UCB was founded in the 1920s and its first blockbuster drug was Zyrtec; since then they have focused on anti-inflammatory drugs.1 Sanofi also operates in the same pharmaceutical field as UCB. Recently, UCB and Sanofi entered into a strategic partnership aimed at finding treatments for immune-mediated diseases such as arthritis and gastroenterology.1 The terms of the agreement include a 50:50 cost-profit split.1 Additionally, UCB is entitled to Initial advance, preclinical and clinical development milestone payments by Sanofi could exceed €100 million.1 The partnership agreements are not made public. The purpose of the partnership is to acquire new products for their product development pipeline, so that both companies continue to be attractive in the market. Both companies have an advantage in using their competitive assets, resources, network and understanding of their sales, but the partnership is a smart decision for UCB, and if not, there is a better option. In recent years, the US pharmaceutical industry's spending on research and development has increased at a rapid pace. Costs remained relatively stable in the preclinical phase, but increased significantly in the clinical phase both in terms of direct costs incurred and time required to complete studies.2 DiMasi's reasoning for the increased costs stems from patient-targeted development chronic and degenerative conditions that require more expensive efficacy studies and larger clinical trial sizes.2 Some pharmaceutical companies have found ways to fill their pipelines through: 1. mergers and acquisitions, 2. licensing of new compounds and 3. forming strategic alliances and partnerships with other companies. Forming a partnership helps develop a product or drug… middle of the paper… thus a justification for higher prices for treatments due to reduced costs of complications. However, the risk and costs will be concentrated in a smaller patient population, which will have an effect on the volume sold. Biologically based drugs have longer periods of exclusivity, so pharmaceutical companies can benefit from drug revenue and recoup research and development costs. Therefore, shifting the focus of treatment towards large molecule drugs is a more attractive option than a partnership. Partnerships are a great strategic action to combat challenges with innovation and R&D. However, the high failure rate of partnerships raises questions about whether it is worth it. There are many strategic alternatives that UCB must adopt, such as shifting the focus of treatment to large molecule drugs that will improve R&D productivity and be less risky than small molecule drugs.
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