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Subject: search.filters.subject.Biotechnology industry

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    Towards the identification of a cost-effective security for biotechnology companies : a dissertation presented in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Finance at Massey University
    (Massey University, 1998) Parry, Jennifer R
    When biotechnology companies have a drug ready for submission to a regulatory authority issuer-investor aspects of security selection become important. If approval to market the drug is received then the company may wish to consider an alternative to their Equity and/or Option/Warrant type of financing. The successful issue of any security will require the approval of and the acquisition by interested investors as well as a guarantee that it is cost-effective as far as the issuer is concerned. The research was divided into two parts: firstly, a questionnaire was sent to those institutional investors in Australia and the UK who were analysing pharmaceutical/biotechnology companies; and secondly, based on the results obtained from the questionnaire, six securities were selected for further investigation. The research then centred on determining which security would have the greatest benefit for the companies. In this part of the study cash flows and net present values (NPV) were calculated for each security. Spreadsheets using these data then formed the foundation for conducting a Monte Carlo simulation. The results of these simulations highlighted those variables which had the greatest impact on the end of year cash flows and company NPVs. Finally, a decision tree model was developed to ascertain which security was the optimal one for the company to use during the first five years of marketing its first drug. The results demonstrate that during this first five year period the type of funding for the companies included in the study would be the same as those currently employed. However, by the end of five years the dominance of options/warrants as a form of financing was declining in favour of other equity-type securities. Therefore, the implications are that even though some positive cash flows were being generated during this period, the cash outflows associated with servicing and refunding fixed interest-type securities mean that they are not the most cost-effective source of funds for these companies.
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    Commercialisation strategy in biotechnology start-ups : a thesis presented in partial fulfillment of the requirements for the degree of Doctor of Business and Administration at Massey University, Palmerston North, New Zealand
    (Massey University, 2009) Dixon, Margaret Janette
    The biotech sector has accumulated losses of around US$40 billion since its inception in the mid-1970s. The reasons for this may lie with the science itself, with organization and strategy, with the underlying costs of developing biotechnologies and/or with the institutional environment that biotech firms operate within. This thesis assumes that better organization and commercialisation strategy will improve overall returns in the biotech sector and asks the fundamental questions ‘how do biotech firms do strategy?’ and ‘how can biotech firms do strategy better?’ Strategy is the domain of the strategic management literature. Contributions to the literature that bear directly on commercialisation strategy in the biotech sector are examined. The sector’s unique institutional context is found to create an environment of high-risk and high-uncertainty. The real options reasoning and dynamic capabilities literatures provided some useful ideas for strategy in this context. Overall, the literature identifies a shortfall in directly actionable advice for biotech practitioners. Thus, the ‘great divide’ between academic research and practice is discussed. This thesis seeks to narrow the gap by synthesizing academic theory and practitioner knowledge on commercialisation strategy in the biotech sector in the way that will extend the strategic management literature and provide a process to aid practitioners in strategic decision making. A two phase methodological approach is employed that begins with a historical review of the development of the biotech sector and three in-depth case studies. Strategic issues facing biotech start-ups at the industry-level and firm-level are examined and related to the business models that firms adopt as an embodiment of their commercialisation strategies. A solid understanding of this relationship is then combined with real options reasoning and theory on dynamic capabilities to propose a model that may help biotech practitioners improve their approach to commercialization strategy. The model is refined and validated in a second phase of research involving interviews with seasoned veterans of the biotech sector. The Commercialisation Options Model is the final output of this research.