Many are called, few are chosen: The role of science in drug development decisions

Linde Colen, Rene Belderbos, Stijn Kelchtermans and Bart Leten

No 706282, Working Papers of Department of Management, Strategy and Innovation, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven

Abstract: Pharmaceutical firms are extremely selective in deciding which patented drug candidates are taken up into clinical development, given the high costs and risks involved. We argue that the scientific base of drug candidates, and who was responsible for that scientific research, are key antecedents of take-up into clinical trials and whether the patent owner (‘internal take-up’) or another firm (‘external take-up’) leads the clinical development effort. We hypothesize that patented drug candidates that refer to scientific research are more likely to be taken up in development, and that in-house conducted scientific research is predominantly associated with internal take-up due to the ease of knowledge transfer within the firm. Examining 18,360 drug candidates patented by 136 pharmaceutical firms we find support for these hypotheses. In addition, drug candidates referring to in-house scientific research exhibit a higher probability of eventual drug development success. Our findings underline the importance of a ‘rational drug design’ approach that explicitly builds on scientific research. The benefits of internal scientific research in clinical development highlight the potential downside of pervasive organizational specialization in the life sciences in either scientific research or clinical development.

Keywords: R&D; patents; science; drug development; pharmaceutical industry (search for similar items in EconPapers)
Pages: 39
Date: 2022-11-21
New Economics Papers: this item is included in nep-ino
Note: paper number MSI_2209
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Published in FEB Research Report MSI_2209, pages 1-39

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Journal Article: Many are called, few are chosen: the role of science in drug development decisions (2024)
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