This paper examines factors affecting the stock price, net proceeds, and subsequent survival of biopharmaceutical firms that have gone public between 1996 and 2007 in the USA. We find that the financial condition of biopharmaceutical firms going public has deteriorated. The results also indicate that the financial condition of the firm prior to its going public and the intermediaries associated with the firm and initial public offering have little effect on first-day price increases. The findings, however, indicate that several of these financial indicators, and having prestigious underwriters, do have a significant effect on the amount of net proceeds received by the firm.

This paper examines the determinants of base pay and total incentive compensation packages of CEOs of biopharmaceutical firms that have recently gone public, and whether human capital and agency factors affect the market's response to the initial public offering. We find that in terms of net proceeds, the IPO market appears to reward the firms that have founder-CEOs and CEOs with higher incentive compensation. CEOs with prior venture capital experience are associated with receiving higher incentive compensation, while CEOs with a greater ownership interest in the firm receive lower incentive compensation but higher salaries. CEOs of firms with a greater percentage of insiders are associated with lower salaries. The results should add to our understanding related to human capital and agency theories, as well as help firms and investors better understand and structure CEO compensation.

The present paper explores the little studied area concerning the acquisition of recent biopharmaceutical initial public offering firms. We examine the nature of the relationship between the acquiring firm and the acquired initial public offering firm prior to the acquisition and from the perspective of the resource‐based view. We find to some extent that firm specific‐resources affect the prospect that the firm will be acquired. Furthermore, our findings show that firms with more of these types of resources are likely to be acquired by firms engaged in co‐opetition rather than by firms engaged solely in collaboration, competition, or (to a limited extent) with no prior relationship.

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This study verifies the existence of strategic groups among biotechnology firms that have filed for an initial public offering (IPO). We found three distinct groupings based on the dimensions of competitive scope and growth. Differences also exist between these groupings and an aspect of market influence -the ability to attract strategic partners. We found that biotechnology IPOs that seek greater breadth in competitive scope and growths also have more alliance partners. This paper adds to our knowledge of the bio-pharmaceutical market-sector and the strategic intentions of firms in an emerging, disruptive industry and their ability to attract strategic coalition partners.