The (In)Direct Relationship Between Science & Product Commercialization in the Pharmaceutical Industry

This paper evaluates the relationship between science and drug commercialization in the pharmaceutical industry. Specifically, I analyze how the nature of the science portfolio underlying a product candidate influences its commercialization likelihood, while simultaneously taking into account the scientific orientation of the firm developing that product candidate. The results suggest that translational product candidates, product candidates that rely on insights stemming from both basic and applied science, have a higher commercialization likelihood than those product candidates that solely rely on basic or applied research outcomes. Nonetheless, the extent to which firms bring together insights from basic and applied science in the development of new product candidates is shown to depend on these firms’ scientific orientation and the scientific state-of-the-art related to the relevant indication field. Moreover, at the firm level, I find that product candidates developed by firms that hold a balanced basic-applied science portfolio have, overall, a higher likelihood to reach the market. These results propose that improved drug and disease understanding, stemming from the integration of basic and applied science at the product and firm level, positively impacts commercialization success in the pharmaceutical industry.