Innovation, product development and market value: evidence from the biotechnology industryinnovation in biotechnology industry

Author: Zaur Rzakhanov

Source: Economics of Innovation and New Technology, Volume 13, Number 8, December 2004 , pp. 747-760(14)

Publisher: Routledge, part of the Taylor & Francis Group

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Abstract:

The subject of the paper is financial valuation of firm's knowledge assets and returns to innovation in the biotechnology industry, where such assets appear to play key role in the commercial success of a product. The biotechnology industry is extremely research-intensive, and successful R&D drives profitability. Further, the pharmaceutical product development advances in a number of well-defined stages that allow relatively precise measurement of product development outcomes. The study reports recent biotechnology R&D statistics, and provides estimates of private returns to innovation and product development activity in the biotechnology industry. The conclusions indicate that the financial market recognizes the value of drugs in product development stage, as it expects the innovative knowledge embodied in drug development projects to become marketable products in the future.

Keywords: Innovation; Product development; Biotechnology; Financial market valuation

Document Type: Research article

DOI: http://dx.doi.org/10.1080/1043859042000226211

Publication date: 2004-12-01

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