Under most circumstances, a book about Amgen, probably the world’s most successful biotech company, and written by a former CEO, would be a great read — Amgen’s revenues rose from $19 million in 1988 to $3.6 billion in 2000, and profits from minus $8 million to $1.1 billion; in 2000, Amgen’s profits compare with the industry’s losses of $5 billion. This book has all the cute Amgen stories. When Dow Chemicals proposed a tie-up with Amgen to produce anti-cancer drug erythropoietin, its big contribution, since the human body produces the drug in the kidneys, was to be tens of thousands of gallons of human urine, courtesy a tie-up with the Italian army. In the case of one of Amgen’s few forays into animal biotech products, one of the farmers using Amgen’s chicken hormone growth product had a heart attack and died while feeding his chicken. His body wasn’t discovered for two days, so the National Enquirer’s headline was ‘Giant Genetically Engineered Chicken Peck Farmer to Death!’
But what differentiates Science Lessons from the normal corporate biographies and takes it in to the genre of management/government policy books is the lessons it holds in a host of other disciplines — oh yes, and for those looking for throwaway cocktail lines of the type that’ll impress Kiran Mazumdar-Shaw (she has a master brewer degree), there are pithy descriptions of recombinant DNA, a discussion of what’s patentable and what’s not, some stuff about the 100 trillion cells (don’t get impressed, it’s in the book!) that, with the exception of red blood cells, are collectively referred to as the human genome (in the book again!), and other such trivia.
Since biotech is an expensive business (think $5 billion losses) and none of the big pharma firms have established successful biotech firms, can government policy help? It can, actually. The Bayh-Dole Act which allowed universities and small businesses to own the titles to inventions from federally-funded research and the Orphan Drug Act that gave seven-year exclusive patents to those discovering new treatments for diseases that affected less than 200,000 people, are two such examples.
And, yes, given that all successful biotech firms — indeed this extends to almost any other field you can think of (think Microsoft, or Google) — began as tiny outfits, it is absolutely critical that the government simplify procedures for doing business. If you’re looking for innovation and entrepreneurship, the real stuff comes only from small firms.
So what’s the science of business, the title of this review? You’d never guess it, but successful scientists, at least in this story, can be successful executives as well. When Amgen’s head of sales and marketing died of a heart attack (it doesn’t say if he was attacked by GM-chicks), Binder asked a scientist to take over the job! Yup. His reaction, like yours, was, “You’re talking to me about sales and marketing?” Anyway, the long and short of it is that he made a go of it, and how. One of his first thoughts was to change the system of marketing around which, not surprisingly, resulted in a lot of scepticism. Being a scientist, however, he did what came best to him. He decided to set up a controlled experiment with pre-defined success goals — one team do it this way, the other my way, and then let’s see. ‘My way’ won, and the rest is history.
As in all such books, there are the usual chapters on how to keep teams motivated, how important it is to choose your partner (all that legal stuff is a waste — if your partner is a schmuck, you’ll always end up with breached contracts), the value of ethics in business and the importance of empowering your teams. The last probably has something to do with the fact that Amgen is/was a pure science-driven company. You can’t hope to get anywhere as a scientist if you aren’t open to experimentation. So, if a company/boss frowns upon those whose experiments don’t succeed, there aren’t going to be any more experiments — since this basic principle is something all scientists understand, it was just natural for this to extend to the way the company was managed. A very important succession tip that you’ll find nowhere else — leave a big success for your successor. Binder became CEO just before erythropoietin was about to be launched — all approvals had been got and so on, the old CEO just had to wait a few months and he’d be hailed the world over. Instead, he chose to give Binder the chance of scoring very early in his term, to bolster his confidence as well as that of others in him. Binder, in turn, left when the pipeline was about to deliver four new products.
There are a host of other great insights Binder’s narrative offers (take the money from VCs but don’t trust them to back you each time, so get the most you can the first time around!). So read the book, and not just to impress Ms Mazumdar-Shaw.
SCIENCE LESSONS WHAT THE BUSINESS OF BIOTECH TAUGHT ME ABOUT MANAGEMENT
Gordon Binder & Philip Bashe
Harvard Business Press
292 pages, $29.95
