Search results

Case information was mainly acquired through interviews with Richard Gammans, chief operating officer. Dr Gammans was a visiting professor at Fayetteville State University for a year, and two of the case authors developed personal friendships with Richard. Interviews were conducted over a two-year period as the accelerator got started. In addition, one author conducted a team-building session with the management team and one of the bio-startup researchers. An interview was also conducted with Clayton Duncan, chief executive officer, to gain his agreement with developing the case.

The Accele website included a write-up on each of the pharmaceutical startup companies. The write-up included a company summary, description of the science (disease and cure), the size of the market, results from testing, regulatory considerations and intellectual property. A literature review was conducted as the basis for the information on the pharmaceutical industry.

This case is about a biopharmaceutical accelerator founded in 2011 by two senior executives with experience in both large pharmaceutical companies and running biotech startup companies. The founders were successful in raising capital to start their first venture capital fund which they used to invest in four biotech startups. All four startups were working in very different disease areas. For example, one developed a drug to help with hearing loss that the department of defense was funding. Another of the startups discovered drug candidates that attack antibiotic-resistant bacteria. Biopharmaceutical accelerators were relatively new. They differed from business incubators because they invest in the startups and provide operational support, but the degree of support provided varies across accelerators. The Accele BioPharma accelerator operated in virtual, network type of organization, and Accele BioPharma provided primary strategic and operational management for the startups. The challenge in this case is to identify how the leaders managed the virtual network, and what additional resources were needed so that the management team could expand their ability to assist startups to get drugs approved by the food and drug administration.

This case is suitable recommended for undergraduate/graduate strategy, undergraduate/graduate organizational behavior, entrepreneurship and health-care management courses.

Economics, business management

The case study is relevant for MBA, Master's and under graduate (economics, international and business economics) students.

Biocon is one of the top 20 companies from India in the Forbes list of “Best under a Billion” companies. It has emerged from being an enzyme-producing firm to a biotech powerhouse under the guidance of Ms Kiran M. Shaw. It is an innovative company with a varied scientific skill base and progressive manufacturing facilities for developing and commercializing biopharmaceuticals. This study attempts to explore the international foray of Biocon using the eclectic OLI framework. Entrepreneurship, need for integrated business model, innovation, quality control, etc. constituted the ownership (O) factors, important for Biocon to earn the more than compensating advantage in the overseas market. The locational factors were less important in case of Biocon as the global expansion was driven by a motive of either market seeking or cashing in on the cost advantage of its operations. The dominant mode of entry has been the joint ventures. The overseas patterns exhibited by Biocon can be captured fully by the O-L-I framework.

To understand the economic theory of OLI and the ownership, locational and internalisation advantages, link the OLI framework with the international foray of Biocon, Biocon's internationalization journey, major overseas deals signed and the economic rationale behind the deals.

Teaching notes are available for educators only. Please contact your library to gain login details or e-mail support@emeraldinsight.com to request teaching notes.

This case is meant for MBA/MS/executive MBA students.

Entrepreneurship development, leadership.

This case is about the successful entrepreneurial journey of Kiran Mazumdar-Shaw, founder of India-based biotechnology company Biocon Limited. Mazumdar-Shaw established Biocon in 1978 as a joint venture company. As a woman entrepreneur, Mazumdar-Shaw faced many challenges and setbacks during her initial days. She overcame these and took Biocon to new heights. Later, Mazumdar-Shaw decided to make a strategic shift in Biocon’s business model – going from manufacturing enzymes to biopharmaceuticals with the vision of making an impact on global health care by providing access to affordable, life-saving drugs.

The learning outcomes are as follows: understand the ecosystem of women entrepreneurs in developing countries; examine the challenges faced by women entrepreneurs in their entrepreneurial journey and how successful entrepreneurs convert challenges into opportunities; and analyze what entrepreneurial leadership is and understand how these leadership qualities play an important role in the success of entrepreneurial ventures.

Mazumdar-Shaw was able to break through the gender barrier that was highly prevalent in Indian society then and successfully established her entrepreneurial venture in biotechnology, a discipline that was still nascent in the1970s. Though she has scaled great heights in the biotechnology area and developed her business, she has remained sensitive to the problems of those who are unable to get affordable medicines. Firmly believing that she should share the prosperity of the company with the poor and the marginalized, Mazumdar-Shaw, through her philanthropic venture, Biocon Foundation, started providing essential drugs at affordable prices to them.

CCS 3: Entrepreneurship.

The case provides an introduction to how currency mismatches create exposures, why and how companies hedge (or do not hedge) those exposures, alternate valuation models and the use of foreign currency convertibles in funding a global expansion program. The case highlights the ambitious growth strategy of Wockhardt, a global biopharmaceutical company. In a bid to dominate the biopharmaceutical market, Wockhardt grew aggressively by acquiring companies all over the world. This expansion was funded by a mix of secured loans (bank borrowings) and unsecured loans including foreign currency (US dollar denominated) convertible bonds (FCCBs). Due to deteriorating business and economic conditions, the company experienced a sharp decline in profitability and stock price resulting in a debt overhang. The company had to restructure its capital structure in March 2009 to escape bankruptcy. Since FCCB holders did not agree to restructure the terms of the instrument, the company had to turn to senior lenders to restructure debt. The company’s management is faced with several options to deal with financial distress. The case asks students to evaluate those options. The case can be used to teach hedging foreign currency exposures, design of capital structure in rapidly evolving industries and dangers of financing R&D intensive ventures with convertible debt denominated in foreign currencies.

The case is based on secondary data sources. Information statements filed with the Securities Exchange Board of India, the company’s website, press releases and security analyst reports formed the basis for this case. Supplementary information was gathered from the CAPITALINE database, and websites of the Bombay Stock Exchange and the National Stock Exchange of India. Sources of information are documented appropriately in the case and teaching note. No names in the case have been disguised. The authors have no personal relationship with the company.

The case is suitable for courses in corporate finance, mergers and acquisitions, international financial management, corporate restructuring and valuation at the graduate level. It can also be used in executive education programs.

The case provides an introduction to how currency mismatches create exposures, why and how companies hedge (or do not hedge) those exposures, alternate valuation models, the use of foreign currency convertibles in funding a global expansion program and the alternatives in corporate restructuring. Suitable references are provided in the teaching note.

Quintiles Transnational Holdings Inc., the largest global provider of biopharmaceutical development and commercial outsourcing services, grew its revenue at a CAGR of 7.3% and EBITDA at 13.9% between 2008 and 2012.

The case is set in December 2012–April 2013, when the majority of the firm was owned by founder Dennis Gillings and four private equity firms (Bain Capital, TPG Capital, 3i Capital and Temasek Life Sciences) after it was taken private in a management-led buyout in 2003 and a subsequent buyout in 2008. Five years after the second buyout, the private equity firm owners were looking to monetize their positions and considered different strategic alternatives: M&A sale to strategic or financial buyers, IPO, or capital restructuring through special dividends.

Students will step into the role of an associate at the lead investment bank working with Quintiles. They must consider the case information and determine an IPO strategy, process, potential conflicts, and valuation.

After reading and analyzing the case, students will be able to:

• Apply valuation techniques (discounted cash flow (DCF) and publicly traded comparables) in pricing an IPO

• Analyze the roles of different parties involved in the transaction

• Discuss the process of a company filing for an IPO

• Evaluate different strategic alternatives available to a private equity—backed company

• Address conflict of interest in management—led buyouts

Apply valuation techniques (discounted cash flow (DCF) and publicly traded comparables) in pricing an IPO

Analyze the roles of different parties involved in the transaction

Discuss the process of a company filing for an IPO

Evaluate different strategic alternatives available to a private equity—backed company

Address conflict of interest in management—led buyouts

The case begins with newly appointed chairman and interim CEO Garo Armen dwelling on the significant issues that Elan Corporation, an Irish pharmaceutical company, faces. Its share price has plummeted 96% after accusations of accounting fraud and the discontinuation of an important clinical trial due to the drug's severe side effects. As a result, Elan faces insolvency. About $2 billion in debt that could no longer be satisfied in stock will soon mature, and there are questions regarding the company's structure and various operating concerns. Armen is also concerned about the ethical consequences of the company's failing and thus not being able to develop potentially life-saving medicines. Armen must decide what the nature of Elan should be moving forward and what strategy it should adopt. The operational and financial issues discussed in the case are complicated by Elan's status as an Irish company with significant international operations. The case closes with Armen reflecting on the decisions he has made—which students should critique and suggest alternatives to—as well as an open decision on choosing a successor CEO.

1. Crafting a vision and strategy for a newly streamlined organization and implementation 2. Balancing the complexities of an international corporation in a turnaround situation 3. Quantitatively identifying the probability, advantages, and disadvantages of bankruptcy 4. Succession planning decision making 5. Responding to fraud accusations 6. Managing a distressed workforce and retaining key employees

IFCI Limited-a non-banking financial corporation in India was struggling with issues of negative Capital Adequacy Ratio and high non-performing assets till 2007. The company had not done any business for a decade until 2007. July, 2007 was the time when Atul Rai joined the company as the CEO. This case revolves around the various strategic initiatives taken by Rai and his team to help the firm turnaround. The main focus of the case is on the implementation of some of the key strategic decisions. The case gives opportunity to review IFCI's strategy and make recommendations for future expansion.

In the 1960s thalidomide, a popular new drug considered to be safe and effective, was revealed to cause severe nerve damage and birth defects in newborn infants, prompting health officials to ban the use of the drug and tighten overall restrictions on new drugs and drug use. Twenty years later, after recognizing the positive effects of thalidomide when treating patients with leprosy and its potential role in the treatment of certain types of cancer and cases of HIV/AIDS, the Celgene corporation would be forced to contend with stringent FDA regulations, liability concerns, public skepticism, and poor mass media portrayal in order to secure the drug's approval.

To illustrate how regulators are subject to political pressure, which companies much recognize and consider when making business decisions.

In January 2013, small biotechnology firm Orexigen was in the final stages of testing Contrave, a promising new pharmaceutical product for the treatment of obesity. At the time, Orexigen had no products in the market, so all its hopes of financial success rested on this new treatment. Contrave had proven to be highly effective in clinical trials, and Orexigen executives were confident it would receive FDA approval.

At the same time, a much larger pharmaceutical company was considering acquiring Orexigen. Because the decision to acquire would ultimately be a financial one, the project team from the large company had to complete a valuation for Orexigen's only significant product in its pipeline, Contrave. What was the new product actually worth?

Allison Watkins, senior director of Merck's Vaccines Division, needed to decide on the pricing of Gardasil, Merck's newest vaccine and one of the company's most important product launches of the year. The outside consulting firm she had hired to recommend a price for Gardasil had suggested a price of $120 per dose (or $360 per person, as each person required three doses over six months to achieve adequate immunity). The Gardasil marketing team disagreed about this recommended price; some thought it was clearly too high, whereas others said it was too low. The latter group argued that Merck would be missing a major opportunity by setting the price at such a low level. Watkins now needed to decide whether to follow the consulting firm's recommendation or to set a different price.

The case highlights the complexity and issues around pricing in the pharmaceutical industry. To decide on the price of Merck's new vaccine, students will work through product economics and be introduced to the role of economic modeling in determining appropriate prices in the biomedical industry. The case is unique because it gives students an opportunity to calculate a cost per quality adjusted life year (cost per QALY), and in the process discover the power and limitations of such an analysis.