Clinical Trials, Innovation and Approaches to Ambidexterity in Pharmaceutical Startup Companies

Abstract

The author investigated how the clinical trial process affected innovation in phar- maceutical start-up firms. An inductive qualitative case study methodology was uti- lized to investigate 3 pharmaceutical start-up firms who were conducting late stage (phase II or III) trials. Key assumptions were that pharmaceutical start-ups must simultaneously pursue exploration and exploitation in different domains while operating under the resource constraints typical for start-up firms. Research identified two key domains of am- bidexterity, technology vs market whom are known from existing literature to have conflicting demands. Pharmaceutical firms were selected because the pharmaceutical industries lacked strong competitive market forces. Lack of strong competitive market forces were assumed to reduce the exogenic sources of interference, making analysis of internal factors easier. Key findings were that early initiation of exploration in the market domain was critical for success in new product development among pharmaceutical firms. The more innovative a product was, the more difficult and important early market explo- ration became. Pursuit of balanced exploration and exploitation was also found to positively moderate economic success in the investigated cases. Previous research had indicated that exploration in one domain would be bal- anced by exploitation in another domain. Domain specific ambidexterity in pharma- ceutical starts was shown to differ from existing litterature as both exploration and exploitation activites occured simultaneously in multiple domains. Keywords: Innovation, pharmaceutical industries, life science, management, ambidexterity, do- main specific, exploration, exploitation, learning.