Part 1: Project Portfolio Management Problem Framing
a. Objectives: The objective is to undertake research and develop pharmaceutical products using criteria that will reduce the value
b. Constraints: There are factors that affect the process of drug discovery and development making it time consuming, extremely risk and also very expensive. The development of generic drugs and competitions they create in the market is a constraint on the development of new drugs. There is always the uncertainty of not getting return on investment.
c. Risks: The biggest risk in the industry is research and development of products that do not qualify to reach the market despite the technical and financial commitments that accrue during the process. The drugs that reach the market are not guaranteed success with ...view middle of the document...
The probable year of launch, the cost of launching, the market risk analysis, and return on investment projection need to be availed. Finally, comparison on the information collected with that of the competitors’ cost and sales, sales of the previous years and cost should be availed.
Part 2 – Project Valuation
How would you establish the value of the following project (Project 1) in XYZ’s portfolio, a project in the pre-clinical phase, part of the Oncology therapeutic area?
I would evaluate all the risks that are expected during the implementation of the project and analyze the probability of success and failure. I will also calculate the cost of the project and the current value.
What additional information would you collect?
I would collect the additional information by making comparison of the previous years’ successes and failures both from the company and from the competitors. I will also analyze the prelaunch costs and sales contained in the company reports. I will also conduct interviews with the production and marketing teams.
How would you assess the risks embedded in Project 1? What additional information would you collect? Which quantitative tool(s) might help you in determining the project risk?
I would assess the risk of implementing project one by comparing the previous projects’ implementation with the on-going implementation process. The additional information would be collected from the previous implementation reports. I would use probability to determine the chances of success of the project.
If R&D budget for the oncology area was reduced to $50 million. How would you choose the projects to continue, and which to put on hold? What additional information would you collect? Which quantitative tool(s) might help you in determining the best portfolio?
I would use probability to determine the projects that are likely to succeed. I will give priority the projects with the highest probability for success. I would use the information from the previous research and development projects to determine the probability of success.