Preface


       This Business Plan is intended to assist T.L.G. Resources International, LLC plan,
implement its strategi...
Table of Contents



       EXECUTIVE SUMMARY……………………………………………3
I.


       COMPANY DESCRIPTION, VISION & GOALS…………………..4
...
BUSINESS STERATEGY…………………………………………..14
VII.
         A carefully planned strategy provides optimal opportunities for growt...
I.     Executive Summary

T.L.G. Resources International, a service business, founded in July 2008, is a Limited
Liability...
therapeutic categories of central nervous system, oncology and cardiovascular system; T.L.G.
wants to untie the complex co...
The USFDA makes manufacturing of APIs expensive, because it involves number of
regulations to be followed. This not only i...
Table 1

                Category                                                    APIs
Central Nervous System- CNS     ...
Some factors that are likely to accelerate market growth:

         Demographic growth in the senior population
         P...
Strategic Location

T.L.G has considered New Jersey State as our strategic location for our operations in
USA. New Jersey ...
Pharmaceutical Companies

Global pharmaceutical companies like Pfizer, GlaxoSmithKline, Merck and Johnson &
Johnson are th...
that is, those with a high proportion of drugs used by seniors- include Merck
        with 20% and Pfizer with 18%.
      ...
companies need employees with high levels of skill in disciplines such as synthetic
Chemistry, biochemistry, and so on. Ov...
o Lack of Capital and small size of business
Weaknesses
                               o Dependence on all types of APIs w...
o Highly skilled in fermentation of microorganisms
              o Very competitive in synthesis of intermediates and the ...
Companies rely on outsourcing in foreign countries that include mainly India and China; for
their APIs sources. They expec...
o Lure more pharmaceutical companies which rely on expensive foreign API
                 suppliers and get them switch to...
VIII. Marketing Plan

T.L.G. is a start up venture and we plan to establish service loyalty. We are going to
implement agg...
Promotional activities for services

The best promotional activity for the services of T.L.G. is to build relationships wi...
IX.      Financial Plan Summary

T.L.G. is projected to lose money until the end of second quarter of the first year of th...
Volume Plan 18

Table 7

                                            % increase from the                               % i...
Consolidated income statements
Table 8

       Particulars            Year 1                Year 2          Year 3
 Revenu...
Key financial ratios (projected) clearly indicate that company will have positive cash flows
from the first quarter of thi...
Appendix-1

                                        Market research analysis




                                       To...
U.S. Pharmaceutical Market Segmentation by companies in % as
                                     of year 2007
           ...
US seniors(65 & above) population and estimates as of year 2007

         35

         30

         25

         20
    %
...
Appendix- 2


                                      APIs demand growth derivation



                          Generic Dru...
Source: LexisNexis® Academic-
                         Business

                         Branded Drug Companies



Prospe...
Appendix- 3

                            Financial Statements

                          Volume Plan

                    ...
Pricing Plan

We need to find Avg. Price per batch of APIs.
Assume inflation rate as 4%
High Demand Growth APIs           ...
Sales Plan


                          First year of the business
                          (Based on 4.5% commission on r...
T.L.G. Resources International, LLC- Financial Plan

                                      Quarterly Pro Formas (Projected...
Second Year of Business

                                   Qt-1            Qt-2            Qt-3            Qt-4          ...
Third year of business

                                   Qt-1            Qt-2            Qt-3            Qt-4           ...
Third year of business

                                   Qt-1            Qt-2            Qt-3            Qt-4           ...
Appendix- 4

                                  Industry expert interviews

1.     Barry Turner: Procurement Director at No...
2.      Professor Gerard W. Cleaves:

Prof.Cleaves is the chairman of Pharmaceutical Management department, FDU in 2003 wi...
They were assumed to be 5-7%, 8-12% and 20-25% in prescription drug companies,
generic drug companies and bio-tech compani...
Appendix- 5

                                    Regulations and associations

        FDA- The U.S. Food & Drug Administr...
manufactured outside the United States. TLG will be acting as a medium between the
producer (who may be overseas) and cust...
BIO - Biotechnology Industry Association- BIO is the world's largest biotechnology
organization, providing advocacy, busin...
41
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Business Plan- TLG Resources International LLC

  1. 1. Preface This Business Plan is intended to assist T.L.G. Resources International, LLC plan, implement its strategies and grow its venture. This Business Plan has been created and developed by Bhumika Gandhi, Madoka Noto and Nroop Bhavsar who are MBA candidates at Fairleigh Dickinson University. Every reasonable attempt has been made to present reliable and accurate information. Much of the analysis is, of necessity, subjective in nature and based largely on team research and analyses, customer surveys, interviews with industry experts, and team observations. As such, the authors and/or the faculty and staff of Fairleigh Dickinson University (FDU) make no warranties or representations as to the accuracy of this Plan. Additionally, the authors, faculty and staff of FDU shall not be responsible or liable for any indirect, incidental, or consequential damages including but not limited to loss of profits or the venture‟s performance. This Business Plan may contain proprietary and confidential information and is not to be reproduced or distributed in any format without the express written consent of its authors, of the venture‟s CEO or founding entrepreneur, and also of FDU Professors Steven M. Fulda or George J. Maddaloni. 1
  2. 2. Table of Contents EXECUTIVE SUMMARY……………………………………………3 I. COMPANY DESCRIPTION, VISION & GOALS…………………..4 II. TLG International Inc. specializes in facilitating the procurement process of internationally sourced Active Pharmaceutical Ingredients (APIs) III. SERVICES & PRODUCTS DESCRIPTION………………………...5 The services provided include the sourcing of prospective purchaser of API and facilitating the import of the same. IV. INDUSTORY OUTLOOK, MARKET TRENDS & ANALYSIS…..6 Growth of APIs demand and supply chains continue to rise because of high pharmaceutical market potential, market size and some positive demographic and industry trends in the United States. o Market Growth o Market/Industry Size or Analysis of Market Niche o Market Segmentation o Industry Trends / Outlook COMPETITIVE ASSESSMENT……………………………………10 V. TLG has a competitive advantage as compared to its competitors because of prompt services and competitive rates. o SWOT Analysis VI. CUSTOMER ANALYSIS……………………………………………12 TLG’s target market is pharmaceutical companies demanding different kinds of API’s. o Insights from customer survey 2
  3. 3. BUSINESS STERATEGY…………………………………………..14 VII. A carefully planned strategy provides optimal opportunities for growth and will help TLG to penetrate in to the market. o Intensive Growth o Integrative Growth VIII. MARKETING PLAN………………………………………………..16 Competitive pricing strategy and an aggressive marketing plan will help TLG to expand networking in the industry. FIANACIAL PLAN SUMMARY……………………………………18 IX. APPENDICES………………………………………………………….22 X. o Market research analysis o APIs demand growth derivation o Industry Expert Interviews 1. Dr. Gerard Cleaves 2. Barry Turner. 3. Hemant A. Alur o Customer Survey 1. Sample survey 2. Analysis of Survey o Regulations o NJ- strategic location 3
  4. 4. I. Executive Summary T.L.G. Resources International, a service business, founded in July 2008, is a Limited Liability Company located in Paramus, NJ. One of the company‟s founders, Thomas Wiedemann, has years of experience in pharmaceutical industry and is currently working with Par Pharmaceutical, Inc. in supply chain management. T.L.G.‟s target market is the healthcare companies including branded and generic pharmaceutical companies; and bio-tech companies who rely on various suppliers of Active Pharmaceutical Ingredients (APIs) and who are looking to adapt the cost-effective approach in term of cost of APIs incurred. T.L.G. has the vision of becoming a leading supply chain enabler who facilitates the procurement process of internationally sourced APIs for the US pharmaceutical companies. Currently, most of the US pharmaceutical companies rely on foreign suppliers of APIs as manufacturing in US is expensive. The foreign manufacturer of APIs has to get approval of the USFDA for its manufacturing facility. Then it has to register US agent for their import processes. Each pharmaceutical company in the US has to register the API bought from the foreign supplier through US agent, with the FDA. Agents like T.L.G. manage the all customs and import procedures and facilitates the procurement of imported APIs and logistics between foreign supplier and the US Company. Statistics show that the pharmaceutical industry in US has been growing at CAGR of 7.4% over the last 5 years. API supply chain is closely associated with the growth of pharmaceutical industry. Thereby, future growth rates of API supply chains are expected to be higher with expectations of higher CAGR in the future for pharmaceutical industry because of Medicare modifications by US Government in favor of pharmaceutical companies, positive demographic trends like aging of population in the largest markets & higher life expectancy of US people at birth; and rising incidence of chronic diseases. The US pharmaceutical market is fragmented with drug types- generic or branded and therapeutic categories. With more focus on APIs of the drugs with higher market share 4
  5. 5. therapeutic categories of central nervous system, oncology and cardiovascular system; T.L.G. wants to untie the complex competitive landscape. Projected Financial Highlights $200,000 $150,000 Revenues $100,000 Gross profits Net profits $50,000 $0 1st year 2nd year 3rd year ($50,000) 1 II. The Company T.L.G. Resources International, LLC, a member-managed Limited Liability Company, has entered into the venture from July 1, 2008, by and among: Eileen Wiedemann and Thomas Wiedemann as the members. It is a service business that facilitates API (Active Pharmaceutical Ingredient) procurement for the pharmaceutical industry. T.L.G.‟s vision is “To become a leading supply chain enabler who facilitates internationally sourced APIs and provide order assistance 24/7.” The company will maintain its principal business office at Paramus, New Jersey. T.L.G. has established and entered into agreement with a large international API manufacturer and supplier, named Jiangsu Kaxi Pharmaceutical Co., LTD., based in China. Under this agreement, T.L.G. has got exclusive rights to sell this company‟s APIs to the US companies. Thereby, no other company like T.L.G. can sell the same API manufactured by this Chinese manufacturer. The focus is to act as a supply chain enabler for US based pharmaceutical companies who manufacture and distribute pharmaceuticals. This company will facilitate procurement of APIs from international suppliers while being cost sensitive to the current market price. 1 Refer table- 8 5
  6. 6. The USFDA makes manufacturing of APIs expensive, because it involves number of regulations to be followed. This not only involves time, but also money. Therefore, the service provided by T.L.G. will solve a major critical problem to bridge a gap between the supplier and purchaser. T.L.G. is seeking the FDA approval (registration) for the major APIs, it wants to involve in. Moreover, T.L.G. is seeking for the contract with the US pharmaceutical companies to be a leading APIs provider. This contract span is usually of 5-10 years which binds US company to depend only on T.L.G. for that particular API. This is how, for that specific time period of contract, T.L.G. is the only source of a particular API. III. Products and Services Description T.L.G. is service designed business and it has following major services: Filing for entry documents like entry manifest, invoices, packing lists, entry summary, evidence of bond and valuation. we will have a fully certified customs agent on staff which will assume the responsibility of performing all required procedures from beginning to end. We will act as the import agent and provide all services required. T.L.G will assume full responsibility for the delivery and quality of the product. We will ensure that all required documentation is provided in a timely manner. We will provide a root cause analysis to determine all product failure and develop and corrective action to prevent future reoccurrence. An order tracking service with daily/weekly/monthly status updates Online ordering and request of price quotes for the batches of APIs If there are any issues related to quality or delivery, the customer would not have to get phone numbers from 3rd party vendors and begin the investigation process. T.L.G would handle all inquires. Active Pharmaceutical Ingredients (APIs) are one of the major products. Besides this, T.L.G. is going to facilitate the procurement of excipients, intermediates, biologics and nutraceuticals. 6
  7. 7. Table 1 Category APIs Central Nervous System- CNS Carbamazepine, Dimenhydrinate, Donepezil HCL, Doxepine HCL Cardio Vascular System- CVS Nicorandil, Acetazolamide, Phentolamine Mesylate Anti- Cancer Temozolomide, Oxaliplatin Other Allopurinol, Amiodarone HCL, Aspirin, Dipyridamol, Indomethacin T.L.G. has divided its APIs in two areas: one is high demand growth APIs which can be used by companies in bulk and stored in excess. Generally, these APIs may be the part of the blockbuster drugs and other major drugs in the market. Second is APIs for specific use; that can be used for specific treatment and its demand is comparatively lower than that of former. These APIs might be formulated in specific way. IV. Industry/Market Characteristics and Outlook The pharmaceutical industry consists of ethical drugs only and does not include consumer healthcare or animal healthcare. This industry comprises establishments primarily engaged in wholesaling biological and medical products; botanical drugs and herbs; and pharmaceutical products and raw materials (APIs) used for manufacturing of pharmaceutical products for internal and external consumption. Market Growth This industry is considered as “recession resistant/immuned2” by analysts. Despite near-term uncertainties, pharmaceuticals still rank among the nation‟s more vibrant & dynamic industries, with average margins well exceeding most industries. Table 2 CAGR over the last five years US Pharmaceutical Industry 7.4% 2.5%3 Prescription drug wholesaling 2 Standard & Poor’s- industry Surveys- Healthcare: Pharmaceuticals, April 24, 2008 7
  8. 8. Some factors that are likely to accelerate market growth: Demographic growth in the senior population Promise of new therapeutic products derived from discoveries in genomics and biotechnology Improvement in new drug pipelines after several years of weakness Cost cutting initiatives and synergies from mergers4 Market/Industry Size or Analysis of Market Niche The US pharmaceutical market is world‟s largest and wealthiest pharma market5, generated total revenues of $260.8 billions in 2006. It generates 48% of the global pharmaceutical market‟s value. It created per capita expenditure of drugs in $1,154 in 2007, nearly double the level found in rest of the world. Leading global markets for pharmaceutical sales ( BIL. $) as of year 2007 205.8 Sales ( BIL. $) 59.3 32.2 29.6 17.4 16.1 15.8 13.9 10.6 8.5 7.2 2.7 Source: IMS Health Inc.6 3 IBIS World Industry Report, July 17, 2008- Prescription Drug Wholesaling in the US: 42221 4 In the past three years, large pharmaceutical companies have responded by merging, forming alliances, buying biotech companies, litigating against generic competitors and cutting costs. Recent acquisition activity has been focused on smaller biotech firms with promising R&D profiles. S&P believes that these responses could help to mitigate some of the effects of generic competition and improve new product pipelines in the next three to five years. 5 Refer Appendix- 1 6 This chart shows the massive sales of pharmaceuticals in the US as compared to that of the other countries. It shows the market potential for T.L.G. 8
  9. 9. Strategic Location T.L.G has considered New Jersey State as our strategic location for our operations in USA. New Jersey has been known as “medical chest of the nation” and “the global epicenter of pharmaceuticals” because of leading hospitals and universities, research institutions and a proactive business climate.7 o Best connected region in the country for speeding product to market domestically and overseas o Over 100 million consumers with a collective purchasing power of $2 trillion are within 24 hours drive o Two international airports- Newark (one of the busiest of the nation) and Atlantic City o Major ports on Hudson & Delaware rivers o Port of NY & NJ is the largest port complex on the eastern seaboard and responsible for more than $100 billion trade Market Segmentation Prescription drugs and Generic drugs (OTC)8 The US market for prescription drugs U.S. Pharmaceutical market segments by drugs (%) as of year has always been of higher potential 2007 Generic and can be a market niche segment for Drugs 13% T.L.G. But now trend has been changing and with the fear of patent expiration and declining economy, generic drug companies‟ growth is Prescripti on Drugs found to be booming. 87% to be booming. 7 Http://www.state.nj.us/njbusiness/njadvantage/strategic/ 8 Source: IBIS World Industry Report- NAICS code : 42221, July 17, 2008 9
  10. 10. Pharmaceutical Companies Global pharmaceutical companies like Pfizer, GlaxoSmithKline, Merck and Johnson & Johnson are the major players.9 Therapeutic categories Central nervous system drug sales proved the most lucrative for the US pharmaceutical market in 2007, generating total revenues of $64 billion, equivalent to 23.2% of market‟s overall value. In comparison, sales of cardiovascular drugs generated revenues of $54.5 billion in 2007, equating to 19.7% of market‟s aggregate revenues.10 Industry Trends/Outlook11 API supply chain is closely associated with the growth of pharmaceutical industry. Thereby, future growth rates of API supply chains are expected to be higher with expectations of higher CAGR in the future for pharmaceutical industry because of the following trends: Big Pharma expands in biotechnology- As conventional pharmaceutical R&D productivity has waned, major global drug companies are turning to biotechnology for new products to fuel growth. Biologics is still one of the bright spots in the pharmaceutical industry. Oncology grows in importance- It is now the fastest growing therapeutic category was $37.5 billion, and sales growth topped 17.0%. Mainstream pharmaceutical manufacturers see oncology as one of the most effective growth rates. Medicare Part D remains a key driver- It has created a new business driver for drug manufacturers. As of the end of 2007, the federal program accounted for roughly 19% of all retail prescriptions, and covered some 65% of all US citizens over age 65. Medicare part D has made the government the largest purchaser of drugs in the US. Companies most exposed to Medicare Part D- 9 Appendix-1 10 Appendix-1 11 Standard & Poor’s- industry Surveys- Healthcare: Pharmaceuticals, April 24, 2008 10
  11. 11. that is, those with a high proportion of drugs used by seniors- include Merck with 20% and Pfizer with 18%. Vaccines remain a bright spot- Vaccines are attracting greater interest amid increased global concern about the spread of the infectious diseases. S&P‟s estimate the global vaccine market was about $15 billion in 2007, and will reach over $27 billion by 2012. Demographic trends remain positive- Three worldwide demographic trends bode well for future pharmaceutical consumption: o Aging of the population in the largest markets and expectations of life at birth of US people12; together will create greater demand for the drugs and thus huge demand for the APIs.13 o Rising incidence of chronic diseases Cost Cutting and Reorganizing- Pharmaceutical companies have found cost cutting and reorganizing to reinvigorate growth and grapple with assorted threats; and this has been successfully implemented by major players of the industry in last 2 years. R&D gets an overhaul- R&D is the source of future growth for pharmaceutical companies. V. Competitive Assessment As the overall competitive environment in the drug industry has grown more intense in recent years, with the landscape littered by patent expirations and pipeline disappointments; pharmaceutical companies are under heavy pressure to seek new cost- effective ways to develop, manufacture, and commercialize new therapeutics. The development of new therapeutic agents often requires the sourcing of novel APIs, for which chemical manufacturers can charge pharmaceutical companies a premium. If the novel drug successfully reaches the market, the supplier of a novel API can reap significant benefits, and the fortunes of several API manufacturers have been made on the back of the sale of blockbuster drugs. Also, pharmaceutical 12 See appendix-1 13 In US, for example, people aged 60 or older represented 17% of the total population in 2006, but they accounted for more than one-third of the nation’s total consumption of total prescription drugs. This group’s share of the population is projected to rise to 25% by 2050. 11
  12. 12. companies need employees with high levels of skill in disciplines such as synthetic Chemistry, biochemistry, and so on. Overall, supplier power with respect to the pharmaceuticals market is strong. Table 3 Leading Location Estimated Description of main line of Competitors Annual business/ competitive advantage/ Sales in $ Attributes Millions o Global supplier of APIs, Attix Pharmachem Canada -- other fine chemicals, raw materials, intermediates and nutraceuticals o Contract biopharmaceutical KBI Biopharma NC, USA 1.3 manufacturer o API manufacturing for the partner company o API development and Hovione NJ, USA 4.3 manufacturing o Consulting services between Ceres Chemical NY, USA -- suppliers of API and pharmaceutical and biotech companies o API manufacturer and TAPI ( Teva) NJ, USA -- supplier o Leading supplier of API Aesica UK 22 m GBP o Manufacturer and supplier of BASF NJ, USA -- raw chemicals and biologics o Manufacturer and suppliers Flavine Holdings Inc. NJ, USA 56 of API o Supply chain enabler of APIs US PharmaLabs NJ, USA 25 SWOT Analysis Table 4 o Venture to be started in New Jersey, the medical chest Strengths of the nation. o Entrepreneur‟s strong understanding of pharmaceutical industry and network with companies o Product and services innovation capability. 12
  13. 13. o Lack of Capital and small size of business Weaknesses o Dependence on all types of APIs without much clarity. o Lack of entrepreneurial experience o Difference in quality control measures for different countries, which effects business o The Chinese APIs are cheaper. Opportunities o Expansion of business with Indian and Chinese companies, leading to more sources of APIs and other chemicals o Growing healthcare industry in the United States o Competition from larger players and private labels. Threats o Newer and tougher regulations o Foreign exchange changes: weak dollar against yuan effects the business VI. Customer Analysis T.L.G has wide array of customers that includes many large brand name drug companies, generic drug companies, bio-tech companies, companies engaged in manufacturing of nutraceuticals and cosmetics. Brand name drug companies, o Often use European suppliers for intermediates and finished APIs o Sometimes produce finished APIs themselves o Now begin to authorize European suppliers to partner with Indian and Chinese companies for the starting materials, intermediates and APIs Generic drug companies, o Heavily use Indian and Chinese API suppliersThe American companies have headed towards Chinese and Indian APIs for the following reasons: o Highly skilled in extraction and purification of herbs and botanicals 13
  14. 14. o Highly skilled in fermentation of microorganisms o Very competitive in synthesis of intermediates and the finished APIs Biologics is still one of the bright spots in the pharmaceutical industry, continuing to spawn lucrative new therapies and enjoy above-average sales and earnings growth. Analysis of the financial statements of the few of the T.L.G‟s prospective customers can derive APIs demand growth for generic, branded and biotech pharmaceuticals.14 We have assumed APIs cost proportion from the overall COGS as up to 6% for branded pharmaceutical companies, up to 10% for the generic drug companies and up to 25% for the biotech companies.15 Table 5 CAGR of APIs Demand Prescription Drug Companies 13.625% Generic Drug Companies 32.7% T.L.G.’s prospective customers’ list include: Table 6 Prescription drug companies Pfizer Inc., Wyeth Pharmaceuticals, Novartis SG, Johnson & Johnson etc. Generic drug companies Par Pharmaceutical Companies, Inc., TEVA pharmaceuticals, Barr Pharmaceuticals, Inc., Watson Pharmaceuticals, Mylen, Inc. etc. Bio-tech companies Amgen Inc., Genzyme Corporation, ImClone Systems Inc., Genentech Inc. etc. Insights from customer survey16 Generally, pharmaceutical companies do not prefer to manufacture APIs in-house to support their cost-cutting strategies. But, when they prefer to do that, it would be limited to APIs for specific drugs with specific formulation requirements. 14 See appendix 2 15 Based on Industry expert- Dr. Hemant Alur’s interview 16 Refer appendix- 6 14
  15. 15. Companies rely on outsourcing in foreign countries that include mainly India and China; for their APIs sources. They expect their sources of APIs readily available when required with standard quality and affordable prices. This is the reason why they require a facilitator or agent or broker who facilitates the price negotiations of APIs and logistics between manufacturer and end users. Because of tighter USFDA regulations, companies tend to believe in higher quality of raw materials like APIs with the approach of minimum price sensitivity. This is how the “price” of APIs, they buy is not crucial, but still important for them. On the service side, they expect, On-time & expedited delivery Convenient & quicker order processing Full certified compliance in handling & storage Most of the companies expect a supplier to store some extra inventory of their order due to unexpected demand in a way that they can get their supply in the most efficient manner as soon as possible. This leads T.L.G. to acquire fully equipped warehouse on rent or lease. VII. Business Strategy T.L.G. Resources International LLC is a service business that procures API (Active Pharmaceutical Ingredient) for the pharmaceutical industry. T.L.G.’s vision is “To become a leading supply chain enabler who facilitates the procurement of internationally sourced APIs & provide order assistance 24X7 and provide a low cost value-added service to pharmaceutical companies.” Intensive Growth Market Penetration- New Jersey based pharmaceuticals is the market niche where T.L.G. is going to focus in early stages of its venture. The few ways, T.L.G. plans to penetrate into API suppliers‟ market are to, o Offer higher quality & competitive prices to client companies as compared to the other API suppliers. 15
  16. 16. o Lure more pharmaceutical companies which rely on expensive foreign API suppliers and get them switch to do the business with us. Market Development- After company penetrates into market, it follows its strategies to sustain its position. o Company will completely take care of import regulations and procedures by US Government Regulatory Authority- the Food & Drug Administration (FDA) to make procurement easier and faster; and provide flexible pricing options/quotes to the clients. o Company will intensify its focus on quality of products it supplies through contracts with various API manufacturers and this is how it plans to make FDA import regulations frictionless. Products & Services Development- o Company will adapt user friendly online customer services including instant price quotes for the required quantities of various APIs & 24X7 assistance. o Company will provide price comparison chart of different API suppliers as guiding tool to the prospective buyers. Integrative Growth Being an entrepreneurial company, horizontal integration is important for integrative growth strategies. Company will adapt efficient supply chain management techniques like cross-docking for warehousing services, to make logistics easier and help themselves improve bonds with supply networks and distribution channels. Strategic alliance with various API manufacturers, because on average contract span between manufacturer and supplier of APIs is 18-24 months and supplier has to register each product with the FDA. Therefore, contracts and alliances with multiple manufacturers will help company to broaden its prospects. 16
  17. 17. VIII. Marketing Plan T.L.G. is a start up venture and we plan to establish service loyalty. We are going to implement aggressive marketing strategies for the first couple of years to penetrate into the market. Marketing strategies for services API companies that do business in the USA act as the middle man only. If there is a failure with the product, they defer all responsibility to the manufacturer. The agent is never involved with the solution. At T.L.G. - we will assume full responsibility for the delivery and quality of the product. We will ensure that all required documentation is provided in a timely manner. We will provide a root cause analysis to determine all product failure and develop and corrective action to prevent future reoccurrence. API distributors do not privately handle Customs activities and do not act as the Export agent. These are 3rd party activities which are done by private companies. At T.L.G - we will have a fully certified customs agent on staff which will assume the responsibility of performing all required procedures from beginning to end. We will act as the import agent and provide all services required. (The normal process is between 3 and 9 days. Having these functions handled at T.L.G will reduce the lag to about 2 - 4 days) An order tracking service with daily/weekly/monthly status updates Online ordering and request of price quotes Nearly all API distributors in the USA have limited responsibility pertaining to quality assurance and deliveries. At T.L.G. - we would assume full responsibility from the time the order is placed until it is received and QC accepted. If there are any issues related to quality or delivery, the customer would not have to get phone numbers from 3rd party vendors and begin the investigation process. T.L.G. would handle all inquires. 17
  18. 18. Promotional activities for services The best promotional activity for the services of T.L.G. is to build relationships with pharmaceutical companies. This is the vital reason why company is willing to enter into a contract with T.L.G. There are many marketing tools through which T.L.G. can promote their supply chain enabling services. Banner ads (Web banner) - It is an important tool to attract pharmaceutical companies or purchasing department of particular companies to T.L.G.‟s services through World Wide Web or internet. Pharmaceutical companies’ direct mailing lists- The most effective form of selling is through direct contact with managers, product control managers, and purchasing managers. T.L.G.’s own web-site- Even though T.L.G.‟s web-site is under construction now, T.L.G. wants to develop its site as the most important tool for the customers. Attending pharmaceutical conferences, bio-tech/pharmaceutical career fairs & trade fairs- This will help T.L.G. to get as much exposure as it can. This is how T.L.G. will come in contact with the professionals of this industry and such network will lead T.L.G. to reach its goal of building long-lasting relationships with pharmaceutical companies. Magazines & newspapers- T.L.G. will promote their services and publish articles related to their services in magazines and newspapers like- Pharmaceutical Representative, U.S. Pharmacist, Medical Product Manufacturing, Pharmaceutical Manufacturing and many more. Expense breakdown of promotional activities in marketing budget of T.L.G. Web banner 18% 18% T.L.G.'s own web-site 15% 24% Attending conferences, trade fairs and career fairs 25% Magazines & newspapers Source: Based on Thomas Wiedemann„s assumptions 18
  19. 19. IX. Financial Plan Summary T.L.G. is projected to lose money until the end of second quarter of the first year of the business. The company‟s gross margin is quite high because of the lower cost of goods sold as it is a service oriented business. High operating expenses shrink projections of net income and profit margins. Key Financial Assumptions T.L.G. financial plan is based on the following key assumptions: T.L.G. is seeking FDA approval for its APIs registration for the client companies. So, we have not taken any specific year to start a venture. Revenues are based on commission of APIs being supplied, which we have assumed roughly 4.5%, 5% and 5.25%17 for the first, second and third year respectively. Volume plan is based on single or very few customers & it is demand driven. During the first year of business, T.L.G. will operate business from home. Then, it plans to rent some space for storing the inventories or lease the warehouse. We have assumed rent expense as $8000, $9000 & $10000 per month for the first, second and third year respectively. No consideration of opportunity costs of storing extra inventories for customers is taken. If it is taken, it is included in revenues for the company as customers has to pay for the storage and insurance for the period of storage. In volume plan, with assumptions & some research, we have observed high jump in volume in second year from first year because of warehouse or storing facility and growing number of prospect customers. Prices per kg of APIs vary from $25-$85 We have assumed 27% as taxes. 17 Based on assumptions of Thomas Wiedemann 19
  20. 20. Volume Plan 18 Table 7 % increase from the % increase from Year Batches Sold Revenue in $ Previous Year the Previous Year 1 209 29,106 2 1059 406.7% 165,266 467.81% 3 1165 10.01% 197,222 19.34% Pricing Plan According to the industry interviews and customer surveys, we can analyze that quality of the APIs plays a vital role for the business. TLG will focus not only on quality but also on reasonable and attractive price for the purchaser. This will be the major benefit for the purchaser as its indeed challenging to get the blend of price and quality in pharmaceutical industry. If the quality analysis is made, TLG International Inc is at par with its competitors. The major parameter different from competitors is price. TLG will earn its profit as a commission charged from the seller on the batches sold. The price of each batch of API will be decided in comparison to the market price existent in the market. Ideally to make it more competitive it will be kept lower then the market price. TLG will calculate final parentage on sales i.e. around 4-7% of commission which will be charged to the seller of API from overseas. For better understanding following is the example. Assuming, Company A is the seller company of API in China. Company B is the purchaser in United States who wants to buy 100 batches of a particular type of API. TLG facilitates the deal of both the companies and therefore company B agrees to purchase 100 batches of API from Company A. The market price of API in United States is 30 $ per batch. But, Company A sells to Company B at $28 per batch. Therefore the total sale is of $ 2800. Now, TLG will negotiate with Company A and charges 5% of commission on total sales i.e. $ 140. The company B will be ready to pay this commission to TLG because even after the commission the Selling price per batch to A is $ 26.60 whereas, the cost is $ 23 per batch which earns the revenue of $3.60 per batch. 18 Appendix- 3 that contains income statements, volume plan, pricing plan and sales plan for the 3 years 20
  21. 21. Consolidated income statements Table 8 Particulars Year 1 Year 2 Year 3 Revenues $29,106 $165,266 $197,222 Cost of Services 17,260 38,280 43,910 Gross Profit 11,846 126,986 153,312 Gross Margin (%) 41% 77% 78% Selling Expenses $22,540 $135,644 $145,388 G&A Expenses 5,580 3,000 2,650 Total SG&A Expenses 28,120 138,644 148,038 EBIT -16,274 -11,658 5,275 Net Profit After Taxes -16,274 -11,658 3,850 Profit Margin % -56% -7.05% 1.95% Consolidated income statement review clearly shows that T.L.G.‟s operating expense would be high. Most of the sizable operating expenses fall into fixed cost category, which, by definition, implies that they have to be paid no matter what the revenue is. The only way to fight fixed costs is to spread them over more units sold, meaning T.L.G. plans to increase sales volume. Key Financial Ratios Table 9 Ratios / Year Year 1 Year 2 Year 3 Gross Margin 41% 77% 78% Operating Expenses 97% 84% 75% Cost of Services 59% 23% 22% Profit Margin -56.00% -7.05% 1.95% Key Financial Ratios 150% 100% Gross Margin 50% Operating Expenses % 0% Cost of Services 1 2 3 Profit Margin -50% -100% Year 21
  22. 22. Key financial ratios (projected) clearly indicate that company will have positive cash flows from the first quarter of third year of business. Low % of cost of services and operating expenses after the first year will boost company‟s profit margin. Expenses breakdown Cost of Services Expenses Breakdown - Total Utilities and Telecommunications 3% Marketing & Advertisement 25% Office supplies Insurance 5% Legal & Accounting 50% Licenses & fees 9% Lease/Rent Expense 1% Miscellaneous G&A expenses 1% 3% 3% 22
  23. 23. Appendix-1 Market research analysis Top 14 Pharma Markets by 2015 sales (BIL. $) 444 82 46 38 38 32 25 25 25 20 20 19 15 15 Source: IMS World Review, analyst projections, McKinsey India Pharma Demand Model 19 19 This shows US’s dominance in the global pharmaceutical market. As APIs supply chain growth is entirely associated with the growth of pharmaceutical industry, this chart will help us understand how the massive future growth in US pharmaceutical market will make APIs supply chains grow all over. 23
  24. 24. U.S. Pharmaceutical Market Segmentation by companies in % as of year 2007 Pfizer GlaxoSmithKline Merck Johnson & Johnson Other 9% 8% 6% 6% 71% Source: Datamonitor Market share of therapeutic categories in % in US as of year 2007 CNS 23% Others including Anti-cancer 27% Anti-Infective CVS 7% 20% Respiratory Alimentary/Metabo 9% lism 14% Source: Datamonitor20 20 This chart shows the potential therapeutic categories in US pharmaceutical market. Demand of APIs of these leading categories will rise in future. And TLG has many APIs in its products line, which fall into these categories. 24
  25. 25. US seniors(65 & above) population and estimates as of year 2007 35 30 25 20 % Proportion of population of 15 65 and above % Growth rate of population of 10 65 & above % 5 0 Years Source: US Census Bureau > www.census.gov Expectation of Life at birth of US people 80 78 76 74 72 70 68 66 Life Expectancy *Based on middle mortality assumptions; Source: US Census Bureau, Population Division Working Paper No. 38 Source: US National Center for Health Statistics, National vital statistics Reports, Vol 55, No. 19, August 21,2007 25
  26. 26. Appendix- 2 APIs demand growth derivation Generic Drug Companies Source: LexisNexis® Academic- Business Prospective Column2 Customers Ticker Column1 COGS in $ millions 2005 2007 2006 PAR Pharmaceuticals 258 Companies, Inc. PRX 501 507 2,770 TEVA Pharmaceuticals TEVA 4,531 4,149 Barr Pharmaceuticals, Not Inc. BRL Not Not Watson 853 Pharmaceuticals, Inc WPI 1,505 1,234 630 Mylan Inc. MYL 1,304 768 4,511 Total 7,841 6,658 As per industry expert‟s assumption, APIs‟ cost proportion in total COGS is 10%21 API costs in 451 COGS 784 666 API cost annual growth rate 17.72% 47.67% This is how we get CAGR of API demand, which is 32.70% 21 As per Dr. Hemant Alur’s assumptions, we derived APIs’ approx. proportion of cost of goods sold expenses of pharmaceutical industries. That proportion will help us to derive demand growth of APIs supply chains in the future. And this is how CAGR of APIs demand will be important figure for TLG’s business growth. 26
  27. 27. Source: LexisNexis® Academic- Business Branded Drug Companies Prospective Customers Ticker Column1 COGS in $ millions Column2 2007 2006 2005 Pfizer Inc. PFE 11,239 7,640 8,525 Wyeth Pharmaceuticals, Inc. WYT 6,314 5,588 5,431 Johnson & Johnson JNJ 17,751 15,057 13,954 Novartis NVS 11,032 9,411 8,259 Total 46,336 37,696 36,169 As per industry expert‟s assumption, APIs‟ cost proportion in total COGS is 6% API costs in COGS 2780 2262 2170 Annual growth rate of API costs 23% 4.25% CAGR of API demand 13.63% 27
  28. 28. Appendix- 3 Financial Statements Volume Plan Volume = Batch : 1 Batch= 50 Kilos First year of the Business QT- 1 QT-2 QT-3 QT-4 Total High Demand Growth APIs 30 40 42 42 154 APIs of specific use 10 14 14 17 55 Total 209 Second year of the business High Demand Growth APIs 200 220 214 227 861 APIs of specific use 48 52 56 42 198 Total 1059 CAGR 406.7% Third year of the business High Demand Growth APIs 230 245 251 240 966 APIs of specific use 50 52 47 50 199 Total 1165 CAGR 10.0% 28
  29. 29. Pricing Plan We need to find Avg. Price per batch of APIs. Assume inflation rate as 4% High Demand Growth APIs $ price/ Batch of 50 kilos 1st year 2bd year 3rd year Allopurinol $1,300 $1352 $1406.08 Amiodarone HCL 1,350 1404 1460.16 Aspirin 1,250 1300 1352 Acetazolamide 1,350 1404 1460.16 Carbamazepine 2,500 2600 2704 Phentolamine Mesylate 2,650 2756 2866.24 Indomethacin 2,300 2392 2487.68 Dimenhydrinate 2,450 2548 2649.92 Dipyridamol 3,450 3588 3731.52 Donepezil HCL 4,200 4368 4542.72 Nicorandil 3,950 4108 4272.32 Temozolomide 4,250 4420 4596.8 Oxaliplatin 4,000 4160 4326.4 1st year 2nd year 3rd year Doxepine HCL 3,800 3952 4110.08 Average commission per batch $2,771.43 $2,997.58 Average price $2,882.29 $124.71 $144.11 $157.37 $4,000.00 $4,160.00 $4,326.40 APIs of specific use $180.00 $208.00 $227.14 29
  30. 30. Sales Plan First year of the business (Based on 4.5% commission on revenues) QT-1 QT-2 Qt-3 QT-4 High Demand Growth APIs $3,741 4,989 5,238 5,238 APIs of specific use 1,800 2,520 2,520 3,060 Second year of the business Based on 5% commission on revenues) High Demand Growth APIs $28,823 31,705 30,840 32,714 APIs of specific use 9,984 10,816 11,648 8,736 $ Third year of the business (Based on 5.25% commission on revenues) High Demand Growth APIs $36,196 38,556 39,501 37,769 APIs of specific use 11,357 11,811 10,675 11,357 30
  31. 31. T.L.G. Resources International, LLC- Financial Plan Quarterly Pro Formas (Projected) First Year of Business Qt-1 Qt-2 Qt-3 Qt-4 Total Revenues Commissions on High Demand Growth $3,741 $4,989 $5,238 $5,238 $19,206 APIs Commissions on APIs of Specific Use 1,800 2,520 2,520 3,060 9,900 Total Revenues $5,541 $7,509 $7,758 $8,298 $29,106 Costs of Services Customer Servicing Expense $2,500 $2,700 $2,800 $2,780 $10,780 Other Costs of Services 1,350 1,600 1,740 1,790 6,480 Total Costs of Services $3,850 $4,300 $4,540 $4,570 $17,260 Gross margin $1,691 $3,209 $3,218 $3,728 $11,846 Gross margin % 31% 43% 41% 45% 41% Operating Expenses Management Salaries 0 0 0 0 0 Utilities and Telecommunications $1,200 $1,500 $1,530 $1,580 $5,810 Marketing & Advertisement 2,500 2,700 2,840 3,060 11,100 Office Supplies 300 420 440 470 1,630 Insurance 0 0 0 0 0 Legal & Accounting 500 610 640 650 2,400 Licenses & Fees 400 400 400 400 1,600 Lease/Rent Expense 0 0 0 0 0 Miscellaneous G&A Expenses 1,300 1,400 1,400 1,480 5,580 Total Operating Expenses $6,200 $7,030 $7,250 $7,640 $28,120 EBIT -4,509 -3,821 -4,032 -3,912 -16,274 Interest expense 0 0 0 0 0 EBT -4,509 -3,821 -4,032 -3,912 -16,274 Taxes -1,217 -1,032 -1,089 -1,056 -4,394 Net Profit ( Loss ) -$4,509 -$3,821 -$4,032 -$3,912 -$16,274 Profit Margin % -81% -51% -52% -47% -56% 31
  32. 32. Second Year of Business Qt-1 Qt-2 Qt-3 Qt-4 Total Revenues Commissions on High Demand Growth APIs $28,823 $31,705 $30,840 $32,714 $124,082 Commissions on High Demand Growth APIs 9,984 10,816 11,648 8,736 41,184 Total Revenues $38,807 $42,521 $42,488 $41,450 $165,266 COGS Customer Servicing Expense $7,000 $7,300 $7,260 $7,200 $28,760 Other Costs of Services 0 0 0 0 0 Other COGS 2,200 2,400 2,450 2,470 9,520 Total COGS $9,200 $9,700 $9,710 $9,670 $38,280 Gross margin $29,607 $32,821 $32,778 $31,780 $126,986 Gross margin % 76.29% 77.19% 77.15% 76.67% 76.84% Operating expenses Management salaries 0 0 0 0 0 Utilities and Telecommunications $1,800 $1,900 $2,000 $1,970 $7,670 Marketing & Advertisement 3,500 3,330 3,600 3,600 14,030 Office supplies 400 380 360 410 1,550 Insurance 1,500 1,500 1,500 1,500 6,000 Legal & Accounting 1,000 1,200 1,280 1,320 4,800 Licenses & fees 300 300 300 300 1,200 Lease/Rent Expense 24,000 24,000 24,000 24,000 96,000 Operating losses as tax carry forward 1,217 1,032 1,089 1,056 4,394 Miscellaneous G&A expenses 600 700 800 900 3,000 Total Operating Expenses $34,317 $34,342 $34,929 $35,056 $138,644 EBIT -4,710 -1,521 -2,150 -3,276 -11,658 Interest expense 0 0 0 0 0 EBT -4,710 -1,521 -2,150 -3,276 -11,658 Taxes -1,272 -411 -581 -885 -3,148 Net Profit ( Loss ) -$4,710 -$1,521 -$2,150 -$3,276 -$11,658 Profit Margin % -12.14% -3.58% -5.06% -7.90% -7.05% 32
  33. 33. Third year of business Qt-1 Qt-2 Qt-3 Qt-4 Total Revenues Commissions on High Demand Growth APIs $36,196 $38,556 $39,501 $37,769 $152,022 Commissions on APIs of Specific Use 11,357 11,811 10,675 11,357 45,200 Total Revenues $47,553 $50,367 $50,176 $49,126 $197,222 COGS Customer Servicing Expense $7,500 $7,800 $7,800 $7,700 $30,800 Other Costs of Services 0 0 0 0 0 Other COGS 3,000 3400 3,450 3260 13,110 Total COGS $10,500 $11,200 $11,250 $10,960 $43,910 Gross margin $37,053 $39,167 $38,926 $38,166 $153,312 Gross margin % 77.92% 77.76% 77.58% 77.69% 77.74% Operating expenses Management salaries 0 0 0 0 0 Utilities and Telecommunications $1,600 $1,700 $1,760 $1,690 $6,750 Marketing & Advertisement 3,000 3,200 3,300 3,280 12,780 Office supplies 500 620 630 600 2,350 Insurance 1,500 1,500 1,500 1,500 6,000 Legal & Accounting 1,000 1,450 1,430 1,280 5,160 Licenses & fees 300 300 300 300 1,200 Lease/Rental Expense 27,000 27,000 27,000 27,000 108,000 Operating losses as tax carry forward 1,272 411 581 885 3,148 Miscellaneous G&A expenses 660 680 720 590 2,650 Total Operating Expenses $36,832 $36,861 $37,221 $37,125 $148,038 EBIT 221 2,307 1,705 1,042 5,275 Interest expense 0 0 0 0 0 EBT 221 2,307 1,705 1,042 5,275 Taxes 60 623 460 281 1424 Net Profit ( Loss ) $161 $1,684 $1,245 $760 $3,850 Profit Margin % 0.34% 3.34% 2.48% 1.55% 1.95% 33
  34. 34. Third year of business Qt-1 Qt-2 Qt-3 Qt-4 Total Revenues Commissions on High Demand Growth APIs $36,196 $38,556 $39,501 $37,769 $152,022 Commissions on APIs of Specific Use 11,357 11,811 10,675 11,357 45,200 Total Revenues $47,553 $50,367 $50,176 $49,126 $197,222 COGS Customer Servicing Expense $7,500 $7,800 $7,800 $7,700 $30,800 Other Costs of Services 0 0 0 0 0 Other COGS 3,000 3400 3,450 3260 13,110 Total COGS $10,500 $11,200 $11,250 $10,960 $43,910 Gross margin $37,053 $39,167 $38,926 $38,166 $153,312 Gross margin % 77.92% 77.76% 77.58% 77.69% 77.74% Operating expenses Management salaries 0 0 0 0 0 Utilities and Telecommunications $1,600 $1,700 $1,760 $1,690 $6,750 Marketing & Advertisement 3,000 3,200 3,300 3,280 12,780 Office supplies 500 620 630 600 2,350 Insurance 1,500 1,500 1,500 1,500 6,000 Legal & Accounting 1,000 1,450 1,430 1,280 5,160 Licenses & fees 300 300 300 300 1,200 Lease/Rental Expense 27,000 27,000 27,000 27,000 108,000 Operating losses as tax carry forward 1,272 411 581 885 3,148 Miscellaneous G&A expenses 660 680 720 590 2,650 Total Operating Expenses $36,832 $36,861 $37,221 $37,125 $148,038 EBIT 221 2,307 1,705 1,042 5,275 Interest expense 0 0 0 0 0 EBT 221 2,307 1,705 1,042 5,275 Taxes 60 623 460 281 1424 Net Profit ( Loss ) $161 $1,684 $1,245 $760 $3,850 Profit Margin % 0.34% 3.34% 2.48% 1.55% 1.95% 34
  35. 35. Appendix- 4 Industry expert interviews 1. Barry Turner: Procurement Director at Novartis Barry Turner is a Fairleigh Dickinson University alumni and a successful professional having more then twenty five years of experience with pharmaceutical industry. He has also served as President and Board of Director at APEX. He is highly knowledgeable and provided with important inputs which are very useful for TLG. Cost is the major issue for the services added upfront. Two issues with API‟s: 1. It‟s costly to reach out in Asia. E.g. India. 2. Risks: As the FDA standards differ among various countries. API business is not just that easy by going out in the market and purchasing the same. There are various technical aspects involved which play a vital role for the business. To be a supplier of API, one needs the quality of each API to be approved and qualified by FDA team From the second year of the business one can provide warehousing services as business volume will be increased. Major barrier by FDA is bio testing of the API which is transition from stage two to stage three among four stages of approval cycle. Third stage is the most time consuming stage. China has the most competitive price for API‟s. They reduce the price to 40% - 50% on average. Only FDA approved API‟s can be imported from India and China. It‟s important to know the US customs check and FDA customs check. If the API is put on hold from the port, it‟s stopped and takes long time in the procedure to get it released. 35
  36. 36. 2. Professor Gerard W. Cleaves: Prof.Cleaves is the chairman of Pharmaceutical Management department, FDU in 2003 with more than 20 years experience in business and organizational development. This experience comes primarily in the global supply chain management software and consulting industries serving multinational chemical and pharmaceutical companies. He serves on the Board of Directors of the Market Street Mission in Morristown, NJ - an organization that has served the needs of the homeless, helpless and hopeless of northern NJ for over 100 years. He has worked for Exxon Chemicals, Chesapeake Decision Sciences (now Aspen Technology), and i2 Technologies and consulted for industry through AtlanTec, a company he founded in 1995. He has degrees in chemical engineering from Lehigh University and Princeton University and an MBA from Harvard Business School. It costs around a billion dollars to bring in a new drug. There are four stages of FDA approval for the new drug. It takes almost twelve to fifteen years to get to fourth stage of FDA approval stages. Companies earn even by filing for the patent of the drug. Even after the approval of the drug, Facility approval by FDA is also challenging. Each process has to be certified by FDA. TLG should deal with companies who already have approval. Lot of distrust of API manufactured from China.. Beware of Scams. 3. Hemant A. Alur, PhD: Vice President, Trilogic Pharma LLC Trilogic Pharma LLC is a startup pharmaceutical venture, started before 3 years. Hemant guided us to derive APIs demand growth from the income statements of pharmaceutical companies. From his vast amount of experience of 15 years in the pharmaceutical industry, he gave us assumptions of % proportions of APIs cost in total COGS of the company. 36
  37. 37. They were assumed to be 5-7%, 8-12% and 20-25% in prescription drug companies, generic drug companies and bio-tech companies respectively. After we found the cost proportion of APIs over the last 3 years, we derived growth rate of that particular cost. Averaging that cost, we found CAGR of demand of APIs. CAGR of demand of APIs was found to be 13.63% and 32.70% for prescription drug companies and generic drug companies respectively. 37
  38. 38. Appendix- 5 Regulations and associations FDA- The U.S. Food & Drug Administration- An agency of the United States Department of Health and Human Services and is responsible for the safety regulation of most types of foods, dietary supplements, drugs, vaccines, biological medical products, blood products, medical devices, radiation-emitting devices, veterinary products, and cosmetics. The FDA requires research or marketing approval for the drug that uses the API. Some of the important regulations and guidelines of the FDA for venture like T.L.G. are as following: Foreign firms that manufacture, prepare, propagate, compound, or process a drug imported or offered for import into the U.S. are required to register name and place of business List all drugs imported or offered for import into the U.S. Shall designate only one U.S. agent, who must be physically located in the U.S. and be point of contact between FDA and foreign firm on all drug registration, listing matters and requirements22 Submit DMF (Drug Master File) which contains confidential API information23, to the FDA. This submission is required to sell the drug that contains the API Trade Associations related to TLG: It‟s very necessary to understand for TLG the importance that each trade association has to its new venture. The following are the ones that we suggest are important as far as the business of TLG is concerned. Consumer Healthcare Products Association (CHPA)- CHPA works with members of Congress on legislation to address concerns about the safety of drug ingredients 22 Importation of active pharmaceutical ingredients requirements 7-16-08 FDA NYK-DO API seminar presentation notes 23 Confidential information means- API information submitted in the IND, ANDA, or NDA 38
  39. 39. manufactured outside the United States. TLG will be acting as a medium between the producer (who may be overseas) and customer companies based in United States. To be a member company with CHPA will help TLG to overcome risks factors involved with manufactured products outside United States. The U.S. Drug Enforcement Administration (DEA)- DEA has responsibility for combating drug trafficking and make efforts to prevent the diversion of legal drugs and precursor chemicals to manufacture illegal drugs. The benefit of TLG with DEA is because Controlled Substances Act (CSA) is one of DEA‟s key authorizing statutes. Generic Pharmaceutical Association - The Generic Pharmaceutical Association (GPhA) represents the manufacturers and distributors of finished generic pharmaceutical products, manufacturers and distributors of bulk active pharmaceutical chemicals, and suppliers of other goods and services to the generic pharmaceutical industry. GPhA advances the interests of its members through initiatives in the scientific, regulatory, federal and state forums and in the public affairs arena which will help TLG too. The Pharmaceutical Research and Manufacturers of America (PhRMA)- (PhRMA) represents the country‟s leading pharmaceutical research and biotechnology companies in United States, which are devoted to inventing medicines that allow patients. Being a part of this association will help TLG to forecast the need for new API used during research and which may be demanded in future when the finished product is out for sale in the market. Therefore, TLG will get details of companies carrying research and therefore those can be future potential customers of TLG. Sales Association of the Chemical Industry (SACI)- Members of SACI involves Sales agents, distributors, and individuals engaged in sales or sales promotion for American chemical manufacturers, exporting companies for American manufacturers, personnel of publications and advertising agencies in chemical and allied industries, and purchasing agents of American chemical manufacturers. Works to increase selling efficiency, foster high sales ethics, and promote fellowship among members. Sponsors golf outings; conducts sales clinics and research programs; provides speakers on selling. TLG as member of SACI will do some marketing of its product and services. Also, it will help to build network and customer base which results in business. 39
  40. 40. BIO - Biotechnology Industry Association- BIO is the world's largest biotechnology organization, providing advocacy, business development and communications services for more than 1,200 members‟ worldwide. TLG should be the member for BIO because this will benefit ventures business development. It will have opportunity to get many potential customers for business from biotech filed. PDE: A Pharmaceutical Trade Association- The PDE is an organization dedicated to the advancement of its membership by providing a forum for interaction, communication, and education. Its membership, predominantly from Pennsylvania, Delaware, New Jersey, but open nationally, includes pharmaceutical manufacturers, the allied trade industries, and schools of pharmacy. We suggest TLG to be a part of PDE as it‟s locally based in NJ and this will help TLG to analyze the competitors locally. Parenteral Drug Association (PDA)- Parenteral Drug Association (PDA) is the leading global provider of science, technology and regulatory information and education for the pharmaceutical and biopharmaceutical community. PDA, a non- profit organization is committed to developing scientifically sound, practical technical information and resources to advance science and regulation through the expertise of its more than 10,000 members worldwide. It holds various conferences on Supply chain management which is a useful resource for TLG as a start up venture. Chamber of Commerce of State of New Jersey:- The New Jersey Chamber of Commerce is a business advocacy organization based in Trenton. The State Chamber staff represents its members on a wide range of business and education issues at the State House and in Washington. The organization also links the state‟s local and regional chambers on issues of importance through its grassroots legislative network. 40
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