BUSB 481 - Professor Coulson
Case 27 - Genentech: After the Acquisition by Roche
Terry Fender
June 3, 2015
1. Perform a VRIO analysis. What is Genentech’s competitive advantage, if any?
The significant resource that led to Genentech 's competitive advantage was culture. This culture was instilled by it 's founding partners Robert Swanson and Herbert Boyer. In this culture R&D focused on applying leading edge scientific knowledge to discover and develop best-in-class medicines. The culture of "individual creativity and initiative," helped to establish a reputation that attracted some of the best scientists in the world who were encouraged not only to work on projects associated with the companies goals, but also to work on projects that
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Weaknesses:
- Dependency on oncology related drug therapeutics.
- Limited product diversification.
- Few original drugs in development pipeline.
- Culture clash with parent company (Roche).
- Few late stage development activities.
- Lengthening time to market as a result of limited FDA approvals.
- Recent failures in Phase III clinical trials.
Opportunities:
- Room for expansion into new therapeutic regimes.
- Continued demand and growth potential for oncology related drugs.
- Continued research and product development to satisfy unmet needs in immunology.
Threats:
- Increasing competition from other pharmaceutical companies entering biotechnology markets.
- Increased government regulation and intervention in CER program.
- Biogeneric drugs entering marketplace and taking advantage of shortened FDA approval process.
- Price controls resulting from healthcare reform laws.
5. What impact will the Roche buyout have on Genentech? Will it be possible for Roche to own Genentech without destroying its ability to innovate?
The buyout of Genentech by Roche will have a major impact on the focus of the company as Roche places a strong emphasis on bringing products to market. Genentech preferred to devote significant resources to early drug discovery, but Roche wanted those resources focused on Phase III development in order to bring more products to market. Another impact was a significant consolidation of resources by closing down some of Genentech 's research locations
1. List whether the student was positive or negative for each characteristic and include whether the characteristic is dominant or recessive. (6 points)
The company is so large that no one drug can lift it from its current sales doldrums. In addition, the company was once highly attractive to investors, but its recent stock price fell to 1997 lows. This may put pressure on the company to attempt acquisitions at a time when the company is ill-equipped to integrate a new company into its organization, and it is engaged in a cost-cutting program at a time when it may need to invest even more in research and development (McTigue Pierce, 2005).
1. A young man of 24 years gets a telegram from an old college friend that he is coming back to see everyone in their small midwestern town.
Genetic Corp X is one of the world's premier tissue and organ cloning centers. Medical breakthroughs of all kinds have originated from the work done at the facility. Zarra Perez was their lead research scientist on her way to curing Alzheimer's disease--until a nearly fatal accident left her with no personal memories or sense of self. Her father and husband want her to return to the life they say she had before her accident. However, even with no sense of personal identity, Zarra isn't content to allow others to dictate her life while she waits on her memories to come back. In her desperate search to remember show she is, Zarra uncovers the horrible truth about Genetic Corp X. Now she is faced with a moral dilemma that could result in her own
Another time Gene faces the question of "what is identity?", is right after his confrontation with Phineas about studying. Gene accuses Phineas of trying to distract him from studying, and then realizes he was way off in his thinking. Gene expresses, "Now I knew that there never was and never could have been any rivalry between us. I was not of the same quality as he."(Knowles, 52). After realizing that Phineas was never jealous of his academic success, Gene feels upset in a way. It dawns upon him that no matter what he did, Phineas and him could never be alike or equal, never of the same quality. He feels down and mad at himself because he wanted to be like Phineas, but realizes he can never be. That feeling of disappointment represents how
The National Institute of Health and Medical Research, France (INSERM) has initiated Orphanet database. It is currently updated by 38 countries of European consortium, coordinated by France. It is published in English, German, French, Italian, Spanish and Portuguese which is freely accessible to both physicians and patients. Orphanet provides services which include inventory, classification and encyclopaedia of rare disease, inventory of orphan drugs, OrphaNews, Report Series and diagnostic tools searchable by sign and symptoms.
From a strategic viewpoint, it is my belief that Pills & Co should make a play to purchase Star Genomics for these reasons:
It was a long day at work and Gene is sick and tired of his job. So excited to get home and play his new game, Gene rushed through traffic. He finally arrives at home to see that his dog, Meaty has torn apart his favorite pillow. The pillow that he sits on whenever he plays his games! Gene is upset with Meaty but won't let it kill his excitement to play his game. Gene makes a Hot Pocket and gets some milk. Finally he sits down to play his game. Gene is having a blast! Until he noticed something out of his window? Oh no!
I met with Victor Barrow on Pyramid. He does not have latitude and longitude store in our tables. He, however, mentioned that his team is currently work on Agency Dimension which will have the attributes but it is no where close to complete at this time.
In 2000, Merck began to cooperate with Schering-Plough on several research products and in 2009 acquired their longtime partner in an effort to diversify its products and reach a broader consumer base. With challenges that include rising prices of research and prescription drugs, Merck has managed to forge forward and overcome obstacles. Merck’s survival has been a subject of speculation many times throughout the years; from the 2004 recall of their top selling drug (Vioxx) due to undesirable side effects to the recently curtailed trials of their very promising new anti-clotting drug (Vorapaxar) due to negative trial results. Kenneth Frazier, Merck’ CEO, has also come under heavy criticism due to his unconventional decision not to cut research budgets in order to increase profits. This strategy differs greatly from the usual path and it has cost Merck investor confidence which resulted in lowered stock prices . Although Merck has been subjected to challenges throughout their history they have always managed to stay afloat and maintain their reputation as a leader in healthcare.
In the past three decades, scientists have learned how to mix and match characteristics among unrelated creatures by moving genes from one creature to another. This is called “genetic engineering.” Genetic Engineering is prematurely applied to food production. There are estimates that food output must increase by 60 percent over the next 25 years to keep up with demand. Thus, the result of scientist genetically altering plants for more consumption. The two most common methods for gene transfer are biological and electromechanical. “Early experiments all involved changing DNA using bacterial vectors”(Randerson, 2001). Through other advances scientists proclaim how they can improve the human gene pool. All humans have
In the last several years, Merck’s individual R &D department has not been able to keep pace with declining revenues from existing products. It is only through Mergers and Acquisitions that Merck has supplemented this income.
GSK is the 2nd largest pharmaceutical firm in the world, and the largest in the UK by sales and profits, it is responsible for 7% of the worlds pharmaceutical market, and has its stocks listed both in UK and US (O 'Rourke, 2002). The origin of the so called blockbuster model, is partly linked with Glaxo (as it was previously known). In the early 80’s, then Glaxo brought to light their first blockbuster drug, Zantac, which was an anti-ulcer drug, which was very similar to the a pre existing drug Tagamet (first ever blockbuster) sold by Smith Kline & French, their completion at the time (MONTALBAN and SAKINÇ, 2011). The introduction of this drug, brought about an increasing sales force in the US, the company soon became dependent on the drug, because it represented a large part of their profit. In 2002, 8 blockbusters of GSK contributed to $14.240 million sales revenue, taking up 53% of its total ethical sales (Froud et al 2006). However, due to the nature of the pharmaceutical industry, the patent began to expire, in other to avoid the patent cliff, Glaxo merged with Wellcome in 1995, which ensured a growing number of sales force, and with Beecham in 2000 (Froud et al., 2006) this merger, boosted the confidence of investors, by growing the business inorganically. For Big Pharma, this block buster model is very profitable, because with the high cost of R&D, the drugs are able to generate ample profit, to cover the sunk costs
The research and development of the pharmaceutical industry is very important as the industry relies on it to develop new products to maintain and sustain the growth of the industry (ALRC 2014). According to the Australian Government Law Reform Commission, every year, the total spending in research and development in pharmaceutical industry, which includes drug discovery, pre-clinical testing and clinical trials on drugs is around $300 million (ALRC 2014). Mergers and acquisitions are intensifying in the global pharmaceutical industry, especially over the last 10 years. With factors like exorbitant research and development costs, the relatively shorter product life cycles, and the rarity of discovering a new life-changing drug acting as catalysts, leading pharmaceutical companies now have more cause to step out and look for external collaboration. This results in an increasing number of smaller biotechnology companies merging with bigger pharmaceutical companies (The
This is a strategic analysis of GlaxoSmithKline that examines the key factors that influence the company and its activities. The strategic analysis will examine key factors in the company’s internal and external environment and their influence on the company’s strategies. GlaxoSmithKline is a global healthcare company that offers pharmaceutical, vaccines and consumer products. The company is a product of various mergers, the latest occurring in 2001 between GlaxoWellcome and SmithKline Beecham. The company started in London United Kingdom in 1715 as Plough Court pharmacy and has evolved to become one of the leading global healthcare companies. The healthcare company operates in more than 150 countries with 89 manufacturing locations and research centers in the USA, China, UK and Belgium. In 2015, the company’s sales grew to £23.9 billion from £23.0 billion in 2014 (GlaxoSmithKline plc. 2015).