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Development of New Therapeutic Applications Using Microfluidics

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Published on: October 1, 2007

Can science be a business? Lessons from biotech.

Gary P Pisano¹

¹Harvard Business School, Boston, USA. gpisano@hbs.edu

Harvard Business Review

|October 17, 2006

Summary

Biotechnology firms struggle with drug R&D due to inherent scientific uncertainty and collaboration challenges. Reforming industry structures, promoting open science, and increasing translational research funding are key to success.

Area of Science:

Biotechnology and Pharmaceutical Research & Development
Organizational Science and Business Strategy

Background:

The biotechnology industry, exemplified by Genentech's founding in 1976, has seen substantial investment but limited profitability and drug development success.
A core question arises regarding the compatibility of profit-driven business models with the fundamental nature of basic scientific research in drug discovery.

Purpose of the Study:

To analyze why the current structure of biotechnology firms, optimized for other high-tech sectors, is ill-suited for the unique challenges of drug R&D.
To propose structural and operational modifications to enhance the success of scientific research within a business context.

Main Methods:

The study presents a critical analysis of the biotechnology sector's performance and organizational structure.

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It identifies key challenges in drug R&D, including scientific uncertainty, interdisciplinary integration, and knowledge-sharing barriers.

Proposed solutions involve organizational restructuring, fostering collaboration, and re-evaluating intellectual property strategies.

Main Results:

The current 'anatomy' of biotech firms is inadequate for drug R&D due to profound uncertainty, the need for integrated diverse disciplines, and learning barriers.
Barriers include tacit knowledge and unclear intellectual property rights, which impede the pace of scientific advancement.
Limited success suggests a mismatch between business objectives and the realities of basic scientific research.

Conclusions:

Biotechnology's promise remains unfulfilled because its organizational model does not adequately address the complexities of drug discovery.
Recommended changes include increased vertical integration, long-term collaborations, university emphasis on sharing over patenting, cross-disciplinary research, and funding for translational science.
With these modifications, scientific endeavors can be successfully integrated into a business framework.