Metabical:

Pricing, Packaging and Demand

Forecasting for a new weight loss drug

Section A -Group 2
Abdullah Shahab
Aditya Kant Pathak
Ashwin Krishna M
Mohit Sehrawat
Ritushree Das
Sanchita
 Metabical vs Current weight loss options

Factors Metabical Others

Prescription
Prescription based Non- Prescription based
type
Side effects Minimal Severe
Target
25<BMI<30 BMI>=30
customers
Price ranging from $120-$300, For a 3
Price To be decided
month supply
First prescription drug to receive Except Alli, none are FDA approved. Alli
FDA approval
FDA approval is OTC only
Treatment No. of pills required is less (12
More no. of pills required.
plan weeks)
 Forecasting method 1

Dosage (4 weeks
Approach 1 4.11
dosage)
Dose
Year Potential market (in mn) Dose 2 Dose 3 Total demand (mn)
1
2008 0.41 0.41 0.25 0.05 0.71
2009 0.21 0.21 0.12 0.02 0.35
2010 0.21 0.21 0.12 0.02 0.35
2011 0.21 0.21 0.12 0.02 0.35
2012 0.21 0.21 0.12 0.02 0.35
Net 1.23 1.23 0.74 0.15 2.12

Highlights
• Considering
• 34% of total population*35% who were actively trying to lose weight*15%
who were comfortable with weight loss drugs = 4.11 mn
• CAGR of 34% was taken for population estimation of 25-30 BMI people
 Forecasting method 2

Dosage (4 weeks
Approach 2 3.28
dosage)
Dose
Year Potential market (in mn) Dose 2 Dose 3 Total demand (mn)
1
2008 0.33 0.33 0.20 0.04 0.56
2009 0.16 0.16 0.10 0.02 0.28
2010 0.16 0.16 0.10 0.02 0.28
2011 0.16 0.16 0.10 0.02 0.28
2012 0.16 0.16 0.10 0.02 0.28
Net 0.99 0.99 0.59 0.12 1.69

Highlights
• Considering
• 34% of total population*35% who were actively trying to lose weight*12%
who were ready to immediately go to healthcare provider = 3.28 mn
 Forecasting method 3

Dosage (4 weeks
Approach 3 4.3
dosage)
Dose
Year Potential market (in mn) Dose 2 Dose 3 Total demand (mn)
1
2008 1.29 1.29 0.77 0.15 2.22
2009 0.22 0.22 0.13 0.03 0.37
2010 0.22 0.22 0.13 0.03 0.37
2011 0.22 0.22 0.13 0.03 0.37
2012 0.22 0.22 0.13 0.03 0.37
Net 2.15 2.15 1.29 0.26 3.70

Highlights
• Considering
• Ideal target group of 4.3 mn
 Advantage/Disadvantage of demand forecast
methods

Advantage for approach 1 and 2:

• Marketing Strategy – STP has been used to identify the target market
segment.

Disadvantage of approach 1 and 2:

• ROI for 5 years is not above 5%
• This sample population was not willing to pay $150 retail price for a 4 week
supply

Advantage for approach 3:

• All the target customers are willing to buy it at the highest price- $150.

Disadvantage for approach 3:

• We might loose other segment of customers such as men and uneducated
people as targeted customers are women who are educated, even though
obesity was more prevalent for those with less education and who are men
 Sales as per demand forecast

DEMAND FORECAST
MODEL1 MODEL 2 MODEL 3
Population -> 2.12 mn 1.69 mn 3.70 mn
SALES ($ 75/Pack) $159 mn $127 mn $277 mn
SALES ($ 125/Pack) $265 mn $212 mn $462 mn
SALES ($ 150/Pack) $318 mn $254 mn $555 mn

We will go for pricing option 3

• $150 retail price
• 4 week supply
 ROI calculation
ROI Calculation

Forecast Method 1 Forecast Method 2 Forecast Method 3

Target market 2.22 1.69 3.70

ROI ($75/Pack) -61.95% -65.99% -46.89%

ROI ($125/Pack) -41.67% -49.76% -11.48%

ROI ($150/Pack) -31.52% -41.65% 6.23%

The ROI is greater than 5% only in the case where the price is $150/pack and the ideal
target group is selected.

Hence we recommend $150/pack with a pack size of 4 week because Ideal target
market is willing to pay this price. With any increase of pack size to 6 or 12, CSP might
even lose this ideal target market.
 SWOT Analysis (For Forecast 3)
Strength
1. FDA approved
2. Lesser side effect
3. 1 pill per day
4. 12 week course
Opportunities
1. Larger potential
target
2. Result oriented
Weakness
1. Higher cost. ~150
2. BMI range 25-30 only
3. New drug hence less customer trust
Threats
1. Well established brands in the market
2. Herbal alternatives
THANK YOU