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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.
Through the case discussion, students should (1) become familiar with the notion of R&D project selection processes (e.g., top-down vs. bottom-up selection), and how this decision fits into the overall strategy and objectives of the business; (2) experience the difficulty and trade-offs involved in multi-stakeholder, multi-objective project selection; (3) convert qualitative project features and objectives into quantitative measurements; and (4) identify and analyze measures of uncertainty and market potential in the pharmaceutical industry and generalize these to other contexts.