Case Study: Millennium Pharmaceuticals (A)

Organization and Strategy at Millennium (A)

Presented by: Saad Irfan

BUMO 752: Strategic Growth in Emerging Companies

Final Exam Fall 2014

Table of Contents

Executive Summary 2

Background 3

Current Challenges 4

Organizational Culture 6

Recommendations 8

Strategic Option # 1 9

Strategic Option # 2 10

Management System, Policy and Procedures 11

Bibliography 13

Executive Summary:

Background:

Millennium Pharmaceuticals was founded in 1993 in Cambridge, MA by Mark Levin with a group of top-tier researchers. To launch the operations, Levin raised $8.5 million in seed funding from venture capital firms and became the CEO of the company. He started as an interim CEO but due to his

In other words, Millennium needed to take the drug research from the start to the end by commercializing it, by aligning the whole organization to one vision.

According to the life cycle of new ventures, Millennium moved directly from the rapid growth stage to decline & regeneration skipping the maturity stage altogether. It demonstrated potential in terms of its research and excess cash but still in the process to become profitable. They established a market niche but were unable to sustain their competitive advantage as the information and technology became available to the market. Dunsire’s challenge here is to establish controls for financial gains and eliminate inefficiencies, professionalize management while also focusing on innovation and potential alliances to change the marketplace & customer

Internally, the organization lost its focus on the research abilities and became involved in developing the downstream commercial function. One solution for Dunsire is to return Millennium to its roots and focus the organizational efforts only on few areas with the goal of becoming the oncology or the cardiovascular company, by addressing the root cause of the disease rather than just treating the problem. With the acquisition of COR in 2002, Millennium gained the R&D platform and by 2003 after major restructuring, it was able to reduce the net loss to $484 million down from $590 million in 2002. Exhibit 6 shows that the net loss further went down in 2004 to $252 million despite the decrease in revenue from strategic alliances. By 2004, almost 77% of total revenue for Millennium was coming from the downstream operations of oncology and cardiovascular acquisitions, which are attractive to further explore and develop company