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Both the discovery and the development portfolios should be merged into one ranking that is based on their strategic fit. This gives a comprehensive priority ranking for all R & D projects in the portfolio, as shown in Figure 10. The results of this analysis may show, for example, that a highly attractive drug (high reward, low risk) does not fit with the therapeutic areas where the company has marketing strength. Such a product has great advantages as a licensing candidate. On the other hand, a drug that has a relatively low reward or high risk might be a good strategic fit because it is the only drug in the portfolio that can fill a pipeline gap. For each therapeutic target, one should seek a steady roll-out of market launches for drugs in the near-term (ready for regulatory submission), mid-term (entering clinical development), and long-term (ready for preclinical development). A gap in the product pipeline can be financially devastating. A drug that fills such a gap should receive a relatively high priority. If done properly, the product priorities should minimize biases that are dependent on the stage of development, emphasize those projects that are both highly attractive and fit well with strategic objectives, and equalize the value of discovery projects and development candidates. |
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G. Interpretation of the Portfolio Analysis and Action Steps |
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Having assessed the individual projects, rated the risk-reward value of the portfolios, and then prioritized them based on their strategic fit, the remaining step is to adjust resources to ensure that the projects receive resources that are consistent with their place in the portfolio [21]. The corporate strategy defines where the company is going. It is up to management to determine how to get there, by resourcing the projects in the portfolio consistent with strategic goals. |
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First, the portfolio should be examined as a whole. Are there the right number of projects in the portfolio, or is the company spread too thin? In order to answer this question, the company has to have some sense of how many projects can be adequately resourced. As greater emphasis is put on shortening development time, the number of development projects will need to be decreased [17,21]. The distribution of projects in the portfolio is also important. Of those that fit strategically, what is the level of risk of the portfolio? Adjustments should be made to ensure that projects represent a balance between profitability and feasibility. |
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Second, the projects at the top of the list should be considered. These are the projects that fit with the strategic plan, have a high reward potential and high likelihood of success. Are these projects moving at maximal speed? If not, what adjustments in manpower and budget will ensure the shortest development time? If nothing else is accomplished, resourcing these projects will quickly improve the product line. Is the value of the portfolio adequate? If the |
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