OPIM 5894 ADVANCED PROJECT MANAGEMENT
VERTEX PHARMACEUTICALS CASE
TEAM 1
http://users.business.uconn.edu/snair/opim5894.html
Vertex Pharmaceuticals case

Which of the 4 project portfolio options currently
facing Vertex do you favor?
VX-765
- Big money
- Earliest in development
- Biggest risk
Prof. Suresh Nair, University of Connecticut
Vertex Pharmaceuticals case

Specifically, which two projects would you advance in
development? Why? Show analysis.
VX-702, VX-765
- Highest expected values
- See graphs
Prof. Suresh Nair, University of Connecticut
Vertex Pharmaceuticals case
Criteria
VX-148
VX-702
VX-765
VX-950
Sales Potential
$4.6 B
$6.0 B
$7.5 B
$4.8 B
Financial Return
$2.5 B
$3.1 B
$3.7 B
$2.5 B
Risk (Chance of Success)
20%
15%
22%
21%
2H ‘07
1H ‘09
2H ‘08
2H ‘09
Wall Street Reaction
Low
Medium
High
High
Breadth of Potential Applications
Low
High
Medium
Low
Time to market
:
:
:
:
Prof. Suresh Nair, University of Connecticut
Vertex Pharmaceuticals case

Would you license out the two others not chosen or
keep them as backup?
-

VX-148 – license out
VX-950 – license out
How much should Vertex management rely on
quantitative methodologies (such as real option
valuation) versus more qualitative approaches?
-
Quantitative Methodologies – 75%
Qualitative Approaches – 25%
Prof. Suresh Nair, University of Connecticut
Revenue Stream
Prof. Suresh Nair, University of Connecticut