Forget the Shortcuts: Creating a Truly Innovative Biotech Culture

7/27/09

Watching the acquisition of Genentech by Roche has been a fascinating process. I wasn’t so interested in the eventual price paid per share, but whether Basel, Switzerland-based Roche, one of the oldest and most traditional pharma companies, could preserve the special science-based culture at Genentech that made it the world’s pre-eminent biotech company. Would Genentech’s top scientists stay in the San Francisco Bay Area? Could Roche successfully integrate a free wheeling West Coast culture into an East Coast (and indeed, European based) organization?It will take time before this question will ultimately be answered. However, the signs are that Roche doesn’t want to mess things up.

This was illustrated by the recent stunning announcement from Roche that it was resigning from the Pharmaceutical Research and Manufacturers of America (PhRMA), the chief trade association and lobbying group of the US pharmaceutical industry, in order to join the Biotechnology Industry Organization (BIO), the trade association for biotech. This announcement, coupled with the decision to move many of their scientific research programs from the East Coast to the West, told me that Roche was serious in their desire to remake their own culture in Genentech’s image. We’ll see over the next six months or so if Roche can hang on to Genentech’s key employees and culture, now that they have begun their restructuring of Genentech, including employee layoffs and buyouts.

If you are buying a research organization both for its novel drugs and the culture of innovation that created them, it makes sense to do what you can to preserve that culture. I discovered the cultural divide that separates pharma from biotech when I was first looking for a job in the industry. The contrast between pharma and biotech couldn’t have been more striking. A job interview at “Big Pharma” introduced me to scientists, dressed in jackets and ties, who spent most of their time devising new types of screening assays against which the company’s library of chemical compounds could be tested. In marked contrast to the scientists, lab assistants wore overalls with their names sewn on the front in a style that was strangely reminiscent of auto mechanics. If hired, I was told that I could spend as much as 20 percent of my time doing any research of my choosing, as long as my primary focus was on developing new screening assays. Promotions and long-term success at the company were based on your success … Next Page »

Stewart Lyman is Owner and Manager of Lyman BioPharma Consulting LLC in Seattle. He provides strategic advice to clients on their research programs, collaboration management issues, as well as preclinical data reviews. Follow @

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  • CMCguy

    You make many good points and especially agree with the getting the right mix of people as crucial. With that in mind there have been much failure in biotechs where good innovative science did not translate to satisfactory outcomes during development or achieve sufficient financial backing because did not bring on people with correct expertise to guide or support required growth. Often the “old organizations” overtly resists the changes, new functions or knowledgeable newcomers that are necessary in such an evolution to an actual company, not a research lab. A group of bench workers tend to know little about what development is and even less about finances.

    Although I do think big pharma has largely lost its way in recent decades, because as suggested seems to be much less science driven/lead (also more blockbuster blinded), I think there is a core of highly skilled and expert personnel that exists at most places who could be innovative and better enable the drug development activities

  • http://www.lymanbiopharma.com Stewart Lyman

    To further illustrate the conversion of Roche into Genentech, it was announced in mid October that the Genentech brand will replace the Roche brand on all drugs that are sold in the United States. This includes small molecules, Roche’s bread and butter for many, many years.

  • CMCguy

    Stewart I don’t understand the point of your follow-up comment on this re-branding name choice. I think this all has little if anything to do with Innovation but more so I see likely as a “clever” Marketing strategy to disassociate from public/political negatively viewed “Big Pharma” label to a more favorably perceived “Biotech” business. Roche may adopt some Genentech ways, particularly for certain areas (namely Biologics), but at its core doubtful will really change much.

  • http://www.lymanbiopharma.com Stewart Lyman

    Sorry I didn’t make this clearer. My point in this case was indeed not focused on innovation but branding and marketing. Yes, changing the products to say they are made by Genentech instead of Roche illustrates that the company wants to be associated more favorably with the biotech world and especially Genentech, which has a reputation for a highly innovative culture and products. This was something done for public consumption. But I doubt that the public at large paid any attention to Roche’s switch from PhRMA to BIO, or was aware of the move of scientists from the East Coast to the West. Roche may not be successful in remaking their culture, but from where I am watching it appears they recognize the need to change their research programs internally, and are at least hopeful that they can get the Genentech “magic” to rub off on the other parts of the company. Sometimes adopting the trappings of a successful culture can help to drive a change in that direction. Time will tell if they are successful or not.