Schaible & Weisman Business Case

How can we use the acquisition of BioCore to increase profitability, while staying true to our

credo?

Capitalizing KEMICARE potential within 5 years

Acquired Biocore, a Biologics company

Historical Overview

Overview Recommendations

ConclusionRisksImplementation

Implementation

Conclusion

Schaible & Weisman must maximize KEMICARE’s profitability by entering the RA markets by utilizing the PRISMS Strategy.

Hypothesis



Solution

Sell KEMICARE with the

superior

strategy

Price KEMICARE

at a premium

cost R&D in the Rheumatoid

Arthritis market

Integrate BioCore

employees into S&W Culture

Market KEMICARE using the

prime strategy

Strategically integrate an

external manufacturer

The PRISMS Strategy



R&D



R&D in the Rheumatoid

Arthritis market The

PRISMS Strategy

Comparing the Markets

The PRISMS Strategy

Crohn’s and RA Market Crohn’s and RA MarketCrohn’s Market

• 2021 Market Size: $466MM

• 75% Market Size Increase From 2016

• 2021 Market Size: $1684 MM

• 92% Market Size Increase from 2016

• 2021 Market Size: $1987 MM

• 93% Market Size Increase from 2016

Crohn’s, RA, and UC Market



Competitive Landscape

The PRISMS Strategy

BRELCEPT KEMICARE INBIBE

• Self-Injection • No dosage

verification

• Timing must be precise

• Administered by physician

• Supervision during injection

• Dosage monitoring at all times

• Self-Injection

• No dosage verification

• Timing must be precise

“Our first responsibility is to the doctors, nurses, and patients, to mothers and fathers, and all others who use our products and services.” – Schaible & Weisman Credo



Integration

Integrate BioCore

employees into S&W Culture

The PRISMS Strategy



Integration of BioCore Employees

625 Employee

s

Severance

Retention

• $950,000,000 Overall Cost• $300 MM Upfront Cost• $65 MM Employee Salary Per Year• Severance does not fit S&W Credo

• $750,000,000 Overall Cost• No Upfront Cost• $75 MM Employee Salary Per Year • Retention fits S&W Credo



Integration of BioCore Employees

Customer Service Employee TreatmentWe value promptness and accuracy in dealing with customers.

We must make the decisions that will make our company profitable.

We want to ensure the rights of every employee are

met.

We value community service and giving back to the world.

Our Values in their

Company Stockholder Priorities Community Responsibility



Selling

Sell KEMICARE with the

superior

strategy

The PRISMS Strategy



Selling

•$275 MM-Total Cost

• 50 Additional Sales Representatives+150 existing Reps

• 2 Medical Conferences and Sales Training



Superior Selling

Marketing

Market KEMICARE using the

prime strategy

The PRISMS Strategy



Marketing-The Goldilocks Approach

Base

• $100 MM cost • Catered towards

Doctors and Professionals

Integrated Prime

• $250 MM • Celebrity

spokesperson endorsement

Prime

• $200 MM cost• Direct to

Consumer approach (DTC)



Solution

Strategically integrate an

external manufacturer

The PRISMS Strategy



Manufacturing

• Fixed Costs – $10 M- Variable Costs- $0.15- Capital Investment- $10

M‣ Depreciated over 7

years

$107 MM Cost of Goods by 2020

• Fixed Costs- $30 M- Variable Costs- $0.018- No Capital Investment

‣ No depreciation

External Manufacturing

Internal Manufacturing

$41 MM Cost of Goods by 2020



SolutionPrice

KEMICARE at a

premium cost

The PRISMS Strategy



Price Point

Customer Validation• High Self Value Validates Product

Higher Profitability • $533MM Average Gross Profit

Inflation Protection• Higher Price Value Protects from

Depreciation

Premium Pricing



TimelineEnter the RA MarketAfter finishing RA development, KEMICARE enters market.

R&D InititiationBegin RA research and development.

BioCore IntegrationIntegrate BioCore employees into S&W culture.

Launch RA Marketing Mid-year marketing/selling strategy launch.

Outsource ManufacturingBegin KEMICARE production from third party site.

2014

2016

2018

2018

2019

Evaluate Market PricingIdentify if inflation needs to be accounted for in price point. 2021

Analyze PRISMS Strategy Make neccesary adjustments to suggestions.

2024



Risks

Loss of Oversight in Product Development

Mitigation

R&D Timeline Delay

Competitive Landscape

- Credo Alignment- Outside management

- Contingency Planning - Create ”what if flowcharts”

- DTC Marketing- Leverage ethical competitive

advantage



Appendix A





Appendix B

Appendix - Premium Pricing option -

AppendixAppendix B






AppendixAppendix B

Cost of Severance Breakdown

Severance: $300 MM

New Employee Cost: $650 MM

Talent Acquisition/Training

$2.5 MM

Employee Training

$952,500,000 MM

AppendixAppendix B






AppendixAppendix C

Appendix - Parity pricing option Appendix C



AppendixAppendix C



Appendix - Internal manufacturing option Appendix C




Appendix C



Schaible & Weisman Business Case

Business

Transcript of Schaible & Weisman Business Case