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Genentech – Capacity Planning

So to increase capacity without commissioning a new plant. If Avastin is approved by FDA. Time needed for the clinical tests to complete is 5 years for Avastin. genentech has to expand his capacity. .Question Huge variations in anticipated capacity requirements.

Capacity      Manufacturing plant in Porrino. Revenue  2003: Total revenue $ 3. New cell culture production plant going live on 2009. Herceptin $425 Million. 2 contract manufacturing relationships. Cost of $600 million for new plant. .Spain manufacturing Avastin.5 Billion.3 Billion.6 Billion Rituxan $1. Product sales $2. Net Income $563 million. Avastin along with drugs Tarceva and Omnitarg in pipeline. Avastin clocks 15% of sales in 9 months Growth Hormones $322 million.

000 litre capacity(8x25000litres). As of November 2004 CCP1 had 12 X 12000 litre production vessels. Approx 20 % of batches was wasted due to sterility issues.(in ccp1) In November 2004. Genentech capacity 280. 2009 CCP2 will go live. CCP2 with 200. Sanfrancisco plant with capacity 96000 litres not designed for high throughput. Single recovery line leading to one product at a time. 15 batches per vessel per year. In 2004 CCP1 was producing drugs with high throughput.80) = 1296 Kg of protein.(Total capacity 12 X 9kg X 15 batches X 0. Rituxan: Contract manufacturer from 2005 Herceptin: Contract manufacturer from 2006 With high margins the company could afford to have idle capacity         . Vacaville CA and Porrino Spain.000 litres. Porrino was entirely dedicated for Avastin manufacturing.Manufacturing capacity       Three facilities at SanFrancisco CA. For 12000nlitre vessel 9 Kg of protein was produced.

 Similarly we need to find penetration for other cancer types. number of weeks. .  Total patient: fl : 40000 sl:20000 oth: 120000 patient penetrated: fl : 20000 sl: 7000 oth:6000 dosage needed 33000x 0.Market size for Avastin  Number of patients with each type of transfer.375= 12375 kg.  Duration of treatment Number of doses.

e. Cost significantly high for 25000 lt tanks. Disadvantage: higher time needed for approvals. too big to manage.  Doubling protein yields with new process innovation.Expansion Option  Demand in 2005: 1000 kg in total. 250 kg of new products.  Smaller products not so profitable as tanks will be larger.  Option 1: new facility of 200000 litres at about $600 million cost. Risk: very less company will be interested in buying it if project fails.  Option2: reengineer the process and get it FDA approved Advantage: higher margins. High changeover costs.  Product sales $750 million in product sales of new drugs i. .