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Fortune magazine recently published an article on the growing trend of generic companies challenging pharmaceutical drug patents. I enjoyed working with the writer to help layout the industry landscape, and share my knowledge of drug patents and trends from DrugPatentWatch.com. It’s a good read, and it does an excellent job of laying out the legal, regulatory, and economic mess that the pharmaceutical industry has become.

Journal of Commercial BiotechnologyI have selected these management-themed articles from the Journal of Commercial Biotechnology, exploring the practical aspects of product innovation, R&D, patent law and marketing. The collection is divided into distinct sections: Commentary; Policy; Commercial Strategy; Valuation/Licensing; Funding; Intellectual Property; International; and Case Studies.

These articles are only fully readable for a limited period of time, so please feel free to read, download and forward them on to your colleagues while they are still available.

You can view the full collection on the Journal’s website: alternatively, the articles included in this collection are listed below:

Commentary

Building biotechnology by design: Role of biotechnology in development
Patrick Nef

Why data exclusivity is the new patent protection
Peter J Pitts

The UK Government’s strategic approach to the biotechnology industry
Lord Sainsbury

Policy

Public–private partnerships in trust-based public health social networking: Connecting organizations for regional disease surveillance (CORDS)
Louise S Greshama, Leslie A Pray, Suwit Wibulpolprasert, Beverly Trayner

Building biotechnology in Okinawa
Yali Friedman

Startup America: What it includes and opportunities for innovators
David B Orange

Commercial Strategy

Revitalizing portfolio decision-making at Merck Serono S.A.
Vincent Aurentz, Bernhard Kirschbaum and Markus Thunecke

Rethinking commercial strategy – A patient-centered commercial model
Sanjay K Rao

Building biotechnology teams: Personality does matter
Anne S York, Kim A McCarthy and Todd C Darnold

Valuation/Licensing

Practical approaches to early stage life sciences technology valuations
Stephen Mayhew

Pharmaceutical royalties in licensing deals: No place for the 25 per cent rule of thumb
Nigel Borshell and Adrian Dawkes

Valuation of complex license contracts
Ralph Villiger and Boris Bogdan

Finance

R&D spending and sources of funding of private US biopharmaceutical firms seeking to go public
David R Williams and Richard W Pouder

Multiyear patterns regarding the relative availability of venture capital for the US biotechnology industry
J Leslie Glick

When should you fire the founder
William Bains

Intellectual Property

Dominating global intellectual property: Overview of patentability in the USA, Europe and Japan
Thomas J Kowalski, Antonio Maschio and Samuel H Megerditchian

Kinik: Raising the stakes for importing products derived from US patented processes practised abroad
Scott B Familant

International

Bioentrepreneurship in Japan: Institutional transformation and the growth of bioventures
Michael J Lynskey

Biotechnology in Cuba: 20 years of scientific, social and economic progress
Ernesto López Mola, Ricardo Silva, Boris Acevedo, José A Buxadó, Angel Aguilera and Luis Herrera

China 10-Point Patent Checklist: Integrating patents into an overall business strategy for a Western manufacturing entity in China
Catherine Sun, Sharon R Barner and Harold C Wegner

Commercial Case Study

Beacon Sciences: Commercialisation from biothreat detection to beauty enhancement
Rob Hanes, Damon Borich

Many biotechnology entrepreneurs favorably look back at times when financing and regulatory approval were easier to obtain. While future periods of investor exuberance may return, it is better to see these as market aberrations.

In periods of investor exuberance companies have been pushed to focus on low-probability, high-return, objectives such as approval and successful marketing of novel drugs for large markets. When this strategy works it is very profitable, but the more likely outcome is failure and destruction of wealth. A favorable strategy is to build a slower, stronger, company than can withstand developmental setbacks.

In a recent issue of the Journal of Commercial Biotechnology I expanded on this concept, providing examples from computer software and bioinformatics where initial products were outside of the company’s target market. This strategy can differentiate a company from competitors, provide evidence of ability to successfully execute on plans, and even provide revenues. For more, see the freely-available editorial on the JCB’s website.

Do you agree? Disagree? Sound-off in the comments below.

I’ve just had a paper published in Nature Reviews Drug Discovery, using data from DrugPatentWatch to profile the locations of drugPharmaceutical Globalization: Where are drugs invented? invention for the past decade.

The location of drug development is important for two reasons. Firstly, it is important to track the global spread of innovation. Much late stage drug development (e.g. clinical trials) and manufacturing have moved to lower wage-cost countries, but trends in the location of invention has not been clearly described. Knowing where drug invention is occurring can help streamline drug development by identifying ideal locations for research facilities. Secondly it is important to know where invention is occurring, because that may affect which drugs are developed. Early-stage research funding and, by extension, the research itself, is likely to be focused on conditions affecting the countries in which these activities are occurring. For example, research in the United States might focus on conditions such as heart disease and stroke, whereas research in Japan might emphasize stomach cancer.

By examining the patents covering drugs developed over the last decade, I was able to ascertain the locations of the inventors. Focusing on inventors is important because it gives a clear indication of where the control of the invention was located. Patents are required to list the names and locations of the individual(s) who maintained intellectual domination of the invention. Failure to list all inventors, or listing too many inventors, can yield an invalid patent. Whereas one might consider assessing globalization of invention by focusing on the location of the company funding the research, or the company listed on the patent, these strategies are flawed. The company funding the research may not be the same company which conducted the research (e.g. Japanese companies funded many of the early US biotechnology companies, but the inventions occurred in the US by US researchers, so focusing on the funder might produce the incorrect conclusion that the innovation was Japan-based), and many companies have facilities in multiple countries, making it impossible to determine in which of the countries an invention might have occurred. Looking at the company listed on a patent is also flawed. The company listed on a patent might not have been the company that housed the researchers or, even worse, it may be a tax shelter based in a country where no invention occurred. So, by focusing on the locations of the listed inventors it is possible to determine where the invention occurred. An additional benefit of this strategy is that it enables inclusion of patenters from numerous countries. For example for a patent listing one US-based and two Canadian inventors, the US would be given 1/3 credit for an invention, and Canada 2/3 credit.

So, what did I find? In short, the US and the legacy pharmaceutical countries in Europe (United Kingdom, Germany, Sweden, France and Switzerland) have been responsible for the bulk of new drugs invented over the past decade, and there is no indication that this dominance is waning. Emerging economies such as India and China were largely absent. For more details, please see the paper at Nature Reviews Drug Discovery: Location of pharmaceutical innovation: 2000–2009.

You can also get more detailed information on the complete set of drug inventors and where they live in my Global Drug Patent Inventor Report and Individual Country Drug Patent Inventor Reports.

What do you think of the findings? Are you surprised? Do you disagree? Sound off in the comments.

The panel on applying Design Thinking to biotechnology was well received, and I look forward to writing up my observations.

I’m now in Japan for a workshop on developing a biotechnology cluster. The U.S. biotechnology industry – the largest in the world – was basically developed with  strong  support from Japanese pharmaceutical and brewing companies. I look forward to developing new insights on what Japan can do to bolster its biotechnology industry.

I will be moderating a panel on the roles of biotechnology in development at the upcoming A Better World by Design conference at Brown University. The theme of the panel will be the promise and challenges of implementing biotechnology advances for public benefit, with a focus on topics such as disease prevention, agricultural improvements, and political hurdles.

The panel will be on October 1st at Brown University. For more details, see the A Better World by Design website.

I will be moderating a panel on the roles of biotechnology in development at the upcoming A Better World by Design conference at Brown University. The theme of the panel will be the promise and challenges of implementing biotechnology advances for public benefit, with a focus on topics such as disease prevention, agricultural improvements, and political hurdles.

The panel will be on October 1st at Brown University. For more details, see the A Better World by Design website.

Once again, the Scientific American WorldView project continues to measure global biotechnology innovation.

I had the pleasure of serving as lead editorial consultant of this project, and my mission was to cut through the marketing messages and develop a coherent measure of biotechnology innovation on a country-by-country basis.

The April 2010 issue of the Journal of Commercial Biotechnology is now available. The links below will take you to the abstract for each paper:

Volume 16, Issue 2

Editorial

Case studies in innovation: What enables outstanding achievements?PDF
Yali Friedman

Articles

Biotechnology marketing: Insider and outsider viewsPDF
Päivi Eriksson, Heidi Rajamäki
The current M&A environment and its strategic implications for emerging biotherapeutics companiesPDF
Mohan Sowlay, Scott Lloyd
Practical approaches to early stage life sciences technology valuationsPDF
Stephen Mayhew
Commercializing synthetic biology: Socio-ethical concerns and challenges under intellectual property regimePDF
Trichi Saukshmya, Archana Chugh
From carbon to carbohydrates: Corporate strategies for biopolymer technology developmentPDF
Avrath Chadha
Biotechnology in the capital region of EuropePDF
Jan Wauters

Legal and Regulatory Updates

Legal and regulatory updatePDF
Gerry Kamstra, John Wilkinson

Conference Report

Funding the dream at the Mid-Atlantic Biotech ConferencePDF
Harley King

Book Reviews

Book Review: Getting to Plan B: Breaking through to a better business modelPDF
Arlen D Meyers
Book Review: Driving innovation – Intellectual property strategies for a dynamic worldPDF
Barry J Marenberg
Book Review: Intellectual property, medicine and health: Current debatesPDF
Stanley P Kowalski
Bird & Bird

As promised, I have posted my observations from the 2009 Kyoto Prize. I had an opportunity to interact with each of the laureates, and focused on the question of how they were able to accomplish their exemplary achievements. It is not enough to simply be brilliant or hard-working — all their peers likely share these characteristics. What are the differentiating factors that enabled their unique achievements?

My observations appear in the latest issue of the Journal of Commercial Biotechnology, and are available for viewing without subscription.