Emba Strategic Dilemma April 2009
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Transcript of Emba Strategic Dilemma April 2009
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This is part of a presentation made by my Executive MBA Team for our final Strategic Dilemma project, April 2009
The Company name has been omitted and some of the slides have been deleted, as the company we were working for had a non-disclosure agreement.
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Virginia Commonwealth University Fast Track EMBA
Team 4: Joe Barnes Sue Brown
Clint Johnson Ailen Lacey Steve Morgan Tim Radmore
Faculty Advisor:Dr. R. Wood
Strategic Dilemma Proposal
Market Entry for (Company)
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Science Background Company Overview Drug Development Competitors Market Entry Options Recommendation Summary Questions
Agenda
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PROTEOMICS:"The study of the structure and
function of proteins, including the way they work and interact with each other inside cells."
National Cancer Institute
The Science
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(Company)
A biomarker discovery company with a proprietary computational platform (algorithm)
MISSIONTo advance pharmaceutical development
by introducing computational bioinformatics services and
new technology
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(Company) – What It Offers
A method to identify Possible diagnostic biomarkers Possible therapeutic targets for new drugs Possible toxic side effects of drugs Optimal dosage of drug
How? using computational bioinformatics combined
with laboratory validation
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G
B
D E C
H
F
A
Protein Interactions
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F
Finding more potential pathways/
interactions than competitors
I
JK
G
B
D E
H
F
A
MWP – Uniqueness
C
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DISEASE
Protein J Causes Disease
F
I
JK
G
B
D E
H
F
A
C
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DISEASE
F
I
JK
G
B
D E C
H
F
A
Protein J Causes Disease
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DISEASE
F
I
JK
G
B
D E C
H
F
A
Protein J Causes Disease
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I
DISEASE
F
JK
G
B
D E C
H
F
Protein J Causes Disease
A
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Source: http://www.fda.gov/fdac/graphics/newdrugspecial/drugchart.pdf
Drug Development Timeline
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Source: http://media.pfizer.com/files/research/pipeline/2008_0930/pipeline_2008_0930.pdf
Drug Development Pipeline - Pfizer
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0
10
20
30
40
50
Pharmaceutical R&D ExpendituresInflation-adjusted (2002$) in Billions
R&D (2002$)
Industry R&D Expenditure Trends
Source: Tufts CSDD Approved NCE Database; PhRMA
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(Company’s) Value Proposition
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Risks and Rewards of Innovation
Drug development is costly, risky, and lengthy
Pfizer states one in many thousand new compounds generates revenue
R&D costs continue to increase
Increased success using (Company) can add substantial bottom line value to Pharmaceuticals
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Competitors
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Ingenuity Pathway Analysis
800-lb gorilla
Used by most large pharmaceutical companies
Referenced in over 1,400 publications
Web-based
Ingenuity Systems
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Ariadne
Pathway Studio®
Not focused specifically on drug industry
Used by numerous research institutes
Referenced in approximately 200 publications
PC stand-alone application
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GeneGo
MetaCoreTM
Newest of the “Big 3”
Gaining acceptance from large pharmaceutical companies
Referenced in approximately 200 publications
Web-based
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Other Competitors
??? Subsidiaries of other companies
Primary focus is support
Not well established
Limited exposure to large pharmaceutical companies
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Ingenuity
Ariadne
GeneGo Other Competitors
(Company)
Where does (Company) fit?
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SellOutright
Market Entry Options for (Company)
We modeled what we believe are the most feasible options Option estimates reflect a 3-year product life (Company) executives can use the modeling tool to refine projections
Partner with Competitor
Hire Sales Consultant
New Stand-Alone
Business
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Obstacles to Market Entry for (Company)
Proof of Concept
Dedicated Resources
Funding
Strategic Alliances
Competitors
Web Presence
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Market Entry Options for (Company)
Lowest risk option
Quickest revenue recognition for (Company) Executives
Must complete “Proof of Concept” and publish results
Estimated revenue from sale: $13,000,000
SellOutright
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New Stand-Alone
BusinessMarket Entry Options for (Company) Highest risk option – Must overcome all obstacles
12+ months to launch – No sales until year two
Competition may duplicate (company) functionality at any time
Healthcare Sales Consultant may reduce launch time/increase revenue
3-Year estimate of end-of-year cash position w/o Sales Consultant:
Yr 1: ($537,000) Yr 2: $701,000 Yr 3: $7,700,000
Hire Sales Consultant
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Market Entry Options for (Company) Partnering with competitor allows (company) to leverage their
resources: Client portfolio Trained staff Web presence
Partner with Competitor
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Industry Partner Portals Quicker launch than Stand-Alone option: 4 months vs. 12+ months
Fewer obstacles than SA, but POC is critical to attract Partner(s)
3-Year estimate of end-of-year cash position:
Yr 1: $2.9 million Yr 2: $10.7 million Yr 3: $22.4 million
Partner with Competitor
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Financial Comparison of Market Entry Options
Scenario Year 1 Year 2 Year 3
Sell Business Outright $ 12,984,068 N/A N/A
Stand-alone Business $ (537,000) $ 701,000 $ 7,700,000
Hire Sales Consultant $ 632,508 $ 2,266,712 $ 10,073,015
Partnership with Competitor (Partner) $ 2,900,000 $ 10,700,000 $ 22,400,000
No scenario includes a revenue sharing estimate
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Recommendation
Launch (company) as a pass-through service from Partner websites
Requirements Estimated $250k in capital Fully dedicated resources Credibility in the marketplace Licensing arrangement
GeneGo
(Company)
Other
Competitors
Ingenuity
Ariadne
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Summary
Proteomics (Company) Drug Development Competitors Market Entry Options Recommendation