Portfolio Optimizer

A company’s R&D portfolio includes multiple R&D programs in various stages of development. However, the Company cannot afford to develop all available programs due to resource limitations

Portfolio Optimizer

To ensure sustainable growth, the Company must select the “right” mix of R&D programs for priority financing to maximize portfolio value, align strategic goals and available resources, and allocate resources optimally between business groups, therapeutic areas, and early and late-stage programs.

Due to strategic considerations and resource limitations, some internal programs could be canceled, postponed, or outsourced, and external programs in different stages of development could be in-licensed to fill potential portfolio gaps. Discovery research throughput should also be aligned with the capabilities of a drug development organization.

Discovery research throughput should also be aligned with the capabilities of a drug development organization.

Input data (major blocks).

Projected cost dynamics– R&D, Sales and Marketing, COGS, Administrative
Projected FTE dynamics
Projected revenue dynamics, ramp-up, exclusivity period
PTRS, Discount rate, tax rate, ratios upper and lower limits (e.g., % of R&D to revenue), time horizon, time interval (year, quarter, month…), and other parameters.
Budgeting and staffing projections
Strategic goals (e.g., revenue target)
Others, company-specific data

Output data

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Some features of the Portfolio Optimizer:

Portfolio Optimizer incorporates multiple project profiles related to the development in-house vs. in-licensing, scheduling options, variety of marketing strategies, rate of development, and other parameters), and selects the best combination. It increases portfolio planning flexibility.
Portfolio Optimizer can capture project dependency such as mutual exclusiveness, conditional financing (if project A, then project B), projects "cannibalization," and many others.
Portfolio Optimizer incorporates a variety of portfolio strategic goals (e.g., revenue target, market penetration, etc.) and a set of business rules (e.g., financial ratios, forced prioritization, mutual exclusiveness).
Portfolio Optimizer could be very helpful for contingency planning (e.g., select substitute programs and optimal resource reallocation) in case of clinical trial failure, revenue corrections, goals modification, etc.
Portfolio Optimizer can effectively analyze resource bottlenecks.
Portfolio Optimizer can compare multiple optimal portfolios (what-if analysis), significantly reducing time and cost for portfolio analysis.

Email

info@orbeeconsulting.com