How can firms and policy makers improve the performance of the UK biotech sector, at a time of declining drug discovery productivity? In particular, how can small firms respond better to increasing outsourcing of early stage R&D by big pharmaceutical firms whilst there is a squeeze on UK venture capital finance and public markets such as AIM exacerbated by the financial crisis?  And what can academics learn from this?

Team: Professor Charles Baden-Fuller (Bayes- Principal Investigator), Dr Sam Kamuiwo (Bayes); Professor Paul Nightingale (SPRU-Sussex - Co-PI), Dr Michael Hopkins (SPRU-Sussex), Dr Joanne Zhang (University of East Anglia), Professor Vincent Mangematin (Grenoble Ecole de Management)


We found that (smaller and newer) UK drug development firms are challenged in managing growth and capturing value, particularly as profitable exits are difficult. For example, in the period 1980 to 2010 only 13 firms managed to sell for cash to a large pharmaceutical company; but many more merged to ensure survival rather than properly exit. Firms financed themselves in various ways and some 40% did not use formal venture capital. These are more issues are explored in detail below.

"From Funding Gaps to Thin Markets" Nightingale P, Murray, G, Cowling, M., Baden-Fuller, C., Mason, C., Siepel, J., Hopkins, M., and Dannreuther, C.  London: NESTA, (June 2009) 36 pages; sponsored by: NESTA

"Buying big into biotech: scale, financing, and the industrial dynamics of UK biotech, 1980-2009" Industrial and Corporate Change (2013) 22 (4): 903-952. doi: 10.1093/icc/dtt022 Michael M. Hopkins, Philippa A. Crane, Paul Nightingale, Charles Baden-Fuller

Servant Firms in Drug Discovery Hopkins, M.M. R.A. Tinoco, P. Nightingale, C. Baden-Fuller Working Paper 2010 (presented at EGOS 2008, LSE, LBS and other workshops in UK and internationally)

Business Models

Identifying and developing appropriate Business Models was a key issue: there are distinct choices, one of the most important of which is whether to be virtual or integrated in research. We explored how this choice influences and is influenced by both funding and by the drug development trajectory.

We also used our project to advance theoretical knowledge on Business Models and organised a special issue with internationally acclaimed academics from Harvard, Wharton and other major business schools on the topic (Long Range Planning, April 2010).  And we have gained a £1.3 million EPSRC grant to follow up this work, (MAKE link to page on Business Models)

Special Issue on Business Models, April 2010,  Edited Charles Baden-Fuller, Benoit Demil, Xavier Lecoq, Ian (Mac) MacMillan Long Range Planning(April 2010)43 (2-3) 143-461

Business Models as Models, April 2010, Charles Baden-Fuller and Mary S. Morgan,
Long Range Planning (April 2010) 43 (2) 156-171

'From Recipe to Dinner: Business Model Portfolios in the European Biopharmaceutical Industry', April 2010, Valerie Sabatier, Vincent Mangematin, T. Rousselle, Long Range Planning, 43(2-3),  p431-447

When technological discontinuities and disruptive business models challenge dominant industry logics: Insights from the drugs industry, 2012, Valerie Sabatier, Adrienne Craig-Kennard, Vincent Mangematin, Technological Forecasting and Social Change79, 949-962

Shareholder returns and the exploration-exploitation dilemma: R&D announcements by biotechnology firms, 2007, Peter Mc Namara, Charles Baden-Fuller, Research Policy; 36 (4) 548-565,

Timing in business models and product market strategy tradeoffs: performance implications, August 2009, Dzidziso Samuel Kamuriwo, Proceedings of the Academy of Management,1-7 (CD) ISSN 1543-8643

Boards and Alliances

All young high technology companies need to form partnerships. We explore many dimensions of this activity. And our work is summarised in the papers listed below.

We found that many companies relied on their boards to act as an extension of the top management team, rather than as monitors and occasional advisors. This challenges current academic thinking and much policy advice, and we have developed advanced tool kits on the topic that have been road tested.

"Resolving the Tensions between Monitoring, Resourcing and Strategizing: Structures and Processes in High Technology Venture Boards" Joanne Jin Zhang, Charles Baden-Fuller and John K. Pool (2010?) Long Range Planning,

'The Influence of Technological Knowledge Base and Organizational Structure on Technology Collaboration', Jing Zhang, Baden-Fuller Charles Journal of Management Studies (2010) 47(4), p.679-704

'Who is my partner and how do we dance?' Al-Laham A, Baden-Fuller, Charles, Amburgy, Terry British Journal of Management (2010)

"Technological knowledge base, R&D organization structure and alliance formation: Evidence from the biopharmaceutical industry." Jing Zhang, Charles Baden-Fuller, Vincent Mangematin Research Policy (May 2007) 36 (4), p515-528,

"Brokerage and firm (network) evolution: The complementary roles of Architectural and Functional Brokers" Joanne Jin Zhang and Charles Baden-Fuller Cass Business School Working Paper 2009; presented at Conferences (AOM 2007/2008, JMS-Durham, 2006, Rutgers University, 2007, EGOS 2007)

Technology Policy

Technology policy is at a cross roads. The UK policy towards high technology generally and biotechnology in particular has lagged sector needs. Whereas start -ups get much support, the same support is lacking for the more demanding stage of growth - a particularly challenging area.

"Organizing for innovation: towards successful translational research, 2009, Will West, Paul Nightingale Trends in Biotechnology,27(10):558-61.

"On a critical path: Genomics, the crisis of pharmaceutical productivity and the search for sustainability, 2009Paul Martin, Michael Hopkins, Paul Nightingale, Alison Kraft Chapter 10, in "The Handbook of Genetics & Society: Mapping the New Genomic Era" Edited by Paul Atkinson, Peter Glasner, Margaret Lock, London: Routledge

"Technological paradigms: past, present and future, 2008, Nick von Tunzelmann, Franco Malerba, Paul Nightingale, Stan Metcalfe Industrial & Corporate Change 17 (3)  p467-484,

The myth of the biotech revolution: An assessment of technological, clinical and organizational change, May 2007 Michael Hopkins, Paul A. Martin, Paul Nightingale, Alison Kraft, Surya Mahdi Research Policy 36 (4) p566-589,


Building High-Performance Boards: Financial and Organisational Innovation in UK High Technology - EPSRC and sponsoring companies - £750,000 - 2007-2010

Principal Investigators: Charles Baden-Fuller (Bayes Business School) and Paul Nightingale (SPRU, University of Sussex)

FINAL REPORT TO EPSRC Updated (pdf added)

Knowledge Integration and Project-Based Organising in the Biotechnology and Film Industries

£220,000 - Economic and Social Research Council (2003-2006). Researchers: Charles Baden-Fuller and Joseph Lampel

Financial and Organisational Innovation in UK High Technology

Building High-Performance Boards: Financial and Organisational Innovation in UK High Technology - EPSRC and sponsoring companies - £750,000 

Principal Investigators: Charles Baden-Fuller and Paul Nightingale (SPRU, University of Sussex) - 2007-2010.

The project will examine and improve the role of Boards of Directors and Advisors in the UK High Technology sector, with particular emphasis on young Biotechnology firms. It will investigate how innovations in London's financial markets can be used to support knowledge development and firm success.

In the UK high technology sector, firms are increasingly ignoring traditional US models of development that stress the role of venture capital firms as suppliers of funds and knowledge. Instead they access funds from financial markets, such as AIM and adopt innovative business models that focus on speeding up product development by using highly experienced boards of directors and advisors to access external knowledge. This research will unpick how these two changes inter-relate and influence firm performance. It will examine how these boards should operate and how they access innovative finance and knowledge from specialist advisors.

A central focus of the research programme will involve developing, validating and disseminating a set of management tools that assist companies, their boards and their advisors in making better decisions about these knowledge accessing mechanisms, business models and related financing.

The tools will be co-developed with our partner research sites and an expert group of advisors. A series of workshops will validate the tools and we will ensure that they are compliant with corporate governance regulations and stock exchange rules. The tools and other output from the project will be supported by an interactive web-site.

The project will also contribute to better academic teaching and future research with development of case studies, teaching materials and other more traditional academic outputs.

  • Industrial and research partners include:
  • Bioindustry Association,
  • Idmos
  • CMP Therapeutics,
  • Novabiotics
  • Arrow Therapeutics,
  • Pleiad Devices,
  • Dart Technology UK
  • Prescot and Leman Executive Search

Knowledge Integration and Project-Based Organising in the Biotechnology and Film Industries

Knowledge Integration and Project-Based Organising in the Biotechnology and Film Industries

£220,000 - Economic and Social Research Council (2003-2006). Researchers: Charles Baden-Fuller and Joseph Lampel

This project is funded under the ESRC's 'Evolution of Business Knowledge' programme, which is concerned with the critical role that knowledge and learning play in economic competitiveness and organisational performance. This is based on the recognition that it is not simply the possession of knowledge which provides competitive advantage, but the ability to continuously acquire, integrate and apply knowledge from a variety of sources that ultimately leads to success.

The project examines the different facets of knowledge integration in the context of project-based organising. Project-based organising assembles diverse knowledge resources for single or multiple organisations with the intent of transforming these into a set of outputs. The strategic link between project-based organising and new organisational forms can substantially increase knowledge-integration capabilities - an important leap forward at a time when competitive advantage is crucially dependent on mobilising and effectively using knowledge

Knowledge integration occurs in many different ways simultaneously and at different levels. It relies on alliances, joint ventures, networks, and geographic clusters. It is intrinsically a process that is at one and the same time based on routine interaction between individuals and groups, but is also the product of intense interaction in temporary focal task structures such as projects. With this in mind the key objectives of the research are as follows:

1. To document managerial practices of how scientific knowledge, creative knowledge and managerial knowledge are integrated in project based organising.
2. To probe the relationship between different knowledge integration practices and differentials in managerial, scientific and artistic performance.
3. To link new ways of thinking about knowledge theory with better understanding of the processes of knowledge integration
4. To provide clear evidence on the connections between UK practices in the film and biotechnology industries and sustaining the competitiveness of UK industry in these sectors.
5. To provide clear evidence on how project based organising facilitates knowledge integration within and between specialist organisations such as Universities, Venture capital firms, and Artistic communities

Supporting High Skill Clusters in the Bio-Pharmaceutical Industry

Supporting High Skill Clusters in the Bio-Pharmaceutical Industry

(£23,500) - Skills Insight/SEEDA (2001-02).
Researchers: Chris Hendry and James Brown.

This study looks at the role of clustering in the South-East England biotechnology industry, with its strong focus on healthcare and new pharmaceuticals. It investigates the relationships between dedicated biotechnology firms, large pharmaceutical companies and the FE/HE sector, and how well the latter will be able to meet the skill needs of biotechnology firms over the next five years.

Brown, J. and Hendry, C. (2001). Supporting High Skill Clusters in the Bio-Pharmaceutical Industry. London: SEEDA.

Creating High-Skill Ecosystems in the UK Biotechnology Industry

Creating High-Skill Ecosystems in the UK Biotechnology Industry

(£17,610) - The Science Technology and Mathematics Council (2000). Researchers: Chris Hendry and James Brown.

The aim of this study was to identify skills needs in the emerging biotechnology industry - an industry in which the UK ranks second only to the USA. UK biotechnology firms are concentrated in clusters, close to major university research centre. A Key question is the extent to which they benefit from this clustering, particularly in terms of skill acquisition and development. The survey of UK biotechnology firms revealed particular concerns around project management, and also the strong international orientation of firms in the sector. The final report contains many lessons for regional development agencies and the new Local Learning and Skills Councils.

Hendry, C. and Brown, J. (2000). Creating High-Skill Ecosystems in the UK Biotechnology Industry. London: The Science, Technology and Mathematics Council/DfEE, 49pp.

The management and valuation of biotechnology firms

The management and valuation of biotechnology firms

(1996-2002). Researchers: Charles Baden-Fuller and Peter McNamara.

These studies build on Baden-Fuller's longstanding interest in entrepreneurship, knowledge management and innovation in high technology firms. The work on biotechnology has progressed through case studies and industry analysis to develop lessons for managing biotechnology companies, valuing and protecting IPR, and integrating knowledge from disparate sources.

Baden-Fuller, C. and McNamara, P. (1999), 'Lessons from the Celltech case: Balancing Knowledge Exploration in Organizational Renewal', British Journal of Management, 10, 4, 291-307.

Baden-Fuller, C. and Pitt, M. (1996). Strategic Innovation. Routledge, 435pp.

Biotechnologies and the UK 2000-2005: Knowledge, Communication and Learning

Biotechnologies and the UK 2000-2005: Knowledge, Communication and Learning

ESRC (2000). Researcher: Chris Hendry.

Hendry, C. (2002, forthcoming), 'Science, Industry and the Laity: Towards a Knowledgeable Society for Biotechnology', New Genetics and Society.