Biotechnology - Genomic and Proteomics/Give an overall picture of the BGP field

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Give an overall picture of the field.

How was this field born and how is it evolving?

Timeline

  • 1953, Crick and Watson discover DNA at Stanford
  • 1973, rDNA (insertion of foreign gene between two ends of an existing gene) produced at Stanford (Acharya pp. 2)
  • 1970's and 1980's – proliferation of private biotech firms
    • 1971, Cetus founded
    • 1976, Genentech founded. First firm to use rDNA technology (Acharya pp. 4)
  • 1982, first rDNA product, human insulin, approved in US (Acharya pp. 4)
  • 1980's firms grow through heavy outside investment
    • easy financing for firms that chose to go public (Acharya pp. 2)
  • 1980's, outside US, pressure to subsidize public-private partnerships for Biotech research (Acharya pp. 3)
  • 1987, stock market crash and larger recession push small biotech firms to merge into larger multinational companies
    • 1990, Genentech merges with Hoffman LaRouch to become largest example of this new sort of firm (Acharya pp. 3)
    • 1993, only 14 biopharmaceutical companies record profits (Acharya pp. 5)
    • 1995, Glaxo-Wellcome merge, forming one of world's largest pharma companies


Causes and Culture

  • Biotech industry emerged from Bay area in 1960's
    • Stanford's biochemistry and virology (later molecular biology) departments expanded aggressively during this time (Penhoet pp. 6)
    • Bill Rutter, chairman of UCSF's Biochemistry and Biophysics department . His work ethic became the model for the industry (Penhoet pp. 7)
  • Herb Boyer, Bob Swanson start Genentech in the mid-1970's
    • first private biotech firm
    • later followed by Cetus, Chiron (Penhoet pp. 8)
  • Venture Capital firms already existed to support emerging Silicon Valley, came in to support Biotech ventures as well (Penhoet pp. 8)
  • Open attitude towards IP: belief early on that innovation would be sustained, so academics continued to publish their findings, even when working with private companies (Penhoet pp. 8-9)

What are the main business models?

  • Platform
    • develop technology platform (e.g. research method) and license it to other companies (Phillips, «Biotech Business Models»)
    • Most viable model since the Biotech bust of 2001
    • Broad patent protection will help this sort of business model (Pareras, «Biotech Business Models»)
  • Product
    • develop a new product (Phillips, «Biotech Business Models»)
    • RIPCO (Royalty-Income Pharmaceutical Company) – develop a new product and license to a larger company in exchange for royalty on sales (Pareras, «Biotech Business Models»)
      • large potential customer bases and the sooner it can be brought to market, the better
    • FIPCO (Fully Integrated Pharmaceutical Company) – develop new product and bring it to market yourself (Pareras, «Biotech Business Models»)
      • much easier to accomplish if you have many products with which to diversify risk
    • NRDO (No Research, Development Only) – buy a 'discarded' drug from a pharmaceutical company and develop it to the point of bringing it to market. Key that you be able to develop the drug in very efficient way, so as to make it profitable (Pareras, «Biotech Business Models»)
  • Vertical
    • early concept to market (Phillips, «Biotech Business Models»)

What are the innovation dynamics in this field?(inputs/outputs, timing of innovation/ disruptive or incremental innovation?)

How does knowledge flow in this field?

Is this field replicating models from other fields?

How many companies?

How much money do they make or how much money do they “move” in the American economy?

How important is research from universities in this specific field?

How important is public funding in this field?

How important is private funding / venture capital in this field?

Are there any specific public policies (from agencies, federal or state policies) that give incentives for openness or enclosure?

What is the cost structure of the field?

Who are the producers, the buyers, and the users?

What is the structure of power from the production side and what is the structure of power in the demand side? (E.g., who has the power to control production and demand? How is the control distributed?)

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