The biotechnologists; and the Evolution of Biotech Enterprises in the USA and Europe.
By Stephanie Jones.
Macmillan; 245pp; £55.
Review by Peter Chambers.
"Been there, done that, got the tee shirt." That's how one former director of a biotechnology company describes his career, having sold out and gone into comfortable retirement in his early 40s. What he implies is that the profits of biotechnology will continue to come from selling companies - rather than products - for some time yet. His view is widely shared.
Ever since biotechnology came into being in the mid-1970s (following work by the Americans Cohen and Boyer, who showed how to manipulate DNA and thus made it possible to adapt natural processes for the volume manufacture of whole new ranges of pharmaceutical and other products) the industry has been on a roller-coaster. First, hyped-up expectations fuelled dramatic growth in the value of biotech companies. Then came collapse, as disappointment set in when products and profits were slow to materialise. Reviewing the fortunes of institutional investors in the sector, Stephanie Jones quotes the Financial Times comment that "Profits have not kept pace with what these institutions would have earned if they had put their money into a Post Office savings account."
However products - if not large-scale profits - are at last beginning to emerge. Biotechnology has been responsible for a lot of the recent "wonder drug" launches: growth hormone, EPO for renal failure patients, the "clot-busting" tPA which counters the effects of heart attack. A number of potential AIDS vaccines are in early clinical trials.
Stephanie Jones relies heavily on quotations from a dozen or so selected scientists, venture capitalists and headhunters. Not surprisingly, most of them are determinedly optimistic. The chairman of Biotechnology Investments (BIL), for example, still has "the same long-term faith, shared by the OECD, that by the year 2010 biotechnology will have as much impact as IT (information technology) has today." Another characteristic that comes across just as strongly is self-satisfaction. But perhaps a measure of self-satisfaction - and self-promotion - is inevitable when direct quotations run on for up to 17 pages at a time.
It's true, however, that some of the "speakers" are among the driving forces of this dynamic and volatile industry - and some of the more innovative and talented entrepreneurs in the business world today. Their statements occasionally contain insights that might be useful to anyone wanting to understand the industry thoroughly. Other contributions are less helpful.
A headhunter offers the following advice on how to get on board a biotech start-up: "evolve a personal strategy, to raise your profile consistent with your capability and your ambitions ... talk with venture capitalists who are most active in pulling deals ... meet executives and investors (and have) something to say about what you want to do ... you must imagine what these companies want and what you can achieve for them". With a few changes, such precepts could well be addressed to an applicant in any industry.
Right from the outset the author makes it clear that success depends on "biotechnologists with a strong business orientation, rather than on the scientists who in many cases were the founders of the companies. Most of the problems of biotech start-ups can be seen in terms of too much science, not enough business." Accordingly she lays great stress on the role of venture capital.
Several of the interviewees - or respondents - expand on reasons why small is beautiful in biotechnology. Big companies, it's suggested, are too rigid and slow moving, and stifle creativity. On the other hand, the major pharmaceutical houses do offer a good training ground for budding biotechnologists, because "a big company background gives you a vision of what is possible organisationally and the discipline necessary to establish priorities". Baxter Travenol in the US, and ICI and GD Searle in Europe, have been particularly rich sources of entrepreneurs in the biotechnology area.
What these individuals gain when they found their small biotech enterprises is "energy, drive and the commitment of staff at all levels". Most biotech executives show fierce allegiance to the idea of remaining independent, and swear to resist the blandishments of bigger corporations. Many succumb nevertheless.
Selling out has always been an option available to the founders of even moderately successful businesses in burgeoning young industries. Now that biotechnology seems to be maturing, to be struggling through to profitable products at last - not just to profitable venture capitalism - its attractions look greater than ever. Which is an excellent reason why quite a lot of people might want to know more about the industry. Whether they would see a return on an investment of £55 is another matter.
Peter Chambers is editor of Mims Magazine, the journal of prescribing and therapeutics for GPs.