Overview

The biotechnology sector has held great promise for the alleviation of human suffering through the creation of novel protein-based drugs or drugs that mimic natural proteins. In like manner, biotechnology promises to expand the food supply with the modification of plants and animals. Biotechnology is also involved in environmental remediation and other industrial processes. During its march from origination to the present day the industry has encountered changes in social expectations and business conditions that have been far more volatile than anticipated, and this has required an agility in reconfiguring scientific, business, and financing strategy. Biotechnology companies have had to respond in kind to challenges such as:

• proving their own technologies on the complex path of preclinical research and clinical development

• navigating through an ever-expanding and evolving corpus of science and the related global base of intellectual property owned by disparate, unrelated entities, each with economic objectives of their own

• compensating for an ever-expanding competitive environment

• adapting to a regulatory process that was itself evolving to accommodate the changing nature of the technology

• responding to the volatility (and often a loss of confidence) of the capital markets

• reconfiguring relationships with initially enthusiastic but ultimately reticent pharmaceutical company partners, who were at the same time responding to these same challenges affecting their internal biotechnology programs, further compounded by a nonproductive research pipeline and a portfolio of expiring patents, all within the midst of massive pharmaceutical industry consolidation (see chapter 2)

The above challenges induced a wholesale rethinking of the biotechnology and pharmaceutical value chain, and consequently of the industry's business models.