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The birth of biotech
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March 29, 2000: 12:36 p.m. ET
Herb Boyer, co-founder of Genentech, says biotech just 'starting to bloom'
By Staff Writer Martha Slud
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BOSTON (CNNfn) - Nearly a quarter century ago, over a few beers at a San Francisco bar, biochemist Herbert Boyer and young venture capitalist Robert Swanson struck a deal to create Genentech Inc., one of the world's first biotechnology companies.
That upstart California company now is one of the veterans of the largely adolescent biotech sector, an industry that numbers nearly 1,300 companies in the United States alone. And more companies are being created all the time. With an unprecedented surge in biotechnology stocks on Wall Street over the past few months, 2000 is on track to be one of the biggest years for initial public offerings of biotech companies.
Boyer, who helped develop the technology of recombinant DNA - the process of taking DNA strands from two different organisms and stringing them together - has seen previous biotech boom times before.
 Since Genentech's (DNA: Research, Estimates) founding in 1976 and banner IPO in 1980, the sector has experienced periods of intense investor interest amid grand promises of new medical paradigms, but also significant down times when gains were wiped out and financing was tough to come by.
But whatever happens on Wall Street with this latest boom, the biotech industry is entering an important new phase, he said.
"It's a bit overwhelming to see the size of the biotech industry today," Boyer told CNNfn.com in an interview in Boston at BIO 2000, an industry gathering of about 9,000 biotech executives and scientists. "I think it's just starting to bloom."
The sequencing of the human genome - a scientific breakthrough expected to be completed later this year by private researchers - will force biotech companies to increase collaboration with one another, he predicts. Once the genome is sequenced, it likely will take years to interpret what the data means and companies likely will form joint ventures to try to accomplish the task and use the information to develop new drugs, he said.
"Fifteen years ago, when the idea of doing the whole human genome was being discussed, I was not very optimistic that it could be done," he said. "It's going to have a very significant impact on the biotech industry. Not any one company is going to dominate this - it's going to require a lot of activity on the part of different biotech companies."
He also cautioned that while technology has accelerated "way beyond my expectations," the amount of time, labor and money to develop a drug, test it in clinical trials and bring it to market still remains immense.
A model for other startups
Boyer and Swanson, who died late last year at age 52 after a long battle with brain cancer, were honored at the Biotechnology Industry Organization meeting for helping "shape the biotechnology revolution." The combination of their experience - Swanson's financing background at VC firm Kleiner & Perkins along with Boyer's cutting-edge DNA research at the University of California at San Francisco - formed the basis for the company's philosophy: a private venture that would develop therapeutic applications based on recombinant DNA technology.
 Genentech, which is majority owned by Roche Holding Ltd. after a 1990 buyout, produces growth hormones and treatments for cancer, heart conditions, cystic fibrosis and other diseases. Its products include Herceptin, a treatment for metastatic breast cancer, and Rituxan, for patients with non-Hodgkins lymphoma.
"The dreams that we had 25 years ago are becoming reality," Boyer said. "Those were very exciting times when Bob and I started the company. It was a daunting period in our lives, but it was extremely exciting."
Genentech was also one of the first biotech companies to experience the "IPO effect" generally associated with Internet shares today. When the company went public 20 years ago in a $35 million offering, the stock jumped from $35 per share to $88 after less than an hour on the market - one of the largest jumps ever at the time. The company also was among the first to offer its employees stock options - an idea suggested by Boyer.
Boyer, 63, served as vice president of the company until 1990. He is semi-retired now, serving on the company's board, as well as on the board of Allergan Inc. (AGN: Research, Estimates), an eye care and specialty pharmaceuticals maker, and Sangamo BioSciences Inc., a startup firm focused on genetic research. The company filed last month for an IPO.
Genentech stock closed up 3-7/8 at 158-1/2 on the New York Stock Exchange Tuesday. 
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