Technological and Organisation challenges in Biotechnology

Discuss the Technological and Organisational Challenges of Firms in the

Biotechnology Sector

Salomé Delay-Goyet 10086908 Veronika Bugaychuk 9221074 XingHao Qu 9470771 Lucy Thomas 9269173 Tansy Zhu 9495823

1 BMAN31811 International Competitiveness and Innovation

I.  General Background

II.  Technological Issues in the

Biotechnology Sector

III. Technological Challenges’

Influence on Firm’s Organization

IV. Conclusion

Outline


General Background ●  Type of Technology based on biology ●  Applied micro-organisms, animal and

plant genetics into products ●  Products aiming to improve our lives and

planet: i.  To reduce environmental footprint ii.  Healthcare products iii.  Feed the hungry iv.  Use less and clean energy v.  Safer and more efficient industrial manufacturing

process ●  One of the emerging and integrated sector


Source: Bio.org, 2016

Globalization ●  Brings changes to science and technology related industries ●  Many innovation of sciences and technologies have been globalized around the world: (Malinowski,

1996). -  More than 250 Biotechnology health care products and vaccines are available to patients -  More than 13.3 million farmers use agricultural biotechnology to increase yields. (Pinstrup-Anderson et

al., 2000) -  America is one of the most skilled country in biotech sector with more than 50 biorefineries are being

built across North America:


●  Test and refine technologies ●  Produce biofuels and chemicals from

renewable biomass

Innovations and monopoly ●  Innovation has been a key factor in the

development of Biotechnology (New Scientist Jobs, 2016).

●  Biotech improved both quantities and qualities of

food productions ●  Created monopoly power (New Scientist Jobs,

2016).


Technological issues in Biotech Cost of bringing the new successful drug to the market between $800 million and $1.7 billion (Hopkins et al., 2007). The first biotechnology product approved for human health care was synthetic human insulin (Hopkins et al., 2007).

6 BMAN31811 International Competitiveness and Innovation Source: Chen, 2016

Biotech & Health: The Human Genome Project

1.  Aims to “decode” the human genome (Anon, 2002).

2.  Newly discovered genes could provide tools to generate and validate targets for a new generation of drugs (Hopkins et al, 2007).

3.  In 2002, few firms had taken drugs based on genomic derived targets. Most of them are still in development (Hopkins et al, 2007).

4.  Health care benefits (Anon, 2002).


The Ethical Concern


Focuses on novel drug development and clinical research aimed at treating diseases and medical conditions. -  Morality – the concept of human ethics which pertains

to matters of good and evil (also “right of wrong”). -  Ethics – is the study of value or quality. It covers the

analysis and employment of concepts such as right, good, evil, and responsibility.

Examples:

-  Pharma is Keeping 45% of Clinical Trial Results Secret (Labbiotech.eu）

The Environmental Issue Genetically Modified Crops

“Potential environmental costs relate to whether transgenic crops can harm the environment through negative impacts on non-target species or bio-diversity, or pest or virus resistance , and on transfer of genes to wild relatives or to conventional crops” (The Royal Society, 1998).

“In The USA, a 90% reduction in populations of the iconic Monarch butterfly has been reported to be caused largely by loss of habitat due to the blanket spraying of RoundUp Ready GM crops with the weedkiller glyphosate” (GeneWatch, 2015).


Technological Challenges’ Influence on Firms’ Organization

Patents Challenge

10 Source: Hopkins et al., 2007

Licences in The Biotech sector

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Drug Development Pipeline

BMAN31811 International Competitiveness and Innovation

Biotech Licensing Trends in 2014

12 Source: NEXT PHASE, (2016) BMAN31811 International Competitiveness and Innovation

Alliances in Biotech -  Mergers and Acquisitions (2014-2015):

-  Potential value of M&A deals (US$100.2 billion) -  Volume of M&A deals (89 deals with disclosed terms) -  Potential value of alliances (US$55.4 billion)

-  Pharmaceutical firms - Biotech companies

1)  some objectives can only be achieved by the combination of resources

2) joint outcome will provide a positive benefit to each party

-  University-Industry Collaborations In Biotechnology Eg. GM Crops (Forbes)

-  Derive both financial and nonfinancial benefits from collaboration.


Open Innovation Process Through Collaborations

“Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology”, Henry Chesbrough (adjunct professor and faculty director of the Center for Open Innovation at the Haas School of Business at the University of California)

Open innovation models: Product Platforming, Idea competitions, Customer immersion, Collaboration, Innovation networks, Open innovation in Science

Collaborations in biotech sector are contractual relationships, which might be formal (research and development partner / joint venture) or informal (involve participation in technical communities).

Source: Walter W.Powell, 1998, Learning from collaboration / https://en.wikipedia.org/wiki/Open_innovation


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→ Human therapeutics company in the biotechnology industry founded in 1980 The company got extensive R&D and marketing collaborations with small biotech companies: ARRIS, Envirogen, Glycomex, Interneuron, Regeneron, Zynaxis… Relationships working on a labor division where the smallest firms develop promising technology with Amgen’s financial and scientific resources, and Amgen will maybe put it on the market. In 2016, Amgen and Advaxis “announced a global agreement for the development and commercialization of Advaxis' ADXS-NEO, a novel, preclinical investigational cancer immunotherapy treatment” (Amgen.com) Source: Walter W. Powell (1998), Learning from collaboration


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Advantages Challenges

ü  Transfer of knowledge, skills and

resources

ü  Exploit emerging technological

opportunities

ü  Avoid a fierce competition

ü  Accelerate the pace of technological

innovation ü  Reduce risks of investment ü  Network share: increase in accuracy

for market research and customer targeting

ü  Firms have to develop capacities to

learn from competitors

ü  Make relevant and durable alliances ü  Raise entry barriers : a potential exclusion factor for firms who cannot afford the “admission fee” ü  Patents issues: firms have to reveal information (possibility to lose a competitive advantage) ü  Increase complexity of innovation control


Conclusions Health improvements due to biotechnology.

The Biotech succeeded to respond to globalization impacts by gathering firms strengths in particular sectors.

The use of Genetically Modified Crops through biotechnology brings with it uncertain impacts on the environment that need to be researched further.

The commercialization of industrial biotechnology is not as fast as we expected.

Changes beget by technology issues have deeply transformed biotech firms organization by creating new ways of working, which definitely impacted innovation to give birth to a smarter innovation.


Interaction Time - Questions/Answers

1.  Innovation & progress vs. Ethics?

2. How far technology and/or humans can go?

3. What possible technological challenges firms can face in the future?

4. Can open innovation concept be a problem for intellectual property over the long term ?


References

•  Amgen.com. (2016). Amgen And Advaxis Enter Global Cancer Immunotherapies Collaboration. [online] Available at: http://www.amgen.com/media/news-releases/2016/08/amgen-and-advaxis-enter-global-cancer-immunotherapies-collaboration/ [Accessed 7 Nov. 2016].

•  Anon, (2002). Key issues in biotechnology. [online] Available at: http://unctad.org/fr/Docs/poitetebd10.en.pdf [Accessed 7 Nov. 2016].

•  Bio.org. (2016). What is Biotechnology? | BIO. [online] Available at: http://www.bio.org/what-biotechnology [Accessed 7 Nov. 2016].

•  Boccanfuso, A. (2016). Why University-Industry Collaborations In Biotechnology Matter. [online] Forbes.com. Available at: http://www.forbes.com/sites/gmoanswers/2016/01/19/university-industry-collaboration/#3dd4f54c5edf [Accessed 6 Nov. 2016].

•  Chen, G. (2016). New challenges and opportunities for industrial biotechnology. [online] Biomed Central Search Publisher. Available at: https://microbialcellfactories.biomedcentral.com/articles/10.1186/1475-2859-11-111 [Accessed 7 Nov. 2016].

•  DrugWatch. (2015). GlaxoSmithKline—Drug Manufacturer History & Products. [online] Available at: https://www.drugwatch.com/manufacturer/glaxosmithkline/ [Accessed 7 Nov. 2016].

•  En.wikipedia.org. (2016). Biotechnology. [online] Available at: https://en.wikipedia.org/wiki/Biotechnology#Medicine [Accessed 7 Nov. 2016].

•  En.wikipedia.org. (2016). Open innovation. [online] Available at: https://en.wikipedia.org/wiki/Open_innovation [Accessed 7 Nov. 2016].

•  Ft.com. (2016). Pollution puts pharmaceutical supply chains under the spotlight. [online] Available at: https://www.ft.com/content/8a7ed3a6-7128-11e6-a0c9-1365ce54b926 [Accessed 7 Nov. 2016].


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•  Hopkins, M., Martin, P., Nightingale, P., Kraft, A. and Mahdi, S. (2007) The myth of the biotech revolution: An assessment of

technological, clinical and organisational change, Research Policy, 36(4): 566-589.* •  Iphandbook.org. (2016). Licensing Biotechnology Inventions. [online] Available at: http://www.iphandbook.org/handbook/ch11/

p01/ [Accessed 4 Nov. 2016]. •  Labiotech.eu. (2016). Pharma is Keeping 45% of Clinical Trial Results Secret. [online] Available at: http://labiotech.eu/

trialstracker-clinical-trials/ [Accessed 7 Nov. 2016]. •  Lewis, T. (June, 20 2013), 5 Amazing Technologies That Are Revolutionizing Biotech, Livescience.com, available at: http://

www.livescience.com/37590-5-crazy-biotechnologies.html •  Malinowski, M. J. (1996) Globalization of Biotechnology and the Public Health Challenges Accompanying It. Alb. L. Rev.

[online] Available at: http://digitalcommons.law.lsu.edu/cgi/viewcontent.cgi?article=1147&context=faculty_scholarship [Accessed 5 Nov. 2016].

•  NEXT PHASE. (2016). LSN Deals Database Spotlight: Biotech Licensing Trends in 2014. [online] Available at: https://blog.lifesciencenation.com/2014/01/30/lsn-deals-database-spotlight-biotech-licensing-trends-in- 2014/ [Accessed 6 Nov. 2016].

•  New Scientist Jobs. (2016). Innovation a key driver for top pharma, biotech and medical devices talent | New Scientist Jobs. [online] Available at: https://jobs.newscientist.com/en-gb/article/innovation-a-key-driver-for-top-pharma-biotech-and-medical-devices-talent-/ [Accessed 7 Nov. 2016].

•  Niosi, J. and Banik, M. (2005) The evolution and performance of biotechnology regional systems of innovation, Cambridge Journal of Economics, 29 (3), 343-357


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•  Pinstrup-Anderson, P. and Cohen, M. J. (2000) Modern Biotechnology for Food and Agriculture: Risks and Opportunities for the poor. [online] Available at: http://www.bio-nica.info/biblioteca/PinstrupAndersenxxxModernBiotechnology.pdf [Accessed 5 Nov. 2016].

•  Pisano, G. P. (2010) The evolution of science based business: innovating how we innovate, Industrial and Corporate Change, 19 (2), 465-482.

•  Powell, W.W. (1998) Learning from collaboration: knowledge and networks in the biotechnology and pharmaceutical industry, California Management Review, 40 (3), 228-240.

•  Seattleorganicrestaurants.com. (2016). Monsanto and DuPont's GMO War and biotech Monopoly. [online] Available at: http://www.seattleorganicrestaurants.com/vegan-whole-food/Monsanto-DuPont-GMO-war-monopoly.php [Accessed 7 Nov. 2016].

•  Segers, J. (2013). Strategic Partnerships and Open Innovation in the Biotechnology Industry in Belgium. [online] Timreview.ca. Available at: http://timreview.ca/article/676 [Accessed 7 Nov. 2016].

•  SILVERMAN, E. (2016). The 5 Most Pressing Ethical Issues in Biotech Medicine. [online] PubMed Central (PMC). Available at: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3570985/ [Accessed 4 Nov. 2016].

•  Slideshare.net. (2016). Ethical issues in biotechnology. [online] Available at: http://www.slideshare.net/snjogdand/ethical-issues-in-biotechnology-and-related-areas [Accessed 4 Nov. 2016].

•  Special issue of Research Policy 2007, vol. 34 no. 4 BMAN31811 International Competitiveness and Innovation

Leadership & Management

Technological and Organisation challenges in Biotechnology