From Alchemy to IPO: The Business of Biotechnologyby Cynthia Robbins-roth
"A tour-de-force for anyone who is interested in the biotech industry. I applaud the enormous achievement of Cynthia Robbins-Roth."-Frederick Frank, Senior Managing Director & Vice Chair, Lehman Brothers"From Alchemy to IPO tells the dramatic story of this revolutionary industry as only an insider can."-George Rathmann, President and CEO, ICOS Corporation,
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"A tour-de-force for anyone who is interested in the biotech industry. I applaud the enormous achievement of Cynthia Robbins-Roth."-Frederick Frank, Senior Managing Director & Vice Chair, Lehman Brothers"From Alchemy to IPO tells the dramatic story of this revolutionary industry as only an insider can."-George Rathmann, President and CEO, ICOS Corporation, Chairman Emeritus, AmgenWritten by a well-known industry insider, From Alchemy to IPO addresses the coming-of-age of biotech products and companies and traces the history of biotechnology from its early inception in the seventies to today's heyday of new solutions and breakthrough treatments. It describes the amazing entrepreneurial trail of product development, novel business models, and critical trials that eventually pave the way to market. This is the first book to accurately record the inner workings of an industry-biotechnology-that's on the verge of living up to its monumental promise to change the world as we know it.
So says Cynthia Robbins-Roth in From Alchemy to IPO, a fascinating, if somewhat dry, look at how the biotech industry grew from nothing to one of the most important business sectors in today's economy. Her retelling has important lessons both for biotech investors and Net investors, who can learn much from biotech's technology-driven boom-bust cycle.
The biotech sector first grabbed the attention of individual investors in 1980. The U.S. Supreme Court ruled that genetically altered life could be patented, Genentech went public and closed at double its offering price of $35, and suddenly the marriage of technology and biology stepped out of science fiction novels and into doctors' offices and grocery stores. Just a few years later, though, impatient investors, who weren't able - or willing - to understand the often long and expensive process required to turn a test tube reaction into a viable drug, began dropping out of biotech stocks in droves. Today, Net investors will be comforted to know that biotech is again booming, as years of research finally yield concrete results.
As a biochemistry Ph.D, former researcher for Genentech and the founder of BioVenture Consulting, Robbins-Roth knows from whence she speaks. Steeped in technological details, her book can be a fascinating read for those enamored of hard science. However, as an investment guide, complete with stock tickers, dates of public offerings, partnering history and other minutiae, the book too often reads like a series of annual reports and would have benefited from the inclusion of far more case histories and stories.
Robbins-Roth also errs somewhat on the side of industry cheerleading at the expense of giving a complete portrait of the biotech investing environment. Early in the book, for example, she talks about the knockout process, in which researchers turn off certain genes to determine their function. Much of this research is done on organisms other than humans, often with disastrous results for the subject. We know from the reaction of consumers in today's marketplace that many people object to scientific testing on animals, yet Robbins-Roth skates by with nary a comment. Likewise, she barely touches on controversial subjects as timely as genetically altered food. To her, it seems, all discoveries in biotechnology are to the good.
The problem is, the human connection to biotech is far more complicated than that of simple innovation, and choosing to invest or not in a company is a complex problem, not only in terms of picking technological winners or losers, but also in making decisions about work that goes to our very essence. When one company finds a better drug delivery system for diabetics, or an experimental gene therapy for cancer patients, it affects, for better or worse, everyone.
The Net is only beginning to force investors to ask similar questions. Toward the end of the book, the author rhetorically asks whether one should invest in a cure for Alzheimer's or the latest online idea to deliver dog food. The cure gets Robbins-Roth's vote, but often as not in real life, it's the dogs who win out, at least in the short term. A less facile book might have helped us better understand why that is.
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Chapter 1: Biotech In The Beginning
Fourteen years ago, Betsy Patterson was a 34-year-old single mom with three kids ages 5 to 10. She was a registered nurse in oncology working on the bone marrow transplant unit, where cancer patients go to replace the marrow cells destroyed by cancer treatments. She was reminded daily just how terrible cancer could be. And then she found her own lump.
Betsy was diagnosed with non-Hodgkin's lymphoma (NHL), a malignant growth of immune system cells that begin to form tumors in lymph nodes and throughout the body. NHL, a deadly cancer that affects an estimated 250,000 Americans, is growing at a rate second only to lung cancer. About 55,500 new patients will be diagnosed in this country this year, and 25,000 will die of the disease. There is no cure for most patients, and only 60% of patients treated with the conventional treatments-toxic radiation and chemotherapy-are still alive 5 years after diagnosis.
Because there were no other symptoms, she and her doctor adopted a "wait and see" approach. Betsy did very well for 9 years. Her lymph nodes would periodically balloon up but then disappear before she even had time to see the doctor. She remarried, and life went on.
But in 1995 things changed. Betsy enrolled in graduate nursing school-the stress level went up. Within weeks, tumor-filled lymph nodes were popping out all over her body. A biopsy showed that her lymphoma had kicked into overdrive. Her doctor suggested immediate chemotherapy, and she entered a 9-month Phase II clinical trial protocol with two drugs-fludarabine and mitoxantrone.
Chemotherapy works by killing off rapidly dividing cells, such as tumors. Unfortunately,there are lots of healthy cells in our bodies that also divide rapidly-hair follicles, the cells lining the digestive tract, the bone marrow cells that produce red blood cells to carry oxygen, and the immune system's white blood cells. During chemotherapy, your hair falls out, your mouth develops ulcers, your gut loses the ability to absorb food properly, your red cell count gets so low that there is not enough oxygen getting to your organs, and your immune system loses the ability to protect you from infection. Some drugs damage the kidneys and the heart. Most lymphoma patients die not of the direct effects of their disease, but of complications of the treatment. Chemotherapy is essentially a race to kill the tumor before the treatment kills the patient.
Betsy's doctor told her that fludarabine was not associated with extreme toxicity-he expected her to keep her hair, and her job, throughout the 9-month protocol. But to Betsy, it felt as though the treatment was killing her pretty quickly. "The chemo was very tough on my veins and I felt pain with each infusion burning up my arms. Within days of the first treatment, I was sick as a dog, with uncontrolled nausea and vomiting."
Within 3 weeks of the first treatment, Betsy got another unpleasant surprise. "The drugs were so toxic to my ovaries that they just stopped producing hormones. I went into abrupt menopause and all the wonderful things that means-constant hot flashes; loss of sexual libido; major physical changes; serious night sweats that would soak the bed, my nightgown, and my poor husband; and my periods ended. Sleep was totally disrupted for both of us. Nobody had warned me about this effect. These were major quality-of-life problems for me and for my family."
At the end of the 9-month protocol, she began replacement hormone therapy. At that point, her body felt and looked like that of a much older woman. The hormone therapy, which she will need to take for the rest of her life, helped return some of her body to normal. But some of the induced changes are permanent...
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(Ron Cohen, CEO and Founder of Acorda Therapeutics)
Meet the Author
Cynthia Robbins-Roth, Ph.D., is the founder of BioVenture Consultants, which provides strategic planning and financial assessment to biotech start-ups, pharmaceutical companies, and venture-capital firms. Her biotech column appears regularly in Forbes magazine, and Forbes ASAP recently named her one of the top twenty-five biotech all-stars of 1999. She lives in San Mateo, California.
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