Nucleon Case - Business Strategy

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it helps to gain experience in dealing with technological and regulatory issues. However, some of the disadvantages include high capital investment, uncertainty when tested in humans, the time required to recruit new talents into the company, and if CRP-1 is rejected by the FDA, the plant will end up being idled. Since most drugs that go through the clinical testing never reach the market, the greatest disadvantage is uncertainty.

On the contrary, option 5 has the lowest risk as the licensee will essentially bear all the risk related to the expenditures in clinical development, clinical manufacturing, regulatory filings and commercial manufacturing and marketing. In addition, this option will allow for immediate revenues. Having a big corporate partner, Nucleon would have value for its research with less risk and can be known to many venture capitals. Based on successful completion of Clinical trial Phase I and II, I would predict that many Venture Capitals will provide necessary funding for Nucleon’s future research and manufacturing Process. On the other hand, this option will not generate high profits as option 1 would.

Based on the different options and the returns attributed to each option, I would recommend Nucleon to License the development and manufacturing right to corporate partner for phase I and Phase II clinical trial. By doing that Nucleon can get enough money to do more research with low risk and can gain manufacturing experience from their partner which can be useful if Nucleon want to go for in-house facility for Phase III.

I think Nucleon had better to license the CRP-1 to another company. Not only it can generate immediate cash, it also spared Nucleon from making large capital investments in clinical development and manufacturing, and allowed the company to concentrate of its financial and human resources on R&D. In addition, by seeing how other company markets the product, it will allow Nucleon to learn from their partner about the business and from there could get a vision of the long-term planning.

Based on these qualitative factors, as well as the quantitative factor of NPV being large enough to cover the cost of this strategy, option E would be my personal recommendation.

And few supporting ideas helped me to make a decision like this.

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3. Obtaining quick funding due to the decision to license the product from the beginning would allow Nucleon to funnel these funds back into R&D and moving more of their projects into the pipeline.

4. Licensing product also transfers the risk of creating a manufacturing process that may soon be obsolete. This is in respect to using bacteria cells for cultures versus mammalian cells.

5. Nucleon needs to play into their core competency of R&D. They have unique and strong academic ties and company culture, as well as top talent in the industry. Play to your advantages and outsource the rest, so to speak.

• Licensing their product to Company A, could result in a strategic alliance with Company A. Not only would Nucleon benefit from learning methodology, but also a proven track record would increase their chances of financial support.