Ultrastatin Company Analysis

The primary objective of the Ultrastatin Company is to produce a potent pharmaceutical medicine that will treat the many Americans who suffer from chronic ailments, particularly hypertension. One of the top five causes of death in the globe and in the United States continues to be heart disease. The introduction of Ultrastatin to the market will help its customers fast lower their blood pressure and lower their high cholesterol levels. The fact that Ultrastatin has advanced to the clinical trial stage suggests that it will transform the way that diseases connected to hypertension are treated. Ultrastatin Company is committed to developing, processing, distribution and marketing of high quality non-generic pharmaceuticals. The management believes that all patients taking Ultrastatin drugs, wherever they reside, are guaranteed to the highest quality products. Ultrastatin’s vision is to provide therapeutic solutions to people suffering from obesity and hypertension to promote their quality of life. The company is committed to be at the forefront of pharmaceutical industry in bringing complex oral non-generic products to patients in the market in which it operates. The company’s target pharmaceutical drugs are cautiously selected to ensure that resources, expertise and vigor are focused on the emerging opportunities that can bring the most gain to all stakeholders – the medical community, staffs, international partners, and society. The company relies on great scientific innovations and passionate management to bring the emerging opportunities to fruition. The company’s main values include integrity, innovation, commitment to excellent, and respect for human life. 

Products

After successful clinical trials, the company will undertake mass production of Ultrastatin. Ultrastatin drug treats and prevents wide range of conditions and diseases, such as hypertension and heart diseases, caused by high fat and cholesterol levels. The company has identified key technologies that will be used in manufacturing Ultrastatin – Process Analytic Technology (PAT), Pharmaceutical Extrusion Technology, and Containment Technology (Bakeev, 2012; Thiry, Krier&Evrard, 2015; and Bässler& Lehmann, 2013).

. The main focus in developing this drug is quality and effectiveness. 

Business Model

Ultrastatin’s business strategy is based on an integrated business model that involves the whole value chain of pharmaceutical manufacturing business, from sourcing of raw materials, processing to marketing and distribution of products to the market. The rationale for choosing this business model is that integrated business planning is the best model in the pharmaceutical industry. The integrated business model is a critical success factor for Ultrastatin because it allows businesses to adapt to their production profile based on the changes in the market environments. 

Feasibility study

The preliminary feasibility study indicates that the drug molecules a lot of therapeutic potential, having gone three phases of testing.  The development of the drug through the third step will require statistical software and diagnostic tools that the members of the team already have. Bioinformatics tools such as molecular docking have already shown the potential of the drug to succeed in the phase. The success in this stage will guarantee the founders a patent for the drug. The Food and Drug Administration and the WHO Research Ethics Review Committee will have to approve this drug for it to be introduced into the market. The market research shows a market niche for pharmaceutical drugs for treating blood pressures. 

Competitiveness        

The nature of competition of Pharmaceutical the industry under which Ultrastatin will be operating was evaluated using Porter’s Five Force model. Based on this model, there is low competition from new entrants, substitutes, buyers’ bargaining power, and suppliers’ bargaining ability. The new entrants encounter high barriers to entry due to high capital requirements and strict FDA regulations. The drug manufacturers have a control over prices until the end of patent life, 20 years. The restrictions also restricts However, the major source of competition is the existing companies. The existing competitors are very strong because some of them have been in operation over a century and have established strong distribution networks, customer base and product quality. The major existing competitors include Pfizer, AstraZeneca, Sanofi, Merk& Co., Johnson & Johnson, Abbott, and GlaxoSmithKline and are all listed on the NYSE. There are three major factors affecting competitiveness within pharmaceutical industry regulations, technological trends, and mergers and acquisitions (M&A). Based on FDA regulations, other companies are allowed to produce generic drug after 20 years upon expiry of patent and this affects competitiveness. There is high demand for advanced technology in this industry and companies are compelled to respond to these changes to remain competitively relevant. The bigger companies have acquired smaller pharmaceutical companies to enhance their competitive capacities. 

Business Strategies 

Ultrastatin will develop business strategies to respond to the current level of competition. The company will attract first-time buyers using three strategies: positioning its products as the solution; providing free health information; and free testing and samples. However, the market tactics for attracting first-time customers will developed from the four P’s of marketing mix as: product strategy (product features and effectiveness); pricing Strategy (affordability); and advertising (promoting using TV commercials and print media to increase awareness).

Strategic assessment

Strategic positions significantly affect strategic capabilities of the business ventures. Ultrastatin’s strategic positions will include: R & D Activities; new product development; product quality; distribution network; and marketing. The opportunities that the company will gain from these strategic positions are both internal and external. Internally, the company will benefit from the growth and expansion of manufacturing facility to meet the increasing demand for Ultrastatin drug, enhanced supply chains, customer base, and increased net profits. External opportunities may include penetration into the emerging market of biopharmaceutical products through the research and development. 

Business risks

While operating within the highly dynamic pharmaceutical market, Ultrastatin will encounter both internal and external risks. The internal risks may include logistical risk and product failure, whereas external risks legal risk and technological trends (Meyer, 2012). Without proper mitigation tactics, there is a high likelihood of business failure especially for this highly regulated venture. The mitigation strategies for these risks will include investment in recent technology and adopt an agile supply chains. 

Financial planning 

The first phase of financial planning is to evaluate different sources of capital and choose a funding strategy for this venture. As Pharmaceutical businesses are capital intensive and there are two available options for most of the startups – venture capital and borrowed capital. Since this entrepreneurial venture does not have history of borrowing or making profit, borrowed capital may be difficult to get. The only probable funding strategy for this business is venture capital, as the business is lucrative and capital-intensive, at the same time. The second phase of financial planning involves financial projection. The projected advertising costs through TV, radio, magazines, retail shops, shows and conventions, and sample - POP display, is $1.12 m. Annual payroll expenses are projected to be $1.005m, while annual operational costs are $2.27m (see Table 2 and Table 3, respectively). The annual breakeven sales are $5,837,142.86 with a contribution margin of 39% (see Table 4), but the minimum annual turnover can go over $10m. 

Options for producing Ultrastatin

Wet and dry granulations are two options for producing Ultrastatin tablets. However, dry granulation method is the best options because the ingredients are sensitive to moisture and unable to withstand high temperatures (Troy, 2015). The rationale for choosing this production method is that it eliminates some steps and processes, but still includes weighing/measuring, blending, slugging, dry-screening, lubricating, and compression. 

Technology and technology policies

There three technologies that pertinent to the production of Ultrastatin: Process Analytic Technology (PAT), Pharmaceutical Extrusion Technology, and Containment technology. These technologies will be adopted to ensure high quality drugs that meet customers’ needs. The technologies require validation so at the design processing units that produce maximum conditions for ultimate quality. Validation can be achieved through research and development policy. The validation data is stored in data servers and password policy is required to ensure maximum data security.

Recommendations        

 However, achieving pharmaceutical production requires commitment and investment in advanced technology and finding the right people for the job. The whole process of pharmaceutical product development is a long process of 10 to 12 years of research and development. The management is recommended to secure the best equipment and sensors for Process Analytical Technology in order to validate and document data as required by FDA regulations. The data should be secured by adopting the recommended technology policies to maintain the integrity of the manufacturing and to get approval from FDA to start the production process. 

References

Bässler, H. J., & Lehmann, F. (2013). Containment Technology: Progress in the Pharmaceutical and Food Processing Industry. London: Springer Science & Business Media.

Bakeev,Sons K. A. (Ed.). (2012). Process analytical technology: spectroscopic tools and implementation strategies for the chemical and pharmaceutical industries. New York: Sage

Thiry, J., Krier, F., &Evrard, B. (2015). A review of pharmaceutical extrusion: critical process parameters and scaling-up. International journal of pharmaceutics, 479(1), 227-240.

Troy, D. B. (2015). Remington: The science and practice of pharmacy. Philadelphia, PA: Lippincott, Williams & Wilkins.

Meyer, P. (2012). Creating and dominating new markets. Michigan: AMACOM Div American Mgmt Assn.