Innovate or Perish: Managing the Enduring Technology Company in the Global Market

Winds of Change: New Technologies, New Innovators, and a New Product Class

In the closing decades of the twentieth century, the previously chemistry-driven industry began to be turned on its head as upstart “biotechnology” companies entered the fray, using new innovations and proprietary techniques in the new fields of molecular biology—gene splicing, genomics, genetics, and so on—that allowed the manufacture of very complex macromolecules (e.g., insulin, growth hormone, blood-clotting factors) that had previously been known as important therapeutics but were obtainable only through isolation from human cadavers of other mammalian tissues (e.g., pig insulin).

While the bulk of the approximate $300 billion gross revenues of today’s biopharmaceutical industry are still derived from the sales of orally active “pills,” the sales of injectable biologics (proteins, antibodies, etc.) now account for 15% to 20% of these sales and are growing rapidly. In addition, and almost incomprehensible to many, two of these biotech upstarts, Amgen, Inc. and Genentech, Inc. are now firmly in the top ten companies of the industry based on market capitalization, having left Merck, once the darling of the industry, in their collective wake.