Word: hybritech
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Dates: during 1980-1989
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When Greene became chairman of Hybritech, Inc., in January 1979, it consisted of little more than a name and some rented lab space in La Jolla. "We had a cell biologist, a protein chemist, a secretary and somebody to clean the animal cages," says Greene, "and that was about it. We had $300,000, but it looked like we were going to run dry by August...
...June, after Hybritech's scientists proved they could fuse cells commercially, Greene found three venture-capital firms to invest $1.6 million, which then seemed "an astronomical amount of money." By the end of the year, the scientists produced the world's first commercially manufactured monoclonal antibody, which acted against hepatitis. Licensed just for research, Hybritech sold only $10,000 worth of the first batch, mostly to inquisitive rival labs...
When the U.S. Food and Drug Administration gave Hybritech clearance in May 1981 for its first commercial product, a diagnostic test for allergies, the firm was still "losing money like crazy." But Greene decided to go public, hoping to sell 2 million shares at $20. In the two months it took to organize the sale, the market plunged; Hybritech sold only 1.2 million shares at $11. "A window was slamming shut," Greene recalls...
...spent the next two years keeping that window open. A new federal rule allowing tax breaks for investments in research helped lure prospective backers. Sales climbed, the stock rose, and Greene launched another offering that sold 1.4 million shares at $26.75. Today Hybritech produces 40% of all the monoclonal antibody products on the market, notably diagnostic kits to test for allergies, pregnancy, prostate cancer and thyroid deficiencies. The company's sales went from $6.9 million in 1983 to an estimated $14.5 million in 1984, and its profit for 1984 will be $1.3 million...
...small select club of moneymen, the eventual winner will be the entire U.S. economy. The innovative companies that venture capitalists find and then foster will manufacture new products, provide jobs and increase productivity in the industries of the 21st century. Today's startups, which have names like Hybritech, Thermo Electron and Collasen, may some day join Eastern Air Lines, McDonnell Douglas and Apple Computer as the success stories of venture capital. -ByAlexander L. Taylor...