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  • Genentech: The Beginnings of Biotech by Sally Smith Hughes
  • Mark Jones
Sally Smith Hughes. Genentech: The Beginnings of Biotech. Chicago, IL: University of Chicago Press, 2011. 232 pp. ISBN 9780226045511, $16.00 (paper).

It became a common occurrence in the United States during the 1970s and 1980s: molecular biologists discovered a heaven called venture capital, drew up business plans, and started small companies in old warehouses. They hired junior colleagues and gave them stock options, along with instructions to clone genes with potential applications in medicine, agriculture, or specialty chemicals. The companies soon went public (although they had no profits and meager revenues), the founders became wealthy beyond their wildest imaginings, and shareholders eagerly awaited the development of breakthrough technologies and products.

The story line is familiar. In Genentech: The Beginnings of Biotech, Sally Smith Hughes rehearses it once more, but hers is the original creation story. She recounts the founding and early development of the world’s first recombinant DNA (rDNA) company. It is an important book. It revisits the San Francisco Bay Area in the 1970s and weaves tales of science, business, and politics into an engrossing narrative about the controversial origins of the biotechnology industry.

Genentech was founded in 1976 by entrepreneur Bob Swanson and biochemist Herb Boyer of the University of California, San Francisco, one of the coinventors of rDNA technology. The partners planned to propagate human genes coding for various medically useful proteins (hormones, cytokines, enzymes, and antibodies) in genetically engineered Escherichia coli bacteria. The microbes were scaled up in deep tank fermenters to serve as living drug factories. Swanson had persuaded Boyer and venture investors that the technology could vault a small company over the pharmaceutical industry’s towering barriers to entry and enable it to grow into a fully integrated developer, manufacturer, and marketer of new drugs.

The start-up was charmed from the beginning. It combined skill, luck, and grit to demonstrate the practical utility of its new molecular tools and to stay two steps ahead of competitors for more than a decade. Hughes follows the company through its first four years. She describes the invention of rDNA technology, the formation and financing of the venture, and Genentech’s scientific and commercial progress from early demonstrations of the cloning system in contracted academic laboratories, through a series of critical R&D projects (recombinant human insulin, growth hormone, and interferon) to a spectacular initial public offering of stock in October 1980, an event that made headlines thrust genetic engineering into the public [End Page 901] consciousness and made Genentech an organizational model for hundreds of small biotech start-ups that followed on its heels.

The narrative is centered on events and processes taking place inside the company. Its fine-grained depictions of organization building and technology development are drawn from the author’s superb collection of in-depth interviews with Genentech principals. Readers become privy to the planning and execution of scientific experiments, the emergence of a unique corporate culture (loose and informal, yet intensely focused and demanding), and the executive deliberations on financial, commercial, and legal strategies.

Hughes periodically backs away from the thick description to survey broader institutional terrains. From its inauguration, Genentech was embroiled in controversy. When the scientific community paused to consider risks associated with uses of rDNA technology, public concerns precipitated decade-long policy debates at federal, state, and municipal levels. For a number of years, biotech firms had to raise money and plan R&D programs under conditions of regulatory uncertainty.

During the same period, critics in the community of life scientists raised objections to the patenting of rDNA technology and contract research conducted for Genentech and other commercial firms in university laboratories. They opposed the privatization of discoveries funded by public grants and argued that conflicts of interest generated by the involvement of university faculty in commercial enterprises would distort research agendas, encourage secrecy, and impede the free flow of information within the scientific community.

Regulatory constraints and institutional resistances were balanced by robust support for biotech R&D from other quarters. The US Congress passed several acts that rewarded investments in high technologies and smoothed the transfer of intellectual properties from academic institutions...

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