This case tests the candidate's ability to develop a strategic framework for product prioritization in a cash-constrained biotech environment. The mathematical component reveals equal revenue potential between both indications, forcing the candidate to recognize that development stage and risk profile become the deciding factors. The case emphasizes practical business reasoning beyond quantitative analysis—understanding the company's constraints drives the final recommendation.
Our client, AllergyPharma is a small specialty pharmaceutical company that develops novel therapies for allergies affecting the nose (allergic rhinitis or AR) and lungs/chest airways (allergic asthma or AA). Our client has one product in Phase II clinical trials for AR and AA, called AP-1. With no products on the market, they do not generate significant revenue.
AP-1 is administered to the patient as an injection in a physician’s office. A full course of AP-1 therapy is 7 consecutive days of AP-1 injections. Phase II clinical trials show that when a full course of AP-1 therapy is administered to patients, symptoms of AR and AA are improved. The data in AR are strong enough for AP-1 to advance to Phase III trials for AR; however, an additional Phase II study would be required in AA before potentially moving onto Phase III trials for AA. Improvements in AR and AA symptoms were observed one month after the full course of AP-1 therapy. By following these patients over time, the client was able to demonstrate that improvements in AR and AA symptoms lasted for 1 year without the need for additional AP-1 treatments.
The client can only afford to pursue one disease indication at a time, though if they are successful in one, it is very likely they will be able to raise enough money to pursue the other indication as well. The client has hired us to help them to decide which indication to pursue first.
What factors should the team consider when prioritizing the two indications?