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Volume 23, Issue 5
This practicum combines business elements with scientific concepts.
The importance of the biosciences industry is unmistakable. Companies in this sector now have revenues of approximately $1.2 trillion per year and growth rates of 6–8% per year. This growth has fostered a need for managers that possess both scientific knowledge and business acumen. Traditional scientific and business programs provide academic backgrounds for the separate disciplines, but lack the sufficient crossover for biosciences managers who need both. To fill this gap, programs augment the graduate curriculum with one or two classes to prepare the manager for an awareness of science, or conversely, the scientist with some rudiments of business. However, this approach falls short in providing the newly minted manager or scientist with the unique background that the biosciences area requires. Biosciences managers must understand the connections between and among all areas associated with the field. Companies representing red (healthcare), white (industrial products), and green (nutrition and agriculture) biotechnology have voiced a desire for such bio-entrepreneurial managers. The North Carolina State University (NCSU) BioSciences Management program was created to fulfill these needs.
Vincent Turula, PhD
Further complicating management of the biosciences organization is the rapidly changing paradigm of product and service development; this includes the business model used to generate such deliverables. The biosciences industry is complex, ambiguous, fast-evolving, highly entrepreneurial, science-driven, expensive, and ethically charged. Companies require specially trained managers, who are aware of these dynamics to compete and grow their organizations effectively. This has become particularly important of late because the availability of credit and venture capital to biosciences companies has become scarce, making growth all the more challenging. The new leaders and innovators of these industries must be cognizant of, and sometimes fluent in biotechnology; more importantly, they must understand how these technologies affect their particular businesses and operations. They will require the skill sets and behaviors to participate in and become architects of evolving business models such as open collaboration innovation.1
The NCSU BioSciences Management Initiative has developed a curriculum that contains elements of traditional business concepts intertwined with scientific concepts. The curriculum contains an initial core of business fundamentals onto which biotechnology and pharmaceutical courses are layered. These involve dynamic areas such as finance, entrepreneurship, alliance forming, intellectual property, innovation management, and marketing, and serve to provide additional background. A principal aspect of the BioSciences MBA is the practicum, a short-term project where students work directly with bio-agricultural, bio-industrial, medical devices, diagnostics, or pharmaceutical firms. The BioSciences MBA culminates in the practicum, which encompasses many aspects of the degree program. The outcome is that students learn the tools needed to pursue management in biosciences and pharmaceutical environments in either science-based functions, such as research and development (R&D), or business functions. In turn, the sponsor receives approaches and solutions to improve performance and positions themselves for enhanced competitive advantage.
(ROB MELNYCHUK, GETTY IMAGES)
The practicum also is the beginning of interaction with companies. The students begin to understand the needs and wants of the companies and industry and the companies begin a partnership with the MBA program. This produces a continuous feedback loop of information to program organizers and is used to update and keep the program focused. This essentially is an action-learning module that is specific for companies so that information generated is instantly useful to the company.
Students select the practicum subjects based on their interest and degree focus area. Because many of the students already have backgrounds in biotechnology, they are encouraged to select projects outside of their area of expertise. During the practicum, the students use the management tools they learned during the first year of the MBA program and apply it to the problem or project of the sponsor institution. Those participating in the practicum have many options ranging from evaluation of supply chain efficiencies, performing data mining, examining company's patent positions, or surveying the competitive landscape to forge strategic partnerships. An extensive array of potential sponsor organizations (approximately 550 companies and organizations) exists in proximity to NCSU within the greater Research Triangle Park area, making these projects readily accessible.2 Table 1 lists companies that have projects in the NCSU BioSciences Management program. Organizations that have had or have current NCSU MBA practica are indicated with "yes" in the practica column, and those involved in the industry advisory board (column IAB) are also indicated with a "yes".
Table 1. The NCSU BioSciences Management Initiative network of biotechnology and pharmaceutical companies in the greater Research Triangle Park area. The table shows which companies have employees as students in the BioSciences MBA program, have been sponsors of practica, and if the organization is a member of the industry advisory board (IAB) of the program.
The project teams are assembled and are composed of several students with similar interests but diverse professional backgrounds. Professors guide the team in the context of the academic exercise. The teams are introduced to the sponsor organizations and the project objectives in an initial meeting. At this time, the teams becomes familiar with the sponsor organizations, their mission, and interests. Project goals are defined and clarified as a precursor to project execution. Deliverables are defined by interaction with key members from the sponsor organization. Standing meetings are scheduled and arranged so that progress is monitored and directed by interactions with both professors and sponsors.
Generally, the project is planned and conducted for completion within an academic term. If additional work evolves beyond the term, a consecutive or follow-up practicum is arranged. The practicum is designed to emulate the biosciences environment and to foster teamwork. Given the time constraints of the project, organizational structure and discipline is imposed by the teams themselves. Generally, workloads are divided among team members as appropriate. The completion of intermediate milestones is mapped and progress tracked toward finalization. Facile access to a centralized database and project management tools are necessary, and therefore web-based user groups, MS Project, and Basecamp, are used.
The practicum culminates with a team presentation of its findings to the sponsors and NCSU professors. Additionally, a key value-added deliverable, summarizing important information and data gathered during the project, is provided to the sponsor.
The traditional business model of pharmaceutical development involves centralized decision-making with top company officials making choices regarding resource allocation. But as companies have grown larger and expanded globally, those executives have become more distant from the research. This leads to poor decisions, miscommunications, non-communications, fewer experimental drug candidates, and missed opportunities. Failure of this model to achieve success does not necessarily stem from a lack of good candidate products, but rather from the inability of the management to overcome the difficulties and challenges encountered in this new environment. As a result, reliance on smaller, more agile biosciences organizations to feed pipelines has become more prevalent, and a new paradigm based on biosciences–pharmaceutical partnering is evolving.3
Described here is one such project in which efforts were made to identify a subset of pharmaceutical companies suitable for partnering with a sponsor biosciences organization. The methodology used for screening the industry to identify potential partners is described and major deliverables explained.
The sponsor organization was The Hamner Institute for Health Sciences (Hamner). This research institution focuses on translational research in biotechnology and pharmaceutical safety. Hamner has been building on its successes in these areas and sought corporate alliances and partnerships to advance its efforts. The NCSU practicum team was assembled to facilitate a networking strategy that included students with experience in the focus area of metabolic disease research, specifically type 2 diabetes, as well as interests in building strategic alliances.4 Additionally, these students possess higher level life sciences degrees and currently work in bioprocessing and manufacturing in large pharmaceutical and startup biosciences companies.
The goals were to identify what major pharmaceutical companies were doing in the area of type 2 diabetes, and how these programs might gain from Hamner's research. Fundamental research from Hamner could help a company improve its R&D productivity by identifying novel pathways to target and help characterize existing lead molecules for clinical performance.
A flow-diagram (Figure 1) shows how a two-pronged approach was used to match the Hamner strengths with potential partners. First, the team conducted interviews with Hamner researchers involved in type 2 diabetes to gain an understanding of the ongoing research at Hamner and its core competencies. Next, the team categorized specific research projects to match internal strengths with industry needs.
Simultaneously, the team surveyed R&D and commercial activities in type 2 diabetes through a market analysis to gauge the commercial landscape and identify pharmaceutical companies with sustained efforts and long-term dedication. The focus of the survey was market size, availability of approved therapies, and corresponding R&D pipelines. Through this survey, it was determined that type 2 diabetes is a global, growing, and potentially lucrative market, currently dominated by five to six key pharmaceutical companies, and many potential partners exist in both industry and academia.
To evaluate the pool of potential partners, the team then used a systematic approach to score each partner based on the fit of its research pipeline and the strengths of Hamner. To accomplish this, the team created a template for patent searching to build a database for patent and literature information. The team examined patent activities, participation of companies in scientific meetings and publications, and classified R&D efforts as either internally focused or externally focused with a dependence on partnering and collaboration. The data were analyzed and scored for attributes of favorable partnerships in the major diabetes type 2 focus areas. The data are presented in Figure 2.
The intellectual property search was conducted with uniform search criteria on the Derwent Innovation Index. This database contains patent coverage from 1963 and covers 40 patent-issuing authorities worldwide. The Derwent Innovation Index allows users to perform in-depth analyses on a research area of interest as shown in Figure 3. For example, the Derwent database enabled the search of recent activity by Merck scientists in the area of peroxisome proliferator-activated receptors (PPAR). Patent search results showed that Merck has had a sustained internal development focus on PPAR for the past 10 years. PPAR research also was of interest to the Hamner scientists. A similar approach was taken for scientific journal publications and public domain searching sites such as PubMed and Web of Science. For example, Web of Science provides quick access to the world's leading citation databases and covers over 10,000 of the highest impact journals worldwide, including open access journals and over 110,000 conference proceedings. This practicum also investigated companies' participation in major diabetes scientific meetings. Business activities were gauged from press releases, annual reports, and marketing analyses, and depending on these activities, were categorized as either internally focused, alliance forming, or likely to acquire the technology. Also, science and business leaders were identified from public disclosures and added to the database for eventual contact.
After the analyses of patents, publications, and business activities were completed, the overall scoring of potential pharmaceutical company partners, as well as smaller institutions, was ranked. A higher score indicated a favorable strategic fit with a good potential for partnership. The results were presented to Hamner with an accompanying database containing all details, data, and contact information obtained during the exercise. The recommendation by the team was to pursue the top companies that offered the best chance of a successful and fruitful partnership. In summary, the team identified: 1) potential partners; 2) drug development programs that are focused on biochemical pathways where Hamner had specific expertise and knowledge; 3) specific individuals within these key programs who might serve as contact points for Hamner; and 4) where in the development process the expertise of Hamner might add value (e.g., toxicology, clinical development, and postmarket analysis). As a result of the practicum, Hamner used this information to contact potential partners. A future practicum team will use these results to refine further the pool of potential business partners with novel tools such as those discussed in Tech Mining.5
A Summary of Recent Practica
We acknowledge the guidance of the following individuals in the preparation of this report: Naina Bhasin, Neil Mason of The Hamner Institutes of Health Sciences, and Mac Rich from NCSU.
Vincent Turula, PhD, (above) is an associate research fellow at Pfizer BioTherapeutics and Vaccines Outsourcing, Navdeep Malkar, PhD, is a principal scientist at Seachaid Pharmaceuticals, Inc., and Richard E. Kouri, PhD, is the executive director, all at the BioSciences Management Initiative, Jenkins Graduate School of Management, College of Management, North Carolina State University, Raleigh, NC, 919.513.0128, firstname.lastname@example.org
1. Lindgardt Z, Reeves M, Wallenstein J. Waking the giant: business model innovation in the drug industry. In Vivo. 2008;26(6):1–6.
2. North Carolina Biotech Center. North Carolina's 10-year bioscience investment tops $1.2 billion. 2008 Nov. Available from: http://www.ncbiotech.org/biotechnology_in_nc/battelle/billiondollarspreadsheet.pdf
3. Hine D, John K. Innovation and entrepreneurship in biotechnology, an international perspective. Concepts, theories, and cases. Cheltenham, UK: Edward Elgar Publishing Limited; 2006.
4. Françoise S, Philip K. Building global biobrands. In: Taking biotechnology to market. New York: Free Press, Simon and Schuster; 2003.
5. Alan P, Scott C. Tech mining: exploiting new technologies for competitive advantage. New York: John Wiley and Sons; 2008.