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Solutions for the Biotech & Pharmaceutical Industry

The profitability of biotech and pharmaceutical organizations is entirely dependent on their ability to discover and market new drugs. Large companies benefit from economies of scale in research, manufacturing and marketing. While smaller companies effectively compete by specializing in drugs that target one or two specific ailments. Operating in a highly concentrated market, with fierce competition among companies, biotech and pharmaceutical organizations are forced to constantly analyze operations and continually look for new opportunities to maintain profitability and strive for positive company performance.

Average revenue per worker is approximately $700,000, and to maintain this ratio, biotech and pharmaceutical companies need to manage internal and external market forces. Rising healthcare costs, scientific advancements, increased regulation, industry consolidation, and closer collaboration among industry players demand biotech and pharmaceutical companies to always have their pulse on corporate status. Financial status updates of the business are a necessity to manage market changes and are required to maintain steady, positive corporate growth.

Why PROPHIX for Biotech & Pharmaceutical Organizations

PROPHIX Performance Management solutions provide biotech & pharmaceutical organizations with up-to-date, timely information.

PROPHIX is a solution that adapts to biotech- and pharmaceutical-specific business challenges such as measuring product line profitability, managing research and development costs, analyzing ongoing company relationships, controlling capital expenditures, examining cash flow variability, staying abreast of government regulation, and maintaining skilled workers. With multiple factors directly affecting biotech and pharmaceutical organizations, clear insight into company performance accompanied by detailed analysis is essential. PROPHIX offers a single solution where budgeting, planning, reporting, and forecasting can become a continuous part of the ongoing planning initiatives of any organization.

Biotech & Pharmaceutical organizations use PROPHIX Performance Management software and services for:

Measuring product line profitability

• Dissect & analyze key profitability drivers such as drug price and sunk development costs to mitigate losses from competitor "me-too" drugs
• Create profitability scenarios measuring the effect of introducing diverse product lines (i.e. manufacture OTC medications, dietary supplements, personal care products)
• Offer different payment terms (tiered co-payment system) to key customers; measure bottom line results on profitability

Controlling research & development costs

• Manage the sunk costs of development and sometimes resulting costs of failed drugs
• Be conscious of research and development costs relative to total revenue; apply maximums to control costs
• Track and control clinical trial costs and bring certainty to total research and development costs

Managing external partner relationships

• Accurately record joint ownership of research and manufacturing organizations to correctly report earnings
• Create merger and acquisition scenarios without jeopardizing data integrity of final plans and budgets
• Generate consolidated financial statements that lists partners, joint ownership and other partnerships

Planning specific capital investments

• Integrate large investment expenses of laboratories and equipment into fixed assets and depreciation calculations
• Provide stakeholders the ability to dissect capital investments and add detailed amounts by capital expense category
• Create summary- and detailed-level reports that lists capital expenditures for key stakeholders

Predicting cash flow variability

• Mitigate cash flow variability due to drug development and market release by continuous cash flow forecasting & analysis
• Integrate the cash flow statement with other key financial statements to ensure immediate updates are accessible
• Understand the inflows and outflows of cash associated with operations through timely cash flow report distribution

Effectively managing government regulation

• Analyze the effect of new government regulations on profitability and ongoing development
• Control patent expenses and associated costs by creating product line profitability statements
• Create what-if scenarios to hedge against government controlled price changes

Accurately estimating skilled worker expenses

• Integrate detailed payroll operating expenses categorized by specific job category into the departmental operating budgets
• Generate personnel expense reports that illustrate all personnel expenses by named employee and job position
• Estimate the result of hiring new skilled labor on the operations plan and bottom line results