TY - JOUR T1 - Is Corporate Venture Capital a Prescription for Success in the Pharmaceutical Industry? JF - The Journal of Private Equity SP - 77 LP - 87 DO - 10.3905/jpe.2003.320058 VL - 6 IS - 4 AU - Andrew Reaume Y1 - 2003/08/31 UR - https://pm-research.com/content/6/4/77.abstract N2 - While venture capital investing may not appear to be aligned with the core activities of most corporations, it is a financial practice that has found its way into many technology-intensive businesses. Unlike traditional venture capital, corporate venture capital (CVC) primarily serves strategic purposes. Among the industries where CVC is prevalent, the pharmaceutical industry has many features that distinguish it from other technology-based businesses. For example, product development times are long, attrition rates of initiated products are high, and companies live off of the income from relatively few high-revenue products. With these characteristics in mind one can easily imagine that CVC fulfills strategic purposes in the pharmaceutical industry differently than it fulfills strategic purposes in other industries. In this study I ask whether CVC truly serves a useful role in pharmaceutical companies and, if so, does it benefit some pharmaceutical companies more than others? I argue that given its relatively low cost versus high strategic benefit, CVC has a role in all pharmaceutical companies. However, it has greater value in companies with complex business models. Furthermore, as volatility in the industry externalities escalates, the value of CVC in the pharmaceutical industry increases. ER -