Case
Teaching Notes
Supplementary Resources
Abstract
Executives at biotechnology firm Genzyme are debating funding a clinical trial for a new version of a medical device called Synvisc. The trial is expensive and the odds of success are not high, but the upside is substantial. The case presents a common business question: invest or not? The case forces students to think about customer insights, wrestle with a number of complex issues, and evaluate the financials of the decision.
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2024 Sage Publications, Inc. All Rights Reserved
Resources
Exhibit 1: Genzyme Financial Highlights ($ in millions).
2005 | 2006 | |
Total revenue | 2,734.8 | 3,187.0 |
Cost of products sold | 462.2 | 536.4 |
SG&A | 787.8 | 1,010.4 |
R&D | 502.7 | 650.0 |
Goodwill charge | — | 219.2 |
Other costs | 381.2 | 961.6 |
Operating income | 600.9 | (190.5) |
Other income | 28.1 | 137.8 |
Taxes | 187.4 | (35.9) |
Net income | 441.5 | (16.8) |
Exhibit 2: Genzyme's Largest Products ($ in millions).
2005 | 2006 | |
Cerezyme | 932 | 1,007 |
Renagel | 417 | 515 |
Fabrazyme | 305 | 359 |
Synvisc | 219 | 234 |
Thymoglobulin/Lymphoglobuline | 128 | 150 |
Sepra products | 68 | 85 |
Myozyme | 4 | 59 |
Exhibit 3: Synvisc Clinical Trial Results (% of patients who were symptom free).
Synvisc | Saline | |
Patient assessment at Week 12 | ||
Weight-bearing pain | 56 | 12 |
Night pain | 82 | 53 |
Overall treatment success | 70 | 18 |
Evaluator assessment at Week 12 | ||
Weight-bearing pain | 47 | 8 |
Night pain | 77 | 42 |
Loss of activity | 60 | 17 |
Overall treatment success | 51 | 15 |
Evaluator assessment at Week 26 | ||
Weight-bearing pain | 39 | 13 |
Night pain | 71 | 45 |
Loss of activity | 59 | 27 |
Source: M. Wobig, A. Dickhut, R. Maier, and G. Vetter, “Viscosupplementation with Hylan G-F 20: A 26-Week Controlled Trial of Efficacy and Safety in the Osteoarthritic Knee,” Clinical Therapeutics 20 (May/June 1998): 410–423.
Exhibit 4: Physical Properties of Viscosupplements.
Molecular Weight (million daltons) | Elasticity (Pa at 2.5 Hz) | Viscosity (Pa at 2.5 Hz) | |
Healthy synovial fluid | 6 | 117 | 45 |
Osteoarthritic synovial fluid | — | 1.9 | 1.4 |
Synvisc | 6 | 111 | 25 |
Hyalgan | 0.5–0.7 | 0.6 | 3 |
Supartz | 0.6–1.2 | 9 | 16 |
Orthovisc | 1–2.9 | 60 | 46 |
Euflexxa | 2.4–3.6 | 93 | 37 |
Exhibit 5: Viscosupplements in 2007.
Injections | Duration of Pain Relief | Price per Dose ($) | Total Cost of Treatment ($) | |
Synvisc | 3 | 6 months | 180 | 900 |
Hyalgan | 5 | 2 months | 100 | 1,100 |
Supartz | 5 | 6 months | 100 | 1,100 |
Orthovisc | 3 or 4 | 22 weeks | 175 | 885 or 1,180 |
Euflexxa | 3 | 3 months | 110 | 690 |
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2024 Sage Publications, Inc. All Rights Reserved