Group 7 assignment medicine company

Group 7 assignment medicine company

• 1.
  The Medicine Company Group-7
• 2.
  Corporate Strategy • Toacquire drugs that were in the late stages of product development but wereundervalued by their developing companies.
• 3.
  Total Expenditure-Product Development 1.Operating Expense during 4 yrs of Product Development Year Operating Expense 1997 $18,464,740 1998 $30,252,871 1999 $35,353,279 2000 $54,605,882 2.Cost of Acquisition-$2,000,000 3.Further Product Development cost-$ 28,000,000 4.Manufacturing Process-$ 10,000,000
• 4.
  Factors effecting- RevenueModel • Expense occurred during Product Development. • Royalty support to Biogenic as per sales volume. • Cost of Goods Sold-$40. • Breakeven to be met before patent expiry.
• 5.
  Market Structure • Categoriesof Patients -Low Risk-50% -High Risk-40% -Very High Risk-10% • Market Share of Heparin(100%)-3.5 million patients covering all categories at $2/dose
• 6.
  Product Characteristics • High Cost-more than $40/dose • Less doses required • Responsive • Less Risky • More effective for High to very High risk cases.
• 7.
  Esimated Market Share •Present Market size is 3.5 million patients growing at 10% y-o-y. • High and very Risk patients are more probable to switch from Heparin to Angiomax. • Assuming 50% switch—1.1 million patients/doctors would opt for Angiomax • Angiomax Market growth would be fuelled by- Capturing Heparin market + Over all market growth assuming 15% y-o-y growth on doses
• 8.
  Pricing Model • Doses=1,100,000 •Variable cost-COGS-$40/dose=$44,000,000 • Fixed Cost over a period of time and would be incurred in the coming years=$ 178,676,772 • Assuming avg. royalty to be 10% for first 10 years • Assuming margins 1:3
• 9.
  Pricing Model Calculation •Selling Price for first 10 years Year Cost per dose(in $) 1 168.7300287 2 162.373938 3 156.8469026 4 152.0407849 5 147.8615521 6 144.2274366 7 141.0673362