Biopasteur is a biotech venture founded by Jeff Thompson, Arnold Hand, and Amy Waitz in 2002.
It aspired to harness the opportunities created by a breakthrough technology that allowed micro-organisms to be grown quickly and less expensive.
Biopasteur became profitable in 2006 due to the introduction of the blood pressure drug: Lobloprin which proved to be more effective than the competition and the reputation of Amy Waitz.
Despite the slow penetration of Lobloprin into markets outside the New England area, profit hit the $50m mark in 2011 and was expected to grow at a rate of 10% every year until 2019 when the patent protecting the new technology would expire.
Diastop was approved for production & distribution by the FDA despite 4.5% of 1000 patients tested with the drug developing some form of side effect which was deemed significant.
The owners plan to donate the company to MIT in 2019 while they pursue or reignite their academic careers with the school.
Problem definition: Should Diastop be Introduced to the market?
Case Alternatives:
a) Lunch Diastop,
b) Do not lunch Diastop,
c) Delay the lunch and invest in improving Diastop.
Evaluate alternatives against the criteria
1) The precedent set by the FDA through its recall of the Liposci drug for a 1% failure rate has far-reaching implications for Diastop if the 4.5% failure rate recorded at the testing phase is extended to its target market.
2) Further tests by Anderson suggest a relationship between Age and complications. Exhibit 2 recorded 22 complications for people in the target age group of 50 to 70 years.
Verdict: Recall threat is high
The release of the drug may impact negatively on the reputation of the owners, their future plans, and the company at large.
Verdict: Too risky (High)
The Basics of Statistics