Korean biopharmaceutical firms, the latecomers in a long-cycle industry, are producing innovative outcomes of developing and out-licensing new drug candidates. It challenges the notion that latecomers achieve catch-up mostly the industries with shorter technology cycle. This thesis aims to explore the phenomenon and illustrates the latecomers’ catch-up and innovation strategies in the biopharmaceutical industry. To achieve the research purpose, this research poses the following question: How can the latecomer firms achieve innovation in the biopharmaceutical industry? The research examines the case of the Korean biopharmaceutical industry with a sectoral system of innovation perspective. Three empirical analyses explore the key characteristics of learning in knowledge and technologies, actors and their networks, and institutional design. The findings show that Korean biopharmaceutical firms have built technology capabilities in the area of clinical research. The intensity of clinical research has a positive effect on the learning curve and out-licensing performances. The analyses also show that Korean biopharmaceutical firms have leveraged domestic hospitals to acquire the requisite knowledge. As for the knowledge utilisation network, the firms use final product knowledge via international collaboration while utilising a domestic network to acquire knowledge of research in progress and collaborate for new product development. Lastly, the analyses also illuminate that institutional design is a critical factor. The sequential implementation of patent and clinical trial policies positively affects the innovation process. These findings are contrasting from multinational pharmaceutical innovation studies which highlight the basic research capability leveraging the network with foreign universities and the simple introduction of patent regulations. This research makes contributions in three aspects. First, it makes a theoretical contribution by suggesting the possibility that latecomers can catch up in a long-cycle industry. Second, it provides strategic direction for latecomer biopharmaceutical firms to leverage local infrastructure rather than use the follower strategy. Third, it has a technology policy implication that priority setting is important for promoting domestic industry development.