Institute for the Study of Genetics, Biorisks & Society (IGBiS), The University of Nottingham, Nottingham NG7 2RD, UK Tel: +44 (0) 115 846 7169 E-mail: Alison.kraft@nottingham.ac.uk

Revised 22 September 2005.

Abstract

Genomics companies are changing their business models and some have moved beyond drug discovery into drug development. The authors' analysis of genomics companies' business models yields further insights into the widening role of genomics firms within drug innovation and on the evolving dynamics between the genomics sector and the wider pharmaceutical industry. Business models within the sector have included that of the FIPCO (Fully Integrated Pharmaceutical Company), technology and information platforms, and, more recently, a new 'dual' business model that combines established platform capabilities with drug development. The study identifies a cohort of 22 leading genomics companies and takes as its focus those companies following the dual and platform business strategies. The paper describes how, over the past five years, leading genomics companies have, typically, refocused their interests downstream within drug innovation, a move that brings new commercial opportunities but also threats. New and evolving business models are enabling these companies to leverage their commercial positions and capture value in the later stages of drug development. These shifts are characterised and the possibility that this 'downstream' trend could exert a major effect on the future relations between genomics companies and pharma/large biotechnology firms, and on drug innovation, is explored.