Portfolio Management
The Place to get world-class Management, Marketing and Forecasting Expertise
Portfolio Management & Optimization
Key Objectives of the Portfolio Management & Optimization Process
The overall Objective is to balance a set of financial and non-financial measures
1. Risk adjusted NPV
2. Peak Sales
3. Strategic Fit
4. Innovation / Scientific Value
(First in Class, Best in class)
5. R & D Productivity Index
6. Technical Probability of Success
7. Commercial Probability of Success
Thr Risk-adjusted Net-Present-Value (NPV) is a key metric
Key components for the Evaluation include:
– Total cost of development (Clinical Trials, Approval Cost etc.)
– Sales & Expense forecasts
– Pricing, Cost of Goods (COG’s), Royalties etc.
– Annual and cumulative Profits
– Annual and cumulative discounted Cash Flows, terminal Value
– Technical probability of success
– IRR
Gain concrete knowledge of the scientific and commercial issues facing each compound in clinical development
Scientific issues include:
– Phase of Development and technical probability of success
– Competitive technologies competing in the same space
Commercial issues include:
– Current and future competition
– Changes in Healthcare arena (Pricing, Reimbursement etc.)
– Competitive intensity / spending levels now and in the future
Prioritized list of all Compounds / Products / Projects in development.
Understand the implications of these portfolio choices on the operations and budgets of the company
– Product completely supported and go “full speed”
– Products not supported during the next budget year
– Products put on the “back-burner”
– Product prepared for out licensing
– Products to be sold
