Innovation, product development and market value: evidence from the biotechnology industryinnovation in biotechnology industry

Author

Zaur Rzakhanov

Economics of Innovation and New Technology, 2004, vol. 13, issue 8, pages 747-760

Abstract: The subject of the paper is financial valuation of firm's knowledge assets and returns to innovation in the biotechnology industry, where such assets appear to play key role in the commercial success of a product. The biotechnology industry is extremely research-intensive, and successful R&D drives profitability. Further, the pharmaceutical product development advances in a number of well-defined stages that allow relatively precise measurement of product development outcomes. The study reports recent biotechnology R&D statistics, and provides estimates of private returns to innovation and product development activity in the biotechnology industry. The conclusions indicate that the financial market recognizes the value of drugs in product development stage, as it expects the innovative knowledge embodied in drug development projects to become marketable products in the future.

Keywords: Innovation; Product development; Biotechnology; Financial market valuation (search for similar items in EconPapers)
Date: 2004
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