ABSTRACT
In a remarkable congruence, three events in 1980 stimulated the emergence of a new industrial sector in the United States and around the world. First, in a pivotal Supreme Court decision, the chief justices decided that genetically manipulated organisms could be patented. Second, the US Congress passed the Bayh-Dole Act, allowing recipients of federal research funding to secure patents. Third, Genentech—the first publicly traded “biotechnology company”—set a record in its initial public offering, as its stock price soared from $35 to $89 per share in 20 minutes. Within a few years, several thousand biotech companies were founded in the United States, raised funds from venture capitalists, and in many cases went public at early stages. Investors accepted “surrogate markers” for sales and income, including prominent scientists on boards of directors, patents on untested medicinal compounds, and ambitions to cure major diseases, including cancer, diabetes, and AIDS. 1
