APPLICATION SUCCESS STORY

Pharmaceutical Applications

DuPont Merck is a research-focused pharmaceutical company. Pharmaceutical research has led to numerous advances in medical therapy. However, such research by its nature involves a tremendous amount of risk and uncertainty. Often 1,000 or more compounds are screened for each one that ultimately is nominated for development. On average, for every ten compounds that reach development, only one gains FDA approval.

An important aspect of Pharmaceutical Development is selecting the proper portfolio of compounds to develop - a portfolio that will provide the expected level of sales at the right level of cost and risk. Crystal Ball simulations are used to model the key risks and uncertainties for each individual project. In addition, Crystal Ball simulations are used to estimate total portfolio value and risk - a probability distribution of potential R&D spending and sales by year.

Often, being the first or second to the market can have a significant impact on total sales realized. In certain high-potential markets, there may be ten or more competitors with compounds in development. Crystal Ball simulations were used to estimate the probability of being first or second to market. This information helps focus attention on the need to achieve key project milestones to ensure a reasonable level of certainty that a compound will be first to the market.