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Nucleon Inc Case Solution

Solution Id Length Case Author Case Publisher
2559 1721 Words (7 Pages) Gary P. Pisano Harvard Business School : 692041
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Nucleon, a biotechnology start-up, is on the brink of developing its first product, the cell regulating protein-1 (CRP-1), a breakthrough treatment primarily for burn wounds and potentially a cure for acute kidney failure. Robert Moore, the project manager at Nucleon, faces critical manufacturing and marketing choices. The drug must pass all three clinical trial phases to be FDA approved. Phases 1 and 2 focus on detecting the drug’s side effects and treatment, respectively; they require small-scale manufacturing. However, phase 3 of the clinal trial tests the drug’s effectiveness in large-scale manufacturing in accordance with the large sample size.

Following questions are answered in this case study solution

  1. What are your recommendations regarding the manufacturing of CRP-1 for Phase I and Phase II clinical trials?

  2. What are your recommendations regarding manufacturing for Phase III clinical trials and commercialization?

  3. How would you justify your recommendations to would-be investors in the company?

  4. What is your recommendation regarding Nucleon’s long-term manufacturing strategy?

  5. What should this company look like in 10 years – an R&D boutique, an R&D boutique with pilot-scale manufacturing capabilities, or an integrated manufacturing enterprise?

Case Analysis for Nucleon Inc Case Solution

Moore is faced with the dilemma of choosing among the following options: 

  1. All in-house manufacturing.

  2. Phase 1-2 in-house and phase 3 licensed.

  3. Phase 1-2 subcontracted and phase 3 in-house.

  4. Phase 1-2 subcontracted and phase 3 licensed.

  5. All phases are licensed.

1. What are your recommendations regarding the manufacturing of CRP-1 for Phase I and Phase II clinical trials?

The issue at hand is the lack of necessary facilities required to enter phases 1 & 2 of the CRP-1 Development. In my opinion, the company should focus on subcontracting the manufacturing to a third party. With its expertise in primarily research and CRP-1 being its first product, Nucleon is still relatively a new company in a highly competitive industry. With limited resources to invest in a pilot manufacturing plant or licensing the manufacturing rights to another biotech firm and losing the rights to its first-ever product, the risk-averse option for Nucleon would be to opt for the middle ground and stick with subcontracting. Sometimes negotiating and reaching an agreement with an outside firm can take as long as manufacturing the pilot plant itself. However, the upside is that Nucleon would not risk losing its investment if CPR-1 fails to show promising results in phases 1 and 2. With the limited resources still at hand, the company could invest in future prospects or research further into the drug’s potential as a treatment for kidney failure instead of going under. 

Nucleon can capitalize on a subcontractor’s already established expertise in manufacturing services, facilities, and talents. However, on the flip side, if Nucleon takes the responsibility of manufacturing on its shoulders, it does not have the necessary experience or the expertise to execute the process in a smooth and diligent manner. It’s primarily a research and development company where 18 of its 22 employees are research scientists from varied disciplines ranging from biochemistry to immunology. Furthermore, the terms of contracting to a third party are usually flexible with no severe consequences in case of drug failure and resulting contract termination. Thus, the company will not suffer additional financial losses or penalties if the drug doesn’t work out.

2. What are your recommendations regarding manufacturing for Phase III clinical trials and commercialization?

The company is at a crossroads and faces the dilemma of either licensing manufacturing to another biotech firm or vertically integrating to produce CRP-1 itself. Despite the inherent risk and Nucleon’s lack of experience in manufacturing, it should produce the drug in-house. The company might not be well equipped to run the plant effectively because it has no prior experience in manufacturing. To tackle this problem, the company could seek assistance from its former partners to whom they subcontracted the manufacturing for phases 1 and 2. Furthermore, the 20 more people they need to hire to manage logistics, maintenance, and provide technical support could be pouched from other manufacturing firms, or they could have at least some prior experience with manufacturing in the biotechnology industry. 

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