Problem identification
• Should BIOMAb be launched with phase 2 results or wait for phase 3 results?
• Or should Biocon invest in phase 2 trials for other indications?
• Developing the product strategy, pricing options, channel and the major means of communication
Situation analysis
• Company:-
o Incorporated in 1978 as a JV between Biocon Chemicals, Ireland and Dr. Mazumdar-Shaw, an Indian entrepreneur
o Started as enzyme manufacturing company and later entered biopharmaceutical market by production of statins (FDA Approved).
o Subsidiaries – Clingine, Syngene International
o Expertise in fermentation process, leveraging its technology to enter biopharmaceuticals
o Developed proprietary drug for head and neck cancer accidentally and becoming the first Indian company to explore this oppurtunity
o Formed a JV with CIMAB to market BIOMAb in India
o Now planning to enter property drug market; Obtained IPO in 2004;
• New Product – BIOMAb
o In phase 2 trials results were 100% for chemo and radiotherapy in combination with BIOMAb.
o A chance to build new research and marketing capabilities.
o Lack of experience in marketing and selling oncology drugs.
• Competitor-
o Erbitux a treatment manufactured by Imclone system in US
Distributed by Merck KGaA of Germany.
Introduced in India in April 2006 for colorectal cancer.
Merck expected formal approval from DCGI in late 2006 to use Erbitux for head and neck cancer.
Had phase 3 approval.
Biocon had advantage against Erbitux as it had 100% phase 2 results, it didn’t caused skin rashes and it could leverage its Indian origin
• Customer-
o Indian incidence of cancer rates for head and neck cancer were highest
Propensity of lower income worker to chew tobacco and smoke cigarettes
The health care system in India was majorly private
• efficient and costly.
• Nearly all of the patients paid out-of-pocket.
o Biocon expected patients would be self-paying and given the high price of cancer drugs wouldn’t be able to afford it.
• Context-
o Regulatory environment –
Change in India patent law. Can retain the first mover advantage in India.
o Economic Environment –
9% growth of economy in addition with awareness and education market was expected to increase.
o Technological Environment –
Technological company was developing.
• Collaborators-
o CFA, Wholesaler, Retail/ Hospital Pharmacy and Doctors.
Problem – Analysis of Pros and Cons
• Market attractiveness: The sector for head and neck cancer is largely untapped until now which will provide a first mover advantage. 21% of cases and 27% of deaths worldwide from head and neck cancer occurred in India. Also, the Indian economy is increasing at 9% annually, so market size is expected to go up. Also, the annual population growth rate of 1.4% could increase the market potential in future.
• Cost Effectiveness: Fixed dosage of BIOMAb ( six doses) in contrast to Erbitux’s indefinite treatment plan will prove to be cost effective and provide a clearer picture of the cost involved to the patient at the time of prescription of the drug. And since 95% of the patients using this drug are estimated to be self-paying, hence this cost effectiveness will be a major advantage of BIOMAb.
• Pricing: