Science & Product Commercialization in the Pharmaceutical Industry

This paper analyzes the relationship between science and drug commercialization in the pharmaceutical industry by examining the development process of 5,613 product candidates over the time period from 1995-2008. Specifically, I evaluate how the nature of the science portfolio underlying a product candidate influences its commercialization likelihood, while simultaneously taking into account the scientific orientation of the firm developing that product candidate. The findings presented in this paper suggest that translational product candidates, product candidates that rely on insights stemming from both basic and applied science, have a higher commercialization likelihood than those product candidates that solely rely on basic or applied research outcomes. This positive effect is specifically salient when the insights from basic and applied science are closely integrated and when they guide the development process of product candidates situated in historically uncertain indication fields. Moreover, I find that product candidates developed by firms that hold a balanced basic-applied science portfolio have, overall, a higher likelihood to be successfully commercialized. In short, these results propose that improved drug and disease understanding, stemming from the integration of basic and applied science at the product and firm level, positively impact commercialization success in the pharmaceutical industry.