Biotech Firms Research Articles

Innovation capacity and economic development: China and India

Decomposing the GDP growth from 1981 to 2004, this paper finds that innovation capacity has contributed significantly to the economic growth of China and India, especially in the 1990 s. Outputs of the national innovation system, measured by patents and high-tech/service exports, demonstrate the considerable progress China and India have made in innovation capacity. The enhanced innovation capacity of China and India is primarily due to their heavy investment in the inputs of innovation system, i.e., R&D expenditure and R&D personnel, in recent decades. This paper emphasizes the role that the governments have played in promoting innovation capacity and their contribution to economic development. Both governments have transformed their national innovation systems through linking the science sector with the business sector, providing incentives for innovation activities, and balancing import of technology and indigenous R&D effort. Using case studies of domestic biotech firms in China and India, this paper also offers micro-level insights on innovation capacity and economic development: (1) innovation capacity has become essential for domestic firms’ market success and (2) global institutional factors and national government policies on innovation have considerable influence on the choice of innovation at the firm level, i.e., to conduct indigenous R&D or to import foreign technology.

START-UP CREATION IN BIOTECHNOLOGY: LESSONS FROM THE CASE OF FOUR NEW VENTURES IN THE UPPER RHINE BIOVALLEY

This paper explores start-up creation in biotech through an in-depth analysis of four new ventures located in the Upper Rhine Biovalley. This analysis helps us discuss the role of several factors in the performance of a new biotech firm. The study specifically outlines three elements, namely: the importance of public science, without which new biotech firms cannot exist; the role of the patent system, which impacts the business model adopted by the firm; and the importance of collaborations, which we study through the concept of distributed entrepreneurship.

Knowledge combination in networks: evidence from the international venturing of four small biotech firms

Although international forms of venturing are critical for the sustained economic growth of small firms, this phenomenon remains surprisingly unexplored in international small business research. This study aims to contribute to this field by shedding light on the underlying factors of the international venturing of these firms. In this endeavor, the study rests on the assumption that knowledge combination in networks is a critical requisite for seizing business opportunities in foreign markets. Hence, the specific purpose of this study is to investigate how knowledge combination in networks underlies the international venturing of four small biotech firms. The findings demonstrate that international venturings are strongly shaped by proactive strategies of identifying and implementing knowledge combinations that span across internationally dispersed network relationships. The findings also reveal that different strategies of knowledge combination in networks are pursued depending on the nature of the venture (namely, international product ventures and international market ventures).

Organisational modes for Open Innovation in the bio-pharmaceutical industry: An exploratory analysis

This paper investigates the adoption of Open Innovation in the bio-pharmaceutical industry, studying through which organisational modes it is put into practice and how these modes are interwoven with the different phases of drug discovery and development process. Two rounds of interviews with industry experts were carried out to develop a model describing the adoption of Open Innovation by bio-pharmaceutical companies. This framework was then applied to an extensive and longitudinal empirical basis, which includes data about the adoption of Open Innovation by the top 20 worldwide industry players, in the time period 2000–2007. The paper provides a thorough discussion of how bio-pharmaceutical firms have used different organisational modes (i.e. licensing agreements, non-equity alliance, purchase and supply of technical and scientific services) to enter into relationship with different types of partners (i.e. large pharmaceutical companies, product biotech firms, platform biotech firms and universities) with the aim to acquire (Inbound Open Innovation) or commercially exploit (Outbound Open Innovation) technologies and knowledge. The implications of the study for Open Innovation research and possible avenues for future investigation are discussed at length in the paper.

SiRNA Therapy for Glomerulonephritis

We are well into a new era in pharmacology in which small molecules, often kinase inhibitors, are used to target signal transduction pathways in cancer and other diseases. In addition to small molecules, antibody-based treatments have become a major part of the pharmacologic armamentarium. RNA interference (RNAi)-based treatments promise to be a third pillar in this new frontier. Indeed, several biotech firms have been established in the past decade to develop RNAi-based therapies. In this issue of JASN , Shimizu et al. 1 bring RNAi-based therapies to bear on kidney disease by demonstrating that small interfering RNAs (siRNAs) to a mitogen-activated protein kinase (MAPK) prevent glomerular disease in a murine model of lupus nephritis. siRNAs are short, double-stranded RNAi molecules that contain complementary sequences to specific mRNAs encoding proteins. By interacting with mRNAs through these complementary sequences, they act similarly to naturally occurring microRNAs to cause degradation of the mRNA or to inhibit translation.2 Interruption of microRNA processing causes dramatic glomerulotubular …

Expanding Entrepreneurship: Female and Foreign-Born Founders of New England Biotechnology Firms

Research on immigrant entrepreneurs in the United States has focused on small businesses in the retail and food service sectors rather than on high-technology start ups. Scholarship on women and immigrants in the U.S. science and technology workforce has focused on academia rather than scientists in industry. This article aims to bridge the gaps in these two literatures by examining the role of women and immigrants in founding science-based biotechnology firms. This research thus speaks to the sociological perspective on power inequalities for women and foreign-born people in entrepreneurship and in the U.S. science and technology workforce. Opportunities and barriers vary by organizational context, and the flexibility of the biotechnology industry has previously been found to benefit female scientists. But what of foreign-born scientists and women who play founding roles in biotech firms? A survey conducted of 261 biotechnology firms located in Massachusetts and New England in 2006 provides the data. The results show that 42% of the firms had at least one foreign-born founder, and 21% of firms had at least one female founder. These numbers suggest that foreign-born life scientists are well represented and female life scientists are somewhat underrepresented in founding roles in biotech. The role of entrepreneurs who have the double status of female immigrants is less clear and needs further study. The research finds significant variation in biotech entrepreneurship of immigrants by their world region of origin. Interviews supplement the survey data to illustrate the barriers and opportunities for foreign-born biotech entrepreneurs.

ANTIBIOTICS YO-YO

IT’S BEEN A TURBULENT few years for companies developing antibiotics. Several late-stage drug candidates have suffered setbacks, and companies claim the regulatory environment has become confusing at best. But the Food & Drug Administration is beginning to offer more clarity on data it needs to approve new antibiotics. And as more development programs reach late-stage trials, biotech firms with promising drugs are finding partners ready to pay big bucks for them. Since October 2009, AstraZeneca, Forest Laboratories, Novartis, and Cubist Pharmaceuticals have each spent hundreds of millions of dollars for access to antibiotics that have produced good data in Phase II or III clinical trials. Industry watchers hope the spate of deals will accelerate the launch of new weapons against dangerous infections. In recent years, superbugs, or bacteria resistant to current antibiotics, have stymied physicians and sent researchers in search of better drugs. Finding novel antibiotics outside currently approved compound ...

Impact Making Biotechnology Firms in India

For long time IT industry has dominated the Indian market. The Biotechnology sector in India, although nascent at present time and accounting for a mere 2% of the global Biotechnology market, is poised for an exponential growth over the next 5-10 years, with an expected global market share of 10%. Finally, India’s biotech sector is ready to storm the business world with innovative products. Powered by growing competence in producing low cost innovative as well as generic drugs and vaccines, Biotech firms from Indian origin are fast emerging as global majors, promising to create substantial opportunities for the Indian economy. The government has also come out with enabling policies, allowing these firms to exploit India’s vast pool of technical and scientific manpower to make a global impact. Today, there are around 325 companies in India, which produce specialised products and services in various sectors of biotechnology. The present research attempts to discover the factors that qualify these firms as Imapct making. This study limits case analysis of four Indian biotechnology firms namely Biocon, Nicholas Piramal India Limited, Dr Reddy's Laboratories & Panacia Biotech, which havde already created a place for temselves in the market. The study will attempt in unfolding different aspect of these firms. Few objectives are as follows: 1. Biotechnology market in India. 2. Factors (endogenous & exogenous) affecting biotech firms & market. 3. To understand the firm architecture that includes nature of business, products, markets, segments, structure, competency etc. 4. Understand the business processess 5. Sustainability & Growth strategies of these firms. 6. How & why these firms are ahead & impact making in India. The outcome of this study will be to identify the above mentioned issues that will aid other non impact making biotech firms to fulfill the gaps.

Industry Watch

CSIRO and Circadian Collaborate in Oncology R&D. Successful Trials in Bone Marrow Regeneration Using Cord Blood. Pfizer China and BMP Sunstone Venture into Women's Healthcare Product. Novartis Acquires Zhejiang Tianyuan to Expand Human Vaccines Presence in China. Carbon Nanotechnology for Target Drug Delivery System Launched in India. Cipla Launches Antiflu to Combat Influenza. Tokyo CRO and Ecron Acunova in Alliance to Strengthen Global Network. World's First Oral Jelly for Alzheimer's Disease Treatment. Leading Japanese and Swedish Biotech Firms Seal Antibody Deal. Caduet® Combination Tablets Launched in Japan. Spectrum Teams Up with Korea's Handok on Apaziquone. Biologics, CEVEC Sign Agreement for Using Human CAP Technology. Chaperone Technologies and MerLion Pharmaceuticals in Antimicrobials Collaboration. Quintiles Expands Asia-Pacific Headquarters in Singapore. NCKU and ScinoPharm Taiwan Establish University-Industry Cooperation.

A Breath of Fresh Air? Firm Type, Scale, Scope, and Selection Effects in Drug Development

This paper compares the innovation performance of established pharmaceutical firms and biotech companies, controlling for differences in the scale and scope of research. We develop a structural model to analyze more than 3,000 drug research and development projects advanced to preclinical and clinical trials in the United States between 1980 and 1994. Key to our approach is careful attention to the issue of selection. Firms choose which compounds to advance into clinical trials. This choice depends not only on the technical promise of the compound, but also on commercial considerations such as the expected profitability of the market or concerns about product cannibalization. After controlling for selection, we find that (a) even after controlling for scale and scope in research, established pharmaceutical firms are more innovative than newly entered biotech firms; (b) older biotech firms display selection behaviors and innovation performances similar to established pharmaceutical firms; and (c) compounds licensed during preclinical trials are as likely to succeed as internal compounds of the licensor, which is inconsistent with the “lemons” hypothesis in technology markets.

Financial risk of the Biotech Industry versus the Pharmaceutical Industry

The biotech industry now accounts for a substantial and growing proportion of total R&D spending on new medicines. However, compared with the pharmaceutical industry, the biotech industry is financially fragile. This article illustrates the financial fragility of the biotech and pharmaceutical industries in the US and the implications of this fragility for the effects that government regulation could have on biotech firms. Graphical analysis and statistical tests were used to show how the biotech industry differs from the pharmaceutical industry. The two industries' characteristics were measured and compared, along with various measures of firms' financial risk and sensitivity to government regulation. Data from firms' financial statements provided accounting-based measures and firms' stock returns applied to a multifactor asset pricing model provided financial market measures. The biotech industry was by far the most research-intensive industry in the US, averaging 38% R&D intensity (ratio of R&D spending to total firm assets) over the past 25 years, compared with an average of 25% for the pharmaceutical industry and 3% for all other industries. Biotech firms exhibited lower and more volatile profits and higher market-related and size-related risk, and they suffered more negative stock returns in response to threatened government price regulation. Biotech firms' financial risks increase their costs of capital and make them more sensitive to government regulations that affect their financial prospects. As biotech products grow to represent a larger share of new medicines, general stock market conditions and government regulations could have a greater impact on the level of innovation of new medicines.

Globetrotting firms: Canada's health biotechnology collaborations with developing countries

A survey of Canadian biotech firms reveals that their biotech collaborations with developing countries are not only significant but also increasingly reciprocal in terms of the exchange of financial resources and technological know-how.

Network resource combinations in the international venturing of small biotech firms

Integrating the resource-based view (RBV) with a network perspective on resources, this article contributes to the growing body of knowledge regarding the internationalization of smaller biotech firms. In particular, it looks at how these firms commercialize innovations by combining resources in their networks in order to enter new foreign markets with existing products and to enter existing foreign markets with new products. Six cases indicate that network resource combinations vary with the nature of the venture; whereas new international product ventures (NIPVs) exploit a broad set of network resources in concordance with the multifaceted challenges intrinsic to these endeavours (i.e., both redefining the product and redefining the market), new international market ventures (NIMVs) depend on a more narrow scope of network resources, deployed with the primary aim to expand and deepen the customer base in foreign markets. The article concludes by proposing a model of the components of network resource combination capability.

The patterns of venture capital investment in the UK bio-healthcare sector: the role of proximity, cumulative learning and specialisation

This paper focuses on the patterns of venture capital (VC) investment in dedicated biotech firms (DBFs) in the therapeutic and diagnostic sectors (bio-healthcare). We use a database of 655 UK bio-healthcare deals to map the geographical flows of VC investment and measure the co-location of investors and DBFs. Then, using 20 face-to-face interviews with venture capitalists (VCs) and DBF firms in Cambridge and Scotland, we study the strategic motives underlying the co-location of investors and investee companies and reflect on the catalytic role VCs play in context of the Scottish and Cambridge bio-clusters. From the viewpoint of VC-related policies, we find that our study is more in line with arguments stressing the attractive power of ‘investor-ready’ opportunities (Mason and Harrison 2003) than supply-side approaches that take for granted VC presence at the core of high-tech clusters. In line with Avnimelech, Rosiello, and Teubal (2008), we propose that VC policy should be consistent with the wider strategic objectives of innovation and technology policy.

BIOTECHNOLOGY Federal Trade Commission endorses biologic drug competition

The Federal Trade Commission (FTC) says it supports giving FDA explicit authority to approve generic versions of expensive biologic drugs as a way to lower consumers’ health care costs. In a lengthy report on the outlook for biologic drug competition, FTC says that “Follow-on biologics, if brought to market, could reduce the estimated $40.3 billion a year consumers spend on biologic drugs.” Unlike small-molecule medicines made by chemical synthesis, biologic drugs are proteins derived from living organisms and are among the most expensive and complicated on the market. Competing bills have been introduced in Congress to establish a regulatory pathway to bring lower cost generic biologics, also known as follow-on biologics or biosimilars, to market (C&EN, April 6, page 23). Biotech firms such as Genentech and Amgen argue that, in order to recoup the cost of discovering and developing original biologic drugs, they need up to 14 years to market their medicines without competition from ...

Growth and profitability in small privately held biotech firms: preliminary findings

This paper reports on preliminary findings on a study of the relationship of growth and profitability among small privately held Finnish Life Science firms. Previous research results concerning growth and profitability are mixed, ranging from strongly positive to a negative relationship. The conventional wisdom states that growth is a prerequisite for profitability. Our results suggest that the reverse is the case. A high profitability-low growth biotech firm is more probably to make the transition to high profitability-high growth than a firm that starts off with low profitability and high growth.

Resource-based and institution-based approaches to biotechnology industry development in Malaysia

In this study, we use both resource-based and institution-based theories to examine potential sources of competitive advantage in the relatively new and rapidly growing biotechnology sector. We then use those theories as the basis for a multimethod study to assess the priorities, capabilities, and competitiveness of the emerging biotechnology industry in Malaysia. Multifunctional experts from a biotechnology industry organization in Malaysia identified the use of biotechnology for agriculture and biofuels as key country priorities, with access to funding and talent cited as key capabilities required for successful sector development. The gap between capabilities required and strategic priorities provides a “to do” list for industry development, with government institutions playing a central role in accelerating technology development and providing the capital flows necessary to bridge this gap. Implications include the need for public–private sector collaboration to enable biotech firms to efficiently obtain international investment and alliances to ensure sustainability, as well as to develop bold and creative approaches for developing and recruiting talent both at home and abroad.

BIOTECHNOLOGY New report sees dry capital markets shrinking the sector

Although the global biotechnology industry fared well in 2008, the recession is likely to spark consolidation in the year ahead as traditional sources of public funding go into long-term decline. Thus states Ernst & Young’s annual report on the industry. The consulting firm found that revenues of publicly traded biotech firms grew 12% to $90 billion in 2008. The global industry’s net loss shrank from $3.0 billion in 2007 to $1.4 billion last year, and the U.S. industry reached aggregate profitability for the first time. Capital raised by publicly traded firms in the U.S. and Europe declined by 46%, however, to $16 billion in 2008. Funding for initial public offerings fell 95% to $116 million; other forms of public funding also dropped off almost entirely. Venture capital funding, on the other hand, remained relatively strong last year, falling only 19% from 2007’s all-time record of $6 billion. Glen T. Giovannetti, who coauthored the report, says ...

On Pricing and Vertical Organization of Differentiated Products

This paper investigates the pricing and vertical organization of differentiated products under imperfect competition. In a multiproduct context, a Cournot model is used to examine how substitution/complementarity relationships among products and vertical structures can affect the exercise of market power. This motivates a generalization of the Herfindahl-Hirschman index (termed VHHI) capturing how market concentration and vertical structures interact to influence prices of differentiated products. The analysis is applied to pricing of soybean seeds in the US over the period 2000-2007. We consider two vertical structures employed by biotech firms: vertical integration and licensing. The econometric analysis finds evidence that vertical organization has significant effects on seed prices. These effects are found to vary depending on the institutional setup and the bundling of genetic material. The empirical evidence shows that complementarity and economies of scope can reduce the effects of market concentration on prices.

Where Art Thou, Departments of Veterinary Pathology?

The American College of Veterinary Pathologists (ACVP) is an organization of veterinary pathologists who have passed a professional competency examination in veterinary or clinical pathology after many years of study, training, and preparation for the exam. We were trained by veterinary pathologists primarily at veterinary colleges but also at some medical schools, diagnostic laboratories, and research institutions. After this long period of professionalization, we often obtained a position in a pathology department at a veterinary college, another college or university, or a research institute. However, where have all the Departments of Veterinary Pathology gone? There used to be so many of them. Are there any Departments of Veterinary Pathology or Pathology at any American or Canadian veterinary college? There are Departments of Pathobiology, Veterinary Pathobiology, Pathology-Microbiology & Immunology, MicrobiologyImmunology-Pathology, Biomedical Sciences, Biomedical Sciences & Pathobiology, Pathobiological Sciences, Veterinary Population Medicine, Infectious Diseases & Pathology, Population Health and Pathobiology, and Pathobiology & Population Medicine. Only 2 veterinary colleges have preserved a Department of Pathology (University of Georgia College of Veterinary Medicine) or Veterinary Pathology (Iowa State University College of Veterinary Medicine). Congratulations to them! The ACVP should present them with a Veterinary Pathology Conservation Award. Undoubtedly, there are good reasons for department consolidation and for new department names. Perhaps it is none of my business; I do not live in those states. But are we to be called pathobiologists? Is pathobiology a soon-to-be new discipline of veterinary medicine to be recognized by the American Veterinary Medical Association? At medical colleges, there is usually a Department or Division of Comparative Medicine that contains a pathology group, but there is not usually a Department of Veterinary Pathology. At research institutes, pharmaceutical and chemical companies, and biotech firms, pathology departments are not often found. In contrast, American colleges of medicine almost unanimously maintain a Department of Pathology or Department of Pathology & Laboratory Medicine, with ‘‘Pathology’’ coming first in the department title. This individual component may be due to large numbers of pathologists, who may also represent hospital pathology practice in many hospitals in the area and have teaching and research duties. A major medical dictionary defines ‘‘pathology’’ as, ‘‘The medical science, and specialty practice, concerned with all aspects of disease, but with special reference to the essential nature, causes, and development of abnormal conditions, as well as the structural and functional changes that result from the disease processes.’’ Thus, the term ‘‘pathology’’ could fit for a department title for most of the departments noted above. Have we lost veterinary pathology as a major discipline in veterinary medicine, or have we only lost it in the veterinary colleges? During the past 30 years, each veterinary college has reorganized and consolidated when necessary for various reasons. In these consolidations, the original departments of pathology or veterinary pathology have disappeared. In several colleges, the pathologists consist of such a large group that the new department still maintains its pathology character. In many others, it can sometimes be difficult to find the veterinary pathology unit, group, or program, much less the veterinary pathologists among the numerous professors, lecturers, and other scientists who are expert in other disciplines. Veterinary pathology, however, does maintain itself as a powerful medical discipline in veterinary medicine in the form of the American, European, and Japanese Colleges of Veterinary Pathologists, the US Society of Toxicologic Pathology, and the European, British, and Japanese Societies of Toxicologic Pathology or Pathologists. Vet Pathol 46:563–564 (2009) DOI: 10.1354/vp.09-VP-0029-W-COM