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Bio-pharma: A financialized business model

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  • Andersson, Tord
  • Gleadle, Pauline
  • Haslam, Colin
  • Tsitsianis, Nick
Abstract
In this paper, we construct a complementary financialized business model of SME bio-pharma that reveals how the product innovation and development process conjoins with speculative forces in capital markets. To conceptualise this descriptive business model we employ three organising elements: narratives about pipeline progress that may (or may not) lead to additional funding from equity investors or other investing partners, capital market conditions that impact on the supply of funding and market valuations and the variable motivations of equity investors who are not in a development marathon but a relay race anxious to pass on ownership and extract higher returns on invested capital through realised market value. Bio-pharmas are, in effect, constituted as investment portfolios of innovations where products in pipeline and firms trade for shareholder value. In this speculative innovation, capital market liquidity business model complementary narratives and favourable capital market conditions are required to keep it all going.

Suggested Citation

  • Andersson, Tord & Gleadle, Pauline & Haslam, Colin & Tsitsianis, Nick, 2010. "Bio-pharma: A financialized business model," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 21(7), pages 631-641.
    • Handle: RePEc:eee:crpeac:v:21:y:2010:i:7:p:631-641
    DOI: 10.1016/j.cpa.2010.06.006
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    References listed on IDEAS

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    2. Tord Andersson & Colin Haslam & Edward Lee & Nick Tsitsianis, 2007. "Financialized accounts: A stakeholder account of cash distribution in the S&P 500 (1990–2005)," Accounting Forum, Taylor & Francis Journals, vol. 31(3), pages 217-232, September.
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    7. William Lazonick, 2008. "The Quest for Shareholder Value: Stock Repurchases in the US Economy," Recherches économiques de Louvain, De Boeck Université, vol. 74(4), pages 479-540.
    8. Pauline Gleadle & Colin Haslam, 2010. "An exploratory study of an early stage R&D-intensive firm under financialization," Accounting Forum, Taylor & Francis Journals, vol. 34(1), pages 54-65, March.
    9. Gleadle, Pauline & Haslam, Colin, 2010. "An exploratory study of an early stage R&D-intensive firm under financialization," Accounting forum, Elsevier, vol. 34(1), pages 54-65.
    10. Marie Carpenter & William Lazonick & Mary O'Sullivan, 2003. "The stock market and innovative capability in the New Economy: the optical networking industry," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 12(5), pages 963-1034, October.
    11. Hopkins, Michael M. & Martin, Paul A. & Nightingale, Paul & Kraft, Alison & Mahdi, Surya, 2007. "The myth of the biotech revolution: An assessment of technological, clinical and organisational change," Research Policy, Elsevier, vol. 36(4), pages 566-589, May.
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    Cited by:

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    3. Gleadle, Pauline & Parris, Stuart & Shipman, Alan & Simonetti, Roberto, 2014. "Restructuring and innovation in pharmaceuticals and biotechs: The impact of financialisation," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(1), pages 67-77.
    4. Morales, Jérémy & Sponem, Samuel, 2017. "You too can have a critical perspective! 25 years of Critical Perspectives on Accounting," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 43(C), pages 149-166.
    5. Goulding, Richard & Haslam, Colin & Leaver, Adam & Silver, Jonathan, 2024. "A ‘Distributional Apparatus’ for real estate: Fair value accounting and the assetization of UK property," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 99(C).
    6. Graaf, Johan & Kraus, Kalle & Strömsten, Torkel, 2022. "The problematics of financialization – On the important (but neglected) horizontal axis of organizational action," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 89(C).
    7. Bay, Charlotta & Catasús, Bino & Johed, Gustav, 2014. "Situating financial literacy," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(1), pages 36-45.
    8. Froud, Julie & Tischer, Daniel & Williams, Karel, 2017. "It is the business model… Reframing the problems of UK retail banking," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 42(C), pages 1-19.
    9. Nadya Wells & Vinh-Kim Nguyen & Stephan Harbarth, 2024. "Novel insights from financial analysis of the failure to commercialise plazomicin: Implications for the antibiotic investment ecosystem," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-13, December.
    10. Befort, N., 2020. "Going beyond definitions to understand tensions within the bioeconomy: The contribution of sociotechnical regimes to contested fields," Technological Forecasting and Social Change, Elsevier, vol. 153(C).
    11. Haslam, Colin & Tsitsianis, Nick & Theodosopoulos, Grigorios & Lee, Edward, 2018. "Accounting for voluntary hospices in England: A business model perspective," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 54(C), pages 27-40.

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