# From pioneers to marketeers

## From Alchemy to IPO: The Business of Biotechnology

Perseus: 2000. 272 pp. $26, £15.95 Cynthia Robbins-Roth has written a real page-turner, as full of suspense as the most exciting novel. Yet From Alchemy to IPO is about the history and theory of the US biotechnology revolution. Robbins-Roth's enthusiasm for her subject stems from the fact that she was fortunate enough to share the early days with its pioneers, and her enthusiasm comes across on every page. As we read of the early times at Genentech and the excitement of the scientists who carved out the biotech world, we also learn about the secrets of successful early biotech, and the mistakes that meant failure. The message that comes across throughout the book — and is even in the title — is that biotechnology was only partly a scientific revolution; an equally important revolution was in the financing of biotech businesses. In the 'stagnant' world of that time, when only big pharmaceutical companies had the resources to fund drug development (which typically required some$150 million and more than ten years before producing a return), two events changed the scene. First was the US law that in the late seventies legalized the investment of pension funds in venture activities, thereby making large amounts of venture capital available. The second was the Genentech initial public offering (IPO) on 14 October 1980, which showed that slow and expensive drug development could be financed in the public market, without the need to rely on money from large drug companies.

Robbins-Roth's history of biotechnology focuses mainly on pioneers such as Genentech, and on today's most successful companies, such as Amgen. She makes clear that the companies that prospered best were those that from the outset hired managers who had experience in drug development with large pharmaceutical companies. Companies that allowed scientists to remain in charge for too long found it a struggle.

Another instructive history covered by Robbins-Roth, which shows how investors can make money even when a technology fails, is that of monoclonal antibodies. This was the technology that launched Hybritech in 1978. But in this case the first-generation technology was insufficiently advanced, and it was 20 years before a product was approved for human therapy.

Robbins-Roth covers the technologies that are biotechnology's building blocks: genomics, biochips, microarrays, antisense, gene therapy, tissue engineering, combinatorial chemistry and agricultural biotechnology. In an accurate and readable narrative that insiders and general readers alike will find interesting, she describes the steps involved in developing a drug for the market, including the associated risks — there is always something to learn.

Although the fundamentals of biotech are introduced briefly in the early chapters, later chapters lucidly describe the biotech business, product development and financing. Robbins-Roth provides a detailed guide on how to start a company: “you need an excellent management with relevant industry experience . . . a strong technology platform to generate multiple product opportunities . . . access to financing alternatives when the public markets are closed . . . the ability to articulate business opportunities, not just sexy science . . . the right corporate location”, and three key people: “An academic scientist . . . an experienced pharma executive . . . and a business/finance person with a track record.” Robbins-Roth even provides a guide to all the financing steps taken by a start-up company as far as the IPO.

And last but not least, she includes a guide for investors. Again, her advice is sensible, and is supported by data in the form of tables and figures. While providing tips for reducing the risks of investing, Robbins-Roth also conveys the message that biotech is a solid and sustainable business, unlike many others that may appear more attractive in the short term but which are more susceptible to the caprices of the market. Importantly, she explains how the results of phase I and phase II clinical trials should be interpreted, and how to avoid panicking or overreacting.

Robbins-Roth is also a strong believer in the future of biotechnology, predicting that the tremendous progress of the past 20 years is just the beginning: “the 21st century will be the century of biotech.” In a chapter entitled “Biotech star wars”, she describes the future as predicted last year by NASA administrator Dan Goldin, who, dressed as a Jules Verne of the twenty-first century, described breathtaking trips in space beyond the solar systems. He talked of the colonization of other planets, missions guided by DNA-based computers with neural networks capable of adaptive learning and a billion times more efficient that today's silicon-based systems. During these long trips, biotechnology would enable food to be produced and could change a planet's unfriendly atmosphere to make it suitable for human colonization. Finally, through biotechnology, drugs could be developed to combat the unknown toxins encountered in space, and to produce regenerative and reparable body tissues. By the end of the chapter you just hope that you will live long enough to be able to see at least part of this future.

The book is both eminently readable and a source of useful data — as tables and appendices — that would be difficult to find in databases. I consider it by far the best book on biotechnology written so far. I recommend it to all biological sciences graduate students and their teachers, to managers and scientists in the biotech industry, and to academic researchers.

The book is also a must for people thinking about setting up a biotech company, and for those interested in investing in the biotech sector. I would even recommend it to people who don't invest in biotech, because it may convert them into investors.

Policy-makers, too, can learn from Robbins-Roth's message. This is that, although the innovation in biotechnology was the technology, a real impetus was given by the financial environment, facilitated by appropriate laws, which created new ways of funding drug development.

## Rights and permissions

Reprints and Permissions