The waves of Biotechnological Innovation in Medicine : Interfirm Cooperation Effects and a Venture Capital Perspective
Published on Dec 10, 2015
markdownabstractAbstract Improving medicine and health is the ultimate purpose of biotechnological innovation, where basic science is used to develop new innovative diagnostics and therapeutics to significantly improve the lives of patients worldwide. Concurrently, for three stakeholder groups, the primary goal is to generate profitable business from biotechnological innovation. These stakeholders are ‘entrepreneurial’ biotech companies, venture capitalists and established pharmaceutical firms. This dissertation evaluates interfirm cooperation and venture capital investments, aiming to better understand how more biotechnological innovation can reach the market and which biotechnologies will revolutionize R&D productivity and global healthcare. The first studies show that alliances between established pharmaceutical firms and biotech companies outperform acquisitions of biotech companies by such firms, as these acquisition negatively affect innovation performance. Furthermore, alliances involve a risk-return trade-off in new product development, for biotech companies as technology suppliers. Moreover, for big pharma, alliances with- and acquisitions of biotech companies are both complementary innovation activities at higher levels of firms’ absorptive capacity. Regarding venture capital, the final studies show that venture capitalists fulfil a crucial role in the biopharmaceutical value chain. By investing in the right technologies and therapeutic areas, venture capitalists build for big pharma as they foresee big pharma’s future innovation demand. Simultaneously, venture capitalists create a technology push as visionary technological gatekeepers. Finally, the dissertation concludes that big pharma’s dominant logic and blockbuster paradigm have been the root cause of underutilized biotechnological innovation. It further proposes transformation towards a new organizational form for sustainable science-based business and effective exploitation of biotechnological innovation.