genentech book analysis business science

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. 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 their identity as pure scientists, as unwilling to sell out to corporate interests.

The concept of a pure science divorced from business interests created challenges for Boyer and Swanson, who had created a new identity, what Hughes calls the “entrepreneurial biologist,” (5). Doing so unleashed a torrent of ethical questions and legal conundrums, which also transformed the business landscape and the practice of science itself. For example, Genentech’s presence created a new phenomenon whereby articles published in peer-reviewed journals could be authored by a corporation.

Articles like “High Dose Recombinant Human Growth Hormone (GH) Treatment of GH-Deficient Patients in Puberty Increases Near-Final Height: A Randomized, Multicenter Trial” have the Genentech authorship in the byline, which does seem to reduce the overall credibility of a scientific journal article given that the research is explicitly designed to market a product sold by the author (Mauras, Attie, Reiter, et al). A plethora of similar research has flooded the peer-reviewed journal landscape since the advent of the Genentech corporation, as Hughes points out.

An article in Nature reveals some of the ethical and legal implications of Genentech (and similar corporate) authored research, whereby the company was forced to admit that one of its drugs increases patient risk of embolisms (Ratner). The phenomenon even reveals the potential for a corporate science research group like Genentech to own its own peer-reviewed media outlet. These are serious concerns for both the scientific community and academia, which threaten to undermine the quality of world’s healthcare system too.

Hughes, who remains laudatory about Genentech overall, does not necessarily frame the potential conflicts of interest in ways that might reflect poorly on the company. What Hughes does do is something potentially of greater value to the reader, which is to position the potential conflict of interest in a different way, from a squarely business perspective. Hughes points out that by publishing the results of research in scientific journals, the Genentech company risked divulging its secrets to potential competitors.

Protecting intellectual property conflicted with the need to at least pretend to retain scientific integrity. As Hughes points out, it was Swanson who was most averse to publishing in peer-reviewed journals: “his instinct was to keep experimental findings secret to protect the company’s intellectual property,” which “dismayed” the scientists (np). Even when peer-reviewed journals are available only in fee-per-access scholarly databases that are not open to the general public, the general principle of science is openness and transparency of methods and research findings.

On the other hand, business does depend on secrecy and the protection of intellectual property. Establishing a business that is based on science as its main product creates a conundrum that Swanson and Boyer had to resolve effectively if theirs was to be a successful endeavor. Boyer was the one who saw the middle path, according to Hughes, encouraging the scientists who worked for Genentech to publish their findings.

Whether Boyer deep down believed that doing so was simply good marketing practice or if he generally believed his rhetoric remains unknown. Yet either way, the methods Boyer and Swanson used to blend science with business have transformed biotech. In fact, Hughes shows how the Genentech model spilled over into other industries that do depend on scientific research for their product research and development. The difference between biotech and other industries, however, is ethical. Biotechnology and other industries that have an application in medicine have the potential to save lives.

If a company produces a drug that could eliminate all cancer, for example, that drug should theoretically be available to the general population and not sold at the highest price possible. Hughes does not focus overly much on this issue, but instead chooses to discuss the more immediate issues that Boyer and Swanson dealt with such as the ethics of cloning and of tampering with human genes in unprecedented ways.

While a potential weakness of Genentech, Hughes’s refrain from attacking the ethics of corporate biotechnology leaves open room for debate about the ability of big pharma to control access to potentially groundbreaking research in the interests of turning a quick profit. This is a critical area of ethical research and one that.