Abstract
There are three main growth strategies for biotechnology firms that govern the investment of equity capital: extension of laboratory capacity, integration of research technologies forward in drug discovery paths, and proprietary projects. The transition model of this study invests equity capital only to cover overhead expenditures, which enables the company to sustain and expand operations for collaborative needs. Integration of technologies, either through internal development or corporate acquisition, allows the high-technology firm to perform more value-added activities in drug discovery. As a consequence, the firm can negotiate higher milestones and, in the case of R&D success, receives more royalty payments. In the context of this study, technology platform expansion would mean that compound screening and optimization of chemical structures are performed, in addition to the development of disease targets.1Collaborative projects on a broader range of research activities create also higher royalty expectations, which further increases the biotechnology firm’s attractiveness to investors.
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1See the drug discovery path in Section 1.1, Figure 3
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© 2003 Springer-Verlag Berlin Heidelberg
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Grossmann, M. (2003). Strategies for Growth Phases to Sustain Independence. In: Entrepreneurship in Biotechnology. Contributions to Management Science. Physica, Heidelberg. https://doi.org/10.1007/978-3-642-57432-0_5
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DOI: https://doi.org/10.1007/978-3-642-57432-0_5
Publisher Name: Physica, Heidelberg
Print ISBN: 978-3-7908-0033-3
Online ISBN: 978-3-642-57432-0
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