Correspondence: Kerstin M. Bode-Greuel, Bioscience Valuation BSV GmbH, Am Zigeunerbergl 3, Grainau 82491, Germany. Tel: +49 8821 966979 0; Fax: +49 8821 966979 29; E-mail: k.bode-greuel@bioscience-valuation.com

¹is founding and managing partner of Bioscience Valuation in Germany and USA, and of Bioscience Market Research, USA. Her 20-year experience covers virtually all therapy areas in pharmaceutical R&D and strategic marketing. She held senior positions at Bayer AG, and after five years of independent management consultancy, co-founded Bioscience Valuation. Her publications include two expert SCRIP reports, professional journal articles and chapter of a textbook. She is Associate Lecturer at University of Essen's Masterclass programme, as well as speaker/workshop leader in international conferences. Kerstin studied medicine in Germany and UK, and was educated in corporate finance at the Wharton School of the University of Pennsylvania.

²received his PhD in Organic Chemistry from the Technical University Berlin in 1979. He then joined the Schering AG as a medicinal chemist doing research work in the endocrinology and cardiovascular field for five years. In 1985 he moved into development and finally led the chemical development department for many years. In 1999 he moved to project management and became head of project- and portfolio management of Specialized Therapeutics, a business unit of Schering AG located in the US. He finally got promoted to heading global project management. After the acquisition of Schering AG by Bayer AG, he joined the Berlin School of Economics where he is now in charge for building a new MBA programme for pharmaceutical management.

Received 31 January 2008; Revised 31 January 2008; Published online 4 March 2008.

Abstract

The concept of portfolio management has been widely used in the pharmaceutical industry. It is used to evaluate the commercial value and the risk structure of development projects. The final goal is to select a portfolio of projects that addresses the strategic objectives of the organisation optimally and that leads to the highest overall portfolio value. Companies now start to apply the portfolio management concept on their research portfolios. Although the basic principle remains the same, the methodology applied has to be adapted to the greater uncertainty that early research projects carry. Commonalities and differences of the portfolio management process in research and development are described and recommendations are given how to harmonise the two different approaches.