Papers presented by Oner Tulum since 2019
2023 Detroit, MI, United States
"Money for Science or Science for Money? BioNTech and Moderna in the Development of the mRNA Covid-19 Vaccines"
Oner Tulum, Academic-Industry Research Network
Abstract:
In January 2020, when SARS-CoV-2 was identified, two product-less biopharma companies, US-based Moderna and Germany-based BioNTech, that had invested in mRNA technologies with a view to developing personalized cancer drugs, shifted strategy to the development of mRNA Covid-19 vaccines. Moderna collaborated with US NationaI Institutes of Health and BioNTech with US-based Pfizer. In December 2020, the US regulator gave both vaccines emergency-use authorization (EUA). In comparing the two young companies, one can say that Moderna needs science to make money whereas BioNTech needs money to make science. Founded in 2010, Moderna’s 2018 IPO was the largest in biotech history. Venture-backed by Flagship Pioneering, its CEO, Noubar Afeyan, hired Stéphane Bancel as Moderna CEO in 2011. At the IPO, Moderna had 21 drugs in development, with no expectation of a product launch for several years. Bancel was a hyper-aggressive fundraiser, with Moderna securing $2 billion in private equity and another $600 million in the IPO. From May 2020, seven months before the Moderna vaccine received EUA, Flagship and Moderna senior executives began selling their shares. By April 2021, the stock sales of Afeyan were $1.4 billion, and the 2021 compensation of the top five executives totaled $362 million. In terms of personal profiteering from the stock market, BioNTech was the antithesis of Moderna. Founded in Mainz in 2008 with its NASDAQ IPO in 2019, BioNTech’s strength resided in the strategic control exercised by its scientist husband-and-wife founders Uğur Şahin as CEO and Özlem Türeci as CMO, Reportedly, through 2021, they had not sold any of their shares. As an innovative enterprise, BioNTech excelled in organizational integration, mobilizing the skills and efforts of personnel to engage in collective and cumulative learning. BioNTech’s sources of financial commitment were far smaller than funds available to Moderna but far more impactful on vaccine development.
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2022 Mexico City
"Transformation from Innovation to Financialization at Merck, Sharp & Dohme"
Oner Tulum, The Academic-Industry Research Network (theAIRnet)
Abstract:
Driven by maximizing shareholder value (MSV) ideology, since the 1990s the US pharmaceutical industry has adopted a highly financialized business model. Its key performance metrics are stock price, earnings per share, and dividend yield, supported by distributions to shareholders in the form of dividends and stock buybacks. Incentivized by stock-based executive pay, this value extraction can be at the expense of productivity in drug innovation. Yet with government support for drug development through the National Institutes of Health combined with intellectual property protection, financial subsidies, and unregulated drug prices that can provide high profits for reinvestment in drug development, US economic institutions are highly conducive to innovation in drug development. Nevertheless, many US pharmaceutical companies face a deep productivity crisis. Seminal works of Alfred Chandler, Louis Galambos, and Jeffrey Sturchio represent significant contributions to understanding the dynamics of the US pharmaceutical industry, but they all ignore MSV and its impact on productivity. A broad objective of this research is to analyze the impact of financialization so that current insight into the productivity crisis in this industry can “catch up with history.” With a study of Merck, Sharp & Dohme (MSD), this paper will analyze its historical transformation from innovation to financialization from the 1980s. The research for the paper applies the “theory of innovative enterprise” framework to provide a thorough and coherent understanding of when, why, and how MSD went from being the beacon of innovation in the global pharmaceutical industry in the 1950s through 1980s to become the most striking example of a financialized pharmaceutical company. The historical transformation of a major US pharmaceutical company presented here is part of a larger-scale project that, eventually, seeks to integrate the findings on innovation, financialization, and productivity from in-depth case studies of all of the world’s major pharmaceutical companies.