The document discusses business models for life science and biotech firms. It notes that the industry landscape is heterogeneous, with different business contexts and corporate approaches. However, biotech firms also share some common characteristics - they are typically born global, non-self-sustaining, research-based, project-focused companies. While strategy often follows knowledge or customers, business models can allow for more strategic choices. Effective biotech business models are typically network-based, with a strong focus and partnerships across multiple relationships and locations.

1. CrESIT‐Assobiotec Workshop 2008
Business Model for Biotech Firms
Business Models for Life Science Firms
Prof. Alberto Onetti
Director, CrESIT, Insubria State University
Nov 24, 2008

2. Life Science: an heterogeneous
landscape…
Different Business Contexts
Health Care (Red Biotech)
Industry and Environment (Grey or White Biotech)
Agriculture and Veterinary (Green Biotech)
Technology (Bio‐Informatics and Platform Biotech)
Different Corporate Approaches
Born Biotech
Diversified Companies
Different Entrepreneurial Models
Start Ups founded by Scientists‐turned‐Entrepreneurs (DBF, NBF)
Corporate Spin‐Offs
Government funded Initiatives
Subsidiaries of MNC

3. Life Science: an heterogeneous
landscape…with some homogeny
Biotech firms are typically:
born global companies
high international precocity
non self­sustaining companies (for a long‐term timeframe), since they have
a high investment‐intensity
an extended pre‐revenue phase (and a long way ahead to become cash positive)
a structural need for external funding
high mortality rates
research based companies
dominant technical‐scientific component (techno‐entrepreneur, bio‐ entrepreneur), but
the necessity of non‐technical competences (marketing, PM, finance, management, HR, legal, …)
and “combinative” capabilities
“project” companies
built around a project
evolving to multi‐project companies

4. Business Model makes the difference
Strategy is mostly given:
Strategy follows knowledge base
Strategy follows lead users/customers
Internationalisation and Innovation are not strategic options, but a way of being
The real “strategic” choices are at Business Model layer

5. Business Model: looking for a dominant
design
A Business Model depends on the business context, corporate approach and
entrepreneurial model
Biotech companies’ business model is typically based on some cornerstones:
They are multi­location organizations, hence being part of a “meta‐national” knowledge
network is not an option
They present a strong “focus”: this is a “must” for firms in early stages, but it is a “should
have” for large corporations too (biotech rarely become full‐scale in drug development)
They are network­based: partnership is the typical “modus”, also for core activities
The network they are part of is “broad” and “multidimensional”: they have to manage plenty of
relationships, not only upstream (scientific community, industry, …) and downstream (lead
users), but also laterally (e.g. finance)
They partner in different ways (licensing‐in and –out, outsourcing, joint venture, strategic
alliances , …)
They have highly educated employee base (“brain” intensive)

6. Business Model for Biotech
LOCUS
FOCUS MODUS
Multiple relationships,
Short Activity List,
Multi-location, also the
Activity A upstream, downstream
mostly R&D
same activity
and lateral
(typically single phase)
Partners Make Together (instead
Activity B
of Make or Buy)
Multiple organizational
schemes (inbound and
Activity C
outbound relationships, …)
Biotech
Value Followers
…
Firm
High Brain-Intensity
Lead
Source: Onetti and Zucchella, 2008
Users