Nucleon, Inc - Introduction

Founded in 1985 by Dr. Alan Ball, to develop pharmaceutical products

By December 1990, it had grown to 22 employees of which 18 were engaged in R&D
It was a leader in cell regulating factors. It was operating in a highly competitive and high
stake drug industry
Its products were based on class of proteins called cell regulating factors (CRP)
It had raised approximately $6 million in VC and received research grants worth $0.6
million
Focussed on researching ways to produce CRP-1 which had potential as a treatment for burns
& kidney failure

 CRP-1 had been undergoing extensive

experimentation and analysis, ready for human
clinical trials.
Nucleon had no manufacturing facilities adhering
to FDA requirements, challenge of supplying CRP1 to the clinic.
The problem

1. Build a new 5000 sq-foot pilot plant with ample

space capacity for Phases 1 & 2 of clinical trials
2. To contract clinical manufacturing to an outside
firm
3. To license the manufacturing to another
biotechnology company or to a pharmaceutical
firm, covering manufacturing, clinical development,
and marketing.
Solutions : 3
Options

Strategy & Competition

Competition in this industry was intense, over 200 firms were developing
pharmaceutical technologies based on molecular biology & immunology
Large pharma enterprises had extensive in-house biotechnology R&D
programs as well as collaborative ties with new entrants
Smaller companies were racing to establish a strong patent position to
lure potential investors
Biotechnology Development & Commercialization Strategies:
All biotech companies started as R&D laboratories
Vertically integrated into production or marketing

Uncertainties with Biotechnology

patent laws

Companies might
claim ownership of
the molecule or the
genetic sequence
used to obtain it.

Very few companies

could afford to wait
Difficult to patent
for several years
the process
required to process
technology used,
an application &
though the starting
huge risks
material & resulting
associated in going
molecule were
ahead with
original
development before
grant of patent

It was possible for

competitors
challenge the
patent grants
anytime.

Nucleon Strategies

Firm
survival
Strategy
Marketing
Strategy

To pick the right projects in first

attempt
To be present at the leading
edge of scientific research
Marketing was unaffordable,
hence ally with established
pharma companies having
strong marketing distribution
capabilities