Strategic Alliances for the Development of Innovative SMEs within the Biopharmaceutical Industry: An Exploratory Analysis

Abstract

In the past decades, the alliance literature has paid significant attention to the biotechnological revolution and the role strategic alliances, most notably R&D partnerships between large pharmaceutical companies and small biotechnological firms, have played in bringing about this transition. As the initial hype faded and venture capitalists pulled out of many biotechnological firms for lack of long-term orientation, large pharmaceutical companies became the most important source of funding for these struggling small and medium-sized enterprises (SMEs). While several articles have been written on the role of strategic alliances in firms' performance, relatively little attention has been paid to the importance of different forms of alliances for the survival and growth chances of biotechnological SMEs. Almost 40 years after the first successes in biotechnological research, it seems appropriate to examine the current state of the biopharmaceutical industry and explore the role different types of alliances (i.e., research partnerships versus commercialization alliances) have played in the development of successful, innovative biotechnological SMEs. We will describe the importance of biotechnology-based drugs in the current innovativeness of the biopharmaceutical industry; we will examine the innovative and financial performance of SMEs vis-a-vis their large counterparts; we will provide an overview of the best-performing biotechnological SMEs and explore the potential relation between their performance and the composition of their strategic alliance portfolios.