Should Natco Explore the Out-Licensing Opportunity?
(8 pages of text)
Case (Pub Mat)
New medicine launches in India had come down by nearly 80 per cent during the last six years. The risks associated with new-drug development were high, and for that reason, companies were considering buying the potential molecules in the early stages of development at comparatively cheaper rates. Apart from cutting costs, out-licensing provided opportunities for domestic players to enter into collaborations with global players. Now, with out-licensing gaining popularity in the global pharmaceutical markets, one of the fastest growing pharmaceutical companies in India wondered whether out-licensing could be its next big Indian opportunity.
The case is designed for use in an MBA-level management course in a segment on strategic decision-making, analysis of potential business opportunities and diversification. It can also be used in a course on strategic management in the pharmaceutical industry. The teaching objectives of the case are to educate students about the rapidly changing dynamics of the pharmaceutical industry. The case provides a snapshot of the different factors affecting pharmaceutical companies in India and of the different options (such as out-licensing) for future growth and expansion. The case also provides students with an understanding of how macro- and micro-level business environment factors influence strategic decision-making and business conduct.
India, Large, 2014
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