U.S. Biotech Industry Note: Abstract
Two elements have differentiated the “biotech industry” from traditional industries: The first is the need for access to large amounts of capital, long in advance of having a “product” that a “customer” could buy; and the second is the requirement to meet stringent government regulatory controls. Strategy in a typical “biotech” company is determined by the capital markets rather than driven by customers. In the period 1990-2003, capital markets supplied over $100 billion to biotech firms.
The note includes:
- Background on the biotech industry and a brief industry fact summary (focus-healthcare)
- A “layman’s language” note on the science that created biotech
- The role of information technology (bioinformatics) in its development
- Tthe role of government as regulator and grantor of intellectual property rights
- Capital markets and trends shaping the industry
- The industry’s main business models
- A brief discussion of some underlying ethical dilemmas
Teaching notes are available for teachers only. Contact the HEC Montréal Case Centre for more information.