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Massachusetts Institute of Technology

The Science and Business of Biotechnology

Massachusetts Institute of Technology via edX


This course focuses on early-stage biotechnology companies, with particular emphasis on understanding the underlying science, technology, and disease targets—together with the application of novel business structures and financing methods—to facilitate drug discovery, clinical development, and greater patient access to new therapies.

Current research is enhancing our understanding of the genetic, molecular, and cellular bases of many human diseases, and is leading to many new types of biotherapeutics that we will cover in this course, including recombinant therapeutic proteins; monoclonal antibodies and antibody drug conjugates; cancer immunotherapies, replacement cells and genetically engineered cells; and nucleic acid and gene therapies. Translating these discoveries into drugs and diagnostics increasingly requires the establishment of for-profit companies, but funding for early-stage development of novel therapies is becoming scarcer, especially for therapeutics for “rare” diseases that affect small populations. The dearth of funding for early-stage biotherapeutics companies in the so-called “Valley of Death” can be attributed to several factors, but a common thread is increasing financial risks in the biopharma industry and greater uncertainty surrounding the scientific, medical, economic, political, and academic environments within the biomedical ecosystem. Increasing risk and uncertainty inevitably leads to an outflow of capital as investors and other stakeholders seek more attractive opportunities in other industries.

By applying financial techniques such as portfolio theory, securitization, and derivative securities to biomedical contexts, more efficient business and funding structures can be developed to reduce financial risks, lower the cost of capital, and bring more life-saving therapies to patients faster. Thus this course will also cover basic financial analysis for the life-sciences professional; the historical financial risks and returns of the biotech and pharmaceutical industries; the evaluation of the science and business potential as well as the mechanics of financing biotech startups; capital budgeting for biopharmaceutical companies; and applications of financial engineering in drug royalty investment companies, biomedical megafunds, drug approval swaps, and life sciences investment banking.


Please note: edX Inc. has recently entered into an agreement to transfer the edX platform to 2U, Inc., which will continue to run the platform thereafter. The sale will not affect your course enrollment, course fees or change your course experience for this offering. It is possible that the closing of the sale and the transfer of the edX platform may be effectuated sometime in the Fall while this course is running. Please be aware that there could be changes to the edX platform Privacy Policy or Terms of Service after the closing of the sale. However, 2U has committed to preserving robust privacy of individual data for all learners who use the platform. For more information see the edX Help Center.


* Week 0:** Intro to the Science of Biotech and Healthcare Finance

  • Week 1: Therapeutic Recombinant Proteins; Present Value

* Week 2:** AAV Vectors & In Vivo Gene Therapy; Capital Budgeting

* Week 3:** Ex Vivo Gene Therapy; Stocks and Bonds

* Week 4:** Nucleic Acid Therapies; The CAPM & Diversification

* Week 5:** Gene Editing; Options

* Week 6:** Clinical Trials

  • Week 7: Antibody Generation; Venture Capital & New Business Models

* Week 8:** Monoclonal Antibodies; Securitization

* Week 9:** Cancer Immunotherapeutic; Healthcare Analytics

* Week 10:** New Cell Therapies; Pricing, Value & Ethics

Taught by

Andrew W. Lo, Harvey F. Lodish and Zied Ben Chaouch


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