Biotechnology Industry Personalities
Chips Off The Old Block Alums of Genentech, Chiron, Cetus make
Bay Area the capital of biotech industry
Tom Abate / SF Chronicle 2apr01
Second of a two-part series on the biotechnology industry.
Genentech turns 25 this weekend, a date that recalls when scientist Herb Boyer and financier Bob Swanson filed its incorporation papers.
The South San Francisco giant isn't the only Bay Area biotech firm celebrating a milestone this year.
Bill Rutter, co-founder of Emeryville's Chiron Corp., reminded me his company will turn 20 in June. And it was 30 years ago in January that molecular biologist Ronald Cape founded Cetus Corp., also in Emeryville. Cetus merged into Chiron in 1991.
Veterans of these pioneering companies are proud that scientists and executives from Genentech, Chiron and Cetus have gone on to found, run or profoundly influence at least 55 biotech firms, research institutes or venture capital operations (see table Page B3).
This same spin-off phenomenon occurred in high tech back in the 1950s and 1960s, when Fairchild Semiconductor became the executive boot camp for the electronics industry. Fairchild alums started so many important companies that they got their own nickname -- "Fairchildren" -- the most famous being Intel founders Robert Noyce, Gordon Moore and Andy Grove.
The economic and cultural character of the Bay Area has been profoundly influenced by these successive waves of high-tech and biotech expansion, as great companies form, grow and sometimes die. Yet something in their corporate DNA drives them to plant the seeds of new companies that push the industry forward.
"I think it starts with the culture of these companies, with people who are willing to take some risks," said Hollings Renton, who went to Cetus in 1981 from the Crown Zellerbach paper company.
Today, Renton is chief executive officer of Onyx Pharmaceuticals, a Richmond firm that is testing a promising treatment for head and neck cancer.
"I was coming from a different side of biology -- the trees," he said of his move to Cetus 20 years ago. Of course, it was another industrial world. Papermaking was a mature business. Biotech was young, exciting -- and largely devoid of products, revenues or profits.
"In those days nobody had any products in clinical trials," Renton said. "There was a lot of promise, but also a lot of questions about what the business was going to be."
COME A LONG WAY
One sign of how far biotech has come since then is the number of medicines approved by the U.S. Food and Drug Administration. Starting with human insulin in 1982, the FDA has approved biotech treatments for 76 conditions, including heart disease, cancer and hemophilia, according to a report from the Pharmaceutical Research and Manufacturers of America, a trade organization in Washington.
An additional 369 biotech medicines are undergoing human clinical trials. Pharmaceutical group spokesman Jeff Trewhitt said roughly 1,000 experimental compounds are undergoing clinical trials. This means the 25-year-old biotech industry is poised to contribute a third of all new medicines. Drug companies, which have been around for a century, are developing the rest.
SMALL COMPANIES THE NORM
With few exceptions, notably Genentech and Chiron, biotech has remained an industry of many small companies. Rutter, Chiron's co-founder, said this stems from the nature of the technology and entrepreneurial spirit of the people who do it.
"Most people believe it is a fundamental of industrial development that new technology is best developed in young companies, especially novel technology which is destructive of old technology," Rutter said.
The entrepreneurial spirit fostered by biotech and high-tech firms accelerates this spin-off process, Rutter said. People given responsibility and freedom inside an organization get the bug to run a company of their own.
"To a certain extent, it is a brain drain" for the older organization, Rutter said. But wise CEOs learn to see the bright side of the defections.
"No industry large or small has a hold on people or on science or technology," Rutter said. "One of the reasons the U.S. is doing well right now is that we have that kind of (corporate) cultures that encourage the formation of ancillary companies, where the people with the passion for an idea can gather energy around it and move quickly."
If the spin-off trick is a trait biotech learned from high tech, there may be one innovation biotech has contributed to our knowledge-based economy -- the notion that industrial science should be on par with academic research.
SCHOLARLY RESEARCH
Rod Ferguson, a venture capitalist at JP Morgan Partners in San Francisco and a Genentech alumnus -- or GenenExer, as these people call themselves -- said Genentech broke with past practices by encouraging its scientists to do the sort of research that would qualify for publication in the research journals once reserved for academic scientists.
Before Genentech came along, Ferguson said, there was a one-way street from the university to industry. Today, GenenExers Axel Ullrich and Anthony Kossiakoff hold prestigious academic posts: Ullrich at the Max Plank Institute in Germany and Kossiakoff at the University of Chicago.
"These guys were so good they broke down the sound barrier and went back to academia," Ferguson said.
They aren't alone. David Botstein went from an academic post at the Massachusetts Institute of Technology to a research job at Genentech, and then went back to Stanford University as chairman of the genetics department.
Frank McCormick, a research chief at Cetus and Chiron, is now director of the Cancer Research Institute at the University of California at San Francisco.
Chiron co-founder Ed Penhoet left business in 1998 to become dean of public health at the University of California at Berkeley. And so on.
OPPOSITE ARGUMENT
As I reflect on this list, I'm aware there could be an opposite argument -- that universities may be focusing too much on short-term research in biology, becoming almost an adjunct to industry -- and neglecting the long-term, basic studies that were the traditional role of academics. But that's a longer discussion for another day.
Today let's celebrate the confluence of factors that have made this region so fertile for the industries that are the envy of the world. And not just because they make money. As I was putting together this column, I heard from Jack Obijeski, a virus researcher and GenenExer who reminded me what helps keep the biotech pot churning.
"We're not making hula hoops and pet rocks. We're making medicines that
help people," he said. "That's what gets us up in the morning." .
CHART (1):
SEEDS OF THE BIOTECH INDUSTRY
Three pioneering biotech firms, Genentech, Chiron and Cetus, all celebrate important anniversaries this year. Veterans of all three companies have gone on to found, run or hold key executive posts in many biotech firms, research institutes and venture capital operations. Here is a partial list, compiled with the help of former Genentech scientist Cynthia Robbins-Roth, now an industry consultant in San Mateo, and Hollings Renton, a Cetus and Chiron financial officer, who now runs Onyx Pharmaceuticals in Richmond. Help perfect the list. If you know of an alumnus(a) of these three firms who meets the criteria founding, running or holding high executive posts in a biotech firm, research institute or venture capital firm e-mail the facts to biotech@sfchronicle.com. Later in the year we'll look for an opportunity to publish a more complete list.
Genentech Progeny
Company People
Aradigm Gonda Igor, Jerald Beers
Sugen Axel Ullrich
Axxima Axel Ullrich
Sensus Bill Bennett
Biota Hugh Niall
Cell Genesys Steve Sherwin
Corgentech John McLaughlin
Collabra Pharma Nick Simon, Brad Goodwin
Steve Peroutka, Jack Obijeski,
Connetics Ernst Rinderknecht, Greg Vontz,
Kirk Raab
CV Therapeutics Tricia Suvari, Dick Lawn,
Brent Blackburn, Dan Spiegelman
Cygnus Gary Cleary
Arris (now Axys) Mike Ross
Creative Biomolecules Roberto Crea
Cythera Mike Ross
Deltagen Bill Matthews, Mark Moore,
Robert Klein, Paul Laland
Duke Univ. Medical Center Ralph Snyderman
Eos Biotechnology Dave Martin, Herb Heyneker
GenencoR a joint venture spinoff of
Genentech
and Corning Glass Works
IDEC Pharmaceuticals Bill Rastetter
IDUN Pharmaceuticals Costa Sevastopoulos
InfiMed Therapeutics Steve Rowe
Intermune John Wulf, Karen Starko
Millennium Pharmaceuticals Mark Levin
Neurocrine Biosciences Gary Lyons
NewBiotics Mike Shepard
Pain Therapeutics Barry Sherman
Raven Biotechnologies Jennie Mather, Gordon Vehar
Rigel Pharmaceuticals Jim Gower, Brian Cunningham
Scios Dick Brewer
Sunesis Pharmaceuticals Jim Wells, Daryl Winter
Telik Inc. Reinaldo Gomez
Titan Pharmaceuticals Louis Bucalo
Tularik David Goeddel, Andrew Perlman,
Roxanne Bales
VaxGen Phillip Berman, John Curd
ViroLogic Bill Young, Christos Petropoulos
Chiron/Cetus progeny Company People Cell Therapeutics Edward F. Kenney Dynavax Technologies Dino Dina Eos Biotechnology David W. Martin Jr., Epoch Biosciences William G. Gerber Eur Ing Pharming Group George J.M. Hersbach Genelabs Technologies Frank F. C. Kung Kleiner Perkins Caufield & Byers Joe Lacob KOSAN Biosciences Michael S. Ostrach, Daniel V. Santi Microcide Pharmaceuticals James E. Rurka MitoKor Walter H. Moos Neurobiological Technologies Jeffrey S. Price OnCare Michael D. Goldberg Onyx Pharmaceuticals Frank McCormick, Hollings C. Renton PARTEUROP Jacques Martin SuperGen Joseph Rubinfeld TRANSGENE Margaret Liu UCSF Cancer Center / UCSF Cancer Research Inst. Frank McCormick Versant Ventures Brian G. Atwood XTL Biopharmaceuticals Judith I. Blakemore . Source: Chronicle research .
CHART (2):
BIOTECHNOLOGY MEDICINES IN DEVELOPMENT
Listed by therapeutic category (some medicines are listed in more than one category):
Cancer/related conditions 175 Infectious diseases 39 Other 29 Neurologic disorders 28 Heart disease 26 Respiratory diseases 22 AIDS/HIV infection and related disorders 19 Autoimmune disorders 19 Skin disorders 19 Transplantation 13 Digestive disorders 11 Genetic disorders 11 Blood disorders 9 Diabetes/related conditions 7 Infertility 5 Eye conditions 3 Growth disorders 3 . Source: Pharmaceutical companies
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