Homework #4 This scenario is loosely based on real company decisions. You are the Portfolio Manager for a mid-size company, ACME Pharmaceuticals. As usual, the drugs being developed have some problems and your job is to determine the best course of action for each and recommend to upper management. For a cost perspective, ACME's historical figures: Process time cost Discovery project 3 years 3 million New lead compound, 1 year 1.5 million established project GLP/GMP production 0.5 year 1.5 million for Phase 1 IND enabling studies 1 year 3 million Phase 1 SAD 0.5 year 1 million Drug #1, novagolix Status: Phase 1, recent report from the trial center: all subjects reported a very strong, bitter taste when receiving their first dose. 2/8 subjects refused to take their second dose. Your options: A) Continue novagolix trial and investigate blocking the taste. 1) Try various combinations of chocolate, caramel and peppermint 2) Investigate a San Diego company that claims they can block bitter tastes with an additive B) Stop clinical development of novagolix and activate the closely related backup compound 1) Since there is a common intermediate, you will save 1/2 the time and money for GLP/GMP C) Stop clinical development of novagolix and find a new compound from a new series 2) Since the program was already running, you have the team available. D) Stop the novagolix program So far novagolix has cost you (sunk cost) $10 million and 6 years. Please fill out the following table based on the numbers above: Option Wasted expense* Future cost* * |How long to next What bitter taste risk are you taking? Phase 1 start? A B C D *Money spent already that cannot help future development ** Minimum cost needed to finish the first Phase 1 What is your recommendation to upper management for novagolix? Why do you think this is the best option