An Analysis of the SmartCells Business Model and Its General Applicability Toward Building Successful Early-Stage Ventures in the Pharmaceutical Industry

Abstract

SmartCells developed a technology that would re-engineer the existing pharmaceutical, insulin, to perform in a way that was safer and more efficacious than the original underlying drug (Zion, 2004). This novel approach to delivering insulin was in the late pre-clinical phase of development when the pharmaceutical giant, Merck & Co., acquired SmartCells and its technology in late-2010 (Carroll, 2010). The deal garnered national awareness for being one of the largest pre-clinical life-science deals in history (Booth, 2011). Even with this much attention, to date no one has critically analyzed the key factors nor the inner mechanics of SmartCells’ unique ability to achieve such an outcome. This case study will delve into not only the critical external factors but also the internal events and decisions made by the company and its key management team members leading up to the Merck acquisition. Using publicly available technical papers, patents and published articles as well as interviews with former high-level SmartCells team members, this case study will determine the general applicability and potential for deploying the “SmartCells Business Model” to enhance the rate of success of early-stage pharmaceutical ventures.