Commercialization Pathway for RaceAstra Drug - Case Study Example

Commercialization Plan for RaceAstra Drug Name: Admission No: Institution: Instructor’s name: Date: TABLE OF CONTENTS Abstract 2 1.Introduction of The Concept 3 1.1.Value proposition 3 1.2.Intellectual Property strategy 4 2.Industry Analysis 4 3.Market Applications 5 4.Research Team and Management 6 5.Possible Challenges and Risks 7 6.Commercialization Pathway and Resources 8 7.Exit for Financial Investors 9 8.References 10 9.Appendices 10 Abstract This paper presents the commercialization process for a new drug that would assist in the cure of Alzheimer disease. This is based on the fact that currently, there is no cure for the disease and it is necessary to ensure proper commercialization is carried out to ensure consumers are not harmed by the introduction of the drug while the manufacturer of the drug gets the rights to own the drug. It provides a description of the new drug and how it will function and the procedures that will be followed to attain intellectual property rights for the product. In addition, it provides an analysis of the industry status by providing an overview of the current treatment of Alzheimer disease and the gaps that need to be addressed by the introduction of the drug. It also investigates potential barriers that may be experienced in the process of introduction into the market and the sales patterns and profit margin patterns that will need to be followed during the sale of the drug. It also investigates potential market applications that will need to be focused on so that the sale of the product is enhanced such as market segmentation variables and demographic characteristics of target customers. This is followed by investigating the management team such as roles and responsibilities of various people who will perform the task of its commercialization. The challenges likely to be experienced during commercialization of the drug are also investigated, the path to commercialization and 1. Introduction of The Concept This concept is s new drug that is under development and will be able to treat Alzheimer disease. The drug will be called RaceAstra and will be provided as oral beta secretase cleaving enzyme (BCE) inhibitor, which will be able to contribute to a reduction in amyloid beta levels in the cerebral-spinal fluid of people affected with Alzheimer disease. In order to ensure the product reaches consumers and the company benefits from development of the drug, an efficient commercialization plan will be developed. This will involve estimating costs of development and commercialization as well as management of revenues. There is the need to ensure a clear illustration of the methods in which revenues will be shared is established and property rights of the developers of the drug are protected (Wessner 2008). There is the need to plan on the launch of a clinical trial with the cooperation of researchers from its development to establish the guidelines for its commercialization and use by consumers. Thus, a commercialization plan has been developed that will enable the right course of action to be taken during its sale and distribution. It also establishes the exit strategy for financial investors. 1.1. Value proposition This drug will contribute significantly towards treatment of Alzheimer disease because it is an example of leading challenges experienced in the medical science today and the use of BACE inhibitors will contribute towards key drivers that contribute to the progression of the disease. 1.2. Intellectual Property strategy The development of this new drug is as a result of the partnership between the UK-based Astra-Zeneca and Eli and Lilly Company in order to meet the customer demands for the cure of Alzheimer disease. This implies that this drug will be owned by Astra-Zeneca and Eli and Lilly Company. Thus, there is the need to move the drug to registration trials (Mehta 2008). Before this is done, the drug will be designed in various sizes of tablets that can be swallowed by patients. The drugs will be packed in specially designed storage devices that are designed with the logo of the manufacturer. This will be an indication that the production of the drug is under the ownership of a particular manufacturer. This will be followed by arranging on its commercialization by establishing structures that will enable it to be reached by consumers. For instance, any legal requirements before its commercialization will be followed and the relevant authority responsible for providing property rights will be approached for a certificate of ownership and distribution of the drug. The company will also bear the responsibility for any consequence of the use of the drug by the public. 2. Industry Analysis Presently, there is no particular cure for Alzheimer disease. It has not been easy to find a treatment that can reverse the progression of the disease. The process of treatment for the condition has not been developed and there is no medicine that can help control its symptoms. However, there are drugs that have been used to treat the symptoms of the disease in some people (LamberT 2008). The most common option has been home based care for patients suffering from the condition. During this process, medicines that ensure a reduction in troubling symptoms of the condition such as depression, sleeplessness and behavioral problems such as agitation have been used. Other methods that have been used to manage the condition include planned medical and social management, exercise and good nutrition or social interaction. Consequently, it shows that Alzheimer’s condition has not been treated by use of a drug which cures the condition. This shows that currently, people are faced with the problem of obtaining a drug that can ensure the condition is treated. Thus, many people who have suffered from Alzheimer condition have died or undergone physical and psychological injuries that have affected their development. This has led to the need to develop a drug that can ensure any person suffering from Alzheimer’s disease is treated. The barriers to entry of a new drug in the cure of Alzheimer has been lack of adequate research on a drug that can enable the cure of the condition and lack of approval of any drugs aimed at curbing the condition by most drugs control agencies in the UK. This is a good environment for the Race Astra drug because it will reach a number of people suffering from Alzheimer condition without facing any competition from other rugs in the control of the condition. 3. Market Applications The primary markets that will be targeted by the new drug are hospitals in the UK where patients suffering from Alzheimer disease have been admitted. Another primary market for the drug will be health centers in various locations in the UK and Chemists involved in the sales of drugs in residential areas. These primary markets will provide high demand that will ensure constant supply of the drug from the manufacturing point (Kahn 2007). In addition, there will be secondary markets available to be supplied with the drug such as shops and local people in residential areas in the UK. These primary and secondary markets provide the right amounts of demands for the drugs thus it is speculated that the drug will be sold at a high rate according to the expectation of the manufacturer. The target users of the drug will be people in their late 60s or early 60s who are more likely to suffer from the condition. Alzheimer condition also affects younger children and it is expected that the commercialization of the drug will meet health needs of children as well as adults. The drug will be easy to afford because it will be sold in tablets that can be purchased in small amounts at a reduced price. Thus, families with low income will be able to purchase the drug. The variables that will be considered during market segmentation include the existence of health care institutions in a particular area, whereby areas that have a high concentration of health care facilities will be supplied with the drugs and residents asked to obtain the drugs from the health facilities (Wessner 2008). Market segmentation will also involve concentrating the distribution of the drug in areas where cases of Alzheimer condition have been frequently reported and setting up distribution centers in those locations. For instance, it has been reported that in remote areas in London, there are few health facilities and people suffering from Alzheimer conditions have not been properly treated. The commercialization team will set up distribution centers in these areas to assist in the distribution of the drug. Customer profile such as areas where previous cases of Alzheimer condition have been reported will be targeted for the distribution of the drug and customers educated on how to use the drug. Demand in a particular area will be established by the number of health institutions that have reported the highest cases of Alzheimer condition. These hospitals will be supplied with the drugs with the focus on those with the highest cases of Alzheimer condition (Mehta 2008). This will be facilitated by data provided by various hospitals in the UK such as those in London. This is because there are adequate records kept regarding patient history in hospitals in London. This will ensure the commercialization team gets the facts regarding areas of demand for the new Alzheimer drug. Needs analysis will also involve determining any group of people in the communities such as rural areas who will be assigned the task of distributing the drug to consumers in rural areas. 4. Research Team and Management Before the drug is manufactured until it is introduced into the market, there will be research and management teams that will be tasked with the responsibility of conducting research on approaches that need to be followed during the design of the drug. The research team will be people who are experienced in conducting the suitability of drugs before they are introduced into the market. The team is also composed of people who can conduct proper product design such as the size of the product and the method of transportation to be used to transport the products. A research will also be conducted on the raw materials such as chemicals that need to be purchased in order to manufacture the drug (Lentz 2009). Medical experts will be involved in ascertaining the quantity of chemicals required to make a sample of the drug. The medical research members will determine the effectiveness of the drug in reduction of amyloid beta levels in the cerebral-spinal fluid of patients suffering from Alzheimer’s condition. The product design professional will ensure the right size of the drug is determined. When the production of the drug is completed, clinical experts will conduct a research on the drug to determine whether it is clinically suitable for use by people suffering from Alzheimer’s. A research will also be conducted on the methods of packaging the drug before it is dispatched to consumers. The management team will be responsible for ensuring facilities for use in the production of the drug are put in place and any legal requirements before the production of the drug is carried out. In addition, marketing research team will be responsible for conducting market research on the places that provide the right market demand for the drug. In the cases where there is a missing talent in the team, the talent may be outsourced from other places where it is available. For instance, if there are few qualified medical research professionals at their services will be outsourced from other institutions such as health organizations. The process of ownership management of the drug will be achieved by seeking registration certificate from the relevant drug control body in the UK. This will be done after the right brand name is given to the product and the drug is designed in a distinctive form so that is not identical to other drugs. The management of Astra-Zeneca and Eli and Lilly Companies will determine any budgetary allocations required to attain certification and pay for the process. 5. Possible Challenges and Risks The main challenges that may be experienced in the process of commercializing the drug can be classified into technology risks, business model risks, market risks and execution risks. Under technology challenges, it is speculated that there may be lack of adequate knowledge to conduct research successfully to determine the components of the drug that need to be included during the manufacture of the drug. Consequently, there is the possibility that the drug may not function well in controlling Alzheimer condition (Kodama 2011). This will result into a halt in the entire project. In addition, technology challenges may not be experienced in terms of lack of equipment and facilities that enable production of the drug. This may be contributed by lack of enough funds to purchase these facilities. Consequently there will be low efficiency in the production of the drug. Another challenge that may be experienced is the business model challenge. The method of distribution may not be one that results into penetration of the market with high demand for the drug. Consequently there is the possibility that the drug will not be sold well due to focus in areas where there are low demands. Another business model challenge that the company faces is the use of middlemen to distribute the drugs. This is because during the process of distribution, there is the possibility that the mode of transport selected may result into destruction of the drugs before they are availed to distributors in the distribution centers. In addition, high transport costs will be incurred if the production point is located far away from distribution points. The market challenges that may be experienced by the company include the possibility that consumers may be contented with the physical methods of treating Alzheimer’s condition and may not be willing to use the drug. This will require the company to conduct promotion activities that will be time and resource consuming. Another challenge is the execution risks. This is where there is the possibility that the drug may not be functioning correctly and consumers’ health may be negatively affected by the drug. This may result into a negative reputation of the producing company and subsequent purchase of the drug may not be easy (Giannobile, Genco and Burt 2010). Another execution challenge is the manner in which consumers are educated to use the drug may not be efficient and consumers may not be willing to use the drug. This will result into loss to the company due to low sales and the company may not be able to break-even. 6. Commercialization Pathway and Resources During the commercialization process of the drug, the companies will need to select the right market entry strategy. This will ensure the drug acquires the right level of demand and customers are informed about the drug. For instance, the strategy of joint venture can be effective for the company. This is where the company collaborates with another company involved in commercialization of drugs so that they combine their activities to a single distribution process. This strategy will be beneficial to Astra-Zeneca and Eli and Lilly Company because it will act as a benchmark for the areas where their distribution processes need to focus (Lentz 2009). In addition, the process of distributing the drugs in addition to their drugs distributed by the partner company will result into the ease of convincing customers to buy the new drug thus promoting its popularity. The timelines and milestones will involve stages through which the drug will undergo during the process of its commercialization. The first stage is the introduction stage. During this stage, the drug will be introduced into the market and most customers will not be aware of its function. In order to improve the demand for the product, promotion and advertisement will be enhanced in the target markets. The second stage during the process of commercialization will be the growth stage. This is the stage where the drug will be gaining popularity and an increased rate of demand. During this stage, additional promotion will be enhanced while areas where customers are aware of the use of the product will be supplied with the drug continuously. The third stage will be the maturity stage. This is the stage where the product has reached maximum level of demand and most markets have been reached. In this stage, supply of the drug will be enhanced while the product will be improved to maintain the level of demand (LamberT 2008). The final stage during the timeline of commercialization of the drug will be the decline stage. In this stage, consumers of the product will have a decreasing demand for the product. This is because they may be aware of the limitations associated with the product such as side effects. Thus, the demand for the drug during this stage will be enhanced by improving the design of the product so that customers get only the benefits and do not suffer from the side effects. 7. Exit for Financial Investors During the exit from the business, the strategy that will be used is the merger and acquisition method. This refers to the process where the business merges with another business involved in a similar activity of the production, sales and distribution of drugs to consumers. This exit strategy will ensure a win-win situation for the business because the acquiring company will have the skills and thus ensuring the functions of the business are not affected. It will also ensure Astra-Zeneca and Eli and Lilly Company are able to implement their policies when they are merged into a similar activity of producing the drug (Rafinejad 2007). It will ensure the company leaves the business gradually and introduces the acquiring company into the procedures and activities involved in the production of the drug. The limitation of this exit strategy is that they will not be able to prevent changes to the activities in the business if they feel that such activities are not into their interest. During the process of exit the financiers will be given the opportunity to invest in training professionals in production of the drug and its commercialization. They will also acquire additional facilities due to their financial capability to purchase new equipment and materials which enable them produce the drug in mass quantities. It will also be an opportunity for Astra-Zeneca and Eli and Lilly Company to grow their revenues while not participating in the business. The benefit of this process of exit is that the initial owner will be entitled to good will and royalties that will result into additional income despite exit. 8. References Giannobile, W. V., Genco, R. J., & Burt, B. A. 2010. Clinical research in oral health. Ames, Iowa, Wiley-Blackwell.  Kahn, E. 2007. Innovate or Perish Managing the Enduring Technology Company in the Global Market. Hoboken, John Wiley & Sons, Inc.  Kodama, M. 2011. Interactive business communities: accelerating corporate innovation through boundary networks. Farnham, Surrey, England, Gower. LamberT, D. M. 2008. Supply chain management: processes, partnerships, performance. Sarasota, Fla, Supply Chain Management Institute. Lentz, C. 2009. The refractive thinker: an anthology of higher learning. Vol. 1 Vol. 1. Las Vegas, NV, Lentz Leadership Institute. Mehta, S. S. 2008. Commercializing successful biomedical technologies: basic principles for the development of drugs, diagnostics, and devices. Cambridge, Cambridge University Press. Rafinejad, D. 2007. Innovation, development and commercialization. Boca Raton, Fla, J. Ross. Wessner, C. W. 2008. An assessment of the SBIR program at the National Science Foundation. Washington, D.C., National Academies Press. 9. Appendices I. Product Development stages II. Schedule of activities during commercialization Activity Duration (Months) Research and Product Development 2 Intellectual Property Acquisition process 1 Designing production process 1 Designing marketing strategy 0.5 Formulating exit strategy 1 III. Budget Estimates during Commercialization process Commercialization stage Number of projects Amount of Investments (£) Technology Demonstration 1 3318177 Research and Development 2 2192813 Improved Research Capacity 3 1350000 Benchmarking and Evaluation 2 699948 Designing and production 2 149259 Marketing 3 1877983 Intellectual property acquisition 1 143278 Exist strategy formulation 1 290347 TOTAL 10021805 Read More