New Biotechnology Firms Research Articles

Strategic Alliances in Knowledge-Intensive Industries: An Integrated View

In this study, we examine strategic alliances between large pharmaceutical companies (LPCs) and new biotechnology firms (NBFs) in the knowledge-intensive biopharmaceutical industry in the light of two explanations for the motives behind R&D alliances, namely, the transaction cost explanation and the learning with flexibility explanation. We develop a series of propositions based on an integrated view of the motives behind strategic alliances in knowledge-based industries.

Antecedents of strategic alliances performance in biopharmaceutical industry: A comprehensive model

We examine which factors determine the performance of strategic alliances as most common strategy for technology commercialization in Iran biopharmaceutical industry. We develop a theoretical framework to performance measurement of strategic alliances between traditional pharmaceutical and new biotechnology firms (NBFs). Our empirical data are derived from a detailed survey held among established alliances by member companies of Iranian Society of Manufacturers and Exporters of Medical Biotech Products in the period 2000–2012. Findings show that partner fit, alliance capabilities, social capital, and learning are determinant constructs of strategic alliance performance. Furthermore, opportunistic behavior was negatively related to alliance performance, as hypothesized. The partner fit, conflict management, trust, and social capital were positively related to learning construct. Trust, and social capital, negatively affected opportunistic behavior. This study finds that alliance capabilities partially mediate between alliance experience and alliance performance. Also, specific partner experience and conflict management were positively related to trust. The social capital positively, affected alliance capabilities. These findings provide a deeper understanding into the strategic alliance performance, and offer executives in biopharmaceutical industry some practical ideas for assuring favorable strategic alliance outcomes.

Comment on “fishing for sharks: Partner selection in biopharmaceutical R&D alliances” by diestre and rajagopalan

A recent study of R&D alliances between new biotechnology firms (NBFs) and pharmaceutical firms investigated how NBFs deal with the “swimming with sharks” dilemma involved in allying with firms capable of appropriating value. It concludes that NBFs are less likely to select alliance partners with related expertise because of greater appropriation risk. Based on our experience as NBF managers and a survey of NBF executives, we believe that such situations are uncommon, and that the study more likely shows pharmaceutical firms seeking diversification. Thousands of NBFs seek alliances with the top 100 pharmaceutical firms, and the larger company is much more likely to be the one to select among multiple potential partners. Copyright © 2013 John Wiley & Sons, Ltd.

Are all ‘sharks’ dangerous? new biotechnology ventures and partner selection in R&D alliances

AbstractWe examine how new biotechnology firms (NBFs) select pharmaceutical firms as R&D allies as a function of value creation and value appropriation considerations. We develop a theoretical framework to understand partnering decisions accounting for both, a potential partner's ability as well as incentives to appropriate and create value within an R&D alliance. Our empirical findings show that NBFs are more likely to ally with pharmaceutical firms with the ability to create value, as long as these firms have the incentives to use their skills to create rather than appropriate value. Our study highlights the double‐edged sword nature of value creation skills and provides a deeper understanding into the contextual factors that determine when potential R&D partners will perceive such skills as increasing appropriation risks. Copyright © 2012 John Wiley & Sons, Ltd.

Biopharmaceutical entrepreneurship in two Japanese and French bioclusters: Differences in founder profiles and experience

Favoured by genetic engineering breakthroughs, a new type of firm has emerged in the pharmaceutical industry. New Biotechnology Firms (NBFs) are ‘bridging institutions', accelerating the commercialisation of science from academia to the pharmaceutical market and facilitating technological incursions into drug development or therapeutic paths yet unexplored. As such, they have raised industrial and political interest around the world. Successes can be outstanding and some countries seem to offer much more favourable environments than others. Countries' performances are usually benchmarked against their provision of favourable resources and institutions, but this article takes an alternative route by considering the entrepreneurial side of NBF as a major factor in their emergence. ‘Entrepreneur biographies' and firm creation experience were collected in two comparable bioclusters in France (Evry) and Japan (Kobe), on 11 Japanese and French drug development NBFs. The result shows an interesting variation in backgrounds and motivations, in that almost all our French entrepreneurs came from public research institutes, whereas a large share of the Japanese entrepreneurs came from large pharmaceutical companies. This finding questions the universal nature of entrepreneurship in biopharmaceutical firms and invites consideration for a model of entrepreneurship that is socially embedded in a country's specific institutional and historical factors.

Financing forefront technology entrepreneurship. Issues concerning biotechnology

This paper surveys financial issues that characterise the US biotechnology scenario. They regard public institutions and companies. The financing approaches available to New Biotechnology Firms (NBFs) force them to operate in a weak competitive position vis-?-vis large companies. Allowing NBFs to somewhat uncouple their investment decisions from the impact on company balance sheet, could give a fundamental contribution to enhance their competitive capacity and fully exploit their potential. The scheme of an off-balance-sheet financing is proposed. It is of the type that regulated the Research and Development Project Limited Partnership (RDLP) in the USA till 1986 when its tax benefits were cancelled by the Tax Reform Act. After 1986, NBFs have proposed to financial markets substitutes for RDLPs, which have proved to be much less interesting to investors. Restoring the rules originally governing RDLPs could be a strategically winning move at the present stage of the biotechogenetic revolution in the USA. An earlier and shorter version of this paper was presented by the author at the Unido sponsored 14th International Conference on Management of Technology, track 12 The Integration of Technology and Business Strategies, IAMOT 2005, Vienna, Austria, May 2005.

Harmonizing science and business agendas for growth in new biotechnology firms: Case comparisons from five countries

In seeking to support the longevity of firms in high technology industries, much research effort has been directed at understanding the stages of growth and development of these firms. One industry regarded as vitally important to most national economies is biotechnology. Although our knowledge of the growth of biotechnology firms remains embryonic, we know that it is a multistage process requiring a changing blend of scientific and business skills at points along a developmental path. In this paper data are presented from a multiple case study, in which new biotechnology firms (NBFs) from five different countries were analyzed using in-depth interviews with CEOs, supported by archival and observational research. A conceptual model is developed from the literature which is further refined using the empirical evidence of the multiple case study. The resultant model captures the temporal aspects of the tension between the science and business agendas as the NBF traverses its commercialization pathways. The authors find that a common feature of successful NBFs is their ability to harmonize the changing scientific and business agendas as the company progresses through its development cycle.

Strategic alliances as a mechanism for wealth creation in the biopharmaceutical industry: An empirical analysis of the Spanish case

The paper studies strategic alliances signed between traditional pharmaceutical companies (TPCs) and new biotechnology firms (NBFs) in Spain, on the initial basis that a firm's rate of new product development is a positive function of the number of strategic alliances that it has entered into. Nevertheless, we believe, as do others, that although strategic alliances may initially have positive effects on that rate, this relationship may exhibit diminishing returns. We suggest that the relationship between the number of alliances and the rate of new product development may be an inverted U-shape in the Spanish biopharmaceutical industry. Our regression model provides evidence to support such a relationship. However, the results suggest that only when the firm enters into too many alliances does diminishing return and ultimately negative return set in. The main strategic conclusion for the biopharmaceutical industry is that alliances represent a viable way for biopharmaceutical companies to gain access to the complementary assets required to increase their rate of new product development. A major contribution to this investigation is the empirical assessment for the Spanish biopharmaceutical industry.

Strategic alliances as a mechanism for wealth creation in the biopharmaceutical industry: An empirical analysis of the Spanish case

The paper studies strategic alliances signed between traditional pharmaceutical companies (TPCs) and new biotechnology firms (NBFs) in Spain, on the initial basis that a firm's rate of new product development is a positive function of the number of strategic alliances that it has entered into. Nevertheless, we believe, as do others, that although strategic alliances may initially have positive effects on that rate, this relationship may exhibit diminishing returns. We suggest that the relationship between the number of alliances and the rate of new product development may be an inverted U-shape in the Spanish biopharmaceutical industry. Our regression model provides evidence to support such a relationship. However, the results suggest that only when the firm enters into too many alliances does diminishing return and ultimately negative return set in. The main strategic conclusion for the biopharmaceutical industry is that alliances represent a viable way for biopharmaceutical companies to gain access to the complementary assets required to increase their rate of new product development. A major contribution to this investigation is the empirical assessment for the Spanish biopharmaceutical industry.

Distant networking: The knowledge acquisition strategies of 'out-cluster' biotechnology firms

This paper addresses the conditions that enable new biotechnology firms (NBF) operating outside major biotechnology clusters, to obtain the resources and competences necessary to emerge and grow. Drawing on in-depth research on the structure, rationale and evolution of scientific and technological relationships of a group of Portuguese NBFs, the paper discusses the knowledge sourcing strategies devised by these firms and the type of factors that favour their adoption. NBFs are found to draw creatively from a diverse combination of local and distant technological relationships and to profit from a number of mechanisms that can reduce the impact of geographical distance on access to partners and on the transmission of knowledge. This behaviour is favoured by factors associated with the strength of the local science base in relevant fields and to the level of international mobility and exposure achieved by local scientists.

Policy tools on the formation of new biotechnology firms in Taiwan

This research explores the contribution of policy tool toward the formation of Taiwanese biotechnology firms. The effect of technological policy for the formation of new biotechnology firms (NBFs) is complicated by the fact that biotechnology is new, and its development raises issues where there is a great deal of uncertainty. This research involved the evaluation of policy tools on the formation of NBFs and was based on a combination of fuzzy multiple criteria decision-making method (MCDM) and interviews with key actors in the field. The focus of this paper is how the users, biofirms, and venture capitalists perceive the contribution of policy tools toward the formation of NBFs. The evaluating hierarchy toward the formation of NBFs shows that two user groups perceive differently. Venture capitalists emphasize the importance of factors relating to technology and human resources, while biofirm groups emphasize those relating to market. The results of the evaluation reveal that: First, policy tools relating to technology and human capital are currently the main focus in Taiwan, a focus consistent with the perception of venture capitalists. However, from the perspective of biofirms, there are mismatches. Second, policy tools contribute to the formation of NBFs in different ways. Some contribute more widely across the criteria, while some are more specific. Third, the ranking of eight policy tools indicates that the role of public research institutes in economic development has become more sophisticated. Not only are they the source of initial capabilities of emerging firms, they are also important actors in industrial innovation, especially for a knowledge-intensive, industry-like biotechnology.

Innovation and market structure in the dynamics of the pharmaceutical industry and biotechnology: towards a history-friendly model

This paper is a first attempt at modelling the long-term dynamics of market structure and innovation in the pharmaceutical industry in a history-friendly way. The model examines the relationships between the nature of the search space, demand, the patterns of competition, and industry evolution in the age of random screening and in the age of molecular biology, and shows that concentration in the pharmaceutical industry is shaped by lack of cumulativeness in innovative activities and market fragmentation. The model conforms to our appreciative understanding and responds to changes in parameters concerning demand, costs, economies of scale, opportunity conditions and the relative advantages of new biotechnology firms (NBFs) vis-a-vis incumbents. With the exception of cost increases, the model is quite robust to these changes in its essential features: it is quite difficult to raise substantially concentration and to have NBFs displacing incumbents.

Technological competence and the influence of networks: a comparative analysis of new biotechnology firms in france and britain

The objective of this paper is to examine the role of external networks not only as a resource but also as a constraint for the evolution ofthe technological competence of twenty new biotechnology firms (NBFs) in France and Britain. The analysis is bared on extensive interviews conducted with the Chief Executive Officers (CEOs) of twenty NBFs, ten in France and ten in Britain. The paper identifies the network structures ofthe tweng NBFs and the impact of netmorks on the evolution of their technologial competence. The paper also attempts to identify the differences between NBFs in France and Britain in terms of the framework developed. It clearly illustrates that the capacity of NBFs to construct appropriate external linkages with other firms andfinanckrs is crucial to their success.

Social networks, Learning, and Flexibility: Sourcing Scientific Knowledge in New Biotechnology Firms

We examine how two highly successful new biotechnology firms (NBFs) source their most critical input—scientific knowledge. We find that scientists at the two NBFs enter into large numbers of collaborative research efforts with scientists at other organizations, especially universities. Formal market contracts are rarely used to govern these exchanges of scientific knowledge. Our findings suggest that the use of boundary-spanning social networks by the two NBFs increases both their learning and their flexibility in ways that would not be possible within a self-contained hierarchical organization.

MODELING THE CREATION OF NEW BIOTECHNOLOGY FIRMS, 1973-1987.

This paper investigates models of the creation of new biotechnology firms (NBFs). Whereas institutional and resource variables have the predicted facilitative effects on NBF founding rates, the eff...

The governance of innovation: Vertical integration and collaborative arrangements in the biotechnology industry

This paper analyzes and compares the various governance structures through which new biotechnologies have been developed and commercialized over the past decade and a half. These governance structures include (1) forward vertical integration by new biotechnology firms (NBFs) from R&D into manufacturing and marketing; (2) backward integration by established firms from downstream industries into biotechnology R&D; and (3) various forms of collaboration between NBFs and established firms involving R&D, technology transfer, production, and distribution. The institutional, technological, and organizational forces affecting the incidence of these governance structures over time are discussed and examined with data from several sources.