2 
that the fruits of genetic engineering, even in the short term, 
will improve the diagnosis and treatment of many diseases, 
positively affect the environment, and improve the world's food 
supply. Genetic engineering may be used not only as a substi- 
tute for conventional methods of manufacture, but also may be 
used to produce unprecedented amounts of scarce or previously 
unavailable biological compounds. The vast majority of genetic 
engineering activity occurs in specialized facilities utilizing 
a closed fermentation manufacturing process. 
The industry, roughly divided between small firms and 
longer established, more diversified large firms, now stands at 
a significant point in its development. The present time is 
particularly important for the small firms, which face a criti- 
cal financial crossroad during the next two to four years unless 
they are able to market their products. Financed largely through 
venture capital investments, public offerings, limited partner- 
ships and equity investments from large firms, no small firm yet 
has obtained income from product sales equaling even 5% of its 
total revenues. Unfortunately, unlike the larger companies, the 
small firms have no alternate sources of self-sustaining income. 
Small firms like Genentech, therefore, are totally depen- 
dent on the product development process. The expense and 
complexity of product development in this industry, however, is 
staggering. Human insulin, the only approved recombinant DNA 
product , required over 5 years to reach the market after it had 
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