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
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.