$191B Industry Drugs awarded 17 year patent Need to cut costs –Sales volume decreasing –Less...

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Transcript of $191B Industry Drugs awarded 17 year patent Need to cut costs –Sales volume decreasing –Less...

Page 1: $191B Industry Drugs awarded 17 year patent Need to cut costs –Sales volume decreasing –Less pricing flexibility –More competition –Manufacturing costs.
Page 2: $191B Industry Drugs awarded 17 year patent Need to cut costs –Sales volume decreasing –Less pricing flexibility –More competition –Manufacturing costs.

• $191B Industry• Drugs awarded 17 year patent• Need to cut costs

– Sales volume decreasing– Less pricing flexibility– More competition– Manufacturing costs increasing

Page 3: $191B Industry Drugs awarded 17 year patent Need to cut costs –Sales volume decreasing –Less pricing flexibility –More competition –Manufacturing costs.

• New Plants needed for new drugs• Two types of plants

– Specialized plant• Capacity 20000kg• Cost $37.5M• Cannot be modified

– Flexible Plant• Capacity 14625• Cost $150M• Easy to switch to new drugs

Page 4: $191B Industry Drugs awarded 17 year patent Need to cut costs –Sales volume decreasing –Less pricing flexibility –More competition –Manufacturing costs.

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Pre clinical

Clinical

Process Development

Facilities Design & Construction

FDA Review

Key Project Points

Produce Clinical Trial Supplies

Process R&D Process Optimization

Product Decision & Final Process

Lockdown Facility CompleteProduct Launch

Page 5: $191B Industry Drugs awarded 17 year patent Need to cut costs –Sales volume decreasing –Less pricing flexibility –More competition –Manufacturing costs.

Chemical Product created

Profits: $37.5MM

Chemical Product not created

Costs: $SUNK

Product moves to Human Trial

Costs: $

Chemical Product created

Chemical Product created

Chemical Product created

Chemical Product created

Chemical Product created

Product does not move to Human Trial

Costs: $SUNK

9990/10000

10/10000

1/10

9/10

Specialized Facility

Page 6: $191B Industry Drugs awarded 17 year patent Need to cut costs –Sales volume decreasing –Less pricing flexibility –More competition –Manufacturing costs.

Chemical Product created

Costs: $150MM

Chemical Product not created

Costs: $Partially Recoverable

Product moves to Human Trial

Costs: $

Chemical Product created

Chemical Product created

Chemical Product created

Chemical Product created

Chemical Product created

Product does not move to Human Trial

Costs: $SUNK

9990/10000

10/10000

1/10

9/10

Flexible Facility

Page 7: $191B Industry Drugs awarded 17 year patent Need to cut costs –Sales volume decreasing –Less pricing flexibility –More competition –Manufacturing costs.

Specialized

Successful

Not Successful Succ

essf

ul

Not Successful

Retro-fit Retro-fit

Page 8: $191B Industry Drugs awarded 17 year patent Need to cut costs –Sales volume decreasing –Less pricing flexibility –More competition –Manufacturing costs.

• Our proposal– Start each new drug in flexible plant– Assess demand and viability of new drug

• If Demand meets or exceeds forecast:– Option to build specialized facility

• If Demand is less than forecast:– Discontinue production– Design specialized plant with many small run drugs

– When demand drops at end of patent protection, move production back to flexible plant

Page 9: $191B Industry Drugs awarded 17 year patent Need to cut costs –Sales volume decreasing –Less pricing flexibility –More competition –Manufacturing costs.

Flex-Plant

SpecializedSuccessful

Not Successful

New Drug

Successful

Not Successful

Specialized

New Drug

Page 10: $191B Industry Drugs awarded 17 year patent Need to cut costs –Sales volume decreasing –Less pricing flexibility –More competition –Manufacturing costs.

S

S S SS S

S

SSS

Page 11: $191B Industry Drugs awarded 17 year patent Need to cut costs –Sales volume decreasing –Less pricing flexibility –More competition –Manufacturing costs.

SSSS

F

Page 12: $191B Industry Drugs awarded 17 year patent Need to cut costs –Sales volume decreasing –Less pricing flexibility –More competition –Manufacturing costs.

• Benefits– Process Optimization

• Flexible facility easier to optimize/adjust• Mass Production available within weeks of Process

R&D completion

– Mass Production matches end of Phase III• Never wait for a plant to be constructed

– Up to 1 extra year of Patent protected sales• Nearly $50MM in profits

– Fewer facilities need to be constructed