Since Genome’s target market Case Study
Since Genome’s target market does not appear to be attractive for most pharmaceuticals n that regard, it gains significant leeway from competition by focusing on orphan drugs. Also, the Orphan Drug Act provides 7 years of market exclusivity which virtually eliminates competition for Genome for at least a while. As an orphan drug, there is minimal threat of substitutes and potential entrants into the market, as explained above. Also, the nature of the drugs made by Genome are of a very critical nature; the drugs save lives of people with very rare genetic disorders.
Considering these points, the bargaining power of customers in this case are minimal to none.
2. How does focusing on orphan drugs affect the types of resources and capabilities a biotech firm needs to be successful? Rare genetic disorders Is a highly specialized area, and so Is the research and development of orphan drugs. The kind of resources needed will definitely be difficult to procure and a biotech firm needs to have access to relevant technology to be successful.
However, in the pharmaceutical industry, orphan drugs can also mean smaller clinical trials, approvals take shorter time, lesser need for focus on large scale marketing and the freedom to have a more direct sales Orca, allowing the biotech firm to be more focused on its core competencies. 3.
Does Genome’s focus on orphan drugs make sense? Do you think Genome has a long- term strategic intent? Genome’s focus on orphan drugs does make a lot of sense, especially since The Orphan Drug Act has been passed. The Act allows better protection than a patent and gives Genome 7 years to develop more drugs and capabilities.
With Improved technology, 7 years Is a lot of time. Also, the orphan drug market Is one where customers have very Limited bargaining power, and this enables Genome to transfer the costs Incurred to customers. Despite the small size of the target market, it is a highly profitable one and Genome managed to capitalist on it. Genome does appear to have long-term strategic intent, but it was difficult to say so at the time they started out.
Their strategic position was to stick to the orphan drug market, and through their initial years they’ve proven that such a position can be profitable.
They’ve managed to come up with a business model that was successful and scalable. As mentioned in the case, their success even attracted the attention of others. Out of the 5000-8000 rare genetic disorders out there (currently known), only 300 orphan drugs have been successfully placed into the market. There is plenty of scope in the orphan drug market, and Genome’s position to focus on orphan drugs does qualify as long-term strategic intent. 4.
Why do you think Genome has diversified Into other areas of medicine? What are the advantages and disadvantages of this?
Genome diversified Into other areas of medicine primarily to generate funds o sustain research and development costs for the orphan drugs. The advantages to tens are Tanat Genome could generate more revenue. Its excellent competencies were supported by the diversification and stick to its decision to stay independent. Also, Genome could divide its liabilities, and it has something to fall back on. The disadvantages to this is that Genome does risk losing focus on its core competencies I. E.
Research and development of orphan drugs. 5. What recommendations would you offer Genome for the future?
Genome can apply for research grants from the overspent due to the nature of the market it is focusing on. This will enable Genome better access to resources and facilities for research and development. Genome can also focus on investing and developing some of its side business which complement Genome’s core objectives, for example the diagnostic centers which are also crucial points for collecting data beneficial for research.
Genome should also consider taking additional measures to secure its intellectual property, which can enable Genome to stay ahead after the 7 years of the Orphan Drug Act has passed.