Patent production is a prerequisite for successful exit of a biopharmaceutical company

Abstract

Patents are especially important for the business of drug discovery; however, their importance for biopharmaceutical companies has not been revealed quantitatively yet. To examine the correlation between patents and long-term business outcome of biopharmaceutical companies we analyze annual number of patent families and business conditions of 123 public-listed biopharmaceutical companies established from 1990 to 1995 in the USA. Our results show the number of patent families per year correlates well with the business condition: average of the bankruptcy group is significantly smaller than those of the continuing and the merger and acquisitions (M&A) groups. In the M&A by big pharma group, the acquisition cost correlates with the number of annual patent families. However, patentability and strategy of foreign patent application are not different among the groups. Therefore, the productivity of invention is the key factor for success of biopharmaceutical companies.

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