Scientific Methods
Genentech's steady focus on research yields a plump bottom line
The Toyota example. The CEO has also reshaped areas like marketing and manufacturing. Unlike at many drug companies, sales staff specialize in only one product instead of a slew of them. The company's in-house drugmakers visited a Toyota factory last year in search of ways to boost efficiency. Even pranks are serious business. When marketing employees presented a mock annual report cover filled with snapshots of Genentech's numerous costume parties, executives made it the back cover of the actual 2005 report.
Winds carry the smell of doughnuts from a nearby factory, Genentech's only remaining neighbor, to researchers at its campus, where sidewalks are shaped like DNA strands. That's not the only thing stoking Genentech's appetite. With the bar set high by Genentech's banner 2006 results, the company is hungry to find new discoveries. Its ambitious plans include gaining 15 new approvals and stocking its pipeline with 20 new molecules by 2010. To do so, it needs to find good science wherever it can. Genentech nearly doubled research and development spending over two years, plowing back two thirds of its profit, or $1.6 billion, in 2006. Construction is a constant background noise at headquarters as new research labs go up. The company plans to double its South San Francisco footprint within a decade.
With biotech research flourishing around the world, Genentech sends teams far and wide to visit universities and smaller companies to check their work. Last year, it signed 50 deals, including the one with Tanox.
With success, Genentech has developed swagger, making the company a tempting target for critics. Outsiders do seem to think Genentech is arrogant, Dixit admits, adding that "we can rub people the wrong way." But at the end of the day, he adds, "we're just a bunch of nerdy scientists."
THE TOP SELLERS
Leading Genentech drugs, 2006
Rituxan: $2.1 billion
Approved to treat non-Hodgkin's lymphoma in 1997 and severe rheumatoid arthritis in 2006.
Avastin: $1.7 billion
Approved to treat colorectal cancer in 2004 and lung cancer in 2006.
Herceptin: $1.2 billion
Approved in 1998 for breast cancer.
Xolair: $425 million
Approved in 2003 to treat asthma.
Tarceva: $402 million
Approved in 2004 to treat lung cancer and in 2005 for pancreatic cancer.
Overall U.S. sales: $7.1 billion
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