Criteria for Clinical Development Genentech's discovery laboratories identify more potential new medicines than the company has the resources to pursue through the expensive and lengthy development and approval processes. Genentech therefore follows a strict set of selection criteria for each project being considered for clinical development. Different groups throughout Genentech gather the data needed to evaluate each criterion, and then a committee comprising individuals with a wide range of business, scientific and medical expertise evaluates that data and determines which few projects to move into Genentech's clinical pipeline for a full development effort. Projects that do not meet all these criteria but remain scientifically promising may be out-licensed to other companies with different business goals. Others may be dropped or remain in research to collect additional data. The criteria Genentech applies to potential development projects are as follows:

Scientific Confidence To meet this criterion, a potential medicine must have a solid scientific basis. The proposed mechanism of action must fit current medical understanding and must be supported in laboratory experiments.

Critical Medical Need The disease or ailment targeted must be critical and currently unmet by existing medical technologies. Genentech drops or out-licenses many potential products because they would only marginally improve treatment for a disease or because sufficient means of treatment already exist.

Significant Market Opportunity As a publicly traded company, Genentech is responsible to its stockholders and subject to the laws of the marketplace. A significant market opportunity must exist for a potential product in order to warrant spending time and money on development.

Adequate Market Protection Because the initial development of a biotherapeutic is extremely expensive and time-consuming, it is critical the product be assured protection from competitive generic copies of the drug once it is on the market. Fair protection of Genentech's intellectual property gives the company the incentive needed to take the risk of developing a potential new product for market.

Reasonable Manufacturing Economics For a project to proceed with development, Genentech must establish that the economics of manufacturing that product make sense in relation to its market opportunities and medical need. Genentech must be able to manufacture a potential medicine in a manner that will not impact unreasonably the ultimate cost of the medicine.