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AutoSave On 2 HW1402_SPRING_2021 Version 1 (2) (1) (1) (1) - Saved - Search Rachid Sarhane RS File Home Insert Page Layout Formulas Data Review View Help Share Comments 11 Calibri 11 = = - AP > ab Wrap Text General 47 O FO Insert 3X Delete Format Paste .00 BIU A += = 3 Merge & Center $ % 40 .00 Conditional Format as Cell Formatting Table Styles Styles Sort & Find & Filter Select Analyze Data Clipboard Font Alignment Number Cells Editing Analysis 1112 X C. J K L P R S T U 25 26 B LACLIPOTIUT CICCICU VICTCK TUK TITS T-SUTUS TITUXITUMU TIIVUTT-SUCC. E mun Eng vua. H N 24 "Global sales of Invanz, for the treatment of certain infections, were $602 million in 2017, an increase of 7% compared with 2016, driven primarily by higher sales in the United States, reflecting higher pricing that was partially offset by lower demand, as well as higher demand in Brazil. Worldwide sales of Invanz were $561 million in 2016, a decline of 1% compared with 2015.... Sales performance in 27 2016 reflects higher pricing in the United States, largely offset by a decline in Venezuela. The patent that provided U.S. market exclusivity for invanz expired in November 2017 and the Company 28 anticipates a significant decline in U.S. Invanz sales in future periods. 29 32 33 34 35 30 After patent protection ends for Invanz, generic drug producers will likely introduce lower cost, generic versions of the product. The speed and size of generic entries will depend on numerous factors, 31 including the attractiveness of market entry by generic manufacturers, the investment required and the technological difficulty of manufacturing the product. While antibiotics such as Invanz are extremely capital-intensive and difficult to manufacture (due to processing complexity and the difficulty in maintaining acceptable conformance quality), generics are making inroads in Merck's other off-patent antibiotics. Patent protection for Primaxin ended in 2008 and a generic version entered the global market in 2010. 36 Merck lost patent protection for Invanz in the US in November 2017. On June 28, 2018, Aurobindo announced that the FDA had approved their generic versions have been approved for use in the US. 37 Aurobindo began selling generic Invanz in the US at the end of July 2018. 38 39 40 41 Invanz is an antibiotic of "last resort" meaning that it is typically only administered after other antibiotics have failed. The increasing incidence of infections that are resistant to more common antibiotics is expected to help offset inroads from generics. Clinical researchers estimate annual growth in demand for antibiotics such as Invanz in the low single digits annually for the foreseeable future due to increasing antibiotic resistance. 42 43 44 48 50 Demand for Invanz produced by Merck will be dependent in large part on Merck's ability to compete on cost as well as quality. Performance quality (i.e., the ability to successfully treat specific 45 infections) is an order winner. Conformance quality (i.e., meeting manufacturing specifications) is an order qualifier. Conformance quality issues are a serious concern; if poor quality product reaches 46 the market, patient safety could be at risk and the firm may need to conduct a product recall. Product recalls are typically damaging to the firm's stock price in the short term and potentially to the 47 firm's brand in the long term. Competing on cost will become increasingly important as new antibiotics enter the market and due to expected competition from firms producing generic versions of Invanz. Generic drug manufacturers may have higher quality risk when introducing new drugs, in part because they lack experience with the process. Merck has an advantage over Aurobindo in this 49 respect, at least initially, because they have lengthy production experience with the process. 51 52 Global sales of Invanz and Primaxin are provided below through the end of September 2018. A single dose of Invanz (1 bottle) retails, on average, at $1,315.56 per bottle; a single dose of Primaxin (1 53 bottle) is priced, on average, at $860.70 per bottle. You can assume that this pricing will remain constant over the period of the strategic plan and that generic competition is present worldwide as of 54 July 2018. You may assume that Aurobindo has a slight cost (price) advantage over Merck for Invanz, and that Aurobindo has adequate capacity to supply global demand for Invanz. A new strategic 55 plan is required for 2019-2023, including annual forecasts of sales of both products. 56 1. Scenario Details 2. Long Term Forecast | 3. Weekly Demand Forecast Sheet1 4. Process F... + Calculate + 70% H Type here to search O & . w AEC ENG 5:48 PM 4/13/2021 714 AutoSave Off He HW1&2_SPRING_2021Version 1 (3) - Excel Search Rachid Sarhane RS File Home Insert Page Layout Formulas Data Review View Help Share Comments 1 Calibri 11 | A? = = > ab Wrap Text General AY FO Insert 3X Delete Format Paste .00 BIU A 3 Merge & Center $ % 40 .00 Conditional Format as Cell Formatting Table Styles Styles Sort & Find & Filter Select Analyze Data Clipboard Font Alignment Number Cells Editing Analysis S88 X B E F G H I J K L N P Q R S . 76 77 78 79 80 81 82 83 84 85 Process & Demand Data 86 ACTUAL GLOBAL DEMAND SALES Year Global Invanz Sales SUS MM Global Primaxin Sales SUS MM 2010 2011 362 406 610 515 2012 445 384 2013 426 335 87 Single Process Line Data Average # of Average Activity Process Step Bottles Waiting Time (minutes) 88 Prior to Activity 89 Bottle Staging 168 12.1 90 Bottle 257 29.08 Tunnel 209 10.9 91 Sterilization 92 Aseptic Fill 220 2.1 Lyophilization 289 13.2 93 (Freeze-drying| 94 Bottle Capping 188 0.5 95 96 97 98 99 100 101 2014 488 329 2015 2016 2017 2018 (through end of September 569 561 602 437 313 297 280 212 1. Scenario Details Sheet1 2. Long Term Forecast 3. Weekly Demand Forecast 4. Process F + 70% 11 O Type here to search o & . W AEC ENG 6:01 PM 4/13/2021 714 AutoSave On 2 HW1402_SPRING_2021 Version 1 (2) (1) (1) (1) - Saved - Search Rachid Sarhane RS File Home Insert Page Layout Formulas Data Review View Help Share Comments 11 Calibri 14 - AP = = ab > General 47 O FO Wrap Text 3 Merge & Center Insert 3X Delete Format Paste BIVE a. Av .00 $ % 40 .00 Conditional Format as Cell Formatting Table Styles Styles Sort & Find & Filter Select Analyze Data Clipboard Font Alignment Number Cells Editing Analysis D12 X A B c E E 5 6 ASSUME THAT THE WEEKLY SHIPMENT DATA (FORECASTING WEEKLY DEMAND) IS INDEPENDENT OF THIS ANALYSIS. 7 Explain your assumptions and methods for making the long- term forecast. Provide any graphs used in long-term forecasting - insert them to the right of your assumptions and forecast values. You may add rows if you need 8 additional space. 9 10 Invanz (Bottles) 2018 Demand Primaxin (Bottles) 2018 Demand What is your estimated (forecasted) demand for Invanz and Primaxin for 2018? Provide the answer in units of BOTTLES. 11 12 13 14 Primaxin Forecasts Pessimistic (Low End) Forecast (Bottles) Optimistic (High End) Forecast (Bottles) 15 16 Provide a table of forecasted demand for strategic planning purposes for Invanz and Primaxin below: Invanz Forecasts Year Pessimistic (Low End) Forecast (Bottles) Optimistic (High End) Forecast (Bottles) 2019 2020 2021 2022 2023 17 18 19 20 21 22 22 1. Scenario Details 2. Long Term Forecast 3. Weekly Demand Forecast Sheet1 4. Process F ... + Calculate + 70% H Type here to search i w AEC ENG 5:48 PM 4/13/2021 714
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