Nucleon Inc.

GROUP MEMBERS
ABHISHEK SANDHU - (PGP/21/003)
HARSH AGARWAL- (PGP/21/021)
JAYENDU BHASKAR - (PGP/21/023)
KUMAR ABHISHEK - (PGP/21/ 028)

RAGHVENDRA PRATAP - (PGP/21/036)

 OPTION -1(PILOT PLANT (I& II) + COMMERCIAL
MANUFACTURING(III))
• Opportunities-
o Enable the firm to develop the nucleus of a future large-scale ,in house manufacturing capability
o Keep control over process and quality procedures
o Scaling up would be easier
o Sole supplier of CRP-I to it’s manufacturing partner
• Threats-
o Pilot facility is not going to be used for phase 3
o The high risk of failure might force the plant to be kept idle
o There is high level off process uncertainty
o Lacked supervisors and technicians as most of the employees were Ph.D scientist
o Cost of going up to commercial manufacturing is way too high
 OPTION -II(PILOT PLANT (I& II) + LEASING OUT MANUFACTURING
AND MARKETING RIGHTS(III))
• Opportunities-
o Enable the firm to develop the nucleus of a future large-scale ,in house manufacturing capability
o Keep control over process and quality procedures
o Scaling up would be easier
o Cost of integrating into commercial manufacturing will be saved( $20 million)
• Threats-
o Pilot facility is not going to be used for phase 3
o The high risk of failure might force the plant to be kept idle
o There is high level off process uncertainty
o Lacked supervisors and technicians as most of the employees were PhD scientist
o Royalty amounts to only 10% of the partners gross sale & $ 7 million after phase I approval, which is
pretty less
 OPTION -III(CONTRACT (I& II) + COMMERCIAL(III))

• Opportunities-
o No major capital investment on Nucleon’s part
o Companies supplying contract manufacturing had facilities and personnel in place.
o Economies of scale comes into the picture for companies applying for contracts
o Sole supplier of CRP-I to it’s manufacturing partner for commercial
• Threats-
o Confidentiality information disclosure will be at risk
o Estimates for cost and time was very painstaking because of various complexities.
o Very tough to integrate into commercial manufacturing after contract manufacturing in phase I & II
 OPTION –IV (CONTRACT (I& II) + LICENSING(III))

• Opportunities-
o No major capital investment on Nucleon’s part
o Companies supplying contract manufacturing had facilities and personnel in place.
o Economies of scale comes into the picture for companies applying for contracts
• Threats-
o Confidentiality information disclosure will be at risk
o Estimates for cost and time was very painstaking because of various complexities.
o Royalty amounts to only 10% of the partners gross sale & $ 7 million after phase I approval
 OPTION –IV (LICENSING(I& II) + LICENSING(III))

• Opportunities-
o No major capital investment on Nucleon’s part
o Had the chief benefit of generating cash immediately.
o Company can concentrate on it’s core competency(research & development)
o Can retain the right to develop CRP-I for therapeutic applications
o Royalties as percentage of sales
• Threats-
o Employees viewed it as “mortgaging the companies future”
o Estimates for cost and time was very painstaking because of various complexities.
o Royalties amount received if product is successful will be far lower than had it manufactured by itself
 FINANCIAL ANALYSIS FOR NPV

NPV
$8,000.00
$7,095.48
$7,000.00

$6,000.00
$5,158.72
$4,960.07
$5,000.00

$3,766.40
NPV

$4,000.00
$3,023.31
$3,000.00

$2,000.00

$1,000.00

$-
1 2 3 4 5
NPV $4,960.07 $3,023.31 $7,095.48 $5,158.72 $3,766.40
Options
RECOMMENDATIONS
• Robert Moore should go for contract manufacturing in phase I & phase II and
then go for commercial manufacturing in phase III.
• The NPV is highest for the given option ,all other opportunities and threats are detailed
in the slides earlier.