Vertical And Vertical Alliances Examples

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There are two main type of alliance: horizontal and vertical ones. When the first one is the relationship among biotechnology firms, the latter is the cooperation between a firm and its suppliers or distributors. Vertical alliances seem to bring more successful cases than horizonal alliances because the partners can become competitors in the horizontal ones. This paper only focuses on the vertical alliance with its two main branches: upstream and downstream ones. Biotechnology firms pursue vertical integration, keeping close linkages with universities as well as end-users such as pharmaceutical companies. 1.1.1. Upstream alliance Close interactions between universities and firms have appeared in many different industries over the past few decades,…show more content…
Stuart et al. (2007) estimated that half of all biotechnology firms have been established by scientists coming from universities. Audretsch and Stephan (1996) identified 101 founders of biotechnology firms, of which 50 were university-employed scientists. In addition to part-time employment contracts and informal collaborations that connect biotechnology firms and universities, there are also formal inter-organizational contractual linkages such as technology licensing deals, in which rights to use distinct discoveries are acchieved by firms, and sponsored research agreements, in which firms provide the fund for university research (Stuart et al.,…show more content…
Important progress made within alliances shows how well collaborating with the suitable strategies can contribute significantly to Genentech’s success. Firstly, Genentech seeks to license late-stage products that can develop its product portfolio and contribute to ist revenues. Collaboration with universities, DBFs and internal research were indeed strongly complementary. For example, Genentech allied with the university of California, San Francisco to discover and develop drug candidates for neurodegenerative diseases. The cases of Hoffman-La Roche (HLR) and Genentech also illustrate clearly this strategy (Malerba and Orsenigo, 1996). HLR joined biotechnology industry mostly because of its capabilities and interests in the field of immunology. Then, HLR built a wide network of alliances with Genentech, which was finally acquired in 1990. Secondly, Genentech partners with pharmaceutical companies to access emerging technologies. For example, Genentech’s relationship with Incyte Pharmaceuticals provides access to a powerful DNA sequence and gene expression
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