Biotechnology is a failed 30-year experiment, says Harvard Business School professor Gary Pisano. For most of its existence, income has been nonexistent - the total for public companies broke zero for the first time in 2002 and hit total operating income of about $2.5 billion on just over $35 billion in sales in 2004, Pisano observes in his book Science Business (Harvard Business School Press, Nov 2006). Remove Amgen from the picture, and income dips below zero.

Pisano says he thinks part of the problem is too short relationships. "They call these things alliances but they're not, they're arms-length contracts," he says. "The average length of a partnership is four years. Drug development is 12 years, so this represents a very short-term commitment. Effective development needs a free-flow of information, a true collaboration. There is a learning curve, so there is a real advantage in working with a consistent team...

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