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Genentech

Genentech (NYSE: DNA) is a biotechnology company that discovers, develops, manufactures, and commercializes biotherapeutics for unmet medical needs. It was founded in 1976 and is located in South San Francisco, CA.

Company Description

Genentech was the first biotechnology company. It develops, licenses, and sells various biological drugs to treat a wide array of diseases, including diabetes, cancer (colon, breast, and lung, among others), growth deficiency, age-related vision loss, and heart attacks.

Human insulin manufactured by bacteria was its first big breakthrough and made insulin cheap and plentiful for those suffering from insulin-dependent diabetes.

The company focuses its products in oncology (cancer treatment), immunology (inflammation and immune diseases), and tissue growth and repair. It is expanding into neuroscience (and diseases of the nervous system) and infectious disease.

Products

Products include (but are not limited to) the following. Note that listing here does not imply medical advice.

  • Activase -- myocardial infarction, ischemic stroke, or pulmonary embolism
  • Avastin -- used in colon or rectal cancer chemotherapy
  • Herceptin -- breast cancer chemotherapy
  • Lucentis -- age-related macular degeneration
  • Nutropin -- growth hormone deficiency
  • Rituxan
    • Non-Hodgkins lymphoma treatment
    • Rheumatoid arthritis
  • Tarceva -- non-small cell lung cancer
  • Xolair -- asthma

Management

CEO and Chairman: Arthur D. Levinson, Ph.D.

President: Susan D. Desmond-Hellmann, M.D., M.P.H.

CFO: David A. Ebersman

Chief Scientific Officer: Richard H. Scheller, Ph.D.

History

A new technology

In the mid-1970s, an exciting (to biochemists) technology was arising -- recombinant DNA. What this allowed was the ability to put portions of DNA where you wanted them, move them around, and use them to make more DNA or, better, proteins.

Genentech was founded in 1976 by a scientist, the late Dr. Herbert Boyer, and a venture capitalist, the late Robert Swanson. It was the first biotechnology company ever. Within a very short time frame, they were able to put the human DNA that gives a human cell the instructions for making insulin into a bacterium and make insulin outside the human body.

This was big news because, until then, diabetics had to use insulin from sheep. Time consuming to make and collect and therefore expensive. What the recombinant technology had done was to make insulin cheap and plentiful. The care and feeding of bacteria is a lot simpler and cheaper than of sheep, you know. And the bacteria could make human insulin. (After all, insulin is just a protein and bacteria are very good at making proteins.)

The process was licensed to Eli Lilly and in 1982 it went onto the market.

The company has since managed to market several other products, including human growth hormone, Factor VIII to treat hemophiliacs, interferon alpha 2 for a type of leukemia, a hepatitis B vaccine, and a protein that dissolves blood clots for heart attack patients, and Herceptin for breast cancer.

A public company

The company went public in 1980.

In 1990, the company partially merged with Roche Holding of Switzerland for $2.1 billion, with an option to purchase the rest of the company. In 1999, Roche exercised the option, then turned around and offered 19% of the company back to the public via 22 million shares. The offer price was $97 and the stock with (new) ticker DNA closed at $127 that day. Later the same year, Roche made a secondary offering of 20 million shares at $143. In 2000, a third offering of 19 million shares was made at $163.

In July 2008, Roche made a cash offer to acquire all outstanding shares at $89 per share. The matter is still pending.


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