Author Archives: Siddhartha Jain

Achieving Competitive Advantage in the Biopharmaceutical Industry

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Drug development is a complex process that is associated with high drug-candidate attrition rates, long development times, and high costs (1, 2). Drug development costs have increased over the past two decades, with current average development cost of about US$2.6 billion, of which $1.4 billion is the direct cost (1, 2). On average, drug development takes at least 10 years to market authorization (2). Biopharmaceutical companies often follow a strategy of developing drugs for multiple clinical indications and biological targets…

April 12, 2016

When Is a Virtual Business Model Suitable for Biopharmaceutical Companies?

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Virtual companies are based on the model that all activities are outsourced. Such companies have no (or few) employees, occupy no laboratory space, and use contract service organizations for all activities. Over the past decade, several virtual biopharmaceutical companies have formed (1–4). They are primarily start-up ventures that use contract research organizations (CROs) for R&D and contract manufacturing organizations (CMOs) for product manufacturing. By contrast, a fully integrated biopharmaceutical company is based on the model that all activities are internal to…

April 14, 2015

A Case for Biopharmaceutical Operations in Low-Cost Countries to Maximize Return on Investment

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A company’s success is associated with its growth. An expanding company hires more employees (full-time equivalents, FTEs) to support its commercial products, to develop new products, and to provide administrative services. As it grows, an organization can become more complex and its operations less efficient. Analysis of 2013 financial data showed that revenue of US biopharmaceutical companies increases with a growing number of FTEs at a slower rate than does cost (1). That study assumed that all US biopharmaceutical companies…

February 6, 2015

Revenue per FTE and Cost per FTE: Metrics of Operational Efficiency and Performance

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www.graphicstock.com Revenue from operations (herein referred to as revenue) and operating cost (herein referred to as cost) are two independent sentinels of a corporation’s performance and return on investment (ROI), which is defined as the ratio of revenue to cost (revenue/cost). Although a company can actively manage cost by controlling its number of full-time employees (FTEs) and the number or type of activities, it cannot directly manage revenue. Revenue is entirely driven by market forces. So if a company experiences…

December 11, 2014

Process Effectiveness Analysis Toward Enhanced Operational Efficiency, Faster Product Development, and Lower Operating Costs

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Complex drug development and biomanufacturing processes involve back-and-forth shuttling of activities among multiple functions. Close communication, collaboration, and coordination among stakeholder departments and functions are needed to successfully execute these processes. Whereas collaboration between multiple functions leverages each function’s expertise, the resultant structure also poses several challenges, as listed in Table 1 (1). These challenges are further exacerbated as an organization grows in size and geography (2, 3). In the absence of clarity and appropriate assignment of roles and responsibilities,…

November 10, 2014

Due Diligence of Early Stage Technologies: Achieving Rapid Product Development with Low R&D Costs

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Increased understanding of human diseases at molecular and cellular levels is leading to development of novel life-science technologies. Such advancements typically pertain to discovery and manufacturing of novel human therapeutics, new modes of drug delivery, and novel diagnostic technologies. The majority of those technologies are developed by early stage biopharmaceutical companies that have a greater appetite for risk than do larger companies. Early stage biopharmaceutical companies, however, have limited capital raised through personal sources, angel investors, venture capital, or government…

June 1, 2014