Thursday, Apr 4, 1996
South San Francisco, Calif. -- April 4, 1996 --It was twenty years ago this Sunday, April 7, that venture capitalist Robert A. Swanson and biochemist Dr. Herbert W. Boyer founded the first biotechnology company, Genentech, Inc. (NYSE: GNE), Genentech reported today. The ten products on the market that have resulted from Genentech's science -- five of which Genentech itself markets in the United States -- have since led to cumulative revenues of more than $15 billion.
"Twenty years ago, very few people believed that recombinant DNA technology was anything more than a useful research tool," said Dr. Arthur D. Levinson, Genentech's president and chief executive officer. "Swanson and Boyer followed their vision against the tide of popular opinion and bet that this technology -- invented only a couple years earlier by Boyer and Stanford University geneticist Dr. Stanley Cohen -- could be the foundation for a viable business and could lead to products that extend and enhance human life."
"Genentech's launch marked the beginning of what is today an almost $9 billion per year industry that includes more than 1,300 companies and more than 100,000 employees," said Carl B. Feldbaum, president of the Biotechnology Industry Organization in Washington, D.C. "Today this industry improves human health, agriculture, the environment, forensics and industrial manufacturing -- just as Swanson and Boyer first envisioned that it someday could back in 1976."
After agreeing to launch Genentech with an initial investment of $500 each, Swanson and Boyer knew their first obstacle was to prove their technological premise: that through recombinant DNA technology, microorganisms could be harnessed to produce usable amounts of useful proteins. They did so within a year when Genentech scientists produced the first human protein, somatostatin, in a microorganism. In 1978, Genentech scientists cloned recombinant human insulin, which went on to become the first approved medicine of biotechnology, marketed by Eli Lilly under license from Genentech for the treatment of diabetes.
Genentech has since brought five of its own products to market for treating growth disorders, heart attacks, blood clots in the lungs, cystic fibrosis, and a rare inherited immune disorder. Since the launch of its first product, Genentech has ensured that its medicines are available to all U.S. patients who need them regardless of their ability to pay.
Genentech's first round of funding after Boyer and Swanson's initial $1,000 investment came from private venture capital. Then, in 1980, Genentech raised $35 million with an initial public offering that went from $35 per share to a high of $88 per share after less than an hour. Today Genentech has a market capitalization of more than $6 billion and assets of more than $2 billion, with 1995 revenues of $918 million and 1995 earnings of $146 million. Following an agreement in 1990 and a new arrangement in 1995 with Roche Holdings Inc., Genentech is approximately 67 percent owned by Roche.
Swanson and Boyer, then a professor at the University of California at San Francisco, recognized from the start that to be successful Genentech needed to attract top caliber scientists. To do so, they developed a unique culture that persists today. It incorporates the best components of an academic environment -- freedom to publish, collaborate and pursue research of personal interest -- with all the benefits of corporate support: modern equipment and facilities, support laboratories for basic laboratory functions and interdisciplinary synergies. From its founding, Genentech has recruited and retained highly qualified and motivated people in all areas of the company. Of more than 2,800 Genentech employees today, more than 80 percent have college degrees and more than 25 percent hold advanced degrees including Ph.D.s and M.D.s. The majority of Genentech's employees work at the company's South San Francisco campus, and Genentech has a professional sales force throughout the United States.
Genentech, Inc. is a leading biotechnology company that discovers, develops, manufactures and markets human pharmaceuticals for significant medical needs. Ten of the currently marketed biotechnology products stem from Genentech science, five of which Genentech markets directly in the United States. Genentech is headquartered in South San Francisco, California, and is traded on the New York and Pacific Stock Exchanges under the symbol GNE. Genentech's world wide web address is http://www.gene.com.
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