Correspondence: Sandra Vanderbyl, 3520 W 37th Ave., Vancouver, BC, Canada V6N 2V8 Tel: +1 604 842 0518; Fax: +1 604 669 3546; E-mail: vander8@telus.net

¹MSc, MBA has over a decade of experience as a scientist and project manager in the biotechnology industry. She is an author of many articles in peer-reviewed journals and conference abstracts. Sandra is currently working as a scientific and pre-clinical product development consultant. Sandra has an MBA specialising in global management from the University of Phoenix.

²RN, BScN, MBA has worked in a variety of operational and consulting roles over the past two decades. She has been a frontline leader and manager in healthcare for over 20 years including multi-cultural and multi-faceted organisations. Sherry currently provides operational relief in isolated areas in Canada & management consulting to a variety of sectors and clients at SKC Consulting Inc. She has an MBA specialising in global management from the University of Phoenix.

Received 11 December 2007; Revised 11 December 2007; Published online 15 January 2008.

Abstract

In order to break down industry barriers and decrease failure rates, biotechnology companies require a sophisticated risk management plan. Biotechnology is an industry sector where a high failure rate for companies is considered the norm. The opportunity for high-profit levels is what currently drives the industry and sustains investment even in the backdrop of the elevated risk. A recent survey of senior management of Canadian biotechnology companies identified the industry's key risk and growth factors and allowed for the development of models of the changing profiles over the product lifecycle. The model for company growth reinforces that a company's dependence on funding decreases during product development as product distribution and generated profits support company growth. The model for company risk exemplifies that risk is higher earlier in development and decreases with expanding market exposure. These models provide a framework to build an infrastructure to position companies in the knowledge-based economy. In order for biotechnology companies to mitigate risk, they need solid corporate governance with adequate resources to develop a risk management plan. Making the risk management plan part of the strategic plan and the strategic planning process improves a company's ability to manage growth and to compete in the local and global economy. This paper investigates what the industry growth and factors are from a Canadian perspective, how risk factors can be managed by developing a risk mitigation plan and how risk impacts the industry's success as a whole.