ANALYSES OF BUSINESS PROBLEM-PRACTICAL APPLICATION OF MODELS TO REAL LIFE BUSINESS CHALLENGE- PART ONE

THE FUTURE OF BIOPASTEUR AS A CASE STUDY

 Sequel to my post on leaning experience gained at the LBS EMBA 28 class on Analysis of Business Problem, I will be applying one of these models to analyse a real-life business issue for better understanding.

This case would be analysed using a PROACT MODEL

PROBLEM

The case study is about the future of BIOPASTEUR, as it faces a dilemma with respect to the split key decision to be taking by the Company’s founders over the future of the company in consideration of whether to go ahead with the production or outrightly stop BIOSTOP:

The scenarios give further context on the history of BIOPASTEUR, the success story of the initial invention, the birth of the new BIOSTOP, the technical and ethical dilemma based on various argument and counter argument on whether to stop BIOSTOP or not.

Diagnose the problem:

From 2006 to 2011, BioPasteur invested a large part of its profit in the development of a drug, DIASTOP that was thought to cure both Type 1 and Type 2 diabetes and to have major advantages over alternative drugs. The Medical community knew about DIASTOP and were looking forward to its introduction especially in New England. Aware of safety BioPasteur has tested DIASTOP extensively and its test results were not as strong as LOBLOPRIN. Of the many trials conducted in 2009 and 2010 with real patients (10 batches of test with approximately 100 subjects per batch), a non-negligible portion patients (45) which 4.5% had developed heart-related complications. 3 of them suffered severe consequences and were hospitalized which constitute 0.3% less than 1%.

Further to the approval gotten from the FDA on the newly invented drugs in October 2010 on the ground that DIASTOP experimental results were no worse than those for the great majority of other drugs in this category.

On the Annual Proceeding of Pharmaceutical, Professor Paul Rivers raised the possibility that the drugs were dangerous for patients between the ages 50 and 70 who are the critical target group for DIASTOP. Out of the estimated sales projection of 14000 boxes at a profit of $5000 making a total expected profit of $70million if the company was to launch immediately, the targeted age bracket of 45 to 70 years old constitute 80% of the sales. Hence, about $56million could be loss if the Professor Paul Rivers thesis were to hold bare.

Given potential impact of Rivers finding, Thompson and Waitz were concerned about what these results might mean for DIASTOP viability. BioPasteur had to decide whether to introduce DIASTOP. Despite FDA approval, what they thought was a safe product might be significantly riskier.

Now the company’s dilemma is whether to continue DIASTOP as supported by Professor Hand and Waitz or to stop out rightly as inclined by Jeff Thompson based on the moral burden if professor River thesis were to be true and the fact that Anderson the head of the research team give a 50% chance of the Drug coming out good after taken back to Lab for further test and research.

OBJECTIVE

The objective of this report is as follow:

1. Reviewing the fact of the case within the context of this scenario
2. Analyse whether to continue, stop or take DIASTOP back to the lab
3. Highlight interests, value, fear, concerns and aspiration

Then make recommendation:

I  will continue with the application of the model in my next post. Watch out!