Attractions company size

With the combined lure of high-margin business and attractive growth prospects, chemical companies of all types and sizes are actively seeking acquisitions. Major firms have been very aggressively acquiring or setting up alliances. 

By contrast, in countries with a small market size, domestic demand is likely to be insufficient to justify large private outlays for R D. Pharmaceutical companies and equity flows available to such companies appear to be attracted to countries in which there is a sizable domestic market or, at least, public policies are favorable to the sale of pharmaceutical products. Thus, smaller countries, which inevitably have smaller domestic markets, tend not to be as well positioned to attract pharmaceutical companies and investment. In addition, such countries are more vulnerable to shortages in the event of national emergencies, such as pandemics. For this reason, some form of government intervention may be required, including government subsidy, public investment in pharmaceutical research, and even direct public production. 

The size of the company involved is also veiy important. Obviously a project with only relatively modest market and profit potential may be of considerable importance to a small company, but would probably not prove attractive to a large multinational company with much larger sales and profit criteria. 

This approach would seem to be an example of concurrent PV [14], which fits well when the development function continues its effort to validate clinical manufacturing processes. It is also an opportunity to validate a process when it is used to produce different batch sizes with a given piece of equipment. It may even be possible to employ differently sized equipment (to make different batch sizes) as part of the validation effort. It remains to be determined whether this kind of approach ought to be extended to the commercial validation effort. Later in this chapter I will discuss the possibility, which should be attractive for the company that is totally involved in TQM. 

Assume that the capital for the project is borrowed at 25% interest with a required return on investment of 5 years. Five annual payments are made to the creditors. The calculations made to determine the size of these payments and their repayment schedule are given in Appendix E (Table E.6). The five payments needed are each of AS5.02 million. These will cover both the 25% interest rate and the AS13.5 million principal. Operating and production costs are tax deductible as is the interest on borrowed capital, only gross profit is taxed. In the calculations, the AS5.02 million capital cost term is therefore broken into two components. The first is the tax-free interest component and the second must come from operating profit. This profit is assumed to attract 49% company tax. 

Large companies have a different burden, because generating growth from a large base is much more difficult. Products in this context cannot become attractive until they are able to generate sums in the hundreds of millions or greater per year in sales. Below a critical size in each company the use... 

In the case of major inventions the inventor may prefer to apply for a patent without foreign participation and try to sell non-exclusive patent rights to different industrial companies or to negotiate country-specific or use- and indication-specific exclusive agreements. At first sight this looks much more attractive for the inventor and may be possible for important inventions which can be split into reasonably sized, separate market segments. Any attempt to do so with minor inventions will most likely result in much less interest of the industrial partners and lower royalty rates for the inventor. Similar development cost will be calculated against smaller market shares due to restricted market access and immediate competitors and the overall benefit for all will be smaller. 

For larger companies, the Europecin centralised/multistate procedure will be the only option in order to penetrate the markets with new products as quickly as possible. The fees for this procedure are very high, which is a deterrent to smellier companies since this procedure would be a major investment for them with a small chance of a successful outcome. The procedure is complicated and very formal, which mcdces it difficult for small companies to cope with the requirements. Thus the national registration procedure remains an attractive alternative for smaller companies since the market size is still big enough, even for products with a modest degree of innovation. 

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