Acquiring R&D Projects: Who, When, and What? Evidence from Antidiabetic Drug Development

Jan Malek, Melissa Newham, Jo Seldeslachts and Reinhilde Veugelers

No 2073, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: This paper analyzes M&A patterns of R&D projects in the antidiabetics industry. For this purpose, we construct a database with all corporate individual antidiabetics R&D projects over the period 1997 - 2017, and add detailed information on firms’ technology dimension using patent information, next to their position in product markets. This allows us to identify the identity of targets and acquirers (who), the timing of acquisitions along the R&D process (when), and which type of R&D projects changes hands in terms of technology novelty (what). The main results can be summarized as follows. First, most of the action in M&As is in early R&D stages, still far from product markets. Second, most of the early-stage projects that change hands are high-risk/high-gain novel projects. Third, the industry leaders in the product markets are rather inactive in acquiring those novel early-stage projects. The likely acquirers of such projects are small or pipeline firms. Our results put in perspective the narrative that large incumbents acquire small targets with low-risk projects close to product launch.

Keywords: M&As; innovation; R&D; pharmaceutics; technology; novelty; patents (search for similar items in EconPapers)
JEL-codes: L41 L65 O31 (search for similar items in EconPapers)
Pages: 44 p.
Date: 2024
New Economics Papers: this item is included in nep-com, nep-ppm and nep-tid
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Related works:
Working Paper: Acquiring R&D projects: who, when, and what? Evidence from antidiabetic drug development (2024)
Working Paper: Acquiring R&D projects: who, when, and what? Evidence from antidiabetic drug development (2024)
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