The Value Creation Models of Biopharmaceutical Industry -The Case of a Cell Therapy Company
Date Issued
2015
Date
2015
Author(s)
Liu, Wei-Bo
Abstract
Innovation would be the major driving force for industry evolution; moreover, it is the core competence for a corporate value creation, as global market towards knowledge-based economy, to have a high efficiency and continuous innovation become the key success factor for corporate to keep their competitive advantage and the capabilities of advanced technology among industry. Recently, many blockbuster patents have expired, and governments have been encouraging the use of generic drugs in order to reduce overall healthcare cost, and this result to the phenomenon of Patent Cliff as patented drugs expired and the sales would be dramatically drops in the next year. However, to acquire patents through continuous R&D and technological innovation can be the most important element for biopharmaceutical industry to ensure they are able to gain from premium profit instead of competition while product launched. Cell therapy is the emerging biotechnology and the most important part of regenerative medicine that utilize healthy cells to repair, replace damaged or necrotic cells and due to illness, injury and damaged tissues or organs. Although cell therapy technologies or products still belong infancy, it has a great potential to become the drive for the continuation of the value innovation and the breakthrough of patent cliff dilemma, especially in big pharma or startup biotech company. In this study, a startup company, Juno Therapeutics Inc. has conducted as a case study to explore how innovative technologies in biopharmaceutical industry create values; this study also includes the status quo of the cell therapy industry and the views on future trends through literature review and various market research reports. An aim to comprehend the strategy and model of the value creation in the emerging cell therapy field via analyzing the business model of this startup case study, this analysis result can be used in cell therapy industry to increase revenue momentum and an assessment whether it’s an opportunity to integrate into the value chain of global biopharmaceutical industry or not. From this case study, we found that the transformation of core competence would formulate its value proposition, which includes providing innovative CAR and TCR technology, focusing on the unmet medical needs market, collaborating closely with advanced clinical institutions, as well as customizing personal medical products and services, the value creation strategy of cell therapy technology would base on these moves. In addition to the key success factors (KSFs) managed effectively, this case demonstrates technological innovation value via the efficiency of clinical trials, and familiar with the US FDA regulations and processes; to fulfill the unmet medical need markets, these are the KSFs for shaping this case company''s value creation model. We also found from this study that the cell therapy technology is lacking spec benchmarking reference base due to its too new to the market and hard to compare with the current products. Only the efficacy of clinical trials would dominate the key of industry success, which is the most important element to the value creation. Along with the regenerative medicine field towards cell therapy field, the market value will be crossing the targeted cancer and stem cell therapy market. According to the IMS health and Visiongain statistics, in 2013, the targeted cancer drug market was around $ 41.8 billion, and the stem cell market will reach $ 8.88 billion in 2016. It means the global cell therapy market will reach more than $50 billion and become the new momentum to generate revenue for global biopharmaceutical industry.
Subjects
Value Creation Model
Biopharmaceutical
Cell Therapy
Regenerative Medicine
Cancer Immunotherapy
Unmet Medical Need
SDGs
Type
thesis
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