RD Continuity of Biotech Start-ups by Selection Freedom

摘要

As the research background, there is a high possibility of difficulty of research and development (R&D) continuity for biopharmaceutical start-ups due to the long valley of deficit especially since the financial crisis in 2008. The research question is; how is it possible to promote the continuity of R&D projects of biotech start-ups at the trade-off situations between the passive attitudes of venture capital from financial markets and the continual progress of life science researches as aptamer, siRNA, iPS cells, and personal medicine. As the research approach, the effectiveness of real options is promising for applying to overcome the valley of deficit. We will examine specifically Dixit model on the business entrance and exit, which is the model showing the analogy between hysteresis and the deferring characteristics of decision making caused by the sunk cost under uncertainty. The research objective is to examine the flexible value of compound chooser option for switching chance between two types of projects, that both have independently each negative NPV, one is the base case and the other is inserting the indication expansion for the drug development. We could find the possibility of positive NPV by just creating only selection chance from these both alternatives.