OPIM 5894 ADVANCED PROJECT MANAGEMENT VERTEX PHARMACEUTICALS CASE SURESH NAIR, Ph.D. Professor, School of Business University of Connecticut, Storrs, USA

Vertex Pharmaceuticals case 2 Issues Raised  Drug development issues – selecting a portfolio of products  In-house versus Licensing issues  Types of risks – Target risk, Mechanism risk, Molecule risk, Market risk  Real options analysis Prof. Suresh Nair, University of Connecticut

Vertex Pharmaceuticals case 3 Team Assignments – Team 1, Team 2, Team 3  Which of the 4 project portfolio options currently facing Vertex do you favor?  Specifically, which two projects would you advance in development? Why? Show analysis. Remember: If chance of success is 0.2 for each of two projects,  the chance that both succeed is 0.04,  the chance that both fail is 0.64  The chance that at least one succeeds is 0.32 Prof. Suresh Nair, University of Connecticut

Vertex Pharmaceuticals case 4 Team Assignments (contd.) – Team 1, Team 2, Team 3  Would you license out the two others not chosen or keep them as backup?  How much should Vertex management rely on quantitative methodologies (such as real option valuation) versus more qualitative approaches? Prof. Suresh Nair, University of Connecticut CriteriaVX 148VX 702VX 765VX 950 Sales Potential Financial Return Risk Time to market Wall Street Reaction Breadth of Potential Applications Follow-on opportunities : : :