Hbr Vertex Case Critique
Josh Boger – R&D Portfolio Management in October 2003
Analysis of Pharmaceutical Industry:
As mentioned in the case, Pharmaceutical industry was experiencing a significant growth between 1993 and 2003. New technologies and approaches such as Rational Drug Design, High Throughput Screening, etc. were advancing drug discovery process to a new level. There were many drugs being approved and commercialized during this period and some of them have become blockbusters in the market. As companies have increasing sales revenues, they were able to invest more in R&D, which resulted in high R&D budgets and many external research partnerships.
However, as the industry was entering 21st century, it was also facing couple of challenges: Firstly, companies started to experience a declining productivity in their R&D pipelines. Secondly, there were concerns being raised about the increasing cost of health care in recent years. Lastly, new laws and regulations are being introduced in patent protection and clinical testing areas. As a result of these factors, big Pharmaceutical companies were switching their preferences from entering early stage research partnerships to alliances for drug candidates that have more and promising clinical data.
Analysis of Vertex Pharmaceuticals:
Vertex is in a strong position in terms of its R&D portfolio as of October 2003. Their largest programs, caspase and kinase, are already partnered, which provides the company necessary funding to progress in these areas. The company’s culture is shaped around the idea of discovering and developing novel drugs for important diseases with unmet needs. Furthermore, senior leaders are open to listen to different opinions and ideas from every level of the organization. Although Vertex is focused on small molecule research, the leaders of the company believe that they can compete with Big Pharma with a greater efficiency due to its smaller size. One of their capabilities to achieve higher efficiency was to
Analysis of Pharmaceutical Industry:
As mentioned in the case, Pharmaceutical industry was experiencing a significant growth between 1993 and 2003. New technologies and approaches such as Rational Drug Design, High Throughput Screening, etc. were advancing drug discovery process to a new level. There were many drugs being approved and commercialized during this period and some of them have become blockbusters in the market. As companies have increasing sales revenues, they were able to invest more in R&D, which resulted in high R&D budgets and many external research partnerships.
However, as the industry was entering 21st century, it was also facing couple of challenges: Firstly, companies started to experience a declining productivity in their R&D pipelines. Secondly, there were concerns being raised about the increasing cost of health care in recent years. Lastly, new laws and regulations are being introduced in patent protection and clinical testing areas. As a result of these factors, big Pharmaceutical companies were switching their preferences from entering early stage research partnerships to alliances for drug candidates that have more and promising clinical data.
Analysis of Vertex Pharmaceuticals:
Vertex is in a strong position in terms of its R&D portfolio as of October 2003. Their largest programs, caspase and kinase, are already partnered, which provides the company necessary funding to progress in these areas. The company’s culture is shaped around the idea of discovering and developing novel drugs for important diseases with unmet needs. Furthermore, senior leaders are open to listen to different opinions and ideas from every level of the organization. Although Vertex is focused on small molecule research, the leaders of the company believe that they can compete with Big Pharma with a greater efficiency due to its smaller size. One of their capabilities to achieve higher efficiency was to