Vertex R&D portfolio Decision
Joshua Boger, CEO of Vertex has to decide on two out of four R&D portfolios that are to be fully funded by Vertex and to decide on the fate of the other two portfolios i.e. whether to partner or hold them as backups.
In order to decide on the R&D portfolio, an objective quantitative analysis might not be suitable considering the high levels of uncertainities and consequently the risks involved in pharmaceutical research projects. It is important to have a qualitative analysis of the situation as a whole that includes Vertex’s own financial position, strategic implications, a quantitative analysis of its Portfolios with realistic estimations and a risk analysis of the portfolios.
1. Vertex finacial analysis
VX-148, VX-702, VX-765 and VX-950. The seven factors are potential market, research complexity, competitve advantage, development stage, success probability, capital investment required and the return on peak sales. Each of these factors is assigned with a weight on a scale of 5 (5 being the most critical) depending on the criticality with respect to Vertex’s financial position and future success. Every drug is then scored based on the data provided in the case study on a scale of 10 (the higher the score the higher the drug’s possibility of making it into the final two list). Appendix-1 lists out all the factors with the weights and a final score is calculated by multiplying the individual scores and the respective weight assigned to the factors.
Potential market
The potential market for each drug decides the future marketability and income from the product. However compared to the other six factors and assuming that any bio-techonology farm before embarking on a research project has a fair idea of the target disease and the drug’s poential market, a weight of 3 has been assigned to this factor.
Research complexity
Vertex’s success is directly dependent on its success on its researchs. Considering the current financial situation, it is important that Vertex needs to focus on projects which are less complex and so that the risk can be reduced. However, complexity