On Growth Option for R&D Continuity of Biotech Start-ups Under Uncertainty
- Takao Fujiwara
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For biotech drug-discovery start-ups, even though the constraint on managerial resources is very severe, it takes more than 10 years for them to transfer a project from laboratory study to products on the market. In order to increase robustness against financial crisis for continuing R&D, we examine the flexibility value of real options, and especially pay attention to the function of growth options for business entry and exit. Through a case study of a Japanese pioneering start-up in the field of regenerative medicine, J-TEC, we consider a survival strategy during the valley of deficit from the perspective of the growth option. Finally, we apply stochastic optimization to select the pipeline candidates from alternative projects.
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- On Growth Option for R&D Continuity of Biotech Start-ups Under Uncertainty
Global Journal of Flexible Systems Management
Volume 13, Issue 3 , pp 129-139
- Cover Date
- Print ISSN
- Online ISSN
- Additional Links
- Biotech start-ups
- Real options
- Growth options
- Valley of deficit
- Path dependent continuity
- Takao Fujiwara (1)
- Author Affiliations
- 1. Toyohashi University of Technology, Toyohashi, Aichi, 441-8580, Japan