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From 2012e.igem.org

Alternative Models

Dedicated biotechnology firms (DBFs) are often the considered the classic model. DBFs mainly translate scientific discoveries and technological inventions made by researchers in universities and hospitals into commercial products. The business model depends on financing from venture capital firms, an initial public offering on the stock market, selling licenses, or working as a joint venture with a larger firm.

The second business model is vertically integrated firms, which often are larger firms than DBFs. Vertically integrated firms are involved in the entire process of developing a product from research and development, production, distribution, and marketing. These firms also provide a market for the discoveries of DBFs.

Both business models form a symbiotic relationship where DBFs provide vertically integrated firms with services and access to potentially valuable technologies through joint ventures. DBFs receive revenue and assets such as sales and distribution chains via vertically integrated firms. Research and development is an expensive process and often requires a joint effort to sustain the business.