Rarity: Not many alternatives for burn victim treatment (assumption based on the case’s voice); large molecule research is still new and rare, tough to get into.
Imitability: Not very imitable, especially if Nucleon can gain strong patent protection. Also, the slow development time means that even if another firm could mimic a similar drug, it would take time.
Organization: Nucleon is currently not organized to begin trials and manufacturing of this drug. They also don’t have a significant amount of financial backing at this point.
Transaction Based Economics
• Contract manufacturer could hold up Nucleon for more money if drug passes phases and becomes more likely to be successful.
• Contract manufacturer could increase manufacturing costs, slow production, or create problems in quality in order to hold up Nucleon.
Options Going Forward
Option 1: Build Pilot Plant
• Nucleon keeps tighter control of IP
• Can retain ownership of product rights through phase I and II
• More flexibility
• Can begin to develop staff for in-house manufacturing, making scaling later …show more content…
• Distracts Nucleon’s financial and human capital away from their core, the drug R&D
Option 2: Contract Manufacturing
• No major upfront capital investment
• Access to experienced manufacturing facilities and staff immediately
• Retain ownership of product rights through phase I and II
• Still not cheap; doesn’t save Nucleon much money over Option 1
• Risk of IP issues
• Contract specifics are very difficult to hash out due to the nature of biotech
• No faster than building their own plant due to slow process of negotiating, knowledge transfer, then scale-up
Option 3: Licensing
• No capital investment
• Little to no