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    Case Millennium TSS J v1

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    killer drama
    Millennium Pharmaceuticals was founded in 1993 and initially focused on technology services to aid drug discovery. In the late 1990s and early 2000s, the company pursued a strategy of forward integration through mergers and acquisitions to move downstream into development and commercialization. However, challenges in profitability from commercial drugs led to restructuring in 2003 to reduce costs and refocus on commercial functions. By 2005, Millennium's stock had declined significantly from its peak as the company faced the challenge of achieving profitability.

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    Case Millennium TSS J v1

    Uploaded by

    killer drama
    124 views6 pages
    Millennium Pharmaceuticals was founded in 1993 and initially focused on technology services to aid drug discovery. In the late 1990s and early 2000s, the company pursued a strategy of forward integration through mergers and acquisitions to move downstream into development and commercialization. However, challenges in profitability from commercial drugs led to restructuring in 2003 to reduce costs and refocus on commercial functions. By 2005, Millennium's stock had declined significantly from its peak as the company faced the challenge of achieving profitability.

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    Millennium Pharmaceuticals was founded in 1993 and initially focused on technology services to aid drug discovery. In the late 1990s and early 2000s, the company pursued a strategy of forward integration through mergers and acquisitions to move downstream into development and commercialization. However, challenges in profitability from commercial drugs led to restructuring in 2003 to reduce costs and refocus on commercial functions. By 2005, Millennium's stock had declined significantly from its peak as the company faced the challenge of achieving profitability.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    124 views6 pages

    Case Millennium TSS J v1

    Uploaded by

    killer drama
    Millennium Pharmaceuticals was founded in 1993 and initially focused on technology services to aid drug discovery. In the late 1990s and early 2000s, the company pursued a strategy of forward integration through mergers and acquisitions to move downstream into development and commercialization. However, challenges in profitability from commercial drugs led to restructuring in 2003 to reduce costs and refocus on commercial functions. By 2005, Millennium's stock had declined significantly from its peak as the company faced the challenge of achieving profitability.

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    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 6

    Organization and Strategy at Millennium (A)

    Group 4
    Amit Verma MP14012
    Anindya Halder MP14015
    Anupam Tripathi MP14018
    Prasenjit Dey MP14038 1
    Vinayak Siddhi MP13067
    Case Facts

    Millennium Pharmaceuticals was founded in 1993 by Levin, a biochemical engineer


    in Cambridge.
    Millennium started as a Technology company, drastically improving the speed,
    effectiveness and cost of drug discovery, providing R&D services to
    pharmaceuticals companies thru alliances.
    Started forward integration or downstream movement in late 1990s and early
    2000s.
    Major strategies chosen for forward integration was merger and acquisitions: 1997-
    ChemGenics Pharmaceuticals, 1999-LeukoSite, 2000-Cambridge discovery
    Chemistry, 2001 COR Therapeutics.
    However the tide changed quickly in early 2000s due to high challenge in
    commercialization of downward value chain.
    Levin launched major restructuring in 2003 including reducing of manpower from
    2300 to 1700, winding down UK and San Francisco operations to reduce early
    stage discovery expenditures and terminating metabolic research efforts.
    One of the major cultural change of Millennium was to move from pure science to
    emphasis on commercial functions.
    By Jan 31, 2005, Millenniums stock was trading at $9.21 per share about one-tenth
    of its all time high. Going forward there is a big challenge in front of Dunshire, MD or
    possible successor to Levin is to bring Millennium to profitability.
    7/15/2017 2
    Core Competency : what gave an advantage to the company

    Mark Levin Daniel Cohen Eric Lander Jeffery Friedman Raju Kucherlapati
    -Field expertise -Genetic -Genome -Obesity Research -Medicine
    -Entrepreneurial Skills Scientist Research Knowledge Knowledge
    -Fund raising Knowledge
    Capabilities

    Market Risks Faced by


    Industry Advantages Offered
    30 ppm success rate $70 Million for
    of marketable drugs development
    Core
    Average Cost of $800 5 Years of lead
    Competency
    Million for development time of
    Lead Time of 10 to 15 development
    years for drug Learning on new
    development drugs

    Integrating Rapidly evolving Information Technology for:


    Large scale DNA sequencing
    RADE- Rapid analysis of Differential Gene Expression
    High Throughput Expression Cloning 7/15/2017 3
    Millennium, its Alliance business model and forward integration

    Benefits for Millennium: Benefits for the Alliances:


    Tremendous amount of cash to build Quick development of target-drug
    downstream Lower expenditure of development
    Downstream market knowledge Research knowledge acquisition
    Ownership of by-product drugs and from Millennium
    co-commercialization rights
    Reasons for going for forward integration:
    1) Along with several benefits of alliances it also offered disadvantages which over the time
    started increasing :
    Initial offerings are guaranteed cash but there is uncertainty of receipt of cash in future hence
    a major risk existed in business model
    Increased difficulties of resources allocation due contract limitations resulting in inefficiencies
    of scale.
    Business model restricted risk sharing but has a share in profits
    2) Dilution of Millenniums competitive advantage:
    Information, technology and tools which were unique are now highly diffused in market
    Partners copied competencies and information resulting in loss of uniqueness and IP.
    DNA research was reaching a stage where it was no longer a barrier for other companies to
    enter in this segment (including Pharma companies developing internal capabilities on similar
    model).
    Looking at above points Levin sensed that these competitive advantage would have no
    value 3 to 5 years down the line, so forward integration is the suitable strategy. 7/15/2017 4
    Forward Integration : A Critical anaylsis

    1997 1999 2000 2001


    ChemGenics LeukoSite Cambridge Discovery COR Therapeutics
    Pharmaceuticals Chemistry

    High throughput Market Reach Down stream Sales and Marketing


    Screening Downstream development skills capability
    capabilities Capabilities Medicinal and Acquisition of
    1to 1 matching with Product Pipeline Computational Intergrein Cardio
    existing capabilities Clinical Trial Chemistry Vascular drug
    Is it forward capability Knowhow through $50 million to
    Integration? 100 Chemists bottom line

    Levins Decision for forward integration was correct w.r.t. the Millennium's future
    growth and ability to remain relevant in the Industry.
    Internal allocation and management was unsynchronized with respect to growth
    strategy
    Frequent change of Vision and Mission never gave employees a stability to
    commit and work towards it.
    Addition of stake holders resulted in many voices in the company which were not
    addressed to creating confusion.
    Discipline of resource control was missing through out the process
    The Interim CEO was never committed towards the company, but was always
    acting as an entrepreneur.
    7/15/2017 5
    7/15/2017 6

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