Introduction to the case studies

This chapter contains an analysis of the three in-depth case studies that form the backbone of this research. These cases represent three very different types of biotech companies. The first, Kiwi Ingenuity Ltd, is a technology platform company with intellectual property that may be commercialised across a wide range of diagnostic and therapeutic fields. Because KIWI’s technology represents a novel compound type that may be used as a research tool or a drug candidate it spans the first and third of Pisano’s innovation classes (as described in chapter two) and has a wide range of plausible business models to choose from. The second case study, Neuren Pharmaceuticals Ltd, represents a typical drug development company with a number of drug candidates being put through pre-clinical and clinical development. It fits into Pisano’s second

innovation class – a novel mechanism of action or target. The last case study, Living Cell Technologies Ltd, is developing a therapeutic based on the transplantation of animal cells into humans. It faces unique challenges being at the cutting edge of a new modality of treatment – Pisano’s fourth innovation class.

Each case has been written up as an individual story following a similar format. First, an overview is provided of the company, technology, product concepts and the value chain specific to their product development and commercialisation. The

company’s business model is then concisely explained – either in their own words, or as a synthesis of the elements that have come from analysis of the case data. Particular emphasis is given to what, how and when the firm intends to plug into the value chain. Factors that the firm perceives will enable or constrain the commercialisation of their technology or product are then described and these factors are related back to the firm’s business model to uncover the key drivers behind the firm’s commercialisation strategy.

The case study analyses focus only on the strategic issues that the firms perceive. The

same objective environment may appear differently to different organisations, but each firm responds only to what it perceives; those things that are not noticed do not affect its decisions and actions (Miles, Snow and Pfeffer, 1974) and thus do not drive its

Lastly each case story looks at the options the company had available to it as possible alternatives for commercializing their product or technology. The concept of options as a significant element in commercialisation strategy is one that resonated with me during my review of the strategic management literature. Specifically, real options reasoning (ROR) struck me as a useful approach to commercialisation strategy in high risk and highly uncertain environments. Close examination of the strategies and actions of the case study companies revealed some examples of options, and some processes that would support ROR, but little evidence that the development of options was an explicit aspect of commercialisation strategy. ROR presents an opportunity to add a new dimension of strategic thinking to the development of commercialisation strategy. This concept is discussed in the next chapter where ROR is positioned as a central process in my Commercialisation Options Model for start-up biotechnology companies.

The field research presented in this chapter was carried out between 2003 and 2006. All three case study companies are still in existence. However, a lot has happened over the past few years. The companies have had their successes and failures in product

development, their environments have evolved and the firms have no doubt adapted their strategies accordingly. I would like to note that the companies I have described in this chapter are the companies I observed several years ago. To any readers who know these companies today my observations may seem substantially out of date. I would urge readers to consider that the currency of the case studies is not germane to the objectives of this thesis in understanding how biotech firms do strategy and how they may do it better. This thesis has not sought to measure firm performance against strategies – a much larger sample size and longer study period would be required for this. Rather, I have sought to understand the drivers behind strategies and business models so that this knowledge may be applied in new or unique contexts.

The results in this chapter are discussed at the level of the company, with one exception. One interview is reported in detail. This is because Dr. Doug Wilson of Neuren

Pharmaceuticals, a particularly reflexive practitioner (Schon, 1995) has, purposefully or otherwise, distilled many of the important choices in commercialisation strategy with regard to drug development. During our interview he drew on the experience gained through a long career in drug development.

A cross-case analysis is presented in the later part of this chapter. The goal there is to present broad themes, linking the theoretical and empirical findings across the cases to the wider bodies of literature on strategic management and biotech commercialisation. The next chapter will then extrapolate from the observations described here, as well as drawing on concepts from the literature to propose a model of how biotech firms could do strategy.