In today's world there is a growing need for new and innovative drugs, vaccines, biologicals, diagnostics and gene therapeutics, particularly now that people are getting older and more and more micro-organisms are becoming resistant to drugs.

Jean-Jacques Boachon Pharmaceutical Company (or Boachon for short) began operations in a small lab at McGill University in 1998, primarily focusing on meeting the chemical needs of local researchers. The company became known for its strong chemistry expertise and expanded both its operational lab footprint as well as its customer base. By 2010, Boachon had outgrown its operational space and moved to its current 100,000 square foot facility in Montreal. The company provides drug discovery, development and manufacturing services to the pharmaceutical and biotechnology industries in Canada.

The company is currently about to make an important strategic decision. It is becoming increasingly clear that in addition to surgery, chemotherapy, and radiation, cancer immunotherapy has grown into a new and very promising method of cancer treatment. Unlike other methods, immunotherapy focuses on using your body's own immune system to fight cancer. There are challenges, however. First, most of the immunotherapeutic drugs are very new and their side effects are not yet properly studied. Secondly, these medications are usually very expensive and so far are not covered by OHIP and similar insurance plans.

Boachon has a very strong research branch - the Poisson Medical Research Institute (PMRI), where renowned scientists, including one Nobel Prize winner, work side by side with young and enthusiastic recent university graduates. The scientists from the PMRI came up with two revolutionary ideas responding to the challenges of immunotherapy. They started developing a medication (let us call it drug A as the true chemical name is very long) that is supposed to be at least as efficient as existing types of immunotherapeutic medications, but much less expensive and therefore available to most patients. Meanwhile, another group at the PMRI are working on drug B (let us call it this), which will be expensive still, but is based on new principles and is expected to be extremely efficient with minimum side effects. Both research directions need a lot of funding, but they could generate a huge profit for Boachon. Drug B would potentially become more profitable for the company than drug A, but drug A research has a higher likelihood of being completed within 1-2 years. At this point the company has some financial difficulties and cannot fully support these PMRI projects. Therefore the company's research teams are going to apply to the famous Fuchs scientific foundation, known to be very generous when it comes to anticancer research. According to the rules, however, the foundation will consider only one project, so the company is facing a dilemma: to go ahead with project A or project B if they want to apply for funding. Each project has an estimated cost of $60 million, and the foundation can cover half of it. The rest will be invested by the company. At this point the management think that they have an 80% chance to get support from Fuchs scientific foundation if they submit the project A proposal and a 70% chance to get support from Fuchs scientific foundation if they submit the project B proposal. If the company's proposal is rejected or not submitted for whatever reason, then Boachon will continue to produce existing immunotherapeutic medications instead of developing new ones.

Not necessarily every promising idea ends up in success. If funding is received for drug A, then, realistically speaking, the detailed forecast would look like this: