Sakthivelayudham B

2113085

SG CASE STUDY

Q1 What factors should the team consider when evaluating whether ABC Pvt Ltd should acquire XYZ
Pvt Ltd?

• The worth of XYZ PVT LTD drug pipeline, the quantity of drugs in development, the caliber of those
medications (possibility of success), potential earnings, and so forth.

• XYZ PVT LTD R&D potential are estimated drug pipeline), clinical talent, highbrow property
(for example, patents, proprietary approaches or knowledge for biologicals research), and
buildings, equipment, and different objects that permit XYZ PVT LTD R&D to operate.
• Marketing or sales opportunities for XYZ PVT LTD. In particular, how advertising messages are sent
like Relationships with key opinion leaders promoting biologics. Key opinion leaders may come
from academia, such as prominent medical school professors, or from the public sector, such as
regulatory executives or prominent tele journalists.
• alternatives to this transaction offered by ABC PVT LTD. Alternative businesses could be acquired
by ABC PVT LTD. Other approaches to joining the biological segment include forming alliances as
opposed to acquisitions and seeking approaches other than entering the biological segment.

Q2 The team wants to explore XYZ Pvt Ltd.’s current drug pipeline. The team decides to focus first on
evaluating the value of XYZ Pvt Ltd.’s current drug portfolio. What issues should the team consider when
evaluating the value of XYZ Pvt Ltd.’s existing drug pipeline?

• Potential profit from each drug's sale.

• Market size, it is like segmenting the customers for instance, patient population size and pricing
• Side outcomes and ability prison exposure, for example, ability regulation fits because of
surprising facet outcomes.
• Costs associated with operations and sale, such as marketing and distribution.

Q3 ABC Pvt Ltd believes that the likelihood of success of XYZ Pvt Ltd.’s primary drug candidate can be
improved by investing an additional $150 million in a larger Phase II trial. The hope is that this
investment would raise the success rate in Phase II, meaning that more candidate drugs successfully
make it to Phase III and beyond. By how much would the Phase II success rate need to increase in order
for this investment to break even?

• A candidate drug's chance of being successfully marketed and sold is 50% x 90%, or 45%, if it
makes it through Phase II. A candidate medicine that passes Phase II is worth 45% x $1.2 billion,
or $540 million, as a successful candidate drug is worth $1.2 billion.
• To break even that is make the $150 million investment worthwhile), the value of the Phase II
drug candidate is $540 million + $150 million = $690 million The dollar should rise. This means
that the combined success probability of phases I and II should increase by (150/540) = 28
percentage points.
 • So, the current probability of phase I and II, that is, 70% x 40% = 28% would need to increase by
28 percentage points, to 56%. so as to return up to 56%, phase II clinical trial probability would
must increase from 40% to 80% (70% x 80% = 56%).
• Given that a rise of 40 percentage points requires a doubling of the current probability of 40%,
this presents a very difficult hurdle.

Question 4:

Next, the team explores the potential setup with XYZ Pvt Ltd after the acquisition. Although
XYZ Pvt Ltd.’s existing drug pipeline is relatively limited, ABC Pvt Ltd is highly interested in its
ability to serve as a biological research “engine” that, when combined with ABC Pvt Ltd.’s existing
R&D assets, will produce many candidate drugs over the next 10 years.
What are your hypotheses on the major risks of integrating the R&D functions of XYZ Pvt Ltd
and ABC Pvt Ltd?

• A structured response is expected as usual since it demonstrates logical reasoning and well-
organized communication, both of which are essential for a fruitful client contact in management
consulting.
• Innovative suggestions are constantly welcomed and unquestionably helpful during
brainstorming sessions. But structure is of utmost importance.
• I typically just let ideas swiftly pass through my mind when brainstorming, classifying them before
presenting. You can certainly ask for a few seconds to organize your response. Most likely, I'll say
that "There are four main categories of dangers, in my opinion. Risks associated with mergers,
organizational structure, logistics, and scientist capacities".
• Important scientific talent exiting XYZ PVT LTD after the acquisition, either because they are now
independently rich or because they don't want to be a part of the new, large ABC PVT
LTDcompany.