The academic paper “Bio-pharma: A financialized business model” construct a complementary financialized business model of SME bio-pharma that reveals how the product innovation and development process conjoins with speculative forces in capital markets.
To conceptualise this descriptive business model three organising elements was used: narratives about pipeline progress that may (or may not) lead to additional funding from equity investors or other investing partners, capital market conditions that impact on the supply of funding and market valuations and the variable motivations of equity investors who are not in a development marathon but a relay race anxious to pass on ownership and extract higher returns on invested capital through realised market value.
Bio-pharmas are, in effect, constituted as investment portfolios of innovations where products in pipeline and firms trade for shareholder value. In this speculative innovation, capital market liquidity business model complementary narratives and favourable capital market conditions are required to keep it all going.
The paper published in Critical Perspective on Accounting 2010 was written together with Professor Colin Haslam, Dr Nick Tsitsianis and Dr Pauline Gleadle. Read more about the paper at Critical Perspectives on Accounting - Bio-pharma.