162 G. Hooper
could obtain additional revenue through the licensing of foreign partners.
We believed it would be easier to license known products with known
markets than totally new products with unknown potential. Human
growth hormone is an example of this logic.
 With this philosophy of product selection, Genentech was able to build
a solid foundation of therapeutic projects while significantly advancing
the science. Soon we were in a position to expand our product portfolio to
include high-risk projects, those with a higher risk of scientific success and
therapeutic value. Our product selection criteria were again modified.
However, relative to large pharmaceutical companies, these were very
simple.

 There must be a significant critical care need. Either current therapy
 is inadequate or existing products were in need of improvement.
 The project had to be scientifically feasible and be completed in less
 than two years, that is, from beginning the project to expression of the
 protein in a microorganism. Today, this often takes only a few months.
 The product must be highly potent in small quantities. This means
 that a smaller manufacturing plant would be required which trans-
 lates into less of an investment. Capital expenditures are very impor-
 tant to a start-up company like Genentech.
 The market potential had to be greater than $100 million. If the pro-
 ject met the other criteria, we were not concerned about how much
 over $100 million it may be worth. It was sufficient to be of interest
 and the marketing group could determine the actual potential at a
 later date.
 Finally, it had to be scientifically romantic or sexy. In other words, it
 had to be extremely interesting and challenging scientifically. We had
 to further extend our scientific lead and prove that difficult proteins
 could be produced through recombinant DNA technology.

 We therefore chose projects such as alpha, beta, and gamma interferon,
 and factor VIII. These projects increased our technological learning, vali-
 dated the quality of Genentech's science, and attracted additional funds
 for our continued growth.
 Today, we are considered large, relative to other biotechnology compan-
 ies, but we still view ourselves as small. As I mentioned earlier, our tech-
 nology is just another manufacturing process. Thus, in terms of other
 pharmaceutical companies, we're quite small. However, it is interesting to
 note that as we have grown to face more complex issues as a company, so
 have our project selection criteria become more complex. As we have more