Sometimes, a hearty collaboration starts with something as simple as a good lunch.

Three years ago, Bentley Assistant Professor of Finance Irving Morgan (left) had a research paper starting to simmer. He ran into Fred Ledley in the faculty cafeteria and asked the professor of natural and applied sciences to review some initial findings. Ledley liked what he saw, and suggested working together at some point.

This winter, the pair finished a project with potential to help the biotechnology industry integrate the best practices of science and business. The goal: Bring more life-changing — and potentially life-saving — products to the real world.

Aiming to Assimilate

The researchers might make an odd couple anywhere other than Bentley. Ledley’s background is in molecular medicine. He has served on the faculty at the Howard Hughes Medical Institute and helped found several biotechnology firms, including one that does gene therapy. Morgan owns an extensive record of scholarship in biotechnology, mergers and acquisitions, and corporate and managerial finance.

Their paper, “Strategic Management of Discontinuous Scientific Change in Biotechnology,” aims to explain why such companies so rarely assimilate their business and science practices.

“A lot of people look at financing, and a lot of people look at technology,” says Ledley. “What we’ve done is break down the financing by technology and, conversely, break down the technologies by where the money’s coming in. It’s really unique.”

Over the past 25 years, government investment and venture capitalism have poured more than $8 billion into the gene therapy sector of the industry. But the track record of products actually making it to market is pitifully anemic.

“The public hasn’t gotten the benefit of the billions of dollars and thousands of scientists at work in this field,” says Ledley. “The question is why.”

The Money Trail

To find out, Ledley and Morgan used a process common in high-tech circles. That concept — technology evolution — holds that technology advances exponentially only up to a certain point, before being supplanted by another technology. Their analysis showed that funding for biotechnology works in much the same way. That is, money was often ample for emerging projects, but slowed to a comparative trickle in later stages.

“The pattern is that the money chases early to the riskier technology, before that technology’s success can be determined,” explains Morgan. “So when you need the money late in a technology, because you now know its capabilities, you don’t get the sufficient capital. It has already gone to the next new technology.”

The two-pronged analysis gave Ledley and Morgan a distinctive take on how to address this breakdown in the business model. Their paper identifies a “science strategy” — pushing companies to navigate vertically between a succession of discontinuous technologies — and a “product strategy,” which requires greater capital investments once a technology is shown to be ready for real-world development. This round of work earned the professors “Best Poster” honors from Bentley.

“Right now this is academic research,” observes Ledley. “But the strategic correlates to practice are going to be really exciting.”