Case ID: 709002
Solution ID: 5182
Words: 1401
Price $ 45

Targanta Therapeutics Hitting a Moving Target

Case Solution

Eli Lilly & Co endeavored to generate revenue by developing the drug from its birth. They invested highly in its research and development. The drug all three phases of clinical trials under their supervision. This is a highly risky strategy, as many such drugs may not pass the trials. However, oritavancin was an exception as it passed the trials. The company also focused mainly on its strategic objectives. Although the company had produced a viable drug with excellent market production, it decided to sell the drug when it was no longer compatible with its business strategy. Instead of selling the drug on a commercial scale, the company sold the drug when it decided to divest from producing antibiotics. For Lilly, strategic focus came before the profit potential of the drug. The strategy of Lilly was also greatly influenced by its ideology on revenue generation. 

Excel Calculations

Questions Covered

Employing two business model generation canvases compare and contrast the original revenue generation business model developed by Eli Lilly & Co. with Targanta’s approach to its revised business model

From an investor’s perspective, discuss why Intermune paid $50 million + royalty commitments and why Targanta was able to buy oritavancin for only $ 1 million?

Did Targanta successfully de-risk the drug? What is the meaning/significance of de-risking a drug?