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Drug Discovery Firms and Business Alliances for Sustainable Innovation

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Listed:
  • Yoshimi Harada

    (Department of Innovation Science, School of Environment and Society, Tokyo Institute of Technology, Tokyo 108-0023, Japan)

  • Huayi Wang

    (Department of Innovation Science, School of Environment and Society, Tokyo Institute of Technology, Tokyo 108-0023, Japan
    Graduate School of Pharmaceutical Sciences, The University of Tokyo, Tokyo 113-8654, Japan)

  • Kota Kodama

    (Graduate School of Technology Management, Ritsumeikan University, Kyoto 603-8577, Japan)

  • Shintaro Sengoku

    (Department of Innovation Science, School of Environment and Society, Tokyo Institute of Technology, Tokyo 108-0023, Japan)

Abstract

Biotech startup firms developing pharmaceutical seeds from scientific and technological innovation are burdened by significant Research & Development (R&D) expenses, long-term R&D operations, and low probability of R&D success. To address these challenges while sustainably creating innovations and new drugs, business alliances with existing pharmaceutical companies are one of the most important issues on the management agenda. The present study explores the necessity and significance of business alliances with pharmaceutical companies for the development of drug-discovery by Japanese biotech startup firms under high uncertainty. This study investigates the types of alliances to understand the origins of sustainability of these creative activities. First, we investigate and analyze the details of the partnership and its impact on the products under development based on the publicly available information of 16 drug discovery biotech startup firms in Japan that had become public since 2010. As a result, all firms continued their operations with the funds obtained from the business alliances with pharmaceutical firms at the time of their initial public offering (IPO). In addition, 56% of these firms’ alliance projects ( n = 73) were seeded-out, and 32% seeded-in, indicating that they had adopted flexible alliance strategies not limited to seed-out ones. For sustainable going concern of the biotech startup business, it is valuable to consider multiple strategic options: “in-licensing and value up”, “best-in-class”, “platform leadership” and “first-in-class” depending on the characteristics of seeds and environmental restrictions.

Suggested Citation

  • Yoshimi Harada & Huayi Wang & Kota Kodama & Shintaro Sengoku, 2021. "Drug Discovery Firms and Business Alliances for Sustainable Innovation," Sustainability, MDPI, vol. 13(7), pages 1-20, March.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:7:p:3599-:d:523033
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    References listed on IDEAS

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