Portfolio Optimizer

A company’s R&D portfolio includes multiple R&D programs in various stages of development. However, companies cannot afford to finance all available programs due to resource limitations (both capital and human).

In order to ensure sustainable growth, companies need to select the "right" mix of R&D programs for priority financing in order to maximize the portfolio value, align strategy and available resources, and allocate resources optimally between business groups, therapeutic areas, early and late stage programs.

Due to strategic considerations, some internal programs need to be canceled or outsourced, and various programs in different stages of development could be in-licensed to fill potential portfolio gaps. Discovery research throughput should also be aligned with the capabilities of a drug development organization.

Some features of Portfolio Optimizer:

  1. Portfolio Optimizer incorporates multiple project profiles related to in-house vs. in-licensing development (eg. scheduling options, marketing strategies, rates of development, etc.), and selects the best combination. It makes portfolio planning more flexible.
  2. Portfolio Optimizer can capture project dependencies such as mutual exclusiveness, conditional financing (eg. if project A, then project B), project "cannibalization", and many others.
  3. Portfolio Optimizer incorporates a variety of portfolio strategic goals (eg. revenue target, market penetration, etc.) as well as a set of business rules (eg. financial ratios, forced prioritization, mutual exclusiveness).
  4. Portfolio Optimizer is very helpful for contingency planning (eg. select substitute programs and optimal resource reallocation) in case of clinical trial failure, revenue corrections, goal modifications, and many others.
  5. Portfolio Optimizer can effectively analyze resource bottlenecks.
  6. Portfolio Optimizer can compare multiple optimal portfolios (eg. what-if scenarios), significantly reducing time and cost for portfolio analysis.

Case Study 1: (Please, see description of the general problem statement)
  • Portfolio value (eNPV) was increased by nearly 20% within resource constraints.
  • Significant time reduction for portfolio analysis was achieved.

Case Study 2: Portfolio planning for a drug delivery group within a large pharmaceutical company

The company’s portfolio included a variety of drug delivery and drug development R&D programs in different development stages. The company’s resources (both human and financial) were limited.

The company’s strategy was to use their drug delivery business to finance internal drug development, while preserving the highest value for the company’s portfolio.

Drug development programs could be developed internally focusing on FDA approval, or they could be outsourced.

Therefore, an outsourcing strategy (which program to outsource and when) was essential for the company. Maximum available throughput of various types of projects, and maximum resource utilization was also important.

Modeling analysis developed by ORbee Consulting achieved the following benefits:

  • Project throughput was almost doubled under the same resource projections.
  • Significant time reduction for portfolio analysis (days vs. months)

Case Study 3: Capacity planning, resource allocation and project scheduling for a drug delivery company

The company developed an effective drug delivery technology platform. Demand for their technology was high. The company expected that it would be challenging to meet potential partner expectations due to limited human resources.

The company’s strategy was to optimize the scheduling of their portfolio projects for a variety of technologies (aligned with business development processes), and maximize resource utilization while optimizing hiring trends for each employee role.

ORbee Consulting’s analysis determined that the company could save 30% of annual FTE costs, significantly increase project throughput and reduce time for portfolio optimization.

Case Study 4: Capacity planning and resource optimization for small and medium bio-pharmaceutical company.

The company had a portfolio with a limited number of compounds in different stages of development. New drug development programs could not be started without raising money from VC groups.

However, there was a chance to accelerate several programs and slow down others, depending on the current and projected status of programs, scientific results, etc.

Therefore, the company’s goals were to (1) minimize amount of money needed (to preserve equity for owners) and (2) not jeopardize the execution of projects.

ORbee Consulting’s analysis saved the company ~ 15% of their three-year budget.