Market Strategies for a Tobacco Bio-Pharming Application: The Case of Gaucher’s Disease Treatment

Abstract

Small firms developing biotechnology applications often focus on establishing intellectual property rights, which can then be sold to more established firms with existing market chains. This paper explores the expected ‘Buyout’ price and economic surplus changes for an emerging bio-pharming application with transgenic tobacco. The results suggest a ‘Buyout’ price of about $1.75 billion. Yet despite this potentially large payout to the innovating firm, consumers also see significant surplus gains.