102, quoted, 97, 96, 90, 81–82, 63, 41, 61, 46, 142, 132, 130, 129, 126, 124, 120, 111, 101, 149, 150, 156, 166; recruitment efforts, 111; 88, 102, 90, 81–85, and research moni- research 143; 55–57, agreements, toring, 60–61; research objectives, 49, stock-selling 91; 75–76, 74, trip,54–55, 155–58 58, 59–66, 72, 109, 110, 123;110, 72, 109, patenting, 59–66, 58, 99; and politics, Riggs-Itakura 66–74; concept, 52–55 123 department, 11; 7–9, clinical medicine, 7; corporate consulting, Palo 25; Alto campus, 7; patenting and licensing, 160 21–22, 138, 24, 65, 44–46, nnova 178n31, SA, 184n92 thymosin, 127 Time tissue plasminogen 167, activator (tPA), trade secrecy, 100, 101, 149 Swanson, Robert Arthur, 37 Sweden: politics, DNA 111, 124 Syntex Corporation, 38, 191n43 Sofi somatostatin: Genentech project, 52–55, South San Francisco, 126 77–78, Squibb & Sons, 78 Stanford Research Institute (SRI), 83–84, Stanford University, biochemistry 78, 83; Steiner, Donald, 182n36 Innova- Technology Stevenson-Wydler

, 99, 102; See alsoSee ; and Genentech, 81, , 86, 87, 92 87, , 86, DNA, sequencing of DNA, See 102–3, 107–9, 111, 113; growth hormone growth hormone 113; 111, 107–9, 102–3, project, “midnight 112–17; raid,” 113–16; materi- research 152; 115, 112, quoted, als, transfer 151–53 113–16, of, 102–3, 113; and patent dispute, 152, 153 (SEC), 147, 153–55 National Institutes of Health, Health, of Institutes National guidelines quoted, 81, 183n55 81, quoted, 139; 98, 119, 126, 93, 138, 69, 83, 68, 67, 61, biosafety committees, 123; safety 59, regulations, 123, 23, 138. 184n87, 194n110 184n87, istry department, and 70; 10, Chiron Corporation, 106; and Eli Lilly and 81–82; Genentech, and 113; Company, and patenting, 185n24; 184n87, 151, 65; and65; somatostatin projects, 52–55, 60–62,65 175n17 and Boyer, collaboration with, 50–52, insulin 93; 54–55, project, 52–54, 91, laboratory,101; 80; and patenting, 65; and press conference, 98; and public- quoted, 68; ity, 62, 60, 54–55, 52–53, sequencing. sequencing. Silicon 135 131, 101, 78, 90, Valley, 83, 31, 49, Smith Kline & French, 175n17 Shapin, Steven, 194n122 Brian, 189n112 Sheehan, Shih, Lillian, 62 Shine, John, 112; and Genentech, 81, 82, Sievertsson, Hans, 109–10 Securities and Exchange Commission Commission Exchange and Securities Seeburg, Peter, 112 82, Salk Institute, 62 159 Frederick, Sanger, Scheller, Richard, 158 59, 57–58, Corporation, 105 Schering-Plough Schumpeter, Joseph, 194n123 Rutter-Goodman team, 80–81, 91 80–81, team, Rutter-Goodman safety concerns, 22, 24, 23, 59, 32, 33, 45, Royston, 106 Ivor, Rutter, William 71, 77; J., biochem- UCSF Riggs-Itakura patents, 183n75 patents, Riggs-Itakura Roche Institute of Molecular Biology, Michael,Ross, 192n73 royalties, 121, 115, 103, 94, 58, 97, 22, 55, 45, Riggs, Arthur, 62 57,

212 INDEX 213 INDEX 160 148,ce, 66, 150, 192n73; and press conference, 98; quoted, 122, 116, 96, 91, 89, 90, 129, 133, 160 and insulin press conference, 98–99; insulin microbiol- 93; projects, 87, 77, ogy department, Mission 65–66; 9, 35, Bay campus, patenting 153; and licens- 65 26, ing, 139–40 Young, William, 128 U.S. Supreme Court, 148, 149–50 148, Court, Supreme U.S. venture capital, 138, 30–34, 106, 105, 76, 40, Nicholas,Wade, 144, 161 154, Watson, James 4, 64, 193n107 23, D., Weissmann, Charles, 143–44 Wetzel, Ronald, 186n31 Wu, Ray, 182n36 Wyeth, 175n17 Yansura, Daniel 84, 89–91, G., 189n112, Upjohn Company, 73, 175n17 150 149, 33, 40, 66, 68, 138–39, U.S. Congress, U.S. Patent Offi Senate,U.S. 66–68, 150 individual

See alsoSee ; and Eli Lilly and University of California, San San California, of University University of California, San San California, of University See (UCSF), 78, 83, 106; biochemistry 78, 106; 83, (UCSF), department, 72, 70, 60, 43, 59, 9–10, biosafety com- 113; 108–9, 103, 80–82, mittee, faculty 59; committee inquiry, 72; Genentech Hall, growth 153; hormone project, 111, 107–9, 118–19; Genentech, lawsuits, 167; 151–53, 117; “midnight patenting raid,” 113–16; and licensing, 22, 24, 115–16, 103, 44–46, research138; agreements, 155–57. 107, alsoSee Francisco research materials, transfer of, 113–16, 151–53 167–68. 72, 111, 155, name by universities and 108; 94–95, 86, Company, and Francisco 102–3, Genentech, and 113; Company, 111; insulin project, 80–81, “mid- 93; 82, night quoted, raid,” 113–16; 133–34, 159; University of California, San Francisco universities: and commercialism, 21, 68, University of California: and Eli Lilly UCSF. UCSF. Ullrich, Axel, 112