{"id":7550,"date":"2015-12-09T23:29:47","date_gmt":"2015-12-10T04:29:47","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/celgene-corporation-diversifying-bets-in-research-development-to-assure-success-in-the-biopharmaceutical-industry\/"},"modified":"2015-12-12T20:32:21","modified_gmt":"2015-12-13T01:32:21","slug":"celgene-corporation-diversifying-bets-in-research-development-to-ensure-success-in-the-biopharmaceutical-industry","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/celgene-corporation-diversifying-bets-in-research-development-to-ensure-success-in-the-biopharmaceutical-industry\/","title":{"rendered":"Celgene Corporation \u2013 Diversifying Bets in Research &amp; Development to Ensure Success in the Biopharmaceutical Industry"},"content":{"rendered":"<p><strong>A Clear Winner<\/strong><\/p>\n<p>Celgene Corporation (NasdaqGS:CELG) boasts impressive statistics: with only 6000 employees, the company was able to generate almost 2 billion dollars in net income in 2014, has more than doubled its revenue between 2010 and the twelve month period leading up to September 2015, produced more than 2 billion in operating cash flow during each of the last three years, returned more than 20% on equity for each of the last four years, and\u00a0is currently valued by the market at almost 90 billion dollars.<\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/cashflow-from-operations.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-7628 aligncenter\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/cashflow-from-operations-300x219.jpg\" alt=\"cashflow from operations\" width=\"425\" height=\"310\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/cashflow-from-operations-300x219.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/cashflow-from-operations-600x438.jpg 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/cashflow-from-operations.jpg 995w\" sizes=\"auto, (max-width: 425px) 100vw, 425px\" \/><\/a><\/p>\n<p style=\"text-align: center\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-7627\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Sales-and-Net-Income.jpg-300x212.png\" alt=\"Sales and Net Income.jpg\" width=\"419\" height=\"296\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Sales-and-Net-Income.jpg-300x212.png 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Sales-and-Net-Income.jpg-600x425.png 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Sales-and-Net-Income.jpg.png 1001w\" sizes=\"auto, (max-width: 419px) 100vw, 419px\" \/><\/p>\n<p style=\"text-align: center\">\u00a0<a href=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/rev-and-NI.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-7721\" src=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/rev-and-NI-300x195.png\" alt=\"rev and NI\" width=\"412\" height=\"268\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/rev-and-NI-300x195.png 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/rev-and-NI-600x390.png 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/rev-and-NI.png 623w\" sizes=\"auto, (max-width: 412px) 100vw, 412px\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<p><strong>The Vision<\/strong><\/p>\n<p>According to the company&#8217;s website, Celgene&#8217;s &#8220;vision as a company is to build a major global biopharmaceutical corporation while focusing on the discovery, the development, and the commercialization of products for the treatment of cancer and other severe, immune, inflammatory conditions&#8221;.<\/p>\n<p><strong>How is Celgene&#8217;s Massive Success Possible?<\/strong><\/p>\n<p>In the words of Chairman and CEO Robert Hugin, the company&#8217;s alignment between its business model and its operating model is completely natural:\u00a0\u201cit\u2019s not hard to set bold goals\u2014you don\u2019t need to meet many cancer patients to understand the urgency.&#8221; Furthemore,\u00a0Joel Beetsch, vice president of Patient Advocacy, describes Celgene&#8217;s as \u201ca make-it-happen culture.\u201d These are some of the key factors that align Celgene&#8217;s operating model with its business objectives:<\/p>\n<ul>\n<li><strong>Focus: <\/strong>Celgene focuses on hematology and oncology, and is pushing to strengthen its\u00a0immune-inflamatory diseases business.<\/li>\n<li><strong>Market Diversification:\u00a0<\/strong>While today Celgene is still highly reliant on blockbuster multiple myeloma drug REVLIMID, which generated sales of nearly $5 billion in 2014, it is aggressively pursuing diversification into other markets, primarily those of oncology and immune-inflamatory diseases.<\/li>\n<\/ul>\n<p><a href=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/Celge-leading-products.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-7576 aligncenter\" src=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/Celge-leading-products-300x131.jpg\" alt=\"Celge leading products\" width=\"451\" height=\"197\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Celge-leading-products-300x131.jpg 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Celge-leading-products-1024x447.jpg 1024w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Celge-leading-products-600x262.jpg 600w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Celge-leading-products.jpg 1166w\" sizes=\"auto, (max-width: 451px) 100vw, 451px\" \/><\/a><\/p>\n<ul>\n<li><strong>Sources of New Drugs:\u00a0<\/strong>Unlike other pharmaceutical companies, which rely heavily on either internal development of new compounds, acquisitions, or partnerships, Celgene takes a balanced approach by pursuing attainment of new compounds via all of these three streams. For example, in 2014 alone, they &#8220;strengthened (their) I&amp;I pipeline through the acquisition of GED-0301, a potential paradigm changing approach to treating Crohn\u2019s disease&#8221;**, &#8220;established more than 10 innovative collaborations with some of the best emerging science companies in the world&#8221;**, in addition to continuing with their in-house efforts. For the years 2010-2014, Celgene has invested on average\u00a032.29% of total revenue in Research &amp; Development and, in 2014, almost 35% of Celgene&#8217;s workforce devoted itself to R&amp;D.**<\/li>\n<\/ul>\n<ul>\n<li><strong>Commercialization:\u00a0<\/strong>\u00a0Celgene&#8217;s products are typically sold to\u00a0government owned or controlled hospitals.* Since its customer base is not highly fragmented,\u00a0Celgene can\u00a0operate with a relatively lean salesforce. Celgene generated 2014 total revenue of $7,670 million with a sales division that employs 2,161 people &#8212; equating to sales per sales employee of $3.5 million!<\/li>\n<\/ul>\n<p>As far as operating-business model alignment goes, Celgene is a great\u00a0example of a company that has managed to balance huge growth with a sustainable long term model.<\/p>\n<p>&#8212;<\/p>\n<p>Sources<\/p>\n<p>*http:\/\/www.celgene.com\/wp-content\/uploads\/celgene-corporate-brochure.pdf<\/p>\n<p>**http:\/\/files.shareholder.com\/downloads\/AMDA-262QUJ\/1144250326x0x825208\/A1003DD5-7CDE-4073-AF4F-ED7EB1D28E73\/Celgene_2014_Annual_Report.pdf<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By investing in in-house drug research and development, partnering with world class research institutes, and acquiring high potential compounds, Celgene has achieved massive success so far and is positioned to continue to do so. <\/p>\n","protected":false},"author":983,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","categories":[221,1120,222,117],"class_list":["post-7550","hck-submission","type-hck-submission","status-publish","hentry","category-biotech","category-celgene","category-pharmaceuticals","category-rd"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/the-tom-challenge-tom-winners-and-losers-assignment\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Celgene Corporation \u2013 Diversifying Bets in Research &amp; 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