Tuesday, December 25, 2007

Biotechnology Management: The science and the business

There are so many definitions of biotechnology exists today that we do not feel inclined to add to them. Not that the definitions are wrong but they do not necessarily convey the very realistic ideas of the subject. Biotechnology is no more just an innovative academic activity, but rather an intense industrial and commercial involvement. This monograph is an attempt to provide you with a variety of issues, their relative importance and their interrelatedness in managing commercial biotechnology. By understanding the factors influencing biotechnology companies it is possible to select opportunities and position for a rewarding career. Examining existing biotechnology firms can reveal desirable credentials for careers. Many companies list the academic qualifications of their senior management. Job postings also describe necessary qualifications for specific positions. The key to a career in biotechnology, regardless of educational background or expertise, is to appreciate the unique challenges faced by biotechnology companies.

Broadly speaking, the path to commercialization of a new technology may be identified by three phases of evolution: phase one (science-driven), where primary emphasis is placed on scientific research; phase two (technology-driven), with primary emphasis on technology development and standardization; and phase three (commercialization), with primary emphasis on commercial development and application. Modern biotechnology perhaps provides an exemplar of a new form of knowledge production where academia-industry collaboration has been evident in all three phases of this evolution since its inception, driven largely by scientific and commercial requirements. Biotechnology management is a model based on multidisciplinary approaches and problem solving in the context of business applications. This model is characterized by the convergence of a diverse set of skills from a variety of disciplines.

The ultimate test of corporate strategy occurs in the marketplace. The biotechnology industry is finally starting to bring products to market. Most of the biotechnology companies are establishing links with larger, more established drug companies to give them the financial and marketing muscle they need for the next stage of their development. Marketing and sales experts are needed to study and develop markets and ultimately enable the delivery of products to consumers. The significant negative impact of patent expirations on sales represents a great opportunity for individuals who can successfully develop strong brand positions for pioneers to help them sustain sales post-expiration. The more you can explain and demonstrate the understanding of the market, the increasing levels of confidence investors have in the concept and ultimately the firm.

Biotechnology is a very capital intensive business. The manager of a biotechnology start-up faces the challenge of fostering a transition within the founding team from science-oriented to commerce-oriented thinking and action. The central role of funding and financial management in biotechnology establishes a demand for individuals with proven financial expertise. Furthermore, the potential for substantial financial returns has attracted great interest for biotechnology in public markets, creating a demand for analysts, venture capitalists, and investment bankers with an understanding of biotechnology-related financial issues. The major challenge for the biotech manager is the timely acquisition of funding to picking up a financial partner in the strategic business.

Likewise, the primary resource of any technology enterprise is its people. Attracting, motivating and retaining these highly trained individuals are the key concerns of the human resource manager. However, keeping those hearts and minds loyal to the cause is no easy feat. Today's biopharmaceutical projects have a high degree of complexity. In order to properly utilize staff and other resources like suppliers and internal groups, a manager must be able to clearly visualize the desired goal. Human resources constitute an increasingly critical function in any biotechnology company, particularly in an industry that's in an increasing state of inflation. Middle managers and human resources experts are needed for their specialized abilities.

All businesses have to keep ahead of the competition and there is no business activity more dependent on innovation than biotechnology. The creation of innovations in a knowledge intensive biotechnology sector had a profound impact on the biopharmaceutical sector. Considering the prospectus of patenting new drugs and diagnostics both the inventor and a manager of an invention-intensive business will need to understand to make meaningful decisions on the subject. Because of the importance of intellectual property protection in biotechnology, the life science graduates with technical and legal expertise are needed to write and defend patents and assist in the collection and evaluation in the competitive biotechnology industries.

Although, an attempt is made to touch upon all the major aspects – marketing, finance, human resource, intellectual property, etc. - that are part of the business, it would be impossible to cover biotechnology management in one such write-up. In such a rapidly changing environment much of the technology and managers will appear very different next year, next month, and even tomorrow. What an exciting industry it is! It is risky and deeply rewarding. It is fascinating and frustrating but never dull. For all that excitement, you must become, like me, part of the experiment.


  1. Konde, V. (2007). Biotechnology Management Blog.
  2. Konde, V. (2008). Biotechnology in India: Public-private partnerships. Journal of Commercial Biotechnology (2008) 14, 43–55. doi:10.1057/palgrave.jcb.3050079; published online 27 November 2007

Monday, December 3, 2007

Crisis Management - A lesson to learn in Corporate Communication

All businesses mess-up on occasion

What to do when it (all) goes wrong?

  • Growing Up Is Hard to Do
  • Crisis need not strike a company purely as a result of its own negligence or misadventure.
  • Often, a situation is created which cannot be blamed on the company - but the company finds out pretty quickly that it takes a huge amount of blame to hit the ball in its response.
  • Clearing the Hurdles & Accelerating the Business

High-profile incidents in the bio/pharmaceutical industry

  • Product integrity is constantly challenged, from patent infringement to counterfeits to life-threatening side effects during first-in-human clinical trials.
  • Each step of the product life cycle, from idea inception to post-marketing surveillance and product retirement, raises potential legal, commercial, financial and ethical risks.
  • Product protection risks should be managed through an anticipatory, proactive approach employing mechanisms found to be successful in monitoring, controlling, and correcting vulnerabilities throughout the product’s life cycle.

Johnson & Johnson and Tylenol Poisoning

  • In 1982, Tylenol - 35 % of the US over-the-counter analgesic market - represented 15 % of the company's profits.
  • Unfortunately, at that point one individual succeeded in lacing the drug with cyanide. Seven people died as a result, and a widespread panic ensued about how widespread the contamination might be.
  • By the end of the episode, everyone knew that Tylenol was associated with the scare. The company's market value fell by $1bn as a result.

Cost and benefit analysis

  • The cost was a high one. In addition to the impact on the company's share price when the crisis first hit, the lost production (destroyed goods) and public law suits as a result of the recall were considerable.
  • Within five months of the disaster, the company had recovered 70% of its market share for the drug - and the fact this went on to improve over time showed that the company had succeeded in preserving the long term value of the brand.

What did the company do?

  • They acted quickly, with complete openness about what had happened, and immediately ordered recall from every outlet - not waiting for evidence to see whether the contamination might be more widespread
  • They showed themselves to be prepared to bear the short term cost in the name of consumer safety. That more than anything else established a basis for trust with their customers
  • Developed better product protection- tamperproof packaging that would make it much more difficult for a similar incident to occur in future.
  • They achieved the status of consumer champion.

What the company didn't do was to avoid responsibility.

Vital Communications: Internal & External

  • On all media interviews, expressed sympathy and regret for all those affected and immediately promised that the company would pay all medical costs.
  • Conducted regular company-wide conference calls on a daily basis, giving employees the chance to ask questions and get the latest information. This approach proved so popular that the practice of quarterly calls survived the crisis.
  • Within 24 hours, the company had an explanatory web site (its first) that received 20,000 hits in 48 hours. The company spoke to the press, appeared on TV and carried out direct advertising with the website address. All possible attempts were made to provide up to the minute, accurate information.
  • There were critics who refused to credit the company with any integrity whatsoever - but was considered that as an exercise in crisis management

What can other businesses learn from such a biotech blow-up?

  • Could J&J have done anything differently?
  • Present-day threats and potential costs associated with recalls have never been higher -- one recall can put you out of business. As companies seek to increase their control and in turn, minimize their risks, they discover that varied activities within and outside the organization must be considered, and operations up and down the supply chain must be addressed.
  • When potential issues are identified, you can quickly determine the underlying cause, make the necessary corrections, and provide supporting documentation.

Please share your thoughts over this case!