Monthly Archives: May 2008

The Journal of Commercial Biotechnology is looking for papers on investing strategies in the biotechnology space. The scope can include valuation models, strategies to identify under-valued companies, case studies in developing and managing a portfolio, etc.

The Journal of Commercial Biotechnology is a peer-reviewed journal focused on the business of biotechnology. More information, instructions for authors, and a sample issue are available at

For those attending BIO2008 in San Diego this year, I’ll be doing a signing of my books on Wednesday June 18th from 10-11. There will also be a limited number of free copies of the Journal of Commercial Biotechnology, so be sure and show up early!

I’ll also be speaking on Friday morning:
Title: Scientific Communications – Trends and Liabilities
Track: Public Relations/Investor Relations
Date and Time: Friday, June 20 9:00 AM – 10:30 AM

Hope to see you there!

I’ve nearly completed revisions for the third edition of Building Biotechnology, the leading textbook on the business of biotechnology. This new edition has several new chapters, new case studies, updated case law, and fresh industry stats — more than 100 pages longer than the second edition.

I’m looking for volunteers to review the chapters and potentially contribute case studies of:

- Entrepreneurship
– Career development
– Managing reimbursement
– Communications
– General management

Reviewers and contributors will be given a free copy of the final edition (an $80 value).

The chapter list is pasted below. If you are interested in reviewing/contributing, please drop me a brief note stating your interest and the chapter(s) you would like to review or contribute to. For an example of previous contributions, see these samples.



1 – Introduction

2 – The Development of Biotechnology

Knowledge and Skills
Industry Trends


3 – Introduction to Molecular Biology

Information Flow in Molecular Biology
The Big Picture

4 – Drug Development

Biologic vs. Pharmaceutical Drug Development
The Five Basic Steps of Drug Development
Qualities of a “Good” Drug

5 – Tools and Techniques

Combinatorial Chemistry
Drug Delivery
Functional Genomics

6 – Applications

Green Biotechnology: Agriculture
White Biotechnology: Industrial Processes and Bio-based Products
Red Biotechnology: Medical Applications

Laws, Regulations, and Politics

7 – Intellectual Property

When Patents Expire
Patent Infringement, Exemptions, and Licenses
Trade Secrets
The Role of Intellectual Property in Biotechnology

8 – Regulation

Food and Drug Administration
Department of Agriculture
Environmental Protection Agency
Securities and Exchange Commission

9 – Politics

Balancing Innovation Incentives with Economic Constraints

The Business of Biotechnology

10 – Biotechnology Company Fundamentals

Company Formation
Business Model
Company Characteristics

11 – Finance

Development Stages and Funding
Private Equity
Public Markets
Other Funding Sources

12 – Research and Development

R&D Stages
Project Selection
Outsourcing Innovation

13 – Marketing

Marketing as a Guide for R&D
Market Structure and Marketing Environment
Marketing Planning and Strategy

14 – Licensing, Alliances, and Mergers

Licensing and Outsourcing
Alliance Partnerships
Mergers and Acquisitions
Selecting Partnership Options

15 – Managing Biotechnology

Starting Up
Managing R&D
Intellectual Property Protection
Management Changes with Growth
Dealing with Failure
Public Relations

16 – International Biotechnology

Benchmarking against the United States
Intellectual Property Protection


17 – Building Biotechnology

Business Models
First Steps
Selecting Opportunities and Business Planning

18 – Investing

Caveat Emptor
Investing in Biotechnology

19 – Career Development

Job Descriptions
Ph.D., MBA, or Both?

20 – Final Words


Internet Resources

Annotated Bibliography


The science of biotechnology is tough. R&D can be unpredictable, and most products need regulatory approval before they can be sold. But biotechnology companies also need to worry about other problems, like management issues. The case of Dyadic’s illustrates some of the often-overlooked challenges in commercializing biotechnology.

Mark Emalfarb founded Dyadic in 1979 as a supplier of tools for stone-washing jeans. When cellulase enyzme technologies for stone-washing emerged, they threatened Dyadic’s use of pumice stones. Rather than fight this change, the company sought to out-innovate early cellulase suppliers and developed a promising fungal expression system with the potential to produce large quantities of complex proteins and enzymes, including cellulase. Opportunities also exist in cellulosic biofuel production and drug manufacturing.

As is often the case in dynamic industries, innovators can be blindsided by unexpected challenges. In spring 2007, Dyadic became aware of operational and financial improprieties at its Asian subsidiaries. An investigation conducted under the supervision of the board of directors audit committee found that Emalfarb had willfully concealed facts relating the improprieties, which led to his termination.mebeli [a representative from Dyadic opted not to comment on this case, and instead directed me to their press release archives]. A report detailing their justification for firing Emalfarb does not imply direct malfeasance, but claims that Emalfarb did not take strong-enough action to stop off-the-books and tax-evading transactions.

Emalfarb, who maintains his innocence, is the largest shareholder of Dyadic, and has been fighting to regain control of the firm. In February 2008 Emalfarb and two hedge funds, who collectively own more than 50% of the shares, issued a letter to the company demanding the resignation of the new CEO and two board members. Interestingly, despite the protests of this group representing a controlling share of the company, the battle for control continues.

Sadly, this is a case with no clear winner. Regardless of who will direct the company in the future, the share price has been decimated and growth opportunities have certainly been missed. Rather than focusing on developing applications of Dyadic’s core technologies, the founder and company are engaged in legal battles.

[Update: Emalfarb regained control of the company]

Courtesy of

Drug Patent Expirations in May 2008
*Drugs may be covered by multiple patents

Tradename Applicant Generic Name Patent Number Patent Expiration
HABITROL Novartis nicotine 5,016,652 May 21, 2008
REQUIP Glaxosmithkline ropinirole hydrochloride 4,824,860 May 19, 2008
SARAFEM Lilly fluoxetine hydrochloride 4,971,998 May 20, 2008

Courtesy of