Essay

Name

Institution

Course

Xyz Pharma
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 less than 30% recording success. There are several instances where a company fails to recover their investment making the whole process high risk. d. Alternatives: It is more prudent to engage in development with lower cost, conduct optimal research and maximize on the sales. e. What information is required for the portfolio management at XYZ and how it can be collected: The information required include the development projects, research conducted and their costs. The probability of the technical success should be analyzed. 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?
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