In Genentech, Hughes examines the remarkable rise of the Genentech company, which was an industry pioneer in the field of genetic engineering. The basic premise of Hughes’s book is that Genentech radically transformed biotechnology and even made a broader impact beyond the medical technology and science sectors. Themes Hughes addresses in Genentech include the business practices and processes needed to start a radical, innovative firm, particularly one with a business model based on science. Another major theme covered in Genentech is intellectual property, which is a major concern for the pharmaceutical industry, which eventually became heavily and inextricably entrenched in genetic science. Hughes also covers the theme of ethics: especially the conflicts of interest that can arise between the altruistic aims of academia and applied science and the commercial goals of a profit-driven enterprise.
Hughes offers an overview and history of the firm, which was created in 1976 by Herbert Boyer and Robert Swanson. In fact, the partnership between Boyer and Swanson is one of the main reasons for the success of Genentech. Boyer was the brains behind the business as the microbiology professor at the University of California. It was Boyer’s research that provided the intellectual property of the Genentech business model, and Boyer remained cognizant of the commercial potential of his research. Swanson’s input as a venture capitalist was critical for bringing Boyer’s ideas to market and coming up with creative methods of marketing experimental, advanced scientific practices. Therefore, the story of Genentech itself covers all the main themes in Hughes’s book: the importance of intellectual property, the means by which science and medicine become big business, and the ethical implications of fusing what could be humanitarian research with profit-driven enterprise.
The business processes sections of Genentech are of interest to the case study analyst or business student who wishes to gain insight into the perseverance, patience, and persistence needed to launch a risky business venture. Moreover, Hughes addresses the importance of taking risks in business, and being willing to face many years of funding shortfalls and debt before even receiving a modicum of profits. With Swanson’s help, Boyer was able to pitch his research concepts and vision for genetic engineering technologies. As business-minded and profit-driven as it can be, though, the pharmaceutical industry did not bite immediately and it took years before Boyer and Swanson were able to gain traction. To do so, Boyer and Swanson also had to overcome innumerable hurdles, not least of which included the regulatory environment that impacts biotechnology. Hughes also shows how public perceptions about genetic engineering needed to change, which required deft marketing practices in an era before the advent of social media. Had Boyer and Swanson had access to social media when they were launching Genentech, it is likely that the pair would have been better equipped to re-brand genetic engineering and drive up interest to create inbound demand for their product.
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Dealing with the government and federal regulations and restrictions was, however, an even bigger challenge for the fledgling firm.
Another major challenge that the business venture faced was battling the legal and moral ambiguities of their project. Although Boyer believed in his business, and may even have believed in the potential of Genentech to save lives and improve quality of life, there was no legal precedent for what they were proposing to do. As Hughes puts it in the prologue of the book, Boyer and Swanson had to “run the gauntlet of legal unknowns in patenting living things,” (Hughes 3). The three “living things” that Boyer first managed to receive patents for included human growth hormone, insulin, and interferon. Receiving patents on living things was challenging enough, but Boyer also had to weave marketing methods into his pitch to both the government and to potential investors—all the while maintaining his legitimacy within the scientific community. Hughes shows how it was a deft balance to strike between remaining firmly entrenched as a man of science and being an astute businessman. For instance, Boyer had to position interferon as a sort of “miracle drug,” even while doing so would have conflicted with the basic principles and tenets of science, which avoids making outlandish and generalized claims (Hughes 4). Most importantly regarding the theme of business practices, Hughes shows how Boyer used a creative process to achieve the Genentech goals: divorcing his work from the university sector. While perhaps not the first time academia and especially science became fused with big business, it was a remarkable shift to go from a university-funded research environment to one that was funded by corporate, private sector interests.
It was this flip in his fusion of business and academia that Boyer created what Hughes claims to be nothing short of a revolution. Therefore, Genentech is about how one company can set a precedent. Genentech established the biotech and genetic engineering sector to the point where “molecular biology was becoming practical, profitable, and controversial in a manner never before experienced,” (Hughes 4). Their risks and hard work paid off, as soon after shifting their corporate structure and business practices, Boyer and Swanson enjoyed watching a startlingly high IPO that led also to the “largest gain in stock market history,” (Hughes 4). Some of the gains were speculative and artificial, but it showed how hungry investors were for new ideas, and especially for the potential that genetic engineering science seemed to offer to reinvigorate a potentially stagnant pharmaceutical industry. Prior to Genentech, celebrity biologists like Watson and Crick still remained firmly attached to….....
Hughes, Sally Smith. Genentech. Chicago: University of Chicago Press, 2011.
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MacGilliravy, M.H., Baptista, J. & Johanson, A. “Outcome of a four-year randomized study of daily versus three times weekly somatropin treatment in prepubertal naive growth hormone-deficient children. Genentech Study Group.” The Journal of Clinical Endocrinology & Metabolism, Volume 81, Issue 5, 1 May 1996, Pages 1806–1809, https://doi.org/10.1210/jcem.81.5.8626839
Ratner, Mark. “Genentech Discloses Safety Concerns Over Avastin.” Nature Biotechnology, Vol. 22, No. 1198, 2004, pp. 1004-1198. doi:10.1038/nbt1004-1198
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