Anne Evans: Assessment of a Biotechnology Market Opportunity

Authors: Evans A.G.; Varaiya N.P.

Source: Entrepreneurship Theory and Practice, Volume 28, Number 1, September 2003 , pp. 87-105(19)

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Abstract:

This case describes Anne Evans’ search for a market opportunity in the biotechnology industry, and examines the feasibility of establishing a new venture to exploit this opportunity. The drug development process in the biopharmaceutical industry spans three critical phases: pharmaceutical discovery, pharmaceutical development, and product marketing. The drug development process is a very capital-intensive process with expenditures averaging $800 million per drug and with very high failure rates—only one out of 5,000 compounds that emerge from discovery and preclinical testing will make it into the market. The drug development process therefore contributes to very high cash burn rates and corporate failures in the biotechnology industry.

Document Type: Research article

DOI: http://dx.doi.org/10.1111/1540-8520.00033

Affiliations: 1: Nikhil P. Varaiya is a professor and chairman of the Department of Finance at San Diego State University.

Publication date: 2003-09-01