In 2009, one of the world’s largest pharma companies acquired a cancer treatment drug for $800 million. After four years under the host’s brand, sales were stagnant and figures suggested that it could take as many as 530 years to break even. Two previous innovation efforts had also failed to yield any results or real insights.
AfCE Corporate Startup Accelerator encouraged the team to take a step back from day-to-day sales work, and assess the product as a new potential business model that they wanted to pursue. It soon became apparent that there were more assumptions than knowledge in the treatment’s business model, so a process of lean experimentation driven by the team ensued. Soon after, a cold reality set in. The assumptions, which the financial success of the business model had been based upon, were invalid and this was the first time the team had any real proof of that. Ultimately, the answer was to divest the product.
Often when corporates acquire, merge or partner, the analysis and due diligence is financial forecast based. The biggest learning for this team was that their employer should not have acquired the treatment in the first place, and this could have been proven within a part-time twelve week intrapreneurship program – saving the organization significant investment.