William Rastetter Interview – July 28, 1997
JONES: I know that you got a PhD at Harvard, in organic chemistry?
RASTETTER: Right.
JONES: Then you went to MIT. Were there postdocs in between?
RASTETTER: No.
JONES: In ‘82, you went to Genentech, what were the circumstance surrounding that? Why did you decide to leave the academy to go into industry?
RASTETTER: Because I could do better science within the industrial sector.
JONES: There were limitations at MIT of what kinds? In terms of resources?
RASTETTER: Well, it was a very disciplinary organization. You lived in a department and you did chemistry, and if you needed to draw upon other skills or resources, you had to go outside the department or often outside the institution. My best collaboration, actually, was at Berkeley, and it was a very painful way to do science. That coupled with the fact that you spent fifty percent of your time writing grants made it very difficult.
JONES: And in particular, what they were doing at Genentech was exciting to you?
RASTETTER: Oh sure.
JONES: Did you perceive a lot of risk in going there? Genentech was only six years old at that point, after the IPO, but...
RASTETTER: Oh, sure, there was a lot of risk, but I went as a fairly young professional, right? There were a lot of things that I could have done had Genentech folded, so the risk was of no importance to me.
JONES: You went intially to work in the Biocatalysis and Chemical Sciences group, but then two years later, you got involved in business development. What was the motivation to make that transition?
RASTETTER: Well, I helped establish spin-off companies when I was in the research group, and then the spin-off companies needed to be financed, they needed managements, they needed boards of directors, and so I moved into the corporate development role.
JONES: Which companies were those?
RASTETTER: Genencor, HP Genenchem, GLC Associates, Travenol-Genentech Diagnostics, and a research institute in Vienna, Austria, which was a joint venture between Genentech and Beohringer-Ingleheim.
JONES: What prompted your decision then to leave Genentech to come down here for IDEC.
RASTETTER: Well, it was chance to lead a company myself.
JONES: And what was the date on that? When did you join?
RASTETTER: December 1st, 1986.
JONES: Did you have other opportunities at the time? Why did you choose this one?
RASTETTER: I had several opportunities at the time. This one just seemed to be one with the shortest path to commercialization of products.
JONES: And was Kleiner-Perkins involved in bringing you down here?
RASTETTER: Correct.
JONES: Brook Byers?
RASTETTER: Correct.
JONES: How did he represent this opportunity to you? Did he come to you?
RASTETTER: No, I learned about it and I went to him, because I knew that he was involved in it.
JONES: So you knew that they were looking for a CEO.
RASTETTER: Correct.
JONES: And did you know the people here at IDEC?
RASTETTER: I knew Howard Birndorf.
JONES: How?
RASTETTER: I sat on a Commerce Department Committee with him in Washington.
JONES: When you arrived, was the licensing with Hybritech already in place?
RASTETTER: Yes.
JONES: Had IDEC merged with Bioterapy Systems at that point?
RASTETTER: We had just completed that merger, correct.
JONES: Later, there was the decision to close, where were they, Mountain View?
RASTETTER: Mountain View, right?
JONES: Why did you decide to close that facility and keep everything down here?
RASTETTER: Well, running a small company in two locations was very difficult.
JONES: Why do it in San Diego rather than move up there?
RASTETTER: Real estate is cheaper, commuting is easier, access to the biotech community is easier here because everybody is in about a fifteen mile radius as opposed to the Bay Area, where it’s very spread out, and one deals, for the most part, with one municipality here in San Diego, rather than dealing with Redwood City, or San Carlos, or Emeryville, or Sout San Francisco, or whatever. So, there’s no cohesiveness of policy in Northern California, and there is quite a bit of cohesiveness here, and we felt that it would be easier, in terms of housing prices, to recruit management to San Diego versus the Bay Area, where housing prices have run about fifty to sixty percent higher, historically.
JONES: As the company started to grow, and you were organizing research, recruiting scientists and management, did you draw on your Genentech experience? Is this is some ways modeled on Genentech?
RASTETTER: Well, I suppose that you draw on your experience in anything that you do, sure.
JONES: Was the corporate partnering strategy in place from the beginning, rather than the idea that IDEC would grow into a so-called fully-integrated company?
RASTETTER: Well, we are today a fully-integrated company. We have marketing, sales, and manufacturing, and development and discovery. There isn’t a function that we don’t have. But getting to full integration has taken ten and a half years, and it would be impossible to do that were it not for the partnering strategy.
JONES: Ten years ago, you knew that you would be doing this?
RASTETTER: Absolutely, absolutely. It’s not something that we invented. I mean, it’s been something that the sector has had to do.
JONES: Yeah, but the extent to which small companies have had to rely on larger entities, this has become increasingly clear?
RASTETTER: Sure, but even ten, fifteen years ago, people knew that you couldn’t fund these companies all the way to full integration based on equity capital. That’s just impractical.
JONES: Genentech is a partner with the new product. Was that partnership facilitated by the fact that you knew people there?
RASTETTER: Sure.
JONES: Is this one of the first places you went to look for a partner for this? Or was it that this product fit in well with what they were doing?
RASTETTER: We went to several people and had very serious conversations with four different companies before we chose Genentech as the one that we would go with. The determining factors were the financial deal, Genentech offered us the best deal among the four of them, and Genentech’s track record and capability in biologics manufacturing, which was going to be very important to drive market share, market share for a product of this sort is not something that’s driven by marketing and sales, it’s driven by manufacturing capacity.
JONES: Are you going to manufacture the product here?
RASTETTER: It’s being manufactured here, but it’s also being manufactured by Genentech, because we have certain volume limitations in production here.
JONES: There has been a lot of talk lately about San Diego companies maybe moving manufacturing elswhere, did you consider doing that?
RASTETTER: It’s still under active consideration. I would give it no better that a fifty percent chance that we’d stay here.
JONES: The intial idea for the company was the yttrium conjugated antibodies, right?
RASTETTER: No, the inital idea for the company was a series of products based on anti-idiotype technology. The yttrium technology was simply an adjunct to that for a particular application?
JONES: Wasn’t it crucial for getting the funding in place, to license that from Hybritech?
RASTETTER: Well, the venture capitalists insisted on that technology being place. That piece of technology, we no longer operate under the Hybritech license. That particular piece of technology is of no current interest to us.
JONES: When was it abandoned?
RASTETTER: Well, a newer generation of technology became available out of the National Cancer Institute, and we took a license from them which didn’t have the limitations that Hybritech put on their license. Hybritech’s license was very restrictive. It didn’t give us much room to operate, so we went to the National Cancer Institute and got a later, more recent version of the technology, and enhancement to the technology that didn’t have the handcuffs on it.
JONES: In the past years, in recruiting scientists and recruiting management, can you identify some of the key people that you brought in and how they got here? Some of the connections that were made?
RASTETTER: All of them were identified by headhunters that were on retainer.
JONES: These were people that you knew or did not know.
RASTETTER: Did not know.
JONES: Had any people from Genentech followed you?
RASTETTER: Well, there are several people that are here from Genentech, but they didn’t follow me here
JONES: But did your personal knowledge of them or your relationships with them have anything to do with it?
RASTETTER: Well, the people that are here from Genentech I actually did not know when I was at Genentech, so my personal relationship with them had nothing to do with it. I did not know prior to hiring them my VP of R&D, I don’t know my VP of clinical, I didn’t know my head of commercial operations, I don’t know my head of manufacturing, I didn’t know my head of quality, I didn’t know my head of strategic planning and resource development, I didn’t know my CFO, I didn’t know my general counsel.
JONES: Had you known of them, by reputation?
RASTETTER: No, the VP of R&D, the manufacturing guy, the clinical guy, the commercial operations guy, were brought in by the same headhunter. The head of finance, our CFO, was somebody I hired from Syntex, who interviewed about two or three months after I joined the company, so he’s been here for ten years. The current general counsel was patent counsel at Hybritech and has been here for eight or nine years.
JONES: What’s his name?
RASTETTER: Ken Wolcott. I don’t know whether that was a headhunter search or he just saw an ad in the paper, or what it was. Our head of planning and resource development was somebody that we had hired as a consultant to help us with the move of the people up north down here, and that grew into a full-time job, but no, my network has not led to the hiring of anybody who currently works at the company.
JONES: What about board members and venture capitalists? Did they recommend anybody or establish any connections?
RASTETTER: None of the management employed today came from the board or the VCs.
END OF INTERVIEW