Growth and profitability in small privately held biotech firms: preliminary findings

This paper reports on preliminary findings on a study of the relationship of growth and profitability among small privately held Finnish Life Science firms. Previous research results concerning growth and profitability are mixed, ranging from strongly positive to a negative relationship. The conventional wisdom states that growth is a prerequisite for profitability. Our results suggest that the reverse is the case. A high profitability–low growth biotech firm is more probably to make the transition to high profitability–high growth than a firm that starts off with low profitability and high growth.