The penetration of research agreements between pharmaceutical and biotechnology companies is mysterious, as it is difficult to understand the exact nature of research activities. One of the main concerns of companies that finance is that R&D companies use their funds to subsidize other projects or to replace one project with another. We are developing a model based on the theory of the right of ownership of the company, which allows researchers of R&D companies to follow several tasks. If the research activities are not contractual, we show that it is optimal for the funding company to obtain the right of option to terminate the research contract while preserving the property rights of the completed project. This right will encourage researchers in the biotech company not to deviate from the proposed research activities. The contract prevents the opportunistic exercise of this right of termination by denying payments under the termination of the contract. We are testing the model empirically using a new dataset on 584 biotechnology research agreements. We find that the transfer of termination and ownership rights to the financeing company takes place in difficult contractual environments where the parties are not able to indicate the reference candidate. We use other empirical tests to distinguish the explanation of property rights from alternative stories based on uncertainty and asymmetric information about project quality or research capabilities. . 549 Evans Hall #3880Berkeley, CA 94720-3880Vereinigte Staaten(510) 642-8724 (Telefon)(510) 642-6615 (Fax) Université de Californie, Berkeley – Département d’économie; Universität von Kalifornien, Berkeley – Haas School of Business; Nationales Büro für Wirtschaftsforschung (NBER); Zentrum für wirtschaftspolitische Forschung (CEPR); Institute for the Study of Labor (IZA) Organizational Scope and Investment: Evidence from the Drug Development Strategies and Performance of Biopharmaceutical Firms. PAGE D’ACCUEIL: www.iza.org/en/webcontent/personnel/photos/index_html?key=918 545 Student Services Building, #19002220 Piedmont AvenueBerkeley, CA 94720Vereinigte Staaten Harvard Business School – Unité des finances; Université Harvard – Unité de gestion entrepreneuriale; Nationales Büro für Wirtschaftsforschung (NBER).

IO: Structure de l’entreprise, objet, organisation et contrat eJournal Biotech-Pharmaceutical Alliances als Signal für Asset und Firm Quality. Financial contract in Biotech Strategic Alliances The granting of control rights in pharmaceutical alliances. The capacity to contract and the organization of research contracts. . 1050 Massachusetts AvenueCambridge, MA 02138United States Subscribe to this free journal for further articles on Productivity in Pharmaceutical Biotechnology R&D: The Role of Experience and Alliances Boston, MA 02163United States617-495-6065 (Phone) 617-496-7357 (Fax) Harvard Business School: Entrepreneurial Management Unit Working Paper Series. Are equity funding rounds important?: Evidence of biotech alliances. .