Robert Swanson and Herbert Boyer: Giving Birth To Biotech

A venture capitalist and a scientist changed how drugs are made
As part of its anniversary celebration, BusinessWeek is presenting a series of weekly profiles of the greatest innovators of the past 75 years. Some made their mark in science or technology; others in management, finance, marketing, or government. In late September, 2004, BusinessWeek will publish a special commemorative issue on Innovation.

In 1976, Robert Swanson and Herbert Boyer created the biotechnology industry over a couple of beers at a San Francisco bar called Churchill's. Swanson, at just 29, was an ambitious venture capitalist who wanted to commercialize a new way of engineering drugs based on splicing DNA from one organism into the genome of another. Boyer, a 40-year-old biochemistry and biophysics professor at the University of California at San Francisco, had co-developed an ingenious technique for doing exactly that. So Swanson cold-called Boyer, stopped by his lab, and the two retreated to the bar to sketch out a business plan. They were about to change the drug industry forever.

The discovery at the crux of their plan was called recombinant DNA. The idea had been around since the early '70s, and many scientists were laboring to commercialize it. But Boyer was the first to perfect a technique for snipping out DNA -- the blueprint molecules that cells use to make proteins -- and combining it with fragments of DNA from another organism. Teaming up with Stanford professor Stanley Cohen, Boyer pioneered a method of inserting segments of the recombined DNA into E. coli bacteria. The microbes, in effect, became tiny factories, churning out drug proteins encoded by the new DNA. To turn the invention into a business, Boyer and Swanson incorporated under the name Genentech Inc. In 1982, the company and its marketing partner, Eli Lilly & Co. (LLY ), won Food & Drug Administration approval for the first genetically engineered drug, human insulin. Soon other biotechnology companies sprouted, using recombinant DNA to produce drugs aimed at everything from anemia to cancer.

Swanson and Boyer bonded over a mutual love of science. Growing up in Derry, Pa., the athletic Boyer was pulled into the field by his high school's football and basketball coach, who was also the school's science teacher. As an undergraduate at St. Vincent College, he was captivated by James Watson and Francis Crick's groundbreaking 1953 revelation that DNA was a double helix. "The whole structure was so beautiful, and it explained so much about genetics," says Boyer, who is now retired and living near San Diego. "It put me on a career path." Swanson, who was born in Brooklyn, N.Y., studied chemistry and management at Massachusetts Institute of Technology. He started his career as a venture capitalist at Citicorp Venture Capital Inc. (C ), then moved to Kleiner & Perkins, the firm that later provided $100,000 in seed capital for Genentech.

The scientist and the businessman played off each other perfectly. As CEO, Swanson preached the benefits of biotech to potential investors while Boyer watched out for the scientists on the staff. It was Boyer who persuaded Swanson to let the whiz kids publish their research, even at the risk of exposing Genentech's trade secrets.

Swanson died of brain cancer in 1999 at the age of 52, just three years after retiring as chairman of Genentech's board. Boyer retired as vice-president in 1991 and has remained on the board of directors ever since. The biotech industry now encompasses more than 1,400 companies in the U.S. alone and generates $39.2 billion in annual revenues. Boyer says he and Swanson couldn't fathom the impact their invention would have on the world. "When he walked into my office, it changed my life," Boyer says. And the lives of millions of patients and their families.

By Arlene Weintraub

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