Early stage biotechnology companies like Nucleon require a large capital, and also have a very large risk factor attached to them. After the massive amount of resources invested in preclinical and clinical trials, there is a high chance that the product will never even come out into the market (only 20% of compounds tested in clinical trials get approved by the FDA1). Especially for small companies, it is better to choose a low-risk market strategy. That is why, if I was in Robert Moore’s shoes I would recommend that Nucleon not build a pilot plant to supply CRP-1 for Phase I and II trials.
Building a pilot plant has a lot of pros: scaling up would be easier, it would enable the company to develop a robust large scale in-house manufacturing plant in the future, it would build the team’s experience in manufacturing, and the control over the process and quality control of the product would remain with Nucleon. It also offers the company more options at a later stage. However, the cons of this strategy outweigh the pros, especially since other alternatives might provide the same advantages.
Process development is very complex and expensive, as the pilot plant would have to meet clinical …show more content…
The case also mentions that the product shows “promise in lab”. However, good laboratory and preclinical trial results mostly do not translate into good clinical trial results: only about 2% of compounds in pre-clinical testing make their way into clinical trials1; therefore, building a pilot plant and investing an enormous amount of money would be very risky.
The financial market for biotechnology companies was not good at the time. Equity markets had grown tighter, and venture capitalists were being more selective. Investors were unwilling to fund early stage projects, and analysts’ views about the market bouncing back were mixed. It would be very difficult for a small company like Nucleon to obtain the capital required to build a pilot plant at this
Building a pilot plant has a lot of pros: scaling up would be easier, it would enable the company to develop a robust large scale in-house manufacturing plant in the future, it would build the team’s experience in manufacturing, and the control over the process and quality control of the product would remain with Nucleon. It also offers the company more options at a later stage. However, the cons of this strategy outweigh the pros, especially since other alternatives might provide the same advantages.
Process development is very complex and expensive, as the pilot plant would have to meet clinical …show more content…
The case also mentions that the product shows “promise in lab”. However, good laboratory and preclinical trial results mostly do not translate into good clinical trial results: only about 2% of compounds in pre-clinical testing make their way into clinical trials1; therefore, building a pilot plant and investing an enormous amount of money would be very risky.
The financial market for biotechnology companies was not good at the time. Equity markets had grown tighter, and venture capitalists were being more selective. Investors were unwilling to fund early stage projects, and analysts’ views about the market bouncing back were mixed. It would be very difficult for a small company like Nucleon to obtain the capital required to build a pilot plant at this