Edited by Marian V Jones, Colin Wheeler and Pavlos Dimitratos
5. Partnership formation in small biotech companies Niina Nummela and Outi Nurminen INTRODUCTION In their recent Global Report on Biotechnology the consulting company Ernst & Young characterizes the industry as growing rapidly but highlights considerable challenges related to market and regulatory uncertainty. It also identifies three major drivers that are reshaping the whole industry: patent expiry, personalized medicine and globalization (Ernst &Young, 2008). The first two have been under debate for some time, but the third is particularly interesting, because if it really is the case that the gains from outsourcing and other attempts to decrease development costs are only temporary, the companies in this industry need urgently to reconsider their business models and revenue logic. Many of them will make major strategic moves in the near future, which will make the whole industry a very dynamic and interesting object of study. In geographical terms the biotechnology industry is scattered around the globe, with strong research-based centres in a small number of countries. The United States is the country with the largest number of firms (more than 2,000), although the European Union as a whole has more than 3,000 firms. Japan has more than 800 companies and France more than 750 (OECD, 2006). In sum, the biotechnology industry is of major significance in the global economy. This study will focus on the role of partnering in the industry. Biotech companies are typically very specialized and require complementary assets from different types of organization (Audretsch and Feldman, 2003, p. 274)...
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