A Role for Virtual Biotechnology Companies in Drug Discovery and Development?

Abstract

The orthodox business model of many drug discovery and development companies centres on adding value to early-stage discoveries prior to engaging with large pharmaceutical companies to bring products to market. Anecdotal observations suggest some companies are moving to a ‘virtual’ business model - instead of employing in-house scientists, a skeletal management team runs the company and out-sources all research and development. This article presents a novel method to determine whether companies are virtual, based on author bylines in peer-reviewed journal articles.

Applying this method to Australian companies in this sector, the size of the cohort identified as virtual was much larger than anticipated, around 52%. The accuracy of this method has been verified statistically using interview data. This article discusses the value and limitations of this method, positing that it can be used to analyse industry and policy implications that may result from widespread adoption of the virtual model