70 research outputs found
A real options based model to select a balanced R&D portfolio
The R&D process in the pharmaceutical industry has a long and dynamic life then it is an ideal field of application for ROA. Actually, ROA implementation, as widely demonstrated in literature, is narrowed to very limited cases because its perceived complexity.
This research wants to suggest a simplified method, respect the ones available in literature, that could foster the use of ROA: we built up an integer linear programming model, based on a model available in literature, useful for selecting a balanced R&D portfolio from a set of candidate drugs. The model has been tested through a case study
Risk assessment and profit sharing in business networks
Nowadays network is the preferred governance form to conduct economic transactions.
Network solution allows to reach flexibility maintaining cost and quality level. Since
network concept refers to a great variety of organizational hybrids it is possible to
choose the one that fits better market requirements. The new trends in interorganization
relationships push towards network solutions: companies are interested
in relationships with partners and customers to overcome resource dependence, to
enter too risky market or simply differentiate their business portfolio. The proposed
research focuses on the network concept aiming at highlighting threats and
opportunities to investigate the double nature of the risk concept. Network structures
offer flexibility and higher profit as a consequence and business risk sharing
opportunity.
These two aspects (profit and risk) are strictly related and have to be considered
together to depict a complete scenario; this implies that risk assessment and
management in network environment cannot neglect profit sharing or, in other words,
that profit sharing mechanisms should use risk as driver. In this context our research
proposes a methodology to measure risk taking into account network peculiarities; risk
estimation is a basic step to evaluate the opportunity cost of capital needed to compute
the network Net Present Value (NPV) that is assumed as base in the profit sharing
process. The profit sharing process has been tackled using the Shapley value approach
that is inspired to the fairness principle while the opportunity cost of capital is assessed
using the Capital Asset Pricing Model (CAPM)
A real options based support system to open innovation
Pharmaceutical R&D process (PR&DP) has been deeply
investigated by different streams of literature; the interest is due to the strategic
implication of the related decisions undertaken. The PR&DP has been
revolutionised by the biotech advent and as a consequence R&D managers
cannot avoid to consider Open Innovation paradigm during this decision
process. Starting from a Real Option optimization model available in literature,
the paper aims at proposing a decision support system (DSS) able to suggest
the candidate products to be included in the best R&D portfolio varying input
parameters (resilient products), to provide a products Pareto analysis that aims
at individuating the products for which it is worthwhile to acquire a deeper
input parameters knowledge and to draw what if rules. The proposed DSS has
been applied to a numerical example available in literature and research
findings show interesting managerial and academic implications
Open innovation: A real option to restore value to the biopharmaceutical R&D
The pharmaceutical landscape has changed, and new business models, based on alliances, are
increasingly being adopted in this industry. Biotechnology advances have pushed this development,
and pooling complementary resources coming from incumbents and newcomers is a key skill to
succeed: these are the premises for a quick spread of the open innovation (OI) paradigm in this
industry. R&D portfolio selection needs R&D project evaluation, and Real Options Analysis (ROA) is
acknowledged as a powerful tool to evaluate uncertain projects that have an intrinsic flexibility. The
present research aims to foster the use of ROA in the OI field in order to encourage firms to undertake
this innovation model; to achieve this goal the authors propose a closed-form model that is easy to
implement, to evaluate the OI initiative for selecting an optimal R&D portfolio. The study wants to
support managers in optimal R&D portfolio construction in terms of choosing the most promising
products, the means by which the related project has to be undertaken (in an open or closed manner;
i.e. licensing-in or not) and the self-financing policy. The proposed model can be easily implemented
into a spreadsheet, and the inputs needed to run it are usually requested to evaluate projects using the
most used net-present-value-based methods. Moreover, some parameters of the model allow strategic
aspects to be considered: for example the nature of the project (core/non-core), the impending project
phase, and the risk-sharing opportunity.
The results of the developed numerical example show that the selected portfolio is well balanced in
terms of development stages, core/non-core therapeutic areas and, licensing-in (an inbound open
innovation solution), is preferred in the case of products at their early stages of developmen
How risk influences the choice of governance mode in biopharmaceutical inter-firm relationships
This paper proposes a new theoretical framework for assessing the influence of risk in
shaping the governance form in biopharmaceutical inter-firm relationships. In particular,
we propose a multidimensional operationalization of relational and performance risk and,
by following Transaction Cost Economics (TCE) and Real Options (RO) theory constructs,
we hypothesize a relation between the aforementioned risk components and the choice of
governance form. Specifically, following TCE reasoning, we hypothesize that a high level of
relational risk leads towards more hierarchical governance forms, while, following RO
theory, we hypothesize that a high level of performance risk leads toward market-oriented
governance forms; finally, we hypothesize a moderating effect of each risk component on
the other. We empirically test our framework through the analysis of 353 inter-firm
relationships signed worldwide between pharmaceutical and biotech companies from
2007 to 2010. The results show substantive support for our theoretical framework.
Furthermore, we find a significant moderating effect of the performance risk on the TCE
relation between relational risk and governance forms
Drivers influencing the governance of inter-firm relationships in the biopharmaceutical industry: an empirical survey in the Italian context
This paper focuses on factors influencing the choice of the governance form in inter-firm relationships (IFRs) between pharmaceutical and biotechnology companies. By reviewing the relevant literature on transaction cost economics, property right theory, real option and resources-based view, we located some drivers that might influence such relationships and we formulated a set of hypotheses linking them to governance forms. Such a theoretical framework has been empirically tested through a survey conducted among the Italian companies associated to Farmindustria. Empirical results provide some interesting insights on how shaping bio-pharmaceutical deals; we found that the developmental stage of the product/technology object of the agreement, the existence of previous collaborations between firms and the number of products marketed by the biotech company are able to influence the selection of a specific governance for
The Management of Dental Practices in the Post-COVID 19 Era: An Economic and Operational Perspective
Background: In order to protect dental teams and their patients during the COVID-19 pandemic, dentists have had to adopt several measures (operating and post-operating procedures) which may increase the total treatment time and costs relating to individual protective measures. This paper will propose a thorough analysis of operating dentistry procedures, comparing the economic performance of the activity in a dental surgery before and after the adoption of these protective measures, which are required to contain the risk of SARS-COV-2 infections. Methods: The economic analysis is articulated in three approaches. Firstly, it assesses a reduction in markup by maintaining current charges (A); alternatively, it suggests revised charges to adopt in order to maintain unvaried levels of markup (B). And the third Approach (C) examines available dental treatments, highlighting how to profitably combine treatment volumes to reduce markup loss or a restricted increase in dental charges. Results: Maintaining dental charges could cause a loss in markup, even rising to 200% (A); attempting to maintain unvaried levels of markup will result in an increase in dental charges, even at 100% (B); and varying the volumes of the single dental treatments on offer (increasing those which current research indicates as the most profitable) could mitigate the economic impact of the measures to prevent the transmission of SARS-COV-2 (C). Conclusions: The authors of this paper provide managerial insights which can assist the dentist-entrepreneur to become aware of the boundaries of the economic consequences of governmental measures in containing the virus infection
The relationship between institutions and value creation in software development models
Purpose - The purpose of this paper is to analyse the possibility for firms to consider institutional settings to systematically direct dispersed individual efforts of discovery and invention towards objects (products or processes) of their interest in order to enhance their value creation capacity. Design/methodology/approach - The authors conduct a comparative analysis of the different institutional settings within which software products are invented and produced – closed producer-centred model, open user-centred model, and hybrid interactive producer-user model. Findings - The authors draw indications regarding the possibility to design institutional settings for value creation and the potential pitfalls tied to these strategic tools. Originality/value - A theoretical framework is elaborated in order to understand the different ways in which institutional contexts influence and direct value creation processes. The model analysed shows the firms’ deliberate attempt to stimulate a dynamic process of social interaction and communication which may foster higher levels of creativity and innovation. In order to guarantee the necessary accessibility and to sufficiently motivate external programmers towards the perception of a new code, the firm has to surrender the traditional source through which it appropriates value: barriers to the accessibility of the code developed through IPRs. The adoption of an institutional setting which facilitates dynamic value creation processes suggests, therefore, the need to turn to dynamic mechanisms for value appropriation in parallel
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