Genzyme Summary

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ENT4400 – SUMMARY + REFLECTION

Case study: Genzyme, schilling, chapter 6 page 105-109

Summary of the case:

Genzyme was founded in 1981, Sanofi purchased the company in 2011. They went public in 1986, raising 27 million dollars. Genzyme startet as a start up Company by scientists studying genetically inherited enzyme diseases. Their strategy didn’t focus on the “blockbuster drugs” like other biotechnology companies but drugs for rare diseases. To developing a drug, it takes 10-14 years at the cost of around 800 million. But the blockbuster drugs had 1 billion dollars revenue. Genzyme has received several honor awards like “national medal of technology”. The food and drug administration established in 1983 the “Orphane drug act” giving seven years market exclusivity to developers of drugs for rare diseases. This gave Genzyme big advantage when it comes to clinical trials, advertising and sales, it does not requires a lot. Their first success was the “Ceredase” drug- to treat the Gaucher`s disease. It was sold to over 4000 patients, with annual revenue of 800 million dollars. They had different way of manufacturing and sales compare to other companies. They did not do licensing to large pharmaceutical company. Genzyme was the worlds third largest biotech company in 2006 only profiting of rare diseases.

Reflection of the case
* Avoided “blockbuster” market and good management
Good strategic to focus on a niche market instead of the ”blockbuster” market. The degree of existing rivalry and entry barriers was low. Henri Termeer took a risk in moving to a start up company but with his experience and expertise, the company went stronger and independent.

* First ones to market and the exclusivity
Genzyme entered a small, untapped market. Being the first biotech company that focus on rare diseases and having the market exclusivity made them leading biotech company. They had the ability to identify almost all customers. They had big advantage when...
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