GROUP 1 - Pullpill Case Final

PULLPILL CASE
GROUP 1
AURELIÉN BOSSET
ANDREJ NASTEVSKI
MANFREDI SOPRANI
ALBERTO ZAGARELLA
JACOPO ZANARDI
1DETERMINISTIC MODEL
(EUR m) 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Sales forecast
Market Assumptions
Patients Treated 100,000.0 101,000.0 102,010.0 103,030.1 104,060.4 105,101.0 106,152.0 107,213.5 108,285.7 109,368.5
Patients Expected Market Share 20.00% 21.00% 22.00% 23.00% 24.00% 25.00% 25.00% 25.00% 25.00% 25.00%
Patients 20,000.0 21,210.0 22,442.2 23,696.9 24,974.5 26,275.3 26,538.0 26,803.4 27,071.4 27,342.1
Days of Treatment per year 365 365 365 365 365 365 365 365 365 365
Daily Dosage 2 2 2 2 2 2 2 2 2 2
Pills per pack 60 60 60 60 60 60 60 60 60 60
Total Number of Packs per Patient 12 12 12 12 12 12 12 12 12 12
Total Number of Packs per Patient /
243,333 258,055 273,047 288,313 303,856 319,682 322,879 326,108 329,369 332,663
year
Price per pack (€) 30 31 31 32 32 33 34 34 35 36
Inflation rate 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%
Weighted Average Commercial
7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
Discount
(EUR m) 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Sales forecast
Market Assumptions
Patients Treated 100,000.0 101,000.0 102,010.0 103,030.1 104,060.4 105,101.0 106,152.0 107,213.5 108,285.7 109,368.5 Patients treated: 100,000,
Patients Expected Market Share 20.00% 21.00% 22.00% 23.00% 24.00% 25.00% 25.00% 25.00% 25.00% 25.00% supposed to increase 1%
Patients 20,000.0 21,210.0 22,442.2 23,696.9 24,974.5 26,275.3 26,538.0 26,803.4 27,071.4 27,342.1
per year
Daily Dosage 2 2 2 2 2 2 2 2 2 2
Pills per pack 60 60 60 60 60 60 60 60 60 60
243,333 258,055 273,047 288,313 303,856 319,682 322,879 326,108 329,369 332,663
year
Price per pack (€) 30 31 31 32 32 33 34 34 35 36
Inflation rate 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%
7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
Discount
(EUR m) 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Sales forecast
Market Assumptions
Patients Expected Market Share 20.00% 21.00% 22.00% 23.00% 24.00% 25.00% 25.00% 25.00% 25.00% 25.00% Patients expected Market
Patients 20,000.0 21,210.0 22,442.2 23,696.9 24,974.5 26,275.3 26,538.0 26,803.4 27,071.4 27,342.1 share: 20%, expected to
increase 1% per year in the
Daily Dosage 2 2 2 2 2 2 2 2 2 2
Pills per pack 60 60 60 60 60 60 60 60 60 60
first 5 years, then stable
243,333 258,055 273,047 288,313 303,856 319,682 322,879 326,108 329,369 332,663
year
Price per pack (€) 30 31 31 32 32 33 34 34 35 36
Inflation rate 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%
7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
Discount
(EUR m) 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Sales forecast
Market Assumptions
Patients 20,000.0 21,210.0 22,442.2 23,696.9 24,974.5 26,275.3 26,538.0 26,803.4 27,071.4 27,342.1
Days of Treatment per year 365 365 365 365 365 365 365 365 365 365 Days of treatment per year
Daily Dosage 2 2 2 2 2 2 2 2 2 2 = 365; Daily dosage: 2 pills;
Pills per pack 60 60 60 60 60 60 60 60 60 60
Pills x pack = 60
243,333 258,055 273,047 288,313 303,856 319,682 322,879 326,108 329,369 332,663
year
Price per pack (€) 30 31 31 32 32 33 34 34 35 36
Inflation rate 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%
7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
Discount
(EUR m) 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Sales forecast
Market Assumptions
Patients 20,000.0 21,210.0 22,442.2 23,696.9 24,974.5 26,275.3 26,538.0 26,803.4 27,071.4 27,342.1
Daily Dosage 2 2 2 2 2 2 2 2 2 2
Pills per pack 60 60 60 60 60 60 60 60 60 60
243,333 258,055 273,047 288,313 303,856 319,682 322,879 326,108 329,369 332,663
year
Price per pack (€) 30 31 31 32 32 33 34 34 35 36 Ex Factory Price x pack =
Inflation rate 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 30€, increasing with an
7% 7% 7% 7% 7% 7% 7% 7% 7% 7% inflation rate of 2%
Discount
(EUR m) 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Sales forecast
Market Assumptions
Patients 20,000.0 21,210.0 22,442.2 23,696.9 24,974.5 26,275.3 26,538.0 26,803.4 27,071.4 27,342.1
Daily Dosage 2 2 2 2 2 2 2 2 2 2
Pills per pack 60 60 60 60 60 60 60 60 60 60
243,333 258,055 273,047 288,313 303,856 319,682 322,879 326,108 329,369 332,663
year
Price per pack (€) 30 31 31 32 32 33 34 34 35 36
Inflation rate 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%
Weighted Average Commercial Weighted average commercial
7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
Discount
discount = 7%
(EUR m) 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Sales forecast
Costs Assumptions
Raw Materials 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39
Fixed Costs 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
COGS x pack adjusted 9.07 9.25 9.44 9.63 9.82 10.01 10.21 10.42 10.63 10.84
Royalties (% of Gross Sales) 20% 20% 20% 20% 20% 20% 20% 20% 20% 20%
Royalties per year (1,460,000.0) (1,579,296.6) (1,704,467.1) (1,835,757.6) (1,973,423.4) (2,117,730.0) (2,181,685.5) (2,247,572.4) (2,315,449.1) (2,385,375.6)
Promotional Expenses per year 2,000,000.0 2,000,000.0 2,000,000.0 2,000,000.0 2,000,000.0 2,000,000.0 2,000,000.0 2,000,000.0 2,000,000.0 2,000,000.0
Investment Costs (3,500,000.0) (1,000,000.0)
D&A 350,000.0 350,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0
(EUR m) 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Sales forecast
Costs Assumptions
Raw Materials 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39 COGS x pack (including
Fixed Costs 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
delivery costs) = 9 €,
increasing with an inflation
Royalties per year (1,460,000.0) (1,579,296.6) (1,704,467.1) (1,835,757.6) (1,973,423.4) (2,117,730.0) (2,181,685.5) (2,247,572.4) (2,315,449.1) (2,385,375.6) rate of 2%
D&A 350,000.0 350,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0
(EUR m) 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Sales forecast
Costs Assumptions
Raw Materials 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39
Fixed Costs 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Royalties (% of Gross Sales) 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% Royalties = 20% of Gross Sales
D&A 350,000.0 350,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0
(EUR m) 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Sales forecast
Costs Assumptions
Raw Materials 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39
Fixed Costs 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Promotional Expenses per year 2,000,000.0 2,000,000.0 2,000,000.0 2,000,000.0 2,000,000.0 2,000,000.0 2,000,000.0 2,000,000.0 2,000,000.0 2,000,000.0 Yearly Promotional Expenses
&
D&A 350,000.0 350,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0
Reps = 2,000,000 €
(EUR m) 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Sales forecast
Costs Assumptions
Raw Materials 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39 6.39
Fixed Costs 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Investment Costs (3,500,000.0) (1,000,000.0) Up-front payment of
D&A 350,000.0 350,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0 475,000.0
3,500,000 € (immediate),
1,000,000 € (third year);
amortization according to the
patent expiration date
(EUR m) 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Sales forecast
Working Capital Assumptions

DSO 60 60 60 60 60 60 60 60 60 60
DSI 90 90 90 90 90 90 90 90 90 90
DPO 75 75 75 75 75 75 75 75 75 75
Working Capital per year 1,124,705 1,216,604 1,313,029 1,414,168 1,520,218 1,631,384 1,680,652 1,731,408 1,783,696 1,837,564
Δ Working Capital +91,900 +96,425 +101,139 +106,050 +111,166 +49,268 +50,756 +52,289 +53,868
Other Assumptions
Tax Rate 30%

WACC 8.5%
(EUR m) 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Sales forecast
Working Capital Assumptions

DSO 60 60 60 60 60 60 60 60 60 60 DSO (days) = 60
DSI 90 90 90 90 90 90 90 90 90 90
DSI (days) = 90
DPO 75 75 75 75 75 75 75 75 75 75
DPO (days) = 75
Working Capital per year 1,124,705 1,216,604 1,313,029 1,414,168 1,520,218 1,631,384 1,680,652 1,731,408 1,783,696 1,837,564
Δ Working Capital +91,900 +96,425 +101,139 +106,050 +111,166 +49,268 +50,756 +52,289 +53,868
Other Assumptions
Tax Rate 30% Tax rate = 30%

WACC 8.5%
Weighted Average Cost
of Capital = 8.5%
€5,192,027.7 29.19% 4.82YRS
NPV IRR PAYBACK PERIOD
2STOCHASTIC MODEL
PATIENT STARTING EXPECTED RAW
GROWTH MARKET EXPECTED MATERIALS
GROWTH
RATE SHARE RATE INFLATION COST
Normal distribution Normal distribution Normal distribution Normal distribution Normal distribution
μ=1.06%/year μ=21.72% μ=0.57%/year μ=2.03%/year μ=6.39 EUR
σ=0.87%/year σ=1.25% σ=0.21%/year σ=0.81%/year σ=0.24 EUR
2STOCHASTIC MODEL
DISCOUNT DSO
Fitted to a Maximum Extreme distribution BetaPERT distribution

Likeliest = 4% Minimum = 56 days
Scale = 2% Likeliest = 67 days
Maximum = 72 days
PROMOTIONAL EXPENSES & REPS WACC
BetaPERT distribution BetaPERT distribution

Minimum = 1.7 million Minimum = 7.5%
Likeliest = 2 million Likeliest = 8.6%
Maximum = 2.2 million Maximum = 9.5%
2STOCHASTIC MODEL
NPV
450
400 Statistics: Forecast values

Base Case 5,192,027.7
350
Mean 6,640,269.7
300 Median 6,628,169.1

Standard Deviation 1,424,628.6
Frequency
250 Variance 2,029,566,626,290.3

Minimum 1,405,517.4
200 Maximum 12,771,309.4
Range Width 11,365,792.0
150
Mean Std. Error 10,073.6
100
50
0
2.726.798,8 4.691.918,4 6.657.037,9 8.622.157,5 10.587.277,1
2STOCHASTIC MODEL
IRR
450

Base Case 29%
350
Mean 35%
300 Median 35%

Standard Deviation 6%
Frequency
250 Variance 0%
Minimum 14%
200 Maximum 61%
Range Width 47%
150
Mean Std. Error 0%
100
50
0
19% 27% 35% 43% 51%
2STOCHASTIC MODEL
PAYBACK PERIOD
0,8
0,7 Statistics: Forecast values

Base Case 4.00
0,6 Mean 3.85
Median 4.00
0,5 Standard Deviation 0.55
Variance 0.30
0,4 Minimum 3.00
Maximum 6.00
0,3 Range Width 3.00
Mean Std. Error 0.00
0,2
0,1
0
2 3 4 5 6
2STOCHASTIC MODEL
3STOCHASTIC MODEL W/
NEW COMPETITOR
New Assumptions :
We decided to create a positive correlation between Market Share Increase and the Weighted Average Commercial
Discount
Correlation Coefficient
= 0.53
3STOCHASTIC MODEL W/ NEW

COMPETITOR
New Assumptions :
We decided to create a custom distribution for every year in which the competitor could enter the market
P = 10 % P = 30 % P = 50 % P = 80 %
Market share decrease due to competitor Market share decrease due to competitor Market share decrease due to competitor Market share decrease due to competitor

COMPETITOR
NPV
400

Base Case 5,192,027.7
300 Mean 3,108,234.2
Median 3,087,690.4
250 Standard Deviation 1,661,147.1
Frequency
Variance 2,759,409,593,561.4
200 Minimum (2,022,610.9)
Maximum 9,277,971.3
150 Range Width 11,300,612.2
Mean Std. Error 11,747.6
100
50
0
(1.504.537,8) 801.848,2 3.108.234,2 5.414.620,2 7.721.006,2

COMPETITOR
NPV
25000
20000
15000
Frequency
97.7% positive values

10000
5000
0
(1.504.537,8) 801.848,2 3.108.234,2 5.414.620,2 7.721.006,2

COMPETITOR
IRR
500
450
Statistics: Forecast values
400 Base Case 29%
Mean 26%
350 Median 27%
Standard Deviation 8%
300
Frequency
Variance 1%
250 Minimum -9%
Maximum 53%
200
Range Width 62%
150 Mean Std. Error 0%
100
50
0
4% 15% 26% 37% 48%

COMPETITOR
IRR
25000
20000
15000
Frequency
10000
5000
0
4% 15% 26% 37% 48%

COMPETITOR
PAYBACK PERIOD
0,8
0,7 Statistics: Forecast values

Base Case 4.00
0,6 Mean 3.92
Median 4.00
0,5 Standard Deviation 0.67
Variance 0.45
0,4 Minimum 3.00
Maximum 10.00
0,3 Range Width 7.00
Mean Std. Error 0.00
0,2
0,1
0
2 3 4 5 6 7 8 9 10 11

COMPETITOR

GROUP 1 - Pullpill Case Final

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PULLPILL CASE

Working Capital Assumptions

Tax Rate 30%

Working Capital Assumptions

Tax Rate 30% Tax rate = 30%

Fitted to a Maximum Extreme distribution BetaPERT distribution

PROMOTIONAL EXPENSES & REPS WACC

BetaPERT distribution BetaPERT distribution

400 Statistics: Forecast values

300 Median 6,628,169.1

250 Variance 2,029,566,626,290.3

400 Statistics: Forecast values

300 Median 35%

0,7 Statistics: Forecast values

3STOCHASTIC MODEL W/ NEW

3STOCHASTIC MODEL W/ NEW

350 Statistics: Forecast values

3STOCHASTIC MODEL W/ NEW

97.7% positive values

3STOCHASTIC MODEL W/ NEW

3STOCHASTIC MODEL W/ NEW

3STOCHASTIC MODEL W/ NEW

0,7 Statistics: Forecast values

3STOCHASTIC MODEL W/ NEW

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