Dresden Pharmaceuticals has decided to develop a new drug.
If upfront development costs are $500,000,000, in what year will the company break even?
Build a model using the best practices learned in Chapter 11 to answer this question.
Given:
The current market size (# of prescriptions) is estimated to be around 3,000,000 and is expected to grow at 4 percent every year.
The market share Dresden hopes to capture in the first year is 7%, and an additional 1% each year after with a maximum market share of 10%.
A monthly prescription is anticipated to generate revenue of $420 while incurring variable costs of $150.
Data:
Development Costs	$ 5,000,000,000
Market Size (Prescriptions)	3,000,000
Market Growth %	4%
Dresden Market Share	7%
Dresden Additional Share Per Year	1%
Dresden Max Market Share	10%
Revenue Per Perscription	$ 420
Cost Per Perscription	$ 150
Model:
	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
Market Size (Prescriptions)
Dresden Market Share %
Dresden # Prescriptions
Profit Per Prescription
Dresden Profit
ANSWER