Creating and capturing value in the biopharmaceutical sector

This study addresses the ongoing implications of the realignment of the pharmaceutical industry knowledge base ? from small molecule methods to new biomedical technologies ? for the competitive positions of traditional pharmaceuticalcompanies and biopharmaceutical start-ups. The theoretical approach draws on the modern theory of the firm and related concepts, to define and develop the concept of the business model. This is employed to guide the empirical analysis, which utilises a combination of data analyses and case studies based on several sources, including detailed company reports and alliance databases. The thesis analyses how the pharmaceutical companies have successfully adjusted their business models to meet the challenge of biotechnology and so retain their powerful position in the industry. Central to this has been the breadth and depth of knowledge transfer through alliance formation. Not only has this been critical to the adjustment process for thelarge pharmaceutical companies but also for the development of the many biopharmaceutical start ups. Nonetheless the business models of these smaller companies have many weaknesses, which have led to the erosion of the value oftheir initial strategic assets. Despite the poor financial performance of the vast majority of these firms, the biopharmaceutical sector as a whole has created significant value. This has been captured disproportionately by a handful of large fully integrated biopharmaceutical firms and, to a lesser extent, by the largest dozen pharmaceutical firms.