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Nucleon Inc Case Summary

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Recommendation:
After a thorough evaluation of various options available to Nucleon Inc. to bring their product to market, we recommend that Nucleon Inc. pursues the option of In-house Pilot Plant for Phase I and Licensing for Phase III.

The available options for Phases I/II/III can be summarized as below: Phase I / II Phase III
Option # 1 In-house Pilot Plant In-house Large Scale Commercial Manufacturing
Option # 2 In-house Pilot Plant Licensing manufacturing to a marketing partner
Option # 3 Contract Manufacturing In-house Large Scale Commercial Manufacturing
Option # 4 Contract Manufacturing Licensing manufacturing to a marketing partner
Option # 5 Licensing product and manufacturing

Each of the available option/strategy for Phase I/II …show more content…

The NPV will drop significantly if Phase III decision is not to enter in the in-house large scale commercial manufacturing.
• Knowledge Transfer: Allows protection of IP (intellectual property). Allows development and protection of manufacturing and technology know-how. Knowledge transfer is relatively easy to transfer as the transfer occurs internal to organization
• Scalability: Relatively easy to scale up due to complete control over the processes
• Core competencies, capabilities and capacity: This option would require a high level of changes within the organization. Nucleon’s existing core competencies and capabilities is in the area of R&D. It has no prior experience of production and manufacturing. Manufacturing is significantly different than R&D. It would require Nucleon to acquire different talent, skillsets, experience and very difference focus in developing manufacturing competencies and capabilities.
• Risks: Due to lack of core competencies in the area of manufacturing, there is a high risk of failure due to mistakes and poor execution particularly working on a first large scale project. There is also a risk that if the trial is unsuccessful, the plant will be …show more content…

Also, Nucleon is mainly a R&D firm and lacks core competencies and capabilities to support large scale manufacturing. As discussed earlier, the changes in organization required to pursue large scale manufacturing for the first time with no significant skill sets, manufacturing know-how and experience can pose a very high risk and detrimental impact on Nucleon’s long term success. Licensing with a proven partner will be a low risk and safe strategy in short term.

Conclusion:

The global growth market in the industry where Nucleon competes is dynamic and complex. Many of the large pharmaceutical enterprises have R&D capabilities along with in-house manufacturing technologies. Some also have collaboration with startup companies.

A great competitive advantage in the industry will be to have an integrated enterprise that is capable of R&D and large scale commercial manufacturing. In this context, Nucleon’s long term strategic goal should be to gain this competitive advantage by continuing to leverage its existing R&D competencies along with acquiring in-house manufacturing

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