The entrepreneurial process of network development in small biotechnology firms: the case of Destiny Pharma Ltd

Small biotechnology firms represent a vibrant sector of the economy [1]. This has led to a growing literature on role of networks in the development of these important businesses [2-4]. Whilst the understanding of the role of networks at the sector level is increasing [2-4], still relatively little is known about the operation of networks within individual biotechnology firms. Indeed, there appears to be a paucity of research that has looked below the surface of these firms to explore the entrepreneurial process of managing stakeholder networks. Exploring networks at this level of detail raises considerable methodological challenges. It requires an understanding of the development of a firm over time and the interaction between the entrepreneur, the stakeholder network and the wider environment. An in-depth case study approach was adopted for this research as it provides a recognised method for exploring such processes [5-8]. The case of Destiny Pharma Ltd was selected as it is an innovative and successful biotechnology company started by a local entrepreneur in 1996 and has developed to achieve a recent valuation of £3 million. The researcher also had good access to the company through his previous relationship with the entrepreneur. This allowed multiple sources of evidence to be gathered and an in-depth understanding of the processes at work to be established. A causal framework was developed that plots the influence of network relations on the development of the business in the four years since its inception. Three interim growth drivers were identified that are important to business development (adapted from [9]) The history of Destiny Pharma Ltd shows that these interim growth drivers are influenced by eight network-related factors licensing expertise, financial expertise, management expertise, contract research, licensing deals, finance, equipment and scientific labour. These factors are in turn influenced by a network of stakeholders during the life of the business. The paper explores the complex patterns of interactions between the entrepreneur and his stakeholder network as the business develops. This leads to an exploration of managerial and policy implications.