Biotech Sector Research Articles

Beyond Regional Clusters: On the Importance of Geographical Proximity for R&D Collaborations in a Global Economy—the Case of the Flemish Biotech Sector

When internal knowledge bases are insufficient for developing innovations, companies tend to collaborate with external R&D partners. According to a long-standing literature on “clusters”, “industrial districts”, “local production systems” and “regional innovation systems”, geographical proximity between innovation partners is considered a precondition for inter-organizational collaborations: proximity is said to facilitate trust, the transfer of tacit knowledge and the intensity of interactions. This article investigates the importance of geographical proximity for R&D collaborations between biotech firms and their innovation partners. Are geographically close innovation partners likely to collaborate more intensely? Studies of the Flemish biotech industry shed light on this question. Regression analyses combined with qualitative interview data reveal that geographical proximity has become less important for inter-organizational collaborations. Owing to lower communication and transportation costs, innovation partners can easily collaborate even when they are not situated close to each other. This leads us to conclude that globalization transforms inter-organizational collaborations.

Public biotech 2011—the numbers

The financial performance of the public biotech sector was remarkably buoyant last year, but a few worrying clouds hover on the horizon.

Straight talk with...Joseph Schwartz

On 17 May, Human Genome Sciences (HGS) formally rejected a $2.6 billion unsolicited takeover offer by GlaxoSmithKline. The Maryland-based biotech firm had long partnered with the UK drug giant to develop drugs including Benlysta (belimumab), HGS's first drug on the market and the first new medicine approved to fight lupus in 50 years. But, at $13 a share, GSK's bid was deemed "inadequate" by the HGS board. Recent history in the biotech sector shows how high the stakes are in such negotiations. Since last November, six biopharma buyouts have exceeded $1 billion each, with Gilead Sciences' purchase last year of the hepatitis C specialist Pharmasset topping the charts at a whopping $11.2 billion, the highest ever paid for a clinical-stage biotech and an 89% premium to its share price at the time. More recently, in April AstraZeneca paid $1.3 billion for Ardea Biosciences, a company with cancer and gout drugs in the pipeline but nothing on the market.One person watching the upward clime of such deals is biopharma analyst Joseph Schwartz, a managing director at Leerink Swann in Boston. Mark Ratner sought out Schwartz, who was named the top stock picker for pharmaceuticals in the last year's FT/StarMine Analyst Awards, for his views on what's behind the recent buyout spending.

Academic entrepreneurship in UK biotechnology firms

PurposeThe purpose of this study is to attempt to provide an insight into the individual aspects of academic entrepreneurship, defining a series of entrepreneurial profiles and investigating the challenges associated with each specific role as well as their impact on firm's performance.Design/methodology/approachThe presented findings are based on the analysis of secondary and primary data. First, a series of articles and reports regarding academic entrepreneurship have been accessed in order to define the research framework. Second, primary data were collected through semi‐structured interviews conducted with 26 academic entrepreneurs working in UK biotech firms.FindingsThe analysis of data revealed that academics choose mainly three forms of academic entrepreneurship: founder‐manager of an entrepreneurial firm; project manager in an existing firm; or scientific advisor to the board of directors of one or several firms. In each of these three situations, the personal responsibilities, the level of implication and the performance impact of the academic entrepreneur are different.Research implications/limitationsFindings demonstrate a direct relation between the specific responsibilities associated with the three types of academic entrepreneurship and the scientific/research performance of the investigated firms. Unfortunately, the small sample does not permit generalizations at industry or national level. Future studies should, on one hand, increase the field of investigation, in order to develop reliable measurements of academic entrepreneurship performance; and, on the other hand, collect additional qualitative information using a case study approach.Practical implicationsThe findings may provide useful information for academic entrepreneurs working in the biotech sector, regarding the specific challenges and positioning of each entrepreneurial role, allowing them to take better professional decisions.Originality/valueThe study enriches the existing literature on academic entrepreneurship, expanding the definition and the profile of entrepreneurial roles to include also intrapreneurship activities in medium‐size or larger organizations.

A comparison of the Lithuanian and Russian Biotechnology sectors

The goal of this paper is to compare the development of the Lithuanian and Russian biotechnology sectors. In case of Lithuania we tried to uncover what are the circumstances surrounding the favorable development of the biotechnology sectors in Lithuania. In case of Russian Federation we looked at encouraging as well as discouraging circumstances surrounding this segment of economy. Drawing upon Schumpeter’s ideas of innovation and Porter’s business cluster theory, we argue that Lithuania is “at the right place and the right time” to make it a regional leader in Baltic biotechnology. Russia, on the other hand, is in the process of developing biotech sector in order to at least to catch up with other countries (including Lithuania). It will take time and continuous governmental support for Russia before this sector starts contributing significantly to Russian economy.

The America Invents Act and Its Importance to Patent Prosecution in the Biotech Sector

Industrial BiotechnologyVol. 8, No. 2 PATENT UPDATESThe America Invents Act and Its Importance to Patent Prosecution in the Biotech SectorTiffany A. Reiter, Erin L. Baker, and J. Peter FasseTiffany A. ReiterSearch for more papers by this author, Erin L. BakerSearch for more papers by this author, and J. Peter FasseSearch for more papers by this authorPublished Online:13 Apr 2012https://doi.org/10.1089/ind.2012.1512AboutSectionsPDF/EPUB ToolsPermissionsDownload CitationsTrack CitationsAdd to favorites Back To Publication ShareShare onFacebookTwitterLinked InRedditEmail FiguresReferencesRelatedDetailsCited byThriving in a new patent world: Mitigating the unintended consequences of the America Invents Act29 June 2019 | Cogent Business & Management, Vol. 6, No. 1Implications of the America Invents Act for R&D Managers: Connecting the Patent Life Cycle with the Technology Development Process28 December 2015 | Research-Technology Management, Vol. 57, No. 5Translational tidbitsScience-Business eXchange, Vol. 6, No. 31 Volume 8Issue 2Apr 2012 InformationCopyright 2012, Mary Ann Liebert, Inc.To cite this article:Tiffany A. Reiter, Erin L. Baker, and J. Peter Fasse.The America Invents Act and Its Importance to Patent Prosecution in the Biotech Sector.Industrial Biotechnology.Apr 2012.66-69.http://doi.org/10.1089/ind.2012.1512Published in Volume: 8 Issue 2: April 13, 2012Online Ahead of Print:March 28, 2012PDF download

Servant Firms in Drug Discovery: a Neglected Project Based Organizational Form

This paper seeks to clarify the theory of project based organisations by highlighting a previously overlooked organizational form - temporary project based firms that are valued for their capabilities rather than their products. Such firms exhibit different characteristics from firms in existing typologies that focus on firms producing products, or subsystems of products, for a profit. ‘Servant firms’ by contrast create value by developing project capabilities, externally for their acquirers, and capture value as a capital gain for their investors at acquisition. The paper positions the firms in a new theoretical typology that is supported by a detailed study of five UK drug discovery firms that serve as examples of our typology in action. We also use our analysis to solve some empirical puzzles, such as why the biotech sector has attracted so much investment despite the dire profitability of so many of its firms.

Big pharma upheavals cast shadow across biotech sector

Big pharma upheavals cast shadow across biotech sector

Does Cluster Policy Trigger R&D Activity? – Evidence from German Biotech Contests

This paper evaluates the R&D enhancing effects of two large public grant schemes for the German biotechnology industry (BioRegio, BioProfile). Both grant schemes are organized in the form of contents for cooperation with the goal to foster the performance of innovative firms by their organization in research clusters. We apply a Difference-in-Differences estimation technique in a generalized linear model framework, which allows us to control for different initial regional conditions in R&D activity of the biotech sector. Our econometric findings support the view that winners generally outperform non-winning participants during the treatment period, thus indicating that exclusive funding as well as the stimulating effect of being a “winner” have positive effects on R&D activity in the short-term. Apart from this direct winner effect, for the non-winning participants no beneficial indirect effect due to a mobilization of local actors during the application phase could be detected. Finally, first attempts in estimating the long-term effects of the contests for cooperation approach on the winner regions’ R&D activity in the post-treatment period show ambiguous results.

Biopatents in Brazil

Biotechnology is at the core of bioeconomy and plays a key role in modern societies. Currently, Brazil is engaged in many cutting-edge projects in the biotech sector, from energy production to promotion of health and provision of foodstuffs. Also, Brazil’s rich and complex biodiversity, which accounts for 15-20% of the entire world’s biological diversity, may provide a great source of new molecules to the industry. Moreover, awareness and use of the intellectual property system have expanded in the country and the number of patent applications filed by residents has substantially increased over the years. In fact, statistics show that filings with the Brazilian Patent Office rose from 5,666 applications in 1997 to a peak of 7,502 applications in 2004, decreasing a little in 2007 to 6,975 applications. However, due to a very particular regulatory framework, researchers and companies still find some difficulties to do research and protect their inventions in the country. This article focuses on patent protection for biotechnological inventions in Brazil and discusses the main issues arising from the existing legislation and practice.

Catalyzing capital for Canada's life sciences industry

Canada's biotech sector ranks within the top five globally, but its life sciences venture capital (VC) industry is among the worlds weakest. This makes for an interesting case study in understanding the disconnect between low levels of VC and a healthy innovation ecosystem in terms of R&D spending, skilled workforce and enterprise support. Three key provinces (Quebec, Ontario and British Columbia) that have taken significantly different approaches to attracting VC are large enough to attract as much government investment as whole emerging markets. The aim of this article is to present evidence from a Canadian natural economic experiment in order to evaluate the effectiveness of varying government policies in attracting VC investment, to illustrate how these policies need tailoring to individual sub-sectors of the life sciences sector, and to highlight potential policy mechanisms that may be applicable beyond Canada's borders. We employ VC returns on investment (ROI) and exit data as a proxy for our evaluation. Our results suggest that government biotechnology investment needs to be structured end-to-end from early to late stage in order to be successful, that prevalence of private and international VC flows is critical for generating market efficiency, and that there is an ‘optimal’ efficient amount of capital before ROI result in diminishing returns.

ATM cash for biotechs

In August, Somaxon Pharmaceuticals chose an alternative strategy to raise $30 million, and in June, BioCryst Pharmaceuticals of Research Triangle Park, North Carolina, used a similar tactic to raise $70 million. Both companies raised money through at-themarket (ATM) offerings, a financing tool that was not used at all in the biotech industry as recently as 2005. Since then, ATMs have been rapidly gaining favor. According to the New York-based investment bank Brinson Patrick Securities, which specializes in ATMs, by 2010 the number of ATM offerings had grown to 26 in the biotech sector (raising $184 million), nearly tripling the 9 that took place in 2009. This year there have been 15 so far. Biotechs typically raise capital by selling shares all at once in large tranches and at a fixed price, while relying on valueadding milestones, hoping that the cash can get them through to the next milestone. Instead, with an ATM offering, a company raises capital by selling shares in the open market at the prevailing price over a period of time, with the advantage that the sale of shares can be stopped or initiated at any time. Todd Wyche, founder and managing director of Brinson Patrick, thinks biotechs are shifting their approaches, using multiple financing options. “Instead of an episodic financing, relying on one or two traditional tools, we’re seeing them incorporate a more strategic kind of financing strategy,” said Wyche. Not only are ATM offerings more flexible, providing cash when needed, but they are also cheaper than traditional stock offerings in which warrants, underwriter spreads and discounts to the market price are taken into account. ATMs aren’t the perfect solution, however. One drawback is that shares have to be dribbled into the market so large amounts of capital can’t be raised quickly. But Brinson Patrick has found that issuers can sell 10–15% of the daily volume without adversely affecting the share price. The shares from an ATM offering also end up in the open market where investors may not be interested in holding them long term. Other options, such as standby equity distribution agreements offered by Yorkville Advisors of Jersey City, New Jersey, can provide the same flexibility while getting the shares into the hands of long-term investors (Nat. Biotechnol. 28, 301–302, 2010). Michael J. Nowak, managing director of Yorkville Advisors, explains that as long term– only investors, they are always interested in maintaining a strong share price for the company. “In an ATM, [bankers] do not care, since they pick up their couple of percent commission on the trade regardless of impact or price,” he adds. Brian Orelli in brief Pertuzumab to bolster Roche/Genentech’s breast cancer franchise?

The Valuation of Firms in Taiwan’s Biotech Industry

This paper aims to explore the relationship of various financial and non-financial factors to corporate value, using Taiwan’s biotech sector for empirical analysis. We collect and compare data from companies within the time window of 1997 through 2010. The techniques of Stepwise Regression and Back-Propagation Neural Network (BPNN) are applied to analyze this data, where the variables of operating profit margin, ROE, ROA, net income ratio, Tobin’s Q and stock price are chosen to indicate firm value. Both results of the Stepwise Regression technique, with and without BPNN, show that the variable that may be estimated with the best accuracy is operating profit margin and that with the least accuracy is stock price. Further, BPNN shows an improvement over the regression method in terms of overall estimation error.

Innovation as a social bubble: The example of the Human Genome Project

In this paper we present a detailed synthesis of the development of the Human Genome Project (HGP) from the mid 1980s through 2000, in order to test our hypothesis of “social bubbles”, which claims that strong social interactions between enthusiastic supporters weave a network of reinforcing feedbacks that lead to widespread endorsement and extraordinary commitment by those involved, beyond what would be rationalized by a standard cost-benefit analysis in the presence of extraordinary uncertainties and risks. The HGP was initiated as a public project funded by government agencies, starting at a moderate pace. The progressive introduction of different actors and the development of various interests catalyzed the project, which eventually became eminent both in the public and private sectors. The competition between the public and the private sector played greatly in favor of both: the financial burden as well as the horizon of the public project were significantly reduced, the private project(s) gained from the hype of the public project, yet had to play an active and collaborative role in order to remain in the game. This is at the core of the social bubble hypothesis. To further our argument, we present quantitative analysis of the development of the biotech sector within the financial stock market. Lastly, we point to the fact that the hypes fueling the bubble during its growth have not been followed by real tangible outcomes over the short expected time horizons. Indeed, at the time of writing (May, 2011), the consensus of the scientific community is that it will take decades to exploit the fruits of the HGP.

Bioboard

AUSTRALIA – Immune System Boost Cures HIV-like Infections. AUSTRALIA – Scientists Shed New Light on How Heart Works. AUSTRALIA – IVF Breakthrough will Increase Chance of Pregnancy. AUSTRALIA – Study Reveals Possible Secret to Long Life. AUSTRALIA – Australian Scientists Make Important Discovery for Safer Drugs. INDIA – Over 40,000 Childhood Cancer Cases in India Every Year. INDIA – Biotech Sector Set for Booster Dose. NEW ZEALAND – Laser to Help Predict Foot Ulcers in Diabetics. PHILIPPINES – Turning School Yards into Vegetable Gardens. TAIWAN – Key Enterovirus Breakthrough Unveiled. OTHER REGIONS — New Heart Therapy More Effective in Women.

The role of contracts and trust in R&D alliances in the Dutch biotech sector

This study explores the value of trust as a construct in understanding how Ref) alliances collaborate over time. A review of literature leads to specific expectations on alliance coordination mechanisms needed to be applied by high-tech companies to secure effective cooperation. I pose trust as a prerequisite for knowledge sharing and innovative performance (Rolland and Chauvel 2000; Norman 2004; Gilsing and Nooteboom 2006) in addition to traditional modes of governance such as contracts and other formal control mechanisms. As such it is crucial to understand the link between knowledge transfer, trust and alliances in knowledge intensive and innovative industries.Based upon an exploratory comparison in the human health industry in The Netherlands between two groups of companies in respectively the start-up and mature stage of their organizational life-cycle an exploration is made on how trust can be used to gain a better understanding of how transaction costs influence RoD alliances.The exploratory findings suggest that in high dynamic markets companies use trust as an informal coordination mechanism for R&D alliances. However, trust does not reduce the necessity of contracts. Trust reduces the uncertainty between alliance partners and the frequency of interaction, but it does not result in an increase of asset specific investments. Still trust can result in a decline of overall transaction costs of R&D alliances. I conclude that trust is a useful construct in extending our understanding on how RoD alliances collaborate over time and emphasize the value of incorporating reputation in the discussion around trust.

The biotech sector in Italy

The biotech sector in Italy

Public biotech 2009—the numbers

The public biotech sector sustained more losses in 2009, but the year ended on a positive note, and the industry has regained its footing.

Exuberant Innovation: The Human Genome Project

We present a detailed synthesis of the development of the Human Genome Project (HGP) from 1986 to 2003 in order to test the “social bubble” hypothesis that strong social interactions between enthusiastic supporters of the HGP weaved a network of reinforcing feedbacks that led to a widespread endorsement and extraordinary commitment by those involved in the project, beyond what would be rationalized by a standard cost-benefit analysis in the presence of extraordinary uncertainties and risks. The vigorous competition and race between the initially public project and several private initiatives is argued to support the social bubble hypothesis. We also present quantitative analyses of the concomitant financial bubble concentrated on the biotech sector. Confirmation of this hypothesis is offered by the present consensus that it will take decades to exploit the fruits of the HGP, via a slow and arduous process aiming at disentangling the extraordinary complexity of the human complex body. The HGP has ushered other initiatives, based on the recognition that there is much that genomics cannot do, and that “the future belongs to proteomics”. We present evidence that the competition between the public and private sector actually played in favor of the former, since its financial burden as well as its horizon was significantly reduced (for a long time against its will) by the active role of the later. This suggests that governments can take advantage of the social bubble mechanism to catalyze long-term investments by the private sector, which would not otherwise be supported.

Empirical Analysis of Technology Diffusion in the Biotechnology Sector in San Diego - Stage of Development and Licensing University Inventions by Start-Up and Established Firms

In this paper I analyze the correlation between the licensing activity by start-ups and established firms (mainly in the biotech sector) and the inventions’ stages of development. Using data from the San Diego region on licensing new technologies and a new variable to characterize the inventions, stage of development. I also study the correlation between this variable and two other outcomes: patenting activity and royalty generation. The decision of firms to license at various stages of development could be affected by comparative advantage principle or by asymmetry of information.The main results show that the established firms are more likely to license more advanced stage inventions, while start-up firms are more likely to license embryonic and early stage inventions. The results regarding the likelihood of royalty generations by start up and established firms across stages of development also follow a similar pattern. The findings could further the understanding of how technology diffusion process takes place in the biotechnology sector. In addition it has implication with regard to the process of firm creation process and management.