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Apoorva Bajaj (Roll 248) Divva Gandhi (Roll 258) Madhul Bhalla (Roll 268) Pratik Chaudhuri (Roll

278) Soni Kumari (Roll 288) Problem Statement


The company no knowledge of dealing with new technology. Lack of knowledge of financial investments required to setup the plant. Inexperience in marketing and selling oncology drugs. Inexperience in conducting clinical trials. Competitor had more experience in head and neck cancer market. Lack of knowledge in manufacturing the product.

Major Issues
When to launch BIOMab: Immediately after the phase II trials or after the completion of phase III trials. What should be the launch strategy-product portfolio, price, channel (place), marketing communication (promotion).

Situation Analysis
COMPANY Biocon, from a very humble beginning in 1978, grew to be one of the top players in the pharmaceutical sector by 2006. Started by Dr. Mazumdar-Shaw as a JV with Biocon Biochemicals of Ireland, it went on to become a leading enzyme manufacturing company. Company decided to enter the biopharmaceutical market due to the huge potential. It started making statins and insulins. By becoming a full-fledged biotech company it was able to make a hugely successful IPO. But realising the need for a proprietary drug, it was contemplating the launch of BIOMab, a drug for head and neck cancer. CUSTOMER Though the end-users of the product were cancer patients, it was the doctors which any pharma company would target first. So the oncologists were the primary customers. The drug, being very high-end, was prescribed only by top oncologists of the world. So the target was very less; only in the range of around 300. But the consumers were the cancer patients. The market

for BIOMAb in India was huge. Around 21% of the people with head and neck cancer were from India. The number of people affected by cancer was also growing at a fast pace every year. COMPETITOR Erbitux, a drug developed by ImClone Systems and marketed by Merck, was the primary competitor for BIOMAb. It was a drug initially developed for colorectal cancer. But Merck had conducted phase-3 trials and received approval from authorities for use in treating head and neck cancer. Erbitux worked well in tandem with chemotherapy and had an advantage of being in the market for three years. But it also had a minor drawback. It caused skin rash in patients because it was chimeric. COLLABORATOR CIMAB was the primary collaborator of Biocon in this project. All other things were managed by Biocon and its subsidiaries (syngene, clinigene) CONTEXT The entire confusion regarding the planning of the launch hinged on the context. Having already completed phase-3 trials, Erbitux was planning to get approval from DCGI by late 2006. So Biocon had to decide whether to conduct phase-3 trials or accelerate the product launch and get the first mover advantage.

Analysis of Alternatives
Launch BIOMAb immediately Launch a group of cancer generics first and BIOMAb later Pros: Chance to build sales capabilities Ease to migrate to high end speciality products like BIOMAb later when phase three results are available In case of a late entry than Erbitux, cost of educating the patients may be less because of similar genre of products. Cons: First movers advantage may be lost. Simultaneously launch BIOMAb and other cancer generics Pros: May be a better a chance to make a compelling pitch to Oncologists Sales representative may get more time with the doctor Additional revenues to support other involvements Cons: It may dilute the Biocons brand value as the only Indian proprietary drug company.

Pros: First movers advantage Cons: Phase 2 results might not be enough to convince Oncologists Monetary, legal and social implications in case of unexpected behaviour of the drug are tremendous. Limited or no sales capabilities available with BIOCON. No experience in selling and marketing oncology drugs. Do not know the patients and physicians in this field.

Market Potential :
Calculation Potential Market Market Share 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1900 Revenue (in $) 1140000 2280000 3420000 4560000 5700000 6840000 7980000 9120000 10260000 11400000 (Head & Neck Cancer Patients) Share of BioMab 15.83% 31.67% 47.50% 63.33% 79.17% 95.00% 110.83% 126.67% 142.50% 158.33%

300% 250% 200% 150% 100% 50% 0% 1 2 3 4 5 6 7 8 9 10 Biomab's share in Biocon's Revenues BioMab's market Share

SWOT Analysis
STRENGTHS WEAKNESSES 1. Market price very low as compared to its 1. No Knowledge of dealing with imported competitor. mammalian cells 2. BioMab phase 2 trial results have shown 2. Lack of manufacturing know how 100% response in patients. 3. Lack of experience in marketing and 3. Lesser side effect selling oncology drugs

OPPORTUNITIES 1. With phase 3 testing, 3016 patients can be targeted and breakeven can be achieved in 5 years in comparison to phase 2 testing where breakeven can be achieved 8 years.

THREATS 1. Competitive reaction- Since BioMab has not proved its phase 3 records competitors can use this against them. 2. Sales Capability: Lack of good sales network 3. Inability to convince oncologist to adopt BioMab over its competitor. 4. Selling BioMab with generic drugs can dilute its image as Indias first proprietary drug.

Calculation:
Note 1: Investment = $25million Profit (on $1000/dose) = 30% = $300 Thus, number of doses needed = 25m/300 = 83,330 doses Market potential = 1900 * 6 = 11400 doses Therefore, no. of years to breakeven = 83330/11400 = 7.5 years approx. Note 2: Investment = $25million Cost incurred per dose: Cost of goods = $250 R&D cost = $ 150 Marketing cost = $450 Profit (on $3000/dose) = $2300 Number of dose needed = 25000000/2300 = 10870 doses We take a conservative assumption that they would be able to capture only 30% of the market due to late entrance and the market size would not increase. Market = 30% of 1900 = 570 Number of doses = 570 * 6 = 3420 doses per year Therefore number of years for break even = 10870 / 3420 = 3.2 years approx.

Recommendations
Launch BioMab immediately after approval to gain the first movers advantage. Product Launch BioMab as a stand-alone product in the Head & Neck Cancer Drug market. Price The product shall be priced at $ 1000 compared to international prices of $ 4000-$5000. Place Ternary health care centers in India targeting oncologists directly. Promotion Target doctors by educating them about the product so that they become knowledgeable and then use it in their practice. CME (Continued Medical Education) can be a medium to promote the product.