ISBN: 3790800333
TITLE: Entrepreneurship
AUTHOR: Grossmann
TOC:

Foreword (by T.J. Allen) VII
Foreword (by J. Meier) IX
Preface XI
1 Independent Biopharmaceutical Companies and Their Specialization in Drug Discovery Technologies 1
1.1 Drug Discovery in Research and Development Pipelines 1
1.2 Growth Problems Generated by R&D Duration 14
1.3 Consequences of Human Genetic Research on Drug Discovery 20
2 Model Structure for High-Technology Firms and Its Dynamic Behavior in Start-Up Phases 33
2.1 Macro Structure for Entrepreneurial Management of Start-Ups 33
2.1.1 System Dynamics as Research Methodology 33
2.1.2 Advancement of a Novel Disease Target Technology as Phase Objective 42
2.1.3 Impacts of Entrepreneurial Confidence on Voluntary Leaving, Absorptive Capacity, and Corporate Planning Horizon 49
2.2 Micro Structure that Determines High-Technology Performance 59
2.2.1 Average Research Experience of Scientists 59
2.2.2 Diversity of Scientific Disciplines 69
2.2.3 Research Quality as Dependent on Understanding of Failures 75
2.3 Dynamic Behavior from Start-Up Model Experiments 79
2.3.1 Surprise Behavior of Technology Effectiveness 79
2.3.2 Start-Up Success as Determined by Conditions of Corporate Foundation 96
2.3.3 Policy Design to Accelerate Start-Up Success 111
3 Model Structure and Dynamic Behavior for High-Technology Firms in Transition to Growth Phases 127
3.1 Macro Structure for Contract Research 127
3.1.1 Scope of Transition Model, Boundaries, and Time Horizon 127
3.1.2 Feedback Structures for Growth and Growth Saturation 130
3.1.3 Principal-Agent Theory to Investigate Research Contracts 135
3.2 Micro Structure for Contract Research on Novel Disease Targets 142
3.2.1 Industry Demand for Research Contracts 142
3.2.2 Planning of Scientific Laboratory Personnel 148
3.2.3 Obsolescence/Irrelevance of Scientific Experience and Contract Research Funding 150
3.3 Dynamic Behavior from Transition Model Experiments 154
3.3.1 Simulation Studies on Corporate Transition 154
3.3.2 Attractiveness Fluctuations from Technology Effectiveness 162
3.3.3 Firm Value from Contract Research Funds 167
4 Economic Value Creation in Transition Phases: Access to Equity Capital 173
4.1 Value Creation from Drug Candidates in Collaborative R&D Pipelines 173
4.1.1 Flow of Drug Candidates Through Pipeline Phases 173
4.1.2 Present Value of Royalty Expectations from Drug Candidates 188
4.1.3 Capital Asset Pricing Model for Discount Rate Estimation 193
4.2 Simulation of Value Creation 197
4.2.1 Present Values of Pipeline Phases 197
4.2.2 Option Premium as a Complement to Present Value 202
4.2.3 Option Premium and Present Value for Investment Decisions 209
4.3 Equity Financing for Growth Phases 223
4.3.1 Fund-Raising Success as Determine by Value Creation in R&D 223
4.3.2 Attractiveness to Investors from Research Track Record and Collaborative Partnership 227
4.3.3 Sensitivity of Fund-Raising Success to Value Creation in R&D 233
5 Strategies for Growth Phases to Sustain Independence 237
Bibliography 239
Appendix 1: Parameter List for Start-Up Model 259
Appendix 2: List of Equations for Start-Up Model 261
Appendix 3: Parameter List for Transition Model 299
Appendix 4: A Dynamic Theory on Cost of Capital for Biotechnology Firms 301
1. Dependency of Cost of Capital on R&D Pipeline Phases 301
2. Leverage Concept to Explain Cost of Capital for Investment in R&D Projects 305
3. Consequences for Management Decisions 313
Index 323
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