The present paper has the objective of understanding the disappearance of biotechnology firms. To accomplish this objective, a sample was built from 552 firms operating in Canada between 1996 and 2010. The results reveal that disappearance is not only due to filing for bankruptcy, but also due to change in firms' names, as well as mergers and acquisitions (M&A). Statistical tests further show that the survival of dedicated biotechnology firms (DBFs) depends mainly on two factors: having a qualified management team, and receiving the support of the venture capital firms. In addition, the results demonstrate that firms which mainly operate in the human health sector and have already received support from VC opt for M&A to exit the industry. This study has some practical lessons for different stakeholders concerning the survival and the exit of new enterprise biotechnology firms.
Keywords: dedicated biotechnology firms, DBFs, venture capital, bankruptcy, mergers and acquisitions, M&, A, management teams, strategic management, Canada, firm survival, firm disappearance