For a European mid–sized company
Project Context and Scope
A newly appointed CEO of a European mid–size pharmaceutical company asked Catenion to help him and his management team review the company’s strategy to fully exploit the potential of the pipeline and to help strengthen the company’s strategic capabilities.
Approach: 2 Partners, 1 Consultant, 1 Analyst for 5 Months
Bottom-Up: In–depth review of the R&D project portfolio as well as the portfolio of marketed products; based on this review, Catenion projected likely scenarios for top–line and profit development over the next ten years, pointing to a significant shortfall versus the company’s published objectives.
In parallel, a review of strengths and weaknesses in the research, clinical, business development, regulatory, health economics and marketing & sales functions.
Top–Down: Preparation of realistic options for the company along the dimensions:
- Focus — therapy areas, technologies, business fields or regions
- Customer groups — primary care vs. specialists
- Geographic coverage — home market/region vs. global coverage
- Innovation mix — incremental lower risk approaches vs. aiming for high unmet need or difficult science with breakthrough potential
- Value chain scope — degree of outsourcing, partnering, etc. for each step in the value chain
Synthesis: Based on this analysis — which was developed by Catenion together with the leadership team of the company— a number of strategy options emerged, including M&A to enter a new business field, a significant change in the resource split between in–house R&D and in–licensing, a strategic partnership to outsource a large fraction of one of the core functions, as well as a shift in geographic focus. In the ensuing discussion with the management team, the different options and their impact on risk, top–line and profitability were re–discussed in depth. The team felt it wanted to improve performance both in terms of growth and the risk profile of the company. Before deciding on an option and to engage the organisation a strategy conference was held bringing together the top management and talent of the company.
Key Benefits to the Client
- The process helped the client team focus on strategy options which were realistic and implementable for the company given its project and product portfolio and its areas of strengths and weaknesses in the core functions.
- The management team of the client was galvanised into action by seeing a significant likelihood of poor performance against goals.
- When discussing the available options, the team gradually shifted its emphasis away from best–case scenarios towards a more balanced view of risk versus upside.
- While the detailed analytic and modeling approach had raised a few eyebrows at the beginning, in the end the team felt the quality of its discussions had improved significantly over past experience with similar processes
- The Strategy Conference format used during this project was implemented on an annual basis to discuss strategy and to track implementation in a wider group and with the top talent of the company.