Bio-pharma: A financialized business model

Andersson, Tord; Gleadle, Pauline; Haslam, Colin and Tsitsianis, Nick (2010). Bio-pharma: A financialized business model. Critical Perspectives on Accounting, 21(7) pp. 631–641.



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.

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