Biotech's value creation chain starts with research link

What's the real value of drug research? The Scientist analyzed the payoffs earned by success in the drug development field these days. With IPOs largely shelved this year--only one biotech has pulled it off in 2008--analysts focused on the dollar value of an experimental therapy in upfronts and milestones. A Phase I drug was likely to get $5 million to $10 million in an upfront fee and about $65 million in milestone payments. A Phase III drug, though, could expect $40 million to $100 million in fees and $150 million in milestones.  

But it all starts at the research level. As The Scientist notes, biotech companies start in the minds of entrepreneurial scientists in academia and industry who have a novel idea for a new therapy. The intellectual property they patent becomes the core asset of an emerging biotech company. And the enterprise almost always relies on a variety of backers, anyone from a relative to a government grant or an angel investor, who puts up the original $1 million to $5 million needed to start work.

- read the article from The Scientist

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