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No Pain, No Gain! Unraveling the Roles of Technological Depth and Breadth on the Financial Capital a Biotech Firm Raises from a Big Pharma Partner

Why do some biotech firms outperform others in obtaining large amounts of financial capital from their ‘Big Pharma’ partners? Of particular interest to researchers and practitioners, this question has been studied in the strategy and technology management literature but has yielded mixed findings. We address a specific form of this question: Does the depth and the breadth of technological resources of a biotech firm influence the amount of financial capital it raises through an alliance with a larger pharma partner? We find that “technological depth” in biotech firms is associated with raising more financial capital, whereas “technological breadth” is related to receiving less money. Furthermore, we also find that when firms bring a well-developed technology to the alliance, both their technological depth and breadth are positively related to the amount of money they receive.