Biotechnology is a well-developed industry which presents solid scientific roots. Before the founding of Genentech in 1975 by Herb Boyer, an unknown microbiologist at the University of California, and Bob Swanson, a 27-year-old venture capitalist, molecular biology was considered as a field academically

interesting but with little commercial opportunities. Since 1975 a huge number of biotech firms have been founded, typically stemming from the collaboration of entrepreneurial scientists with the ambition to improve human lives and venture capitalists or managers coming from the pharmaceutical industry. Nowadays the biotechnology industry consists of a number of start-ups, with impressive R&D investments and significant financial losses (see Table 7.1). Consistent with the empirical evidence reported in Table 7.1, the existing literature points to universities and public research organizations as the main source of entrepreneurship in the biotechnology industry. The founders of a substantial number of biotech firms include universities, faculties and professors (many of them world-renowned scientists) who invented the technologies that the start-ups licensed from the universities, often in return for an equity stake. Recombinant Capital analysis on 52 US Biotech IPOs (Initial Public Offerings) in the 2003-2004 IPO window points to the increasing role of academic equity which totalled 9.2 percent of aggregate technology value ($310 million of $3.4 billion), while in the 2000 IPO window, it only totalled 6 percent of aggregate technology value ($920 million of $15.5 billion). Furthermore, 94 percent of academic equity value was captured by faculties, rather than institutions and, interestingly, professors approximately held 50 percent of this portion. Professors often maintain their position in academia, or they can go corporate, moving away, definitively or temporarily, from academia. In addition, it is worth noting that universities play a crucial role in boosting firms’ learning processes via collaborative arrangements. Blumenthal et al. conducted, in the mid 1990s, a survey among biotech managers which revealed that over 90 percent of the firms responding to the survey were involved in some form of academic-industry relationship. The most frequent types of contract included consultancy (88 percent) and research contract (59 percent). In addition, a survey on 2,052 faculty members at the 50 most research-intensive US universities revealed that 28 percent of respondents reported receiving research support from life science industries (Blumenthal et al. 1996b). We can mention the multimillion collaboration between Novartis and the Department of Microbial and Plant Biology at University of Berkeley (Lawler 2003), the relationship of Monsanto with Washington University in St. Louis since the early 1980s, and the agreements with MIT carried out by Amgen (Lawler 2003).