Last week we had an assignment to submit on the 10th of February for our Analysis of Business Problems (ABP) course. It required us to review a case called titled ‘The Future of BioPasteur’ which is a Harvard Business School Case written by Giovanni Gavetti and Francesca Gino.
Facts of the Case
- Jeff Thompson a talent mathematician and PHD holder from MIT, his classmate Arnold Hand and a famous MIT chemistry professor Amy Waitz founded BioPasteur, a biotech venture in 2002.
- BioPasteur became profitable in 2006 with a revolutionary blood pressure drug called LOBLOPRIN and by 2022, profit had gotten to about $50 million and was estimated to grow by 10% every year until 2019 when many patents protecting BioPasteur technology were due to expire.
- BioPasteur developed a new drug, DIASTOP, which was a drug for type 1 and 2 diabetes patients and was expected to have an edge over alternative drug currently in the market.
- In the trials of DIASTOP with real patients, out of 1,000 of them, only about 45 had developed heart related complications and 4 of those had severe side effect and were hospitalized.
- An additional batch of tests was ordered by FDA where about 100 patients around the age of 30years with moderate cases of diabetes were given different dosages of the drug. The result of this test indicated that there was no correlation between daily dosage and the incidence of side effect, and this was seen as good news.
- The FDA then approved DIASTOP on the basis that the drug’s experimental result was no worse than majority of drugs in this category.
- After that, Professor Waitz and Thompson participated in the Annual Proceedings of Pharmaceuticals conference where during a plenary session on diabetics, she divulged the scientific bases of DIASTOP.
- Professor Waitz discussant who was also an MIT colleague Professor Rivers raised the possibility that the drug was dangerous for patients between the ages of 50 to 70years (a critical target group for DIASTOP). However, he did not have direct empirical support for his theory as he had tested them on non-human subjects. It was worthy to note that there has been an existing long-standing rivalry between himself and Professor Waitz. Also worthy to note that Professor Rivers entrepreneurial ventures had always failed whilst Professor Waitz was a very successful and rich entrepreneurial.
- After the conference, Thompson had concerns about launching DIASTOP and called for a meeting with Professor Waitz and Hand to discuss if they should take the drug back to the lab for further development or launch it to the public.
- Taking the drug back to the lab for further development would cost about $12 million each year with a 50% probability that the technology would only be available much later in 2015 and might lead to abandoning DIASTOP if no improvements were found by 2017.
- If DIASTOP was launched into the market and the drug as much as caused even a few episodes of heart problems, FDA could recall the drug and BioPasteur could lose its credibility and jeopardize LOBLOPRIN sales.
The assignment was to advice the directors of BioPasteur if they were to progress with the launch or take the drug back to the lab for further development.
After reading the case and identifying the facts of the case, I decided that my advice to BioPasteur’s directors would be to take the drug back to the lab for further development. My reasons felt clear in my mind as I had weighed the effect of the consequences of BioPasteur losing credibility and jeopardizing the success of the existing drug, LOBLOPRIN.
The interesting thing to note is that when we discussed the case in class later that week (on Saturday), one key thing that came across clearly was that different people chose their advice depending on their appetite for risk or otherwise.
The key learning for me was not necessarily on the advice one chose to give but the important of understanding the facts and making a more informed decision with all information that can be received about the case. Going through the process of understanding the context of the case, defining the problem, defining a clear objective, weighing the options before deciding on a preferred option was what mattered more. So you see, every information matters. #EMBA28
