ZS Associates: Refilling the Pipeline

Abstract

ZS Associates, a global consultancy, has been hired by the head of marketing at the global pharmaceutical firm Rensselaer to identify a promising strategy to protect and grow Rensselaer's oncology business. Currently, Rensselaer is a large player in the market, but its intention is to grow this business into the “largest” in the industry within the next decade. Combined with this long-term ambition, Rensselaer faces the acute, near-term worry that one of its key products (generating almost one-fifth of sales) is facing patent expiration. Anna Schumacher is charged with presenting a recommendation to Rensselaer. She has identified several promising drug candidates (assets) that Rensselaer could pursue in its project-development portfolio. Now she must decide which of the assets Rensselaer should prioritize, given the firm's current strategy and objectives and the competing interests of several departments within the company.This disguised field-based case is taught at Darden in the second-year MBA elective “Managing Innovation.” It can also be adapted for courses on new product development, core strategy, and project/program management. The case is also suitable for Executive MBA and Executive Education audiences, which are likely to have experienced portfolio decision-making. Given its content and context, it can also be particularly applicable for audiences in the consulting industry or with a background in the pharmaceutical industry or biological sciences.

Excerpt

UVA-OM-1775

Sept. 1, 2022

Refilling the Pipeline

Anna Schumacher, associate principal at ZS Associates (ZS), pushed open the doors of her local gym and started walking home in the brisk Philadelphia air. She was determined to make 2021 her year, and she was off to a good start with her New Year's resolutions. Yet, as she turned the corner, her thoughts went back to work. She knew that her shot at being promoted to principal and achieving partner status rested on how well she executed on the project recently assigned to her.

One of ZS's major clients, New Jersey–based Rensselaer Pharma, was a large player in the global oncology market. Its ambition was to become the largest oncological drugmaker worldwide by 2030. However, looming patent expirations on one of its key anticancer drugs, Biprovic, threatened to push Rensselaer over the “patent cliff.” After its patent expiration in 2029, the company would be exposed to competition from generic drugmakers, starving the firm of revenues and eroding market share and future growth prospects if left unaddressed.

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Keywords: Innovation, R&D, project selection, project portfolio decision-making, bottom-up selection, top-down selection, market risk, technology risk, uncertainty, pharmaceutical industry, pharma, Big Pharma, drug development, cancer, oncology, consulting, strategy, stakeholder, patent expiration, marketing, key performance indicators, KPI, negotiation