A Biotech Pioneer Goes After Big New Game

Even in biotech pioneer Genentech Inc.'s notoriously hard-driving culture, David V. Goeddel had an intensity that few could match. The boyish PhD routinely worked 80-hour weeks and slept at the lab. By his 30th birthday, he had taken over molecular-biology research. For 15 years, he was the industry's most productive scientist. He and his team produced Genentech's first five products, including the heart-attack drug TPA, and published dozens of papers in scientific journals. On his rare vacations, he climbed serious mountains.

Now, Goeddel is channeling energy in a new direction. At 41, he's leaving Genentech to head research at Tularik Inc., a biotech startup he helped found just over a year ago and for which he has been working part-time. So far, Tularik has raised $12 million to corner a risky new technology involving so-called transcription factors. They are special chemicals the body makes that turn genes on and off. Tularik hopes to exploit the concept to find drugs for hepatitis, herpes, high cholesterol, and other conditions.

TRADEMARK GRIN. In the late 1970s, molecular biologists such as Goeddel became expert at gene-splicing, or using genes to produce natural proteins that can be used as drugs. Genentech, which in 1990 sold 60% of itself to Swiss giant Roche Holding Ltd. for $2.1 billion, has kept its focus on these protein-based drugs. But many complex diseases such as cancer and AIDS haven't responded well to single-protein drugs. Proteins can be expensive to make and must also be injected, rather than packed into pills. Those limitations have spelled opportunity for dozens of key Genentech employees, who have moved to startups to pursue novel technologies.

Goeddel himself has had plenty of chances to leave before now. With his trademark leering grin, he says he scared off venture capitalists shopping uninspiring ideas by demanding a salary of $10 million a year. The money didn't actually matter much. Like many other early Genentech employees who bagged oodles of options, Goeddel became a blue-jeaned, tennis-shoed millionaire through the Roche buyout. Besides, he says, Genentech always gave him what he wanted: "the best job in the whole biotech industry."

But that wasn't good enough. Goeddel dreamed up Tularik with two friends: Steven McKnight of the Carnegie Institution and Robert Tijan of the University of California at Berkeley--both of them noted academics and transcription experts. Their strategy was to find nonprotein drugs to block the transcription factors that switch on the deleterious effects inside cells. Tularik wants to make pills that stop disease at the source, without the side effects that plague other drugs. In herpes, for example, turning off the factor that allows the virus to replicate could be the key to short-circuiting the disease entirely.

`ON THE EDGE.' It's a strategy that makes Tularik even riskier--if that's possible--than most other biotech startups. No other company is focused exclusively on transcription factors. But many academics are in hot pursuit, and well-heeled drug companies are devoting more research to them, including Du Pont Merck Pharmaceuticals Inc., whose research is led by David Martin, another former Genentecher. He says Goeddel's move makes sense, in part because Goeddel "has always stayed on the edge of technology."

Goeddel becomes the fifth Genentech alum to join Tularik, whose chief executive, James Gower, launched the controversial TPA for Genentech in 1987. The "Genen-Exers" already have cloned a taste of the old corporate culture: Tularik will have Friday beer bashes, and all employees will be shareholders. It remains to be seen whether Goeddel will also import water-pistol wars and dollar-bill tossing--a nouveau-riche version of pitching pennies--in the hallways.

Genentech, for its part, is keeping a stiff upper lip about losing yet another scientist. "We've done well recruiting," and Goeddel's loss won't be devastating, says Arthur D. Levinson, Genentech's vice-president for research and development and a friend of Goeddel. "This is a new, uncertain technology, and the way Dave lives is for an adrenalin rush associated with tremendous risks." Levinson says Genentech, which has a small investment in Tularik, is not pursuing transcription factors, because nobody is certain if they will work in "5 or 30 years."

Well, one person is, anyway. "This is my mountain. If this place doesn't make it big, that's a failure to me," Goeddel says of Tularik. "I don't want to have just another biotech company trading at 10 bucks a share."

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