Listing seven years in, on a contract-research model that licensed the platform to big pharma (2013)

A business designed to be profitable — and what that cost it as a drug company

The core of this decision was that PeptiDream refused the biotech orthodoxy of the day — run the research on outside money and treat losses as a given — and instead assembled in advance a business model in which a profitable, independently run company was possible. To aim at being a “mini pharma” selling its own drugs would have meant being pulled forever between the demands of maintaining a listing and the demands of research. Kubota Kiichi was able to choose, and hold to, a design of supplying technology to the majors while running many programmes in parallel because two things overlapped: exclusive access to Suga Hiroaki’s technology, and a structure that kept invention and management apart. That is also why the listing could be a place to present the model rather than to raise money.

Even so, the reliance on partnership that made profit possible was, turned around, a handing of the initiative in creating new drugs to the other side. With the market waiting on the few new drugs that appear in any year, the limit of the model can be seen in the fact that Kubota himself acknowledged the fading of the company’s brand and called its market capitalisation a matter of “expectation.” A design that stayed profitable on its own did not amount to completion as a drug company. On the partnership-shaped frame that set within a few years of listing, the question of how to stack up results of its own was carried over to the management that succeeded him.