Theranostics: Bridging the Gap
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Theranostics are to pave the path for personalized medicine by using molecular assays to determine the optimum dose of the drug for the right person at the right time. The potential of personalized medicine has been a subject of much attention and discussion over the last decade because it offers more effective treatments with fewer side effects for the patients. Theranostics are a combination between therapeutics and diagnostics and are expected to result in a decrease of the clinical trial time, costs and the targeted recruitment of patients. With theranostics, ideally the drug is developed parallel to the corresponding diagnostics during clinical trials, because the therapeutic product depends on the use the respective diagnostic tests and a lack of test approval causes lack of product approval. But to be able to develop these personalized drugs parallel to the corresponding diagnostics during clinical trials, the companies have to form alliances. The formation of these alliances should improve the efficiency and economics of the discovery, development and the marketing of medicines, which in turn improves the power of the relations between the RxDx alliances. But, this brings a whole new set of features with it, because compared to their normal routine of alliance formations the business models of the two industries are completely misaligned do not understand each other, which for example create hurdles of overcoming the differences in R&D processes between the pharmaceutical and diagnostics companies. This makes it difficult to fully co-develop the products and set up horizontal alliance formations. The aim of this research is to tackle the problems of alliance formations between the pharmaceutical and diagnostic industries and develop a strategic model, which is needed to enhance the performance of the co-development of pharmaceutical drugs and diagnostic tests in order to bridge this gap. To tackle the problems of alliance formations between two distinct technological trajectories current collaborations within the industry are explored and analyzed to develop a set of hypotheses based on the managerial experiences using the insights of the resource based view (RBV), transaction cost theory (TCT) and the network theory (NT). These theories are used in this research to answer the main research question: Which types of collaborations contribute to an increase in the performance of pharmaceutical and diagnostic companies? In this research a strategic model is developed using a deductive statistical analytical multi linear regression on a quantitative dataset. The dataset consists of over 50 pharmaceutical and diagnostic companies that have and/or had theranostic collaborations and are investigated on their performance and amount of collaborations over the last 10 years. The results of the model indicate that a higher amount alliances in general and within the same technological field results in an increase of the financial performance. A higher amount of alliances with the same companies results in a decrease of the financial performance. This implies that the companies that have higher amounts of alliances with companies in the same technological field and fewer with the same companies should have an increase in the financial performance. This means that in order to bridge the gap between the pharmaceutical and diagnostic companies and to enhance the performance of the co-development of pharmaceutical drugs and diagnostic tests, the RxDx companies need to collaborate more with other RxDx companies and not with the same RxDx companies previously collaborated with. Furthermore RxDx companies should collaborate more with other RxDx companies in the same technological field to enhance the performance of the co-development of pharmaceutical drugs and diagnostic tests. Using this model, theranostic companies can improve their performance by setting up alliances according to the model. In doing so, not only can the performance of the theranostic companies be improved, but this also the development of new medical entities and as a result new or improved cures for diseases. Furthermore this research offers new insights into the results of developments of forming alliances within the theranostics industries using the resource based view, the transactions costs theory and the network theory. Other studies have used combinations of the theories in this research, but they have not yet been integrated to benefit alliance formation specific for the theranostics industry. This research shows which types of collaborations are needed to improve the performance of the collaborations between pharmaceutical companies and diagnostic companies for the co-development of theranostics and provides new opportunities to research the relevant types of collaborations and how to improve them.