Using an effectuation theory lens, we study reverse stock splits in the biotech industry where significant uncertainty makes specific scenarios of success difficult to predict. We conjecture and find that, in contrast to other environments where there is less uncertainty, reverse stock splits in the biotech industry are followed by positive abnormal returns over the subsequent 1- to 12-months. Also consistent with our effectuation-based predictions, we find that these returns are positively related to the reverse split ratio, size, cash holding, and long-term debt, and negatively related to the market-to-book ratio and firm age. We also find that liquidity increases after a reverse stock split. These results suggest that the concept of effectuation theory is better suited to analyzing reverse stock splits in the biotech industry.
The paper presents the limited quantitative and qualitative analysis of the biotechnology and ICT industries in Lithuania and Estonia, as well as public policy instruments aimed at supporting the development of these industries. In depth analysis of the employment profile of the select biotechnology and ICT enterprises is provided. The paper suggests that existing public policy instruments designed to promote enterprise and innovation fail to differentiate among technological fields. This and other factors cause preference to the short cycle technological fields, such as ICT. Very few instruments are available for the needs of the biotechnology industry, and the long cycles and return horizons of biotechnology development are not recognized. These oversights are detrimental to the biotechnology sector and high-tech local employment. Suggestions on the policy reform are made.
In recent years cell therapies have evolved and matured, moving from academia to industry. Scale up of a process is the natural path of any product evolutionary development and maturation, this process not only allows higher manufacturing capacity to meet demands but rather to increases the yields and reduces cost of goods. Cells are living things that react to the environment and conditions in which they grow, therefore process changes should be done as early as possible. The traditional 2D culturing systems can be truly up scaled, therefore there is a need to advance to bioreactors that will influence the product. Additionally, in order to make cell therapy a viable one, the cost of manufacturing is critical. Cost drivers such as media, serum, footprint, human resource and infrastructure must be optimized without changing the cells critical quality attributes. The paper analyze the main cost drivers on the cost of goods and is based on the experience of cell manufacturing in both traditional 2D and three dimensional (3D) bioreactor systems produced in Pluristem therapeutics GMP site. Furthermore, the paper discussed possible process development steps to insure cost efficiency emphasizing the need and benefit of early process development investment.