Annika Rickne, CIRCLE CASE

jamaicanabsorbingBiotechnology

Dec 5, 2012 (4 years and 8 months ago)

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Annika Rickne, CIRCLE

Paradoxes and innovation processes
in biotechnology & biomedicine


Policy concerns



Global Competition in High Tech
Sectors, Nov. 2007 Lecturer:

Astrid Szogs


It is gratefully acknowledged that the slides were provided by
Annika Rickne.


Annika Rickne, CIRCLE

Definition of biotech

Biotech as a knowledge field


The
application

of knowledge about living organisms and
their components & characteristics into industrial products
&
processes



Included knowledge fields: molecular biology, genomics,
proteomics, bioinformatics, etc.



What to include in biotech changes over time



Biotech as an industrial sector



Firms focusing specifically on these knowledge fields:
Dedicated Biotech Firms (DBF)


Annika Rickne, CIRCLE

Biotech

Medical technology

Instruments

Pulp & paper

Food

Chemistry

Agriculture

Pharmaceuticals

Environment

Materials

Biotech influences many sectors

Annika Rickne, CIRCLE

Sometimes Biotech = bioscience = bio
-
x

Biotech

Bioinformatics

Biomedical

engineering

BioMaterials

Bioinformatics

Biotech = bioscience = bio
-
x

Annika Rickne, CIRCLE

Definition of biomedicine


Medical technology

Instruments

Pharmaceuticals

Biotech

Bioinformatics

Biomedical

engineering

BioMaterials

Bioinformatics

Knowledge fields

Sectors

Annika Rickne, CIRCLE

Paradox 1


Different definitions, operationalizations


DBF vs all types of firms


Biotech vs biomedicine vs bioscience



Statistics & measurement


Measuring change within a region/country


Comparisons between countries



Causal relations



Focused field but still lack of facts

Annika Rickne, CIRCLE

Paradox 2


Controversies whether commercialization of biotech is ’good
or bad’


Ethics: sources of stem cells


Safety: use of xeno
-
material


Modification of nature: GMO


Public knowledge or appropriation: ownership of cells


Equality: who to donate to, welfare diseases


These are balanced against needs and outcome


User needs: Parkinson, Altzheimers


Economic growth: High hopes


Attracting talent: Interesting research environments



There are many concerns that need to be balanced


Region and countries take different roads


Policy actors play major role & also firms, universities, researchers,
media, etc.

Annika Rickne, CIRCLE

Paradox 3: S&T vs market as drivers

Science & technology driven


Knowledge base: areas of scientific & technological knowledge


Embodied in techniques & instruments


As knowledge evolves borders are blurred


Driven by possibilities in S&T


Driven by researchers & engineers


User driven


Societal debates


Innovations developed in close interaction with medical doctors and patients


Examples:


Nobel Biocare: Brånemark implants


Focal: Biodegradable gel


Innovations emerge from uncertain, complex processes involving knowledge
and markets.


Development of science
-
technology
-
application
-
market intertwined


Co
-
evolution

Annika Rickne, CIRCLE

Paradox 4:

High hopes but slow return


High hopes of meeting user needs and creating
economic growth


Most countries have a biotech policy for growth


India: US$ 5 billion, 1 M jobs by 2010


Regenerative medicine: cure diabetes, increase life span


But not so much realized so far?


Examples:


Tissue engineering


Pharma


How fast and radical change can we expect?

Annika Rickne, CIRCLE

CASE: Regenerative medicine

To help the body heal itself

Replace


-

implant new organ



Repair

-

add new cells to organ



Regenerate

-

stimulate cell renewal

Annika Rickne, CIRCLE

Challenges


Research


Complex multi
-
disciplinary approach


In vitro viability versus in vivo function


Determine primary pharmacology and dosing


Availability of animal (disease) model


What constitutes clinical success ?


Products


Firm experience of how to get products to the market


Some products on the market


Production


Living organisms : preservation of viability


Biodistribution and half
-
life of cells



The batch size of one


What constitutes GMP ?


Traceability processes


Sources


Large scale?

Rickne and Sandström, 2006

Annika Rickne, CIRCLE

Challenges


Regulatory issues


Technology and clinical therapy evolving faster than regulation and
standardization of processes


Protect patients


Quality Safety and Efficacy


Classification not clear


A political process


Collaboration between public health authorities and private enterprise


Will it be too costly?


Fast reaction needed!!


“One man cannot hold another man down in the ditch without
remaining down in the ditch with him” Booker T Washington.


Ethics/Precautionary Principle


Media coverage


Creating debate (Nancy Regan)


Ethical issues:


Who to donate to?


Stem cells: Which source?


Rickne and Sandström, 2006

Annika Rickne, CIRCLE

Challenges



To handle the customer hesitancy & the regulatory issues


Gradually introduce the technology



Reimbursement


convincing clinical data


public acceptance


demand for therapy.



Firms & investors


Clear route needed: regulation, business models, reimbursement



Societal gains


Who should make money?


Rickne and Sandström, 2006

Annika Rickne, CIRCLE

CASE: Biotech in pharma


Science: genomics, combinatorial chemistry, etc.


Pharma:


Increasing development cost


Shift towards blockbuster drugs


Declining R&D productivity


Biological products:
therapeutic proteins (partly due to fast
track approval)


Role of biotech:


identification of drug targets


understand human body


tools for development


Speed up process?


new sector created & pharma restructured, new division of labor


More drugs in development by DBF + Big pharma


drugs for unmet clinical needs (<15 since 1980)

Hopkins et al, 2006

Annika Rickne, CIRCLE

CASE: Biotech in pharma

But


slower to validate targets


hard to transfer knowledge from academia to industry


translational process difficult


targets identified with genomics has so far lower success rate


R&D productivity still declining (more difficult: infectious to
cronic diseases?)


Time lags?


Pattern of technological change

(Rosenberg, 1979, von Tunzelmann,
1993)


Revolutionary science & incremental technological change


Technology often primitive when introduced & require high
investment for improvement


Biotech first process technology


Complementary innovations


Large technical change in some parts of DD process but not
overall

Hopkins et al, 2006

Annika Rickne, CIRCLE

Biotech in pharma

Organizational & institutional change needed


Organizational change of drug discovery process & clinical practice


New regulation needed


Adapt to clinical procedure (clinical trials, economic assessment, etc.)


Managerial ability


Policy:


Funding of public R&D: yes but not expect fast or direct returns


Much focus on technology transfer, start ups, etc.


Link goals (e.g. improved health) to policy instruments


Understand time scales & mechanisms


The ’hype’ as a way to speed up the process & acquire resources?


Correct statistics

Hopkins et al, 2006

Annika Rickne, CIRCLE

Refuting the linear view of innovation :

Innovations emerge from uncertain, complex processes
involving knowledge and markets


Incremental technological change


Science investment as a crucial ingredient


Conclusion not to downsize S&T investment


Only indirect link to industrial growth


Mechanisms: labor mobility, informal collaboration, etc


Internal firm & university capabilities


Resources & complementary assets & ability to obtain
resources in markets and networks


Organizational & Institutional change needed


Paradox 5:

Regulation both costly and wanted

CASE: Tissue engineering & the regulatory gap


Astrid Szogs & Annika Rickne

Firm opportunities?

First firms in artificial skin products


not strongly regulated


large freedom,


first mover advantages,


communication with regulatory units,


uncertainty


betting on the development


Today firms demand


clear regulation


transparency


converngence between countries

Astrid Szogs & Annika Rickne

Regulatory patchwork in EU


Innovative medical technologies, including TE products do not fit into the
existing regulatory frameworks


In EU, there is a lack of a harmonized regulatory framework for TE
products


This leads to a regulatory patchwork within EU


Now in process of harmonization

Astrid Szogs & Annika Rickne

Constructing the TE regulation in Europe


Dimensions underlying the construction of regulation


Scientific: origin of cells


Industrial: production volume and frequency


Historic: Building on existing regulation


A structure under change


The division of responsibility between the national and the supra
-
national levels are under change


Choice of legal instrument


regulation
-

set framework for the
change process : new rules will have to be implemented in all
member states



A negotiation process



The double role of policy


Time spans


Actors, negotiations and power structures

Astrid Szogs & Annika Rickne

Conclusions


Institutional change (here ex regulation) important for
innovation


constrain or facilitate innovativeness,


provide stability,


facilitate and control the emergence of markets


facilitate exchange at markets,


empower actors,


not neutral but different missions,


different efficiency levels


Institutions are dynamic


Developed historically, path
-
dependent


Involve social groups, coordination & power systems

Astrid Szogs & Annika Rickne

Annika Rickne, CIRCLE

Paradox 6: Global knowledge flows & very local & clustered


CASE:
C
ommercialization of human biobanks


deCode Genetics, Iceland, Oxagen, UK, UmanGenomics, Sweden


Innovation process as iterative, uncertain and complex:
not linear




multi
-
scientific and multi
-
technological


only initial stage of innovation process



various aspects of a drug interdependent and shaped interactively and
simultaneously


Process shared over several actors


SMEs intermediaries, integrating


High R&D costs, VC, large samples


Regulation directs who can appropriate



Firms played different roles in networks


Small firms loose out? Takes time, big pharma hesitant


Rickne, Laage
-
Hellman, McKelvey 2006

Annika Rickne, CIRCLE

Clinical
genomics
company
Universities
Hospitals
Sample donors
Research
ethics
committees
Biotech supply
firms
Government
agencies
Pharmaceutical and
diagnostics firms
Research
financiers
Venture capital
fims
Other biotech
firms
Rickne, Laage
-
Hellman, McKelvey 2006

Annika Rickne, CIRCLE

Knowledge sharing in networks

Various linkages exist among diverse actors in innovation processes, where
the firm plays a particularly important role


Multitude of diverse actors compete and interact


The firm as an organisational form is crucial to assemble the capabilities needed for
exploiting knowledge within biotech, engaging in research as well as
commercialising over time in an iterative fashion.


Science
-
driven: scientists, universities and industrial R&D labs key actors.


User inputs crucial.


Resource flows & knowledge sharing in networks crucial


Organization of knowledge sharing


Geographically close relations important


Institutional structure set frame & regions/countries differ in propensity to share &
diffuse


However: not always delimited by geography


Embedded in professional networks and global knowledge pipelines


Global industry & knowledge markets


Policy
: move from cluster focus to understanding of mechanisms of knowledge
sharing in each specific instance

Rickne, Laage
-
Hellman, McKelvey 2006

Annika Rickne, CIRCLE

Policy needs to handle the paradoxes

1.
Clear & comparable definitions, operationalizations,
indicators and statistics

2.
The triple role of policy: Societal concerns vs.
patient needs vs. economic growth

3.
S&T vs market as drivers of innovation

4.
High hopes but slow return

5.
Regulation costly and wanted

6.
Global knowledge flows & very local & clustered


Annika Rickne, CIRCLE

Policy concerns

Who takes care of policy?


Definition of policy & role of government

What level?


Global
-
supranational
-
national
-

regional
-
local

Specific vs. general?

Policy instruments


investment in basic and applied sciences


stimulation of (academic) entrepreneurship


support of regional clusters


Etc.

Who has the recipe?

US leader


Europe lagging?


In comparison with the USA more biotech firms in EU but smaller firms
and less revenues:


USA (2001): 1453 firms, 141000 empl, $25 billon revenues


EU: 1879 firms, 34000 empl, $7,5 billon revenues


Main market is US (e.g. 80% of biomedical products)


The evolution of the biotech sector in the USA



In rich resource environment (California)


Key scientists


Funding of science


Breakthroughs + Scientific competition & collaboration


Large firms + Knowledge flows between new firms & scientists


University policy & attitudes


Dominating user industries: Close contact with both science and users


Financing through VC and stock market


Cooperation & networking crucial

Annika Rickne, CIRCLE

Questions raised



Are these true facts ? Definitions and statistics?



Does US generate more & higher quality research? Why?


Is US better at commercializing? Why?


Does the US have a well functioning institutional set
-
up?



Should EU imitate the leader? Is there a best practice model?


Annika Rickne, CIRCLE

Readings


Hopkins, M., Martin, P., Nightingale, P., Kraft, A., Mahdi, S. (2006) The myth of
the biotech revolution: An assessment of technological, clinical and organisational
change, WP, SPRU.


McMeekin, A., Harvey, M. and Gee, S. (2004): Emergent bioinformatics and newly
distributed innovation processes, in McKelvey, M., A. Rickne and J. Laage
-
Hellman (Eds),
The Economic Dynamics of Modern Biotechnologies: Europe in
Global Trends,
Edward Elgar Publishing Co.


McKelvey, M., Rickne, A. and Laage
-
Hellman, J. (2004): Stylized facts about
innovation processes in modern biotechnology, WP.


Orsenigo, L., Pammolli, F., Riccaboni
, M., Bonnaccorsi, A. and Turchetti, G.
(1998): The evolution of knowledge and the dynamics of an industry network,
Journal of Management and Governance, 1, 147
-
175.


Powell, W W., K. W. Koput, L. Smith
-
Doerr (1996): “Interorganizational
Collaboration and the Locus of Innovation: Networks of Learning in
Biotechnology”, Administrative Science Quarterly, Vol. 41, No. 1.


Prevezer, M. (2001): Ingredients in the Early Development of the U.S.
Biotechnology Industry, Small Business Economics, 17, 17
-
29.


Szogs, A. and Rickne, A. (2006):
Institutional change as a process of negotiation:
The case of European regulation for tissue engineering, Globelics India 2006:
Innovation Systems for Competitiveness and Shared Prosperity in Developing
Countries, Trivandrum, India, Oct 4
-
7.