Subject Terms:
*BIOTECHNOLOGY industries
*FINANCIAL economics
*PHARMACEUTICAL industry
*ENTREPRENEURSHIP
*COMMERCIALIZATION
Author-Supplied Keywords:
biotechnology industry
entrepreneurship
finance
fund raising
pharmaceutical industry
policy
start-up
Abstract:
The development and commercialization of new therapeutics have had immense impact on the quality and length of human life. Nevertheless, the biotechnology and the pharmaceutical industry have evolved to be driven mostly by a profit oriented market system, in which distinct stakeholders interact with different motivations to make the development and commercialization of therapeutics a reality. This study discusses the financial ecosystem available for early-stage biotechnology companies and its influence on the their strategic business objectives and on the biotechnology industry. On the basis of this, distinct paradoxes in the funding ecosystem are uncovered, which suggest that the present ecosystem is not well aligned with the interests of these biotechnology firms, the biotechnology industry, and it neglects strategic disease burden needs. To address these, it is recommended that increase in funding and improvement of current financing approaches for early-stage biotechnology companies by more government and big pharmaceutical company participation should take place, because the cost of capital for these two organizations is substantially lower compared to private corporate investors such as venture capitalist. Even partial resolution of these paradoxes will enable further growth in the industry and lead to more innovative therapies for untreatable diseases with large social and economic burdens.