Genentech - Capacity Planning

The plan of efficacy increase in mainly assemble on one product Avastin and for indications that it is not yet authorise for by FDA. There argon three options: course a new production facility; improve the current serve out; and do nothing. My recommendation is to increase substance by up the current process. Analysis follows: There ar veritable pregnant things to consider in this case study. First, the projected pe brightenration suck judgment that David Ebersman is looking at and mentioned in the appendix be base on very affirmatory assumption. Second, near of the clinical trials for new(prenominal) indications are either just initiated or are not expected to finish very soon. So, it is probably too early to make a conclusiveness on increasing the subject of existing plants or var.ing a new one. Considering that the last has to be made now, as mentioned in the case, there are some opposite facts and figures value looking into. With the close starry -eyed assumptions, the projected pe meshingration rates for Avastin are 303 Kg in 2005, 1263 in 2010 and 1391 in 2005 respectively. Other products are projected to in around 1000 Kg in 2005 and 1250 (25% growth) by 2010 and other growth of 25% by 2015. Another 250 Kg are projected in total for other new drugs in 2015.

Genentech has three plants and two contract manufacturing relationships to provide from 2005 until 2009. Te power of three plants in Nov 2004 was 280,000 liters which means 210 Kgs of drugs. Assuming that only 65% of proteins are recovered, it is 136 Kgs. With 15 batches per year, it leads to 2048 Kgs. Given that Genentech keeps one year cost o! f stock, it does make sense to make a decision on increasing the capacity now but to reiterate, these numbers are based on very optimistic assumption. The cost to build new plant is around 500 to 600 million dollars; most of which must be invested by second year. Minimum magazine to get it ready is 4.5 years. It is worth to notice that Genentechs non-GAAP net income in 2003 was 634.9 million...If you want to get a full essay, tell apart it on our website: BestEssayCheap.com

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