In the fall of 1980, Genentech, Inc., a little-known California genetic engineering company, became the overnight darling of Wall Street, raising over $38 million in its initial public stock offering. Lacking marketed products or substantial profit, the firm nonetheless saw its share price escalate from $35 to $89 in the first few minutes of trading, at that point the largest gain in stock market history. Coming at a time of economic recession and declining technological competitiveness in the United States, the event provoked banner headlines and ignited a period of speculative frenzy over biotechnology as a revolutionary means for creating new and better kinds of pharmaceuticals, untold profit, and a possible solution to national economic malaise.
By the end of 1978, Genentechs total administrative and scienti c staff numbered twenty-six, including the rms rst protein biochemist and several lab technicians.90 A research organization was emerging, distinct in form and function from that of the university. Instead of academias independent and sometimes competing university laboratories, each a hierarchical efdom with a professor at the top, Genentechs research beginning around this time was loosely structured into three exible and egalitarian divisionsmolecular biology, nucleic acid chemistry, and protein chemistryall three oriented to work cooperatively to a 1 0 3 H U M A N N S U L I N 1 0 4 C H A P T E R
id: 47862436dd501eb1e286d35fe7a22ca0 - page: 120
F O U R common purpose: making marketable products. Heyneker, with customary enthusiasm, recalled the era: We were really, certainly in the early days, a very collegial group of people. We all had a very similar goal, of being successful, of being rst, and staying ahead of the game, and not because we had to do it; because we wanted to do it. We were incredibly proud of Genentech and what was going on. We were very excited about the technology. . . . It was a terri c time.91 Though there clearly was teamwork and collegiality, interpersonal and interdisciplinary rivalriesinevitable in an extraordinarily competitive group of young men with their scienti c reputations to proverumbled just below the surface. As Genentech hired organic and protein chemists, shop talk was that the molecular biologists, the lauded cloners and top dogs, got more kudos and credit than their fair share.
id: e867d1fd3588f0f9eecf43d7339eccc1 - page: 121
In December 1978 everyone took a brief break from the mad intensity. It had been a momentous rst year as an operating company. Genentech, its laboratories completed, held an open house to inaugurate, as the invitation announced, its newly expanded headquarters. The guest list provided a snapshot of the various constituencies that the insulin achievement had attracted to a radically new approach to making pharmaceuticals. Among the sixty or so invited were pharmaceutical industry representatives, venture capitalists, investment bankers, academic scientists, attorneys, and accountants.92 The array of guests foretold the major participants in the new eld of commercial biotechnology.
id: 00a592e7486a1088a211504ce4da8c5b - page: 121
For Genentech, the consequences of making human insulin and partnering with Eli Lilly were substantial and far-reaching. The two achievements, broadly interpreted as decisive scienti c and business coups, validated the company as the proprietor of a promising new technology and showcased the fact that a corporation of Lillys stature considered recombinant DNA technology of suf cient industrial potential to warrant forming an R&D partnership with an insigni cant start-up. Genentechs alliance with the pharmaceutical giant enormously magni ed its visibility and boosted its chances of future nancing and corporate contracts. As Middleton later observed: That relationship [with Lilly] put Genentech on the map. That was the idea. It was an endorsement for a new technology by the leading producer of insulin in the world. It gave our company overnight credibility in the commercial world. 93 Recalling
id: d1c8e0478973d7e293f896ff268ccd41 - page: 121