Rathmann was born on December 25, 1927, in Milwaukee, Wisconsin. His mother was from the Valentin Blatz Brewing Company Blatzes, while his father was of more humble origins. He had been drawn to science and was inspired by an older brother and brother-in-law who were chemists, and by Mr. Leker, his high school chemistry teacher at Milwaukee University School (where his grandfather had taught years before). He had originally planned to attend medical school, before switching to physical chemistry and obtained a B.S. degree in physical chemistry at Northwestern University in three years, then earning a Ph.D. at Princeton in 1951, by which time he had already been recruited by 3M as a research chemist, where he worked for twenty-one years, helping develop Scotchgard and rising from scientist to corporate manager.
Rathmann left 3M in 1972 to become President of Litton Medical Systems, but was dis-satisfied and left in 1975 to join Abbott Laboratories as Vice President of Research and Development in the Diagnostics Division. At Abbott, Rathmann became interested in recombinant DNA and additional aspects of biotechnology, and was recruited in 1980 by venture capitalists to help found Amgen, where he would serve as Chairman, President and CEO.
In 1990, Rathmann left Amgen to start Icos, a new biotechnology company in the Seattle area. While at Icos, he raised the largest-ever-to-date private offering for a biotechnology company. The offering included an investment from Bill Gates, Gates' first investment in biotechnology. Rathmann left the company in February 2000, and was replaced as CEO and chairman by Paul Clark, a former executive at Abbott, under whom Icos would decline and eventually be sold off to Eli Lilly.