Invention and business performance in the tissue-engineering industry.

Tissue engineering is a young and interdisciplinary scientific discipline but it offers exciting opportunities to improve the quality of health care for hundreds of thousands of patients. Lured by its potential, several start-up companies, pharmaceutical corporations, and medical device enterprises alike are investing heavily in this sector. Invention is a key driver of competition in this sector. In this study, we aim to explain the variation in inventive output across the different firms in the sector. Our major premise is that firms that forge alliances will be able to tap into the expertise of their partners and thus improve their chances of inventive output. We further argue that alliances that enable technology acquisition or learning will enhance the inventive output of firms more than other kinds of alliances. We measure the inventive output of a company by the number of patents filed. On the basis of a preliminary analysis of seven companies, we find support for the hypotheses. We also argue that, to achieve commercial success, firms need to manage time to market (through alliances or otherwise), have a global outlook, nurture their financial resources, and attain critical mass through mergers.

Advanced Tissue Sciences Inc.: learning from the past, a case study for regenerative medicine.

On 31st March 2003 Advanced Tissue Sciences (ATS) was liquidated, with the effect that in excess of US$300 million of stakeholder financing was destroyed. Although successful in the development of breakthrough technologies in the regenerative medicine arena and the building of a substantial portfolio of patents, the company never made a profit. In this case study, ATS’ business strategy, market and competitive environment will be discussed in the context of the company’s historical development. A number of important lessons from this case are discussed. From a management perspective the most critical lesson is the importance of effective financial planning and management of costs, and in particular R&D costs, including the significant costs associated with clinical trials. In addition, a clear strategic focus is extremely important due to the significant resources required in the development of a new therapy. From an investor’s perspective the lessons to be gathered from the ATS case are related to the risk involved in investing in the field of regenerative medicine. This case indicates that both professional and private investors did not fully question the validity of ATS’ business strategy and financial forecasts. A clear and focused strategy based on long-term investor commitment is essential for the successful commercialization of regenerative medicine.