Product details

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Subject category: Entrepreneurship
Authors: Patrick Bliek (Universiteit Twente); Peter Van der Sijde (Universiteit Twente); Aard J Groen (University of Twente, Department of Business Administration)
Published in: 2003

Abstract

This case is part of the PRISM case study portfolio of 15 cases on the intangible economy, funded by the European Commission. The exploitation of an innovation is always difficult - and nowhere more so than in the pharmaceutical industry. This industry is dominated by very large, multinational players and is a harsh environment for small start-up companies, fewer than one percent of which become profitable. This is the context for this case about a start-up company called Lemniscates Ltd. (Note: the authors warrant that this case contains a factual account of a real company. However, to protect the commercial interests of the firm, its proprietors and the network, their names are disguised.) It all started with a veterinarian, Mr Garth, with a successful international practice in the treatment of racehorses. While trying a new proprietary gel on lame horses Mr Garth noticed that in some cases the treatment actually increased inflammation in joints. He had an idea about what might cause this problem and had it researched. It led to a patentable discovery. Mr Garth, together with two business partners, set up Lemniscates Ltd to develop the patent and the associated technology to create a new product, 'Garth-gel'. The three entrepreneurs decided to fund the venture themselves. None had experience of the pharmaceutical industry so they developed a network of relationships with established firms. These specialists include research laboratories, manufacturers, marketers and firms dealing with regulatory approvals and clinical trials. This networking approach offers important benefits. First, it means that Lemniscates can retain ownership of the patent. Second, the company avoids the cost of building skills and facilities from scratch and may defy the very low survival rate of biotech start-ups. Third, the network could also serve to conceal the firm's activities from the gaze of predators. Lemniscates is now poised to launch Garth-gel for veterinary use. Meanwhile, the network is exploring and developing applications for the patent in the fields of surgery, cosmetics and drug delivery systems for humans.
Location:
Size:
Small
Other setting(s):
1996-2003

About

Abstract

This case is part of the PRISM case study portfolio of 15 cases on the intangible economy, funded by the European Commission. The exploitation of an innovation is always difficult - and nowhere more so than in the pharmaceutical industry. This industry is dominated by very large, multinational players and is a harsh environment for small start-up companies, fewer than one percent of which become profitable. This is the context for this case about a start-up company called Lemniscates Ltd. (Note: the authors warrant that this case contains a factual account of a real company. However, to protect the commercial interests of the firm, its proprietors and the network, their names are disguised.) It all started with a veterinarian, Mr Garth, with a successful international practice in the treatment of racehorses. While trying a new proprietary gel on lame horses Mr Garth noticed that in some cases the treatment actually increased inflammation in joints. He had an idea about what might cause this problem and had it researched. It led to a patentable discovery. Mr Garth, together with two business partners, set up Lemniscates Ltd to develop the patent and the associated technology to create a new product, 'Garth-gel'. The three entrepreneurs decided to fund the venture themselves. None had experience of the pharmaceutical industry so they developed a network of relationships with established firms. These specialists include research laboratories, manufacturers, marketers and firms dealing with regulatory approvals and clinical trials. This networking approach offers important benefits. First, it means that Lemniscates can retain ownership of the patent. Second, the company avoids the cost of building skills and facilities from scratch and may defy the very low survival rate of biotech start-ups. Third, the network could also serve to conceal the firm's activities from the gaze of predators. Lemniscates is now poised to launch Garth-gel for veterinary use. Meanwhile, the network is exploring and developing applications for the patent in the fields of surgery, cosmetics and drug delivery systems for humans.

Settings

Location:
Size:
Small
Other setting(s):
1996-2003

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