Team:Shanghai HS/Entrepreneurship
Entrepreneurship
A strategic marketing plan for Antibody X
I. EXECUTIVE SUMMARY
This business report is a detailed strategic marketing plan of Antibody X. In response to the ongoing mutations of the coronavirus, Pansolver Base wanted to invent an antibody that targets all mutated strains of COVID-19. Antibody X is such antibody that directly targets the ACE2 receptor in human bodies instead of the ever changing spike protein of the coronavirus. In this report, we will start with introducing our product and business, then will dive into a thorough research of the market, including literary research and various other research techniques. A detailed competitor analysis will also be conducted by using multiple professional business analytical techniques. Based on our research, we will then create a strategic plan to market our product, Antibody X. Finally, a financial report will be forecasted to indicate the feasibility of our market plan. We hope that this business report clarifies the urgent necessity of our product, and its positive and far-reaching impact on the world.
II.INTRODUCTION
A.Description of the background and the product:
Since the global outbreak of novel coronary pneumonia in December 2019, the world has endured the enormous loss of life and economic damage. In the first instance, antibodies and vaccines were developed one after another in countries around the world. However, many mutated strains of the new coronavirus continued to be produced, including mutants B.1.1.7, B.1.351, B.1.617, etc. They have significantly reduced the efficacy of the initial generation of anti-new coronavirus drugs. In response, the Pansolver Base developed a new antibody, Antibody X.
To address the mutations of the coronavirus, Pansolver Base proposed a new antibody that can target and block the ACE2 receptor. Innovatively, we abandoned the traditional target, the S protein of the coronavirus, and instead chose to target the ACE2 receptor in human cells to increase the medicine's efficacy towards mutated strains. Cooperating with the Shanghai Institute of Materia Medica (SIMM), we screened out Antibody X, which can target the ACE2 receptor, from plenty of antibodies. Consequently, mutation type as the virus is, the antibody X will effectively block the virus entry, thus remedying the pandemic's damage.
B.Description of the target market:
The coronavirus is a pandemic that spreads worldwide so that we would target the global market in the long term. But first, since it would cost a fortune to apply our product worldwide, our short-term goal would be to focus on the countries that have the financial ability to buy our product. We would be using demographic segmentation on the nations’ monthly income per capita to find our targeting countries.
We would also target specific segments of people in the short run: medical workers and volunteers on the front line, who face a higher possibility of contacting the coronavirus. In addition, our product is more efficient and could be derived into more uses such as curing the disease or preventing workers from getting the virus.
C.Overview of the business
After determining the project, our team—the Pansolver Base—developed into a small-scale biomedical company, including the Marketing and Customer Service Department, Finance Department, R&D Department, Human Resources Department, and Commercial Operations Department. We are twenty-three high school students from all over China, determined to fight against the coronavirus.
III.RESEARCH STUDY
A. Description and rationale of research methodologies selected to conduct the research study
PEST analysis: In this part, we would use the PEST analysis to determine our product’s competitiveness in the market and evaluate the external factors that may benefit the development and spreading of our product. PEST analysis is a management method enterprises use to access the external factors that may affect their firm’s operation. P stands for political factors, E stands for economic factors, S stands for social factors, and T stands for technological factors. The specific use of this analysis will be shown in the next section.
Market analysis: We created a TOM/SAM/SOM graph to analyze our target market using the following statistics: accumulated to September 2, 2021, a total of 217,558,771 people has been diagnosed with the coronavirus globally. There have been 18,650,693 confirmed cases and 4,543,164 deaths.
Questionnaires: To better market our product, we investigated two customer segments: the general public and front-line workers who have close contact with the coronavirus, including volunteers and medical workers.
B.Findings and conclusions of the study
a) PEST analysis
P (political): Many countries have enacted policies that will reduce the stress of firms developing treatments of the coronavirus and also ones that will encourage them to spend more effort and time in this industry. For example, on September 1st, 2020, Shenzhen enact China's first free trade zone legislation, Regulations on Qianhai Shekou Pilot Free Trade Zone of Shenzhen Special Economic Zone. And it was being mentioned in the 53rd article that "Medical institutions and scientific research institutions in the FREE Trade Zone can carry out research and transformation and application of new technologies such as stem cell immune cell gene therapy and tissue engineering of monoclonal antibodies according to their technical capabilities and relevant regulations" (in-text). This means that more medical and scientific institutions would be allowed to research developing vaccines and other treatments for the virus. It would be easier for the organizations to get permissions. Also, in America, the FDA has created a particular emergency program for possible COVID-19 treatments, called the Coronavirus Treatment Acceleration Program (CTAP), aiming to increase the efficiency of passing available therapies. They provide information for the researchers to find sponsors and to find data, which helps the researchers decrease the time spent on things apart from developing possible therapies. These policies and official programs have proved that countries are applying policies to support the invention of treatments. Thus it can be said that it would be a tremendous political environment for our product to develop.
E (economic): We found out that many countries can purchase our product, and their citizens would also have the ability to purchase our product by themselves. So, for example, according to the chart of average monthly income per month, countries such as Sweden, Australia, and Canada have an average revenue per month of over 3400 dollars. However, some of the countries also have high costs of daily lives, it would still be guaranteed that they would have the ability to purchase our products, so the economic environment there would be a benefit for us.
S (social): As more and more mutants occur, the pandemic has been brought to the public again. While worrying about whether vaccines can defend people from those viruses, people pay more attention to how the pandemic can be totally solved. We think this awareness of people would create a great social environment for us to promote our product, for there won't be much disagreement on getting a better cure for the pandemic and even though some might still question our products' functions, there would be a higher possibility that people will try them because of this social environment.
T (technological): The technical environment is also great for our product. As more attention is put into developing vaccines and other valuable treatments against the virus, more and more firms are entering this vaccine industry. According to WHO's Status of COVID-19 Vaccines within WHO EUL/PQ evaluation process, published in August 2021, 24 manufacturers are applying to get their vaccines to pass the examination, and the number of vaccines within the process of evaluation is reaching over 20. This means that there would be more data that we can use and more successes and failures that we can learn from. This would decrease the time we need to develop our product to a state where it could be safe and effective enough for our product to be used by people worldwide.
b) Market analysis
c) Questionnaire
Specified for front workers:
C. According to the questionnaire results above, we understood that both the general public and frontline workers believe that a new antibody is necessary with slight concern about side effects. We also learned what people expect from a new medical product. We improved our antibody product by analyzing these data and inspired new strategic plans to market our product.
D. Conclusions based on the findings
We concluded that our Antibody X is essential to the world based on the PEST analysis, market analysis, and questionnaire results. We also found out that thorough competitor analysis is needed to market our product better.
IV.COMPETITOR ANALYSIS
A. Overview of Competing Factors
Hospitals and universities: The most important thing for developing new technology are experts in the field and funds, which most hospitals and universities have. They also have the most advanced and effective laboratory and close relationships with biomedical companies to reach customers quickly and with relatively better prices.
Substitutions: At present, since no particular medicine for the coronavirus has been invented, there are only two ways to mitigate the adverse effects of COVID-19: vaccination and traditional medical measures. However, both are proved to be ineffective. Furthermore, although nearly three billion people worldwide have been vaccinated, the number of confirmed cases has gradually increased recently, which means that vaccines cannot completely prevent the spread of the mutated coronavirus. Nonetheless, medical resource of patients is limited as severe patients need to be admitted to the ICU for advanced treatment. Thus, Antibody X is currently more effective treatment for the coronavirus as it has a relatively low cost and a short treatment duration (elaborated in later sections).
3. The bargain of suppliers: Since the raw material for Antibody X is drug synthesis, the cost can be almost ignored. Instead, the primary budget is fixed fees such as staff salary and lab equipment, which can be paid soon.
4. Buyer's bargaining power: The primary customer segment of Antibody X is areas where the number for COVID-19 is still high. Since those areas are dispersed worldwide, we are confident that our product will be no monopoly by one company or country. Therefore, our products will not be constrained by potential buyers.
- Competitor analysis:
As for the antibody market, only two have been developed especially for the treatment of COVID-19, namely B38 and ACE2-Fc. The following is a comparison between our Antibody X and these two antibodies.
1. B38 Antibody and Antibody X: 1. B38 is one of the early anti-SARS-CoV-2 antibodies isolated from COVID-19 patients. Researchers concluded that B38 antibodies could interdict the spike glycoprotein of the COIVD-19 to combine with the receptor's ACE2. The experiment with small mice indicates that the antibody can reduce the VL in small mice's lungs when infected. Some companies are researching this antibody, such as Santa, Abcam, and R&D company. With similar effects, now we are going compete for B38 antibody with our antibody X.
a) Firstly, the B38 antibody is not well-engineered concerning affinity and developability compared to our antibody X because of its urgent nature. Therefore, the B38 antibody was isolated from patients.
b) Secondly, our antibody X has better universality than the B38 antibody.
c) Thirdly, our production can enjoy lower cost.
ACE2-Fc and Antibody X: ACE2-Fc, a virus RBD-targeting fusion protein consisting of human ACE2 extracellular domain and the Fc region of human IgG1, showed broad but mediocre blocking on pseudo viruses. ACE2-Fc fusion protein molecules may act as a "decoy" to prevent coronaviruses from binding to endogenous ACE2 molecules. Although ACE2-Fc molecules are broad-spectrum in theory, their binding affinity to RBDs, specificity and developability are usually lower than antibodies. ACE2-Fc was included in our studies as control, and mediocre efficacy was observed in vitro. Thus, ACE2-neutralizing antibody appears to be a more promising approach than ACE2-Fc fusion protein.
* "Cocktails" therapy: "Cocktails" or combination therapies have been currently explored in treating COVID-19 19. Combining 3E8 with antibodies recognizing different epitopes on the viral surface seems a viable option and could be explored in the clinic for better efficacy. Previous studies showed that contractile dysfunction was founded in ACE2, which antibody X may effectively progress it.
At present, no antibody can completely kill the coronavirus. Both B38 and ACE2-Fc can only target one virus strain. However, as the number of infected people shows a rebound trend, the coronavirus continues to mutate. Viruses infect humans by using the spike protein to bind to the human body's ACE2 receptor, and traditional viral antibodies all interfere with the virus's spike protein. However, because the spike protein of each virus strain is different, each antibody can only target the spike protein of specific viral strains. Instead, our antibody targets the ACE2 receptor: it restricts the ACE2 receptor and prevents binding to the coronavirus, thus eliminating the infection. Antibody X fundamentally closes the door-- ACE2 receptor-- so our antibody is effective no matter how the virus mutates.
C. SWOT Analysis：
We will use SWOT to analyze the strengths, weaknesses, opportunities, and threats of our product. First, we will list the main internal strengths and weaknesses and external opportunities and threats closely related to the Antibody X based on the competitive environment and arrange them in matrix form. Then, the various factors will be analyzed, with a series of conclusions drawn from them. Corresponding marketing strategic plans would then be made.
SWOT analysis of antibody x | |
Strengths | Weaknesses |
|
2.Poor thermal stability |
Opportunities | Threats |
1. Large demand 2. The market is not fully developed and there are many opportunities 3.Good market prospects |
|
S(Strengths): At present, the antibody is the most helpful treatment method for the coronavirus. The technique used by our team is to restrict the ACE2 receptor in human bodes so that it cannot bind to the new coronavirus. This is why our Antibody X can be used for various virus strains, which is a unique advantage. For the ever-increasing number of infected people and mutant virus strains, our antibody has universality in addition to the low cost of raw materials.
W(Weakness): The areas of improvement for Antibody X include thermal stability and the single way of administration, namely injection. However, low thermal stability is a common problem for all antibodies as proteins are easily denatured. In a way, the problem of thermal stability continues to be an obstacle in biomedicines. Regarding the problem of the administration method, injection seems to be the best approach so far as Antibody X is a macromolecular protein. Oral or spray methods have not been developed since they require the breakdown of macromolecules which is complicated and expensive. Those two problems are the major challenges for marketing Antibody X.
O(Opportunities): The current COVID-19 antibody market has not been fully exploited as the vaccine market. Compared to the two existing antibodies, B38 and ACE2-Fc, our product can target various mutated strains, so it has a good market prospect. Moreover, the development potential of the coronavirus market is huge because ultimately, humans all need to live with the coronavirus. We hope that our Antibody X could ultimately mitigate the negative effects of the coronavirus no matter how it mutates.
T(Threats): The side effects of Antibody X are not yet apparent, though it might cause cardiovascular disease. More clinical trials and modifications of the antibody are needed. In addition, since there are only a few products in the coronavirus antibody market compared with the vaccine market, it is difficult to develop specific marketing strategies. The imitation of other companies or factories remains as a threat as well.
V. PROPOSED STRATEGIC PLAN
A. The 4 Ps of marketing:
Product: Antibody is a relatively effective viral treatment. The difference between Antibody X and other antibodies is that our antibody targets the ACE2 receptor in human bodies instead of the S protein of the coronavirus, which means that Antibody X can target more mutated strains of the coronavirus than other antibodies.
Price: Since there are only a few coronavirus antibodies in the market to compare, we asked for advice from several interviews with virology experts and the vice president of Fosun Pharma, Mr. Wang (detailed interview report is in the IHP section). After roughly learning about the timing and funding for a new medical product, we decided that the production cost of a dose of Antibody X is 63 yuan. Nonetheless, we all believe that the price of our product is relatively low in the long run, though the development fee is high. Since humans currently have a high chance of contracting the new coronavirus due to the high mutation rate, large-scale industrialization of antibody is needed. Once it enters large-scale production, fixed costs can be earned soon, and the total cost will only be lower. However, we can only ensure its worth as the price needs to be adjusted with the market's response.
Place: Our marketing target is governments and leading biomedical companies worldwide, after collaborating with relating enterprises for clinical trials. If the feedback is good, we can then enter the actual selling and marketing phase with the government and relevant companies. In addition, we can utilize online marketing tools, including a website or a WeChat official account that we already created.
Promotion: As for the promotion strategy of our products, we believe that social media is the key to increase the awareness and exposure of our product. At the beginning of our product promotion, we will provide reasonable discounts to our buyers. We will also participate in professional seminars domestically and internationally to increase the visibility of our product in the biomedical industry. Establishing strong business relationships with collaborating institutions is also vital in the marketing of our product.
B. Distribution Channel analysis:
We want to sell our products through three distribution channels:
1) The first is to produce and sell both independently, forming an "academic +enterprise" structure. This way we could control the profit more effectively.
2) The second is to cooperate with a leading biomedical company in the industry. We can sell our patented technology to them and earn dividends every year. This way, we can eliminate the risk of selling.
3) The third is to negotiate with the government to receive funds. This way, we do not need to worry about reaching the customer or having trouble promoting the product as the Chinese government has power over the market.
VI. FINANCIAL ANALYSIS
A. Investment Income Forecast
We analyzed the 850 questionnaires in Shanghai’s Pudong New District: 675 customers will accept Antibody X, 163 people may or may not buy it, and 12 people cannot yet be vaccinated. Then, we took the number to a larger scale. Assuming that 1 million people in Shanghai’s Pudong New District had a demand for the coronavirus antibody the first year of production, we can sell 900,000 doses of Antibody X in a single year. As we expand our market to the whole country and even the world in the next few years, the income of our product is forecasted as follows:
*The production cost is 63 yuan/dose
Then, we analyzed the cash flow with the cost and income:
*According to the regulations of the Shanghai Municipal Government, the income tax should be 25% of its profits
Finally, several financial indicators are calculated below:
- Payback period:
1+(13,410.45-6,393.74)/134,10.45=0.523 years
2. Net present value of investment:
CI=present value of future net cash flows
CO=present value of original investment
i=discount rate
t=number of periods.
NPV=∑(CI-CO)/(1+i)^t =140,855.52 yuan
3. Break-even point:
C=Variable cost per piece
F=Fixed cost
P=Sales price
Breakeven point=Q=F÷(P-C)=360,000(reach in the first year)
According to the indicators, the company's income for the first year far exceedes the break-even point, and in the following years, it greatly exceeds the operating cost. Its profit goes up each year and has a good prospect.
B. Proposed Budget
The main budget for our business goes to staff salaries, namely the marketing department for further market analysis, the laboratory department for product development, a promotion department and some other employees.
C.Risk assessment
The above analysis proves that we have a good debt repayment ability and profitability, and the financial risk is relatively small. Although our product has a good prospect according to the PEST analysis and SWOT analysis, further research and development are necessary due to our limited equipment and funds. Nonetheless, we believe that our product could be trusted and invested for the mutual benefits of humankind.
VII. CONCLUSION
As more and more mutated strains of the coronavirus appear, more and more people are infected by the disease. Since 2019, the world has suffered and paid a huge loss due to the negative effects of the pandemic. We must stop it as soon as possible so that our life could one day be back to normal. However, we cannot stop the virus from mutating; thus, the only way out is an antibody medicine that could combat all mutations of COVID19, such as Antibody X. Although we realize that we are still just on a starting point, we hope that the world can notice us and offer us support.
The fact that the coronavirus has the ability to infect rodents indicates that one day we might have to live with the virus, which further indicates that an antibody is in urgent need. In the future, we might be able to treat the coronavirus as a normal cold, but an antibody ensures the health and happiness of all humankind. We don’t want to live in fear.
This business plan is a detailed analysis of our antibody in the current market in which we want to introduce ourselves and leave positive impact. We not only analyzed various macro factors including political, economical, societal, technological, but also researched our targeted customer segments and competitors. Research offered us a comprehensive understanding of the Antibody X’s position in the market which gave rise to a thorough marketing plan of our product. Eventually, we produced a forecasted financial statement of our business to indicate the urgent necessity and absolute feasibility of our plan. Although risks exist, benefits prevail. Antibody X has a great prospect that after further development, it will offer mankind a huge advantage on the road against the coronavirus.
VIII. BIBLIOGRAPHY
https://extranet.who.int/pqweb/sites/default/files/documents/Status_COVID_VAX_19August2021.pdf for WHO report
https://www.investopedia.com/terms/p/pest-analysis.asp for PEST analysis definition
https://www.worlddata.info/average-income.php for nation’s average monthly income
https://www.cn-healthcare.com/articlewm/20200909/content-1144324.html for policy in Shenzhen
https://www.fda.gov/drugs/coronavirus-covid-19-drugs/coronavirus-treatment-acceleration-program-ctap for FDA’s program
Email - julaxy@qq.com
Wechat Official Account - Pansolver Base