The document discusses various business models in the life science industry. It describes models such as the fully integrated pharma company, virtually integrated pharma company, research model, platform model, no research development only model, re-indication/recovery model, combination drugs model, and drug delivery model. Each model is defined by its value proposition, value chain structure, and revenue generation approach. The document provides examples of companies that have utilized each business model.

1. Life Science Business Models

4. Generations of Drug Discovery Source: Burrill & Company, Life Sciences: A Changing Prescription

5. Stringent drug development funnel

6. Risks and Uncertainty of R&D Source: 2001 Nature Publishing Group biotech.nature.com

36. Affymetrix GeneChip and Genentech’s Herceptin

39. Medical Technology Market and Technology Matrix Technology New Existing Existing Market New Market Easy to produce and demonstrate Costly and Longer term More costly to produce and demonstrate More costly to produce and demonstrate 1 2 3 4

40. Value Creation Simple innovation – i.e. Safety syringe Idea Early design Initial test Redesign Clinical test Manufacturing prototype Make and sell 0 Need Initial Prototype Approval Proof Value Value demonstrated

41. Value Creation Complex innovation – i.e. Medical electronics Idea Early design Initial test Redesign Clinical test Evaluation prototype Make and sell 0 Need Initial Prototype Approval Proof Value demonstrated Value

44. Angiotech’s Paclitaxel Eluting Stent

45. Pfizer and Nektar’s Exubera