Vladislav Gurin :: BioTech & Pharma consulting

The more complex a product becomes, or the higher the value ascribed to it, the greater the opportunity for value-added influencers to make a significant impact.

Consumers are influenced consistently and substantially by professionals. The real choices or decisions facing us are too difficult to take. We need shortcuts. Sometimes their advice is sought, other times it comes at us uninvited. Nevertheless, consumers listen to. It’s easier if the expert makes the decision for us. The professions that customers listen to are varied, not restricted to the white collar professions. They are listed below:

• Doctors
• Lawyers
• Financial advisers
• Builders
• Teachers
• Journalists
• Academics
• Taxi drivers
• Hairdressers
• Dentists
• Gardeners
• Architects
• Council officials
• Hotel concierges
• Travel kiosk staff

Especially in the biotech, biochem, pharmaceutical and medical sectors, the role of specific academics can be extremely influential. Not only do some educational institutions play a prominent part in the day-to-day fabric of some sectors, but the major vendors lean heavily on their academic links in order to leverage the kudos of perceived thought leaders. Besides academics are rarely even considered by sales or marketing staff as having any effect on a company’s profits and expectations. They’re often wrong. The answer is that we tend to believe people with expertise and professional standing. Academics have been proven for decades to be heavily influential.

Unlike the product launch, the brand launch is, from the very beginning, a long-term program.
Such launch will modify the existing order, values and market shares of the category. It aims at establishing a new order and different values and at impacting on the market for a long time. This can only be achieved if people are convinced of the brand’s absolute necessity and are ready to give it all they have.
In order to keep staff, management, bankers, clients, opinion leaders and salespeople mobilised for the long term, the company must be driven by a real brand project and a true vision. The latter will indeed serve to justify, internally and externally, why the brand is being launched and what its essential purpose is.
Creating a brand implies first drafting the brand’s programme, which underlies the brand identity and positioning. Presenting the brand in a programmatic format (Table 1) is fruitful.

Table 1. Underlying the brand is its programme.

It indicates where the brand stems from, where it draws its energy, what big project lies behind the brand. This is useful as a step in the brand thinking process itself, before the brand identity prism and brand positioning are defined.
Many brands no longer know why they exist, so they would be quite unable to answer questions such as those in Table 1 defining the brand programme. Such questions reflect a philosophy at the opposite of niche tactics.
Only those who are driven by a grand project within can actually set out on the long trip of brand making.

I believe that we are on the precipice of a new age that I like to think of as the Customer Service Revolution (CSR). Technology is influencing our live more than at any other time in history. But the technological advances we have experienced in the last twenty years are almost nothing compared to those that will occur in the next decades.

Customers literally have a world of choices. I purchase pharmaceuticals from the other side of the world on a regular basis. I do work for clients thousands of miles away simply with the click of a button. Things happen quickly and people expect fast service.
Small businesses can look like large corporations with some smart promo packages and a good website.
As business owners and operators we all have access to new and developing markets and new sources of customers. It doesn’t take a lot to start and run your own business. Pay a few fees and register a name, and bingo — you are a business owner and operator. This means that we are all facing increased competition, and I believe that the competition we face today is nothing compared to the competition we will face tomorrow.
As competition for market share becomes tougher, manufacturers and suppliers have to be highly competitive in their pricing if they want to stay in business.

But the main thing that gives one business an advantage over others is customer service.

Those businesses that are smart enough to realise that their future success lies with increasing levels of customer service will prosper in the coming decades.
The consumer backlash against having to stand in long queues in banks, dentistries, pharmacies and other institutions, or against being put on hold for long periods of time, is allowing room for smarter operators to come in and develop their own market share simply by offering better levels of service at the same price.

Customers today are time short and demanding.

They know that they have choices, and they are prepared to take their business elsewhere if the service is poor or prices aren’t competitive.
I believe that more customers are lost through lousy service than through poor pricing. If people don’t return your phone calls, don’t deliver on time and don’t thank you for your business, you will take your business elsewhere. And once a customer is lost, it’s very hard to get them back.
So, while this is a testing time for many businesses, there are also enormous upsides.

Customer service is one of the easiest and cheapest ways to improve in any business.

Normally it involves just changing the way things are done. As the Customer Service Revolution goes on, your business can either grow stronger and be a leader in your field, or it can be left behind to wallow with the majority of others.

But finally it’s up to you, dear readers, remember you and only you are the final decision makers. That’s why I would like to wish you to succeed in your business, choose the right way, just go ahead of the future and simply stay the leader in your area.

Sincerely yours,

Vladislav Gurin,
Editor-in-Chief

The manufacture of pharmaceuticals is a complicated process, comprising numerous steps leading from raw materials to finished formulated product. That finished product is the API (active pharmaceutical ingredients), and it is this product, along with the necessary inert ingredients, packaging, and labeling, which the FDA licenses.
A drug manufacturer’s plan for producing a given medicine, which must pass muster with the FDA before the agency permits its distribution, contains a number of steps:

• Planning — A strategy for ordering the raw materials.
• Sourcing — Choosing the suppliers that will deliver the goods and services. Suppliers could be domestic or international.
• Making — This is the manufacturing step. Manufacturers schedule activities necessary for production, testing, packaging, and delivery. Manufacturing is also the most timeintensive portion of the supply chain. Manufacturing involves making the API and its conversion to the final dosage form, as mentioned above. More than one manufacturer may be involved, and manufacturing can take place in the United States or abroad. A pharmaceutical company may contract several chemical steps to foreign firms and then import the resulting intermediate compounds needed to complete the manufacture of the API domestically. The manufacturer can also outsource the manufacture of the API abroad; when it does so, the FDA closely monitors those plants. Conversion of API to the final dosage form may occur domestically or be “outsourced’’ to a foreign plant.
• Delivering — This is the “logistics’’ portion of the manufacturing and supply plan. Companies coordinate the orders from customers and choose transporters who carry the product to customers, such as wholesale distributors and pharmacies. Finally, the pharmacy dispenses the finished medicines to patients.
• Returning — This is the system for receiving defective and excess products back from customers and supporting customers who have problems with delivered products (including reimbursement).

This is a great question and one that we would all answer a little differently. Balance means something different for each and every one of us, and to find out what it means for us is the first step to achieving it.

For some people it means no stress at all, having everything in perfect order, living a perfectly healthy life, feeling energised, calm and under control.
For others - it is cutting back the workday from 18 hours to 14 hours, the number of coffees from 10am to 5 pm. . . You get the picture.
This is not an article with scientific approach about spiritual enlightenment, but a practical advice (step-by-step tips) to help you find your own balance between your business and other aspects of your life. As you work through it you will form your own mental picture of how you would ideally love your life to look and feel.

The following list identifies the ten reasons for getting out of Work & Life balance. Of course, there are many more, but these are the biggest  most common culprits:

1. Overwork — simply putting in too many hours and being a slave to your business.
2. Financial problems — struggling to make ends meet in the business and worrying about how you will pay your bills.
3. Overcommitment — agreeing to do giant work for too many people and not leaving enough time or energy for yourself.
4. Poor stress management — not knowing how to manage your own stress or not being able to admit that it is a problem.
5. Relationship — with partners, family and friends, co-workers and customers.
6. Poor lifestyle — eating badly, lack of physical exercises, and alcohol and drug abuse.
7. Lack of direction — feeling trapped and isolated in the business and uncertain about your future direction or goals.
8. Lack of bounds — being too accessible to too many human-beings.
9. No space and time to rejuvenate — no holidays, time outs, hobbies or amusements to remind you why you do what you do.
10. Negative environment or negative people around you every day.

A number of HIV attributes and its mode of infection conspire to render creation of an effective vaccine less than straightforward. These factors include:

• HIV displays extensive genetic variation, often even within a single individual. Such genetic variation is particularly prominent in the viral env gene whose product, gp160, is subsequently proteolytically processed, yielding gp120 and gp41.
• HIV infects and destroys T-helper lymphocytes, i.e. it directly attacks an essential component of the immune system itself.
• Although infected individuals display a wide spectrum of antiviral immunoresponses, these ultimately fail to kill the virus. A deeper understanding of what immunity elements are most effective in combating HIV infection is required.
• After initial virulence subsides, large quantity of cells harbour unexpressed proviral DNA.
  The immune system has no method of identifying such cells. An effective vaccine must thus induce the immune system to:
  (a) bring the viral infection under control before cellular infection occurs; or
  (b) destroy cells once they begin to produce viral particles and destroy the viral particles released.
• The infection may often be spread, not via transmission of free viral particles, but via direct transmission of infected cells harbouring the proviral DNA.

Arthur Kornberg, the Stanford University Nobel laureate, who first synthesised DNA in a laboratory and whose identification of the enzymes used by cells to reproduce DNA laid the basis for the biotechnology, died of respiratory disorder on Friday at Stanford Hospital at the age of 89.

Kornberg was the founder of the Stanford University School of Medicine’s biochemistry department, taking in a talented group of unique scientists who worked together for nearly 50 years.

Kornberg lived to see his son Roger win the 2006 Nobel Prize in Chemistry.

It is often hard to conceive how little was known about the mysterious DNA molecule when Kornberg began his research in the 1950s. Scientists were pretty sure that it was the repository of genetic information. In spite of that, DNA was a mystery.

During the second world war Kornberg was interested in enzymes, the bioproteins used by cells to carry out chemical reactions, especially the synthesis of substances used by cells.

After preliminary work isolating enzymes involved in vitamin manufacturing, Kornberg tackled the more difficult challenge of DNA and RNA, the messenger molecule used by cells in the conversion of genetic information contained in DNA into proteins.

Kornberg reasoned that cells would produce DNA by stringing together pre-made nucleotides - combinations of a base, a sugar molecule and a phosphate group.

While Kornberg was working on the project in 1953, James Watson and Francis Crick published the DNA structure, providing clues to direct his efforts. By the following year, Kornberg and his colleagues had isolated the enzymes used to produce the nucleotides used in RNA and DNA.

By 1957, Kornberg had discovered and purified the key molecule, named DNA-polymerase, and submitted two papers describing the work to the Journal of Biological Chemistry. Referees, however, objected to calling the material produced by the enzyme DNA.

Disgusted, Kornberg withdrew the papers, but they were published the following year when the journal appointed a new editor.

His work confirmed speculation by Watson and Crick that genetic information was encoded in opposite directions on the two strands of double-helical DNA.

Kornberg shared the Nobel Prize in Physiology/Medicine for the DNA synthesis in 1959.

In association with Financial Times

TRIPS is the most significant agreement on intellectual property of the 20th century. More than a 100 ministers signed it on behalf of their nations in the magnificent Salle Royale of the Palais des Congrès in Marrakesh on 15 April 1994.
TRIPS is one of 28 agreements that make up the Final Act of the Uruguay Round of Multilateral Trade Negotiations, the negotiations that had begun in Punta del Este in 1986. Another of those agreements established the WTO, and it is the WTO that administers TRIPS.
TRIPS was the first stage in the global recognition of an investment morality that sees knowledge as a private, rather than public, good. The intellectual property standards contained in TRIPS, obligatory on all members of the WTO, would help them to enforce that morality around the world.
In India, generics industry warned of dramatic price increases in essential drugs that would follow from the obligation in TRIPS to grant 20-year patents on pharmaceuticals.
TRIPS is about more than patents. It sets minimum standards in copyright, trade marks, geographical indications, industrial designs and layout-designs of integrated circuits. TRIPS effectively globalizes the set of intellectual property principles it contains, because most states of the world are members of, or are seeking membership of, the WTO. It also has a crucial harmonizing impact on intellectual property regulation because it sets, in some cases, quite detailed standards of intellectual property law. Every member, for example, has to have a copyright law that protects computer programs as a literary work, as well as a patent law that does not exclude microorganisms and microbiological processes from patentability. The standards in TRIPS will profoundly affect the ownership of the 21st century’s two great technologies – digital technology and biotechnology. Copyright, patents and protection for layout-designs are all used to protect digital technology, whereas patents and trade secrets are the principal means by which biotech knowledge is being enclosed. TRIPS also obliges states to provide effective enforcement procedures against the infringement of intellectual property rights.
No one disagrees that TRIPS has conferred massive benefits on the US economy, the world’s biggest net intellectual property exporter, or that is has strengthened the hand of those corporations with large intellectual property portfolios. It was the US and the European Community that between them had the world’s dominant software, pharmaceutical, chemical and entertainment industries, as well as the world’s most important trade marks.
The rest of the developed countries and all developing countries were in the position of being importers with nothing really to gain by agreeing to terms of trade for intellectual property that would offer so much protection to the comparative advantage the US enjoyed in intellectual property-related goods.
For instance, an Australian study of copyright royalty flows during the 1990s showed that Australia paid out to overseas copyright owners around Aus$1.2 bln more than it received. Another Australian study showed that the cost to Australia of the TRIPS provision which extended the patent term of 20 years to patents already in existence could be as high as Aus$3.8 bln.
In Australia, as is the case in all small- to medium-sized developed country economies and developing country economies, the vast bulk of patents is in foreign ownership.
Sometimes we were told that ‘we will be eventual winners from intellectual property’. While it is good to be optimistic about one’s distant destiny, it does not explain why normally hard-nosed trade negotiators would take the highly dangerous route of agreeing to the globalization of property rules over knowledge that had brought their countries so few gains in the past. Of the 3.5 million patents in existence in the 1970s, the decade before the TRIPS negotiations, nationals of developing countries held about 1%.
Developing countries such as South Korea, Singapore, Brazil and India, that were industrializing, were doing so in the absence of a globalized intellectual property regime.
More disturbing for developing countries is the development cost of an intellectual property regime. The basis of competition lies in the development of skills. The acquisition of skills by newcomers disturbs roles and hierarchies.
After India built a national drug industry, it began exporting bulk drugs and formulations to places such as Canada. A developing country which had acquired skills threatened those at the top of an international hierarchy of pharmaceutical production – the US, Japan, Germany and the UK.
Australia has shown in the field of wine-making that the acquisition of skills can upset a European-led hierarchy of wine quality and production. The French have responded, in part, by insisting on protection for geographical indications, a form of intellectual property protection allowing them to claim, for example, exclusive use of the ‘Burgundy’ and ‘Champagne’ labels.
Underneath the ideology of intellectual property there lies an agenda of underdevelopment. It is all about protecting the knowledge and skills of the leaders of the pack.
The answer to the question about why developing countries signed TRIPS has much to do with democracy – or rather, its failure. Put starkly, the intellectual property rights regime we have today largely represents the failure of democratic processes, both nationally and internationally. A small quantity of US companies, which were established players in the knowledge game, captured the US trade-agenda-setting process and in partnership with European and Japanese multinationals drafted intellectual property principles that became the blueprint for TRIPS. The resistance of developing countries was crushed through trade power.
One answer to this might be that corporations are entitled to lobby, and, in any case, developing countries agreed to TRIPS through a process of bargaining among sovereigns. It is indeed true that big corporations are entitled to lobby. It is important that big business makes its views and policy preferences known to government since around the globe it represents hundreds of millions of jobs and investors. However, that lobbying in relation to property rights should take place under conditions of democratic bargaining.
Democratic bargaining matters crucially to the definition of property rights because of the consequences of property rules for all individuals within a society. Property rights confer authority over resources. When authority is granted to the few over resources on which the many depend, the few gain power over the goals of the many. This has consequences for both political and economic freedom within a society.
The stakes are high in the case of IP rights. Intellectual property rights are a source of authority and power over informational resources on which the many depend – information in the form of chemical formulae, the DNA in animals, the algorithms that underpin digital technologies and the knowledge in books and electronic databases. These resources matter to communities, to regions and to the development of states.

After drawing on research from AMR Research, McKinsey & Company, I point to the widespread adoption of CRM technology solutions.
CRM (Customer Relationship Management) is the technology that tracks customer activity and tailors marketing pitches accordingly. Estimates of the size and growth of the CRM software market vary considerably. Nevertheless, the investment in this technology is both substantial and growing and an important focus of companies’ budget. The Gartner Group estimated that worldwide spending on CRM was already $23bln in 2000 and would grow to $76bln by 2005 (or about $100bln by 2007).
Two-thirds of all telecom operators in U.S. and half or more of all U.S. financial services, pharmaceutical, BioTech and transportation companies are either implementing or already utilizing such solutions. Across the USA and Europe, approximately 45% of the companies in the high technology, healthcare, aerospace, retailing and utilities sectors have invested in CRM systems.
Most large organizations dealing with a giant number of customers have adopted or will adopt one or more IT-based CRM solutions. Medium-sized and smaller organizations need to consider their existing and potential scale in relationship to the technology requirements.

Having analysed extensively CRM project management and using a range of sources I’d like to emphasize some of organizational prerequisites that make a company an ideal candidate for adopting an IT-based CRM solution:

• Do you have a large number of people in sales and service in direct contact with customers, say more than 30?
• Are you in a highly collaborative environment, with customer interaction requiring input from multiple players within each function (sales and service)?
• Do you sell complex products that require a high degree of configuration and customization?
• Do you have a large number of customers, say more than 10 000?
• Is a typical customer relationship worth a lot to you from a profit standpoint, i.e. will it cost you to lose one?
• Can your customers interact with you across multiple channels?
• Do you have frequent contact with large groups of customers, or all customers, across multiple channels?
• Is there a need to customize what you are saying to each customer through these channels?

I will try to provide several examples of a real option analysis in contractual relationships between two parties: a delivery contract for a service product with uncertain development time; a supplier contract for assets with short lead times such as fashion goods with market uncertainty; and a joint venture agreement to co-develop a new original drug with significant technical and market payoff uncertainty.
For instance, a joint venture on a product Research & Development program can be viewed as a sequential compound option whereby after the initial learning experience one of the partners makes an equity investment in the other partner.
Successful product development during the joint venture creates the option to expand the agreement to include sales or distribution rights and may ultimately create the incentive—and real option—to acquire the joint venture partner. These types of agreements are frequent in high-tech industries such as semiconductors, software development or biotechnology, which feature high R&D intensity and high levels of technical uncertainty.
A recent article in Financial Times alludes to Pfizer’s changing drug strategy to restructure R&D, which now involves a series of investments in start-up BioTech companies in exchange for equity. The size and research budget from Pfizer’s approximately $7bn in annual R&D spending and to be corrected later.
These examples also extend to other industries. Anheuser-Busch, the global brewery, within the past few years has initiated a novel strategy of growth option acquisitions by making small equity investments in local breweries in foreign markets. These investments given Anheuser both growth options as well as learning options: By participating in the small breweries, Anheuser learns quickly about the market structure, demand, and growth potential of these markets, thereby reducing much of the noise that would otherwise cloud assumptions about the attractiveness of these markets. This, in turn, facilitates informed decisions as to which of those growth options should be exercised by acquiring target firms in proliferating markets.
A joint venture creates the option to learn about technical and market uncertainty by preserving a stake in the development program. It provides the opportunity to participate in the upside potential while also sustaining enough flexibility to exit at low costs if the project fails. Those partner strategies that build on sequential investments constitute an important part of corporate strategies. They avoid the risk inherent in premature acquisition of some technology firm prior to obtaining a good understanding of the feasibility of the emerging technology and its market acceptance.
An agreement between two partners, be it to jointly develop a new product or to provide for product or service supply, should allow for sufficient embedded options and flexibility to sustain a fair and just allocation of obligations and rewards to each party for both the current conditions, under which the agreement is closed, and a set of future uncertainties. In other words, the agreement should create a Pareto optimal allocation of risks and reward in the face of uncertainty: there is no other allocation in which some other individual is better off and no individual is worse off. It implies that both parties can benefit equally from future upsides and are equally protected against downside risks. Contract embedded options that permit fair risk and reward sharing during the presumed lifetime of the agreement under a set of future uncertainties are likely to stabilize and sustain the relationship between the two parties.
One solution to the problem of future uncertainties is contingent contracts.
In a contingent contract, some of the deal terms are not finalized but are left open for future events, that is, the contingencies, to occur. Those contingencies may relate to uncertain market payoffs, the success of a joint project, or the costs it may take to complete a task. Real options are a great analytical tool to reconcile disparate assumptions and expectations in the structure of a contingent contract.
In other words, contract embedded options are constructed to make behavioral motives or penalize unwanted actions. These include delivery contracts with penalty clauses for delays or employment contracts that entail incentive options.