Subject: Genentech, Battered, Is Tightening Its Belt
Date: Published: 10/11/88 82 lines
Source:  Wall Street Journal.  Copyright Dow Jones & Co. Inc. 

    Lost Euphoria:  
    Genentech, Battered
    By Great Expectations,
    Is Tightening Its Belt
    ---
    Firm's Employees, Investors
    Stunned by Stock Plunge
    As Heart-Drug Sales Slow
    ---
    Scientists on Margin Flings
    ----  
    By Marilyn Chase
    Staff Reporter of The Wall Street Journal

    SOUTH SAN FRANCISCO -- A year ago, Genentech Inc. toasted
 the regulatory approval of its heart drug TPA with champagne
 under circus tents, fireworks that closed the airport, and
 rock 'n' roll by its biotech band, the Rolling Clones.
    Today, the euphoria is gone.  Genentech is a victim of
 success -- real success, that is, as measured against a
 fantasy of success that had enthralled investors, Wall Street
 and Genentech itself.

[163 lines irrelevant to AIDS have been removed. -- sysop]

    All this means a tighter scientific focus, with the accent
 on product-driven research rather than basic science.
    "A lot of brilliant ideas don't lead to a product," Ralph
 Snyderman, the vice president for medical research and
 development, comments.  "We will be more selective.  We will
 focus on those things with the scientific, clinical,
 regulatory and marketing advantages."  This could portend more
 hard choices, such as the decision earlier this year to scale
 back Genentech's AIDS-vaccine development.  The program was
 judged too lengthy, costly and uncertain.
    Genentech's future hopes center on three products:  Gamma
 interferon, an immuno-modulator, is being tested in lung
 cancer, colon cancer and malignant melanoma; it also seems to
 help children with the fatal immune disorder, chronic
 granulomatous disease.  Genentech's CD4, a molecular sponge to
 soak up the AIDS virus, was the first of its competitors into
 the clinic and in early tests shows no toxic side effects.
 And heading for the clinic in early 1989 is Relaxin, a
 substance to aid in natural childbirth and stem the rising
 tide of Caesarean deliveries.  Genentech still holds the
 strongest overall portfolio of drugs in the biotech pipeline.
    But none of these are guaranteed to be the blockbuster
 that Genentech needs to fulfill Mr. Swanson's oft-repeated
 prophecy of topping $1 billion in revenue by the early 1990s.
 Most analysts now see this as a difficult promise to keep.
    For now, Genentech is relying on its growth hormone,
 Protropin, and TPA. Mr. Gower, the marketing vice president,
 plans a major shift in tactics to reach the larger market
 pool of TPA's 400,000 potential U. S. patients.  "We'll stop
 fighting the comparative, competitive wars (with
 streptokinase)," he says.  "We'll just start selling
 thrombolytics" to win doctors over to clot-busting in
 general.
    Genentech's 194 salesmen will be preaching:  "Forget brand
 names.  For God's sake, just treat 'em," Mr. Gower says.  This
 will work still better if the FDA permits Genentech to add
 improved survival to its marketing claim and label -- a
 blessing he confidently expects soon.
    Having so far battled a trench war of muddy statistics,
 Mr. Gower predicts that the simple message "Thrombolytics
 Save Lives" is the best way to reach reluctant physicians and
 fulfill TPA's potential -- at least until the Gissi 2 study
 is out.  And what if that study doesn't render a clear verdict
 for TPA over streptokinase?  
    "It's not going to be worse," smiles Mr. Gower wearily,
 "than it is right now."
    ---
[12 lines irrelevant to AIDS have been removed. -- sysop]

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