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Mission
Genentech's mission is to be the leading biotechnology company, using human genetic information to discover, develop, manufacture and commercialize biotherapeutics that address significant unmet medical needs. We commit ourselves to high standards of integrity in contributing to the best interests of patients, the medical profession, our employees and our communities, and to seeking significant returns to our stockholders based on the continual pursuit of scientific and operational excellence.
Products Genentech manufactures and commercializes multiple biotechnology products. BioOncology
Immunology
Tissue Growth and Repair
Medicine Development at Genentech Genentech has an extensive track record in all phases of bringing new disease treatments to patients — from discovery research through clinical development, manufacturing, and commercialization. With multiple protein-based products on the market for serious or life-threatening medical conditions, Genentech has experience taking a drug from A to Z, transforming the seed of an idea in a lab into a novel therapy for a patient in need. Discovery Research Research is the wellspring of potential products, and Genentech's research organization is among the world's finest. Genentech's more than 1,100 researchers, scientists and postdocs consistently publish important papers in prestigious peer-reviewed journals and are among the top researchers in the world in terms of total citations. In addition, Genentech's scientists have secured approximately 7,450 current, non-expired patents worldwide and have approximately 6,250 patent applications pending worldwide. Discovery research at Genentech focuses primarily on three areas of medicine: oncology, immunological disease, and disorders of tissue growth and repair, including angiogenic disorders. In March 2008, the research organization also announced the initiation of early efforts in two new therapeutic areas: neuroscience and infectious disease. To ensure continued scientific excellence, in October 1992 Genentech opened the Founders Research Center, a 275,000 square-foot, $85 million research facility devoted solely to biotechnology. It was dedicated to Bob Swanson and Dr. Herbert Boyer in honor of their pursuit of the promise of biotechnology when they established Genentech in 1976. In April 2001, the company celebrated its 25th anniversary by breaking ground on a 280,000 square foot expansion of the Founders Research Center. Completed in 2003, the complex houses specialized laboratories and state-of-the-science equipment in several interconnected buildings. Product Development Genentech uses an extensive set of criteria, including scientific rationale and medical need, to determine which projects to move from discovery research into development. Our clinical scientists and medical professionals then perform the essential role of translating basic science into patient benefit. They help Genentech determine which potential new drugs are tested against specific diseases in the clinic and guide chosen drug candidates through the many phases of clinical testing. Genentech is dedicated to evaluating its therapies in rigorous randomized trials. Our approach is to put a drug candidate through tough clinical testing in order to demonstrate its potential benefit as a therapeutic. Genentech's development pipeline includes multiple projects targeting a range of disease areas across all phases of clinical development. Manufacturing Genentech was the first biotechnology company to scale up protein manufacturing successfully from the small quantities used for research to the much larger quantities needed for clinical trials and marketing. Genentech is a world leader in biotech manufacturing, with more FDA-approved manufacturing capacity for the production of biotech medicines than any other company. Over the last two decades, Genentech has built world-class production facilities, developed expertise in commercially viable manufacturing processes and also attracted and retained key personnel with experience in all aspects of large-scale biologics manufacturing. Genentech's manufacturing expertise and capacity (approximately 330,000 liters of installed fermentation capacity) provide important competitive advantages in the maturing biotechnology industry and position the company well to meet the demands of its promising product pipeline. Genentech currently has three manufacturing facilities in California (South San Francisco, Vacaville and Oceanside). In 2004, Genentech began construction on an expansion to its Vacaville site, which, when completed, will be the largest biotechnology manufacturing facility of its kind in the world. Genentech acquired an Oceanside, California biologics manufacturing facility in June 2005 and received U.S. Food and Drug Administration (FDA) licensure in April 2007. In March 2006, Genentech announced the purchase of property in Hillsboro, Oregon, for the construction and development of a fill/finish facility. Construction is progressing at the location for a fill/finish facility, and the warehouse and distribution center became operational in July 2008. In November 2006, Genentech and Lonza entered into a supply agreement for the manufacture of Avastin at Lonza's facility currently under construction in Singapore. When completed, the 80,000-liter facility will be the first large-scale bulk biologics manufacturing plant in Singapore, with FDA licensure expected in 2010. Commercialization The commercial group plays a crucial role in bringing Genentech's therapies to our customers by transforming our scientific innovations into changes in the practice of medicine that enhance and extend patients' lives. The group's primary focus is to market and sell novel, targeted therapies for disease areas with unmet needs. The development and implementation of commercial strategies involves collaboration across a variety of teams with dedicated expertise. These dialogues are supported by intensive market planning to ensure thoughtful understanding of each therapeutic area and customer group and by ongoing examination of broad healthcare marketplace trends. Product Pipeline In 2007, Genentech invested more than $2.4 billion, or 21 percent of operating revenues on a GAAP basis, into research and development — significantly more than the pharmaceutical industry average. To balance resource use with the strongest likelihood of success, Genentech continuously evaluates its pipeline products in order to determine which are the most promising projects to move through the many phases of clinical testing. Genentech's development pipeline continues to grow, now numbering more than 100 projects in the following therapeutic focus areas: oncology, immunology, disorders of tissue growth and repair, and neuroscience. The pipeline includes both breakthrough innovations and new indications for existing, well-understood products that may fight more than one disease or more than one form of a disease. Oncology Genentech is taking part in the fight against cancer by continuously studying and developing therapies for a variety of cancers. At present, we are studying our marketed products Avastin, Herceptin, Rituxan and Tarceva in numerous new oncology indications as well as investigating a number of new molecules as cancer therapies. We are also conducting combination trials of some of our cancer therapies, such as Avastin plus Tarceva in lung and pancreatic cancer and Avastin plus Herceptin in breast cancer. Immunology Immunology is a growing area of expertise and emphasis for Genentech, and we are developing several potential therapies for immune-related diseases. Two of our marketed products, Xolair for moderate-to-severe persistent asthma and Raptiva for moderate-to-severe chronic plaque psoriasis, are aimed at immunological conditions. In February 2006, our cancer drug Rituxan entered the realm of immunology when the FDA approved Rituxan for use in adult patients with moderately-to-severely active rheumatoid arthritis who have had an inadequate response to one of more tumor necrosis factor antagonist therapies. We are continuing to investigate Rituxan in a variety of immune disorders as well as Xolair in pediatric asthma. Disorders of Tissue Growth and Repair An example of our investigational work in disorders of tissue growth and repair is our anti-angiogenesis drug, Lucentis, which was approved in June 2006 for the treatment of neovascular (wet) age-related macular degeneration (AMD). We are also studying Lucentis in diabetic macular edema and retinal vein occlusion. Neuroscience In March 2008, Genentech announced neuroscience as a new focus area, building on existing internal expertise and interest in neurodegeneration, neurophysiology and restoration. Since December 2006, we have had a research collaboration with AC Immune for the development of anti-beta-amyloid antibodies for the potential treatment of disease, and in the first quarter of 2008 we filed an IND for an anti-beta antibody in Alzheimer's disease. Employees Genentech employees consistently cite the opportunity to make a difference in the lives of patients as the primary reason they enjoy working at the company. We place great value on our approximately 11,000 dedicated and mission-driven employees and reward them accordingly with a comprehensive and diverse set of benefits and services. The company has consistently been recognized as a top employer by such publications as FORTUNE, Working Mother, and Science. In January 2008, FORTUNE named Genentech to its annual list of the "100 Best Companies to Work For" for the tenth consecutive year. Commitment to Patient Access Genentech is committed to patients having access to our therapies. Through its Genentech Access Solutions program, the company provides patients and healthcare providers with coverage and reimbursement support, patient assistance and informational resources. Patient assistance support is for those eligible patients in the United States who do not have insurance coverage or who cannot afford their out-of-pocket co-pay costs. Since 1985, when its first product was approved, Genentech has donated approximately $1 billion in free medicine to uninsured patients through the Genentech® Access to Care Foundation (GATCF) and other product donation programs. Since 2005, Genentech has also donated more than $140 million to various independent non-profit organizations that provide financial assistance to eligible patients who cannot access needed medical treatment due to co-pay costs. Corporate Growth Strategy Our Horizon 2010 vision and goals will help ensure that we are solidly positioned to continue our 32-year mission of discovering, developing, manufacturing and commercializing life-enhancing and life-saving medicines for patients with unmet medical needs. We are investing now to achieve the kind of revenue and earnings growth necessary to remain a leading company through 2010 and beyond. Originally announced in March 2004, the company provided an update to its Horizon 2010 goals in March 2006.
Our Vision Our Goals
Our Guiding Principles
Long-Term Planning
Execution
People and Culture
This backgrounder contains forward-looking statements regarding our Horizon 2010 strategy of bringing new molecules into clinical development, bringing major new products or indications onto the market, becoming the number one U.S. oncology company in sales, and achieving certain financial growth measures, and our internal stretch goal to add a total of 30 molecules into development. These forward-looking statements involve risks and uncertainties, and the cautionary statements set forth below and those contained in "Risk Factors" in our SEC reports identify important factors that could cause actual results to differ materially from those predicted in any such forward-looking statements. Such factors include, but are not limited to, difficulty in enrolling patients in clinical trials; the need for additional data, data analysis or clinical studies; biologic license application (BLA) preparation and decision making; FDA actions or delays; failure to obtain or maintain FDA approval; difficulty in obtaining materials from suppliers; unexpected safety, efficacy or manufacturing issues for us or our contract/collaborator manufacturers; increased capital expenditures including greater than expected construction and validation costs; product withdrawals; competition; efficacy data concerning any of our products which shows or is perceived to show similar or improved treatment benefit at a lower dose or shorter duration of therapy; pricing decisions by us or our competitors; our ability to protect our proprietary rights; the outcome of, and expenses associated with, litigation or legal settlements; increased R&D, MG&A, stock-based compensation, environmental and other expenses, and increased COS; variations in collaborator sales and expenses; our indebtedness and ability to pay our indebtedness; actions by Roche that are adverse to our interests; the unsolicited proposal from Roche to acquire all outstanding shares of our stock not owned by Roche; decreases in third party reimbursement rates; and greater than expected income tax rate. We disclaim and do not undertake any obligation to update or revise any forward-looking statement in this backgrounder.
1 The non-GAAP EPS goal for 2006 through 2010 excludes the after-tax effects of the following items: employee stock-based compensation expense associated with our adoption of FAS 123R, recurring charges related to the redemption of our special common stock by Roche, litigation-related special charges for accrued interest and associated bond costs on the City of Hope judgment, certain items associated with the acquisition of Tanox, Inc. including recurring recognition of deferred royalty revenue, recurring amortization of intangible assets, in-process research and development expenses (a non-recurring expense in the third quarter of 2007), a gain pursuant to Emerging Issues Task Force (EITF) Issue No. 04-1 (a non-recurring gain in the third quarter of 2007), and purchase accounting adjustments, costs incurred by the company on behalf of the Special Committee in connection with its review of the Roche merger proposal (Proposal), as well as legal costs incurred in defense of the Special Committee and/or its individual members in shareholder lawsuits filed in connection with the Proposal;and other potential special charges related to existing or future litigation or its resolution, the Roche Proposal,and changes in accounting principles, all of which may be significant. GAAP EPS for 2006 through 2010 would include the items described above. October 2008 |
