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• Phase 1 Clinical Trials
The Elan Story
Here the drug is tested on human volunteers to confirm that the Medicinal drugs can be delivered in a number of different ways. They drug is safe to give to people. These trials can last for a year or Elan Corporation plc is a phenomenal Irish success story. Today it is may, for example, be delivered orally, injected into the bloodstream, or the largest Company on the Irish Stock Exchange, despite originating absorbed through the skin. Some methods of delivery are favoured over • Phase 2 Clinical Trials
in a garden shed in Dublin thirty-two years ago. In fact, the shed was others and may be more ‘user-friendly’ for patients. For example, it In this phase, the drug is tested on people with the actual disease a small laboratory and, in this unlikely setting, Donald Panoz in 1969 would be easier for patients to take one tablet that slowly releases the to determine the dose of the drug and the frequency of began to develop drug delivery technologies.
drug over the course of the day, as opposed to taking a tablet four times administration. These studies can take two years or more to per day to achieve the same effect. Elan’s Drug Delivery group is complete. Currently Elan is at this stage with a new treatment for From this modest beginning Elan has grown to a point where it is a focused on developing/designing delivery systems so those drugs may Alzheimer’s disease. It will be tested with about 400 Alzheimer’s leader in drug delivery technology and pharmaceutical research. It be released into the body over a specific period of time.These methods operates globally, employing almost 5,000 people, and had company of controlling the absorption of the drugs are called ‘drug delivery
• Phase 3 Clinical Trials
revenues of $1,483m in 2000. The story of Donald Panoz as an technologies’.
This phase can last approximately three years.The drug is tested on entrepreneur in action is now legendary in the pharmaceutical industry.
up to 3,000 patients and all kinds of statistical tests are carried out.
To date, the company has developed more than ten delivery
It is only at this stage that Elan knows whether or not the drug Elan has two main areas of focus in terms of research. Research is technologies and co-operated with other companies to develop
should be submitted to the government to seek a license to launch focused on the development of new groundbreaking drugs as well as on others. For example, in the 1980’s a drug to treat heart disease the discovery of new methods of delivery for existing and new drugs.
hypertension called Cardizem‚ (Registered Trademark owned by
• New Drug Application (NDA)
TWFC, Inc.), which had to be taken four times a day was reformulated
This is the actual application submitted by Elan to the Food and Drug This first part of the case study explains drug delivery.The remainder of by Elan using a drug delivery technology to allow patients to take the drug Administration (FDA) in the United States for final approval of the the study looks at the process of developing a new drug for medical use, only once a day.This innovation resulted in sales of over $850 million and drug.The application can actually be up to 100,000 pages long.
and describes how Elan has grown to its dominant position. You will was revolutionary in terms of how people perceived medicine. Clearly, discover how Elan markets its products and then examine some aspects the development of these technologies requires a lot of research, The Drug Development Process
of the company’s impressive financial performance.
including research in Ireland. Much of this takes place in Elan’s Alzheimer’s Disease, Parkinson’s Disease and Epilepsy); oncology Biopharmaceutical Research Centre (EBR) in Trinity College, Dublin and (cancer-related research) and pain. Most of this research is conducted in in Elan’s laboratories in Athlone, Co. Westmeath. There are also drug Elan’s US-based laboratories. However, a drug cannot be placed on the delivery research groups at other sites in the United States and Israel.
market simply because it has been discovered. A long development process must take place before it is legal to make a drug available to the Having specialised in drug delivery, Elan then set out to position itself as public. In fact, it can take from eight to fifteen years, or possibly longer, a developer of new drug products. In order to appreciate this to complete the process. Elan’s primary market is in the US where the achievement it is necessary to understand the complex product Food and Drug Administration is responsible for approving and regulating new drugs. Outside of the USA, each government has its own If the FDA approves the drug, it then becomes available for doctors to prescribe in the United States.To place on the market in the EU/rest of national agency to regulate the pharmaceutical industry.The key steps in the FDA drug approval process are as follows.
the world, similar approvals must be obtained from local regulatory bodies. Once initial approvals have been obtained, Elan must continue • Drug Discovery
to adhere to a strict product monitoring process, by continuing to Drugs are used for a variety of medical reasons. Most people take the This is the start of the research process. Thousands of chemical produce reports for the FDA and/or to keep them informed about any availability of such drugs for granted. Paracetamol, for example, can be compounds are analysed or screened against various requirements unusual effects reported following use of the drug.
purchased over the counter, while doctors prescribe hundreds of other to see if they act in the way the scientists want them to work.
treatments every day. The development of a new drug is called ‘drug
• Pre-clinical Testing
This whole development process is very costly. Thousands of discovery’ and Elan Corporation scientists through research have
During this phase the successful compounds from the screening are compounds are investigated in order to find one with the desired discovered several new drugs. Elan’s drug discovery scientists specialise fully tested in the laboratory to establish its effect on the target effects. Studies have shown that investment of up to $350 million dollars in fields such as biology, pharmacology and neurology. Collectively these disease before it tested on man.This phase can last several years. It is often necessary. Even after approval has been obtained, if the FDA is fields are known as ‘life sciences’. Elan’s drug discovery researchers are is very important to establish that the drug is safe before it is given not satisfied with the safety, effectiveness, or even the labeling of a drug, working on new products in neurology (brain-related diseases such as it can recall the product from the market.
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Following approval, the drug must be manufactured in quantities suitable There are advantages and disadvantages associated with any mode of Partnership is an essential ingredient in Elan’s growth strategy. The
for sale and distribution in the marketplace. Some drugs are licensed to expansion and each requires careful planning and management. From the company’s approach to partnership is underpinned by three basic other companies for manufacture, while others are retained in-house to very start Elan set out to achieve a global position in the pharmaceutical themes – trust, confidence and communication. Companies cannot work be manufactured. One of Elan’s biggest manufacturing plants is located in industry. By 1972, Elan had launched a product in the UK.This product was together effectively in the absence of these three elements. With this Athlone, Co. Westmeath where some 700 people work to produce a co-developed with a U.K. company called Organon. This was Elan’s first philosophy the company has developed to the point where today Elan, New York, London andD u bl i n e x c h a n g e s . T h e variety of drugs. Since drugs are produced for human consumption, the partnership venture. From this point the company has expanded at a • markets over 20 specialist products in more than 40 countries quality process must be tightly controlled. Elan’s Total Quality
remarkable rate. In the late 1980’s Elan developed its ‘Mind to Market’ • has worked with nearly all the top pharmaceutical companies in the Management (TQM) approach requires high levels of training,
strategy where Elan started developing its own products, without a client motivation and commitment from staff at all levels. The Elan plant is company.This strategy was a key turning point in increasing the growth of website, www.elancorp.com
computer controlled to ensure that the highest standards of production the company and it increased the interest of the investment community in • operates several large manufacturing plants, including Athlone Co Elan’s shares. The panel shows a sample of the wide range of activities undertaken by Elan’s management over the last thirty years and vividly The FDA also has the power to inspect manufacturing facilities.They can illustrates the dynamism of the organisation’s management team.
A model that is very useful when considering company growth is Elan started as a specialist drug delivery company, but has developed into arrive on any site without notice and visit any part of the plant, question Ansoff ’s product/market matrix as shown below.
many other areas to become the successful organisation it is today. Drug staff and inspect records. Managers must therefore ensure that proper Elan Growing – For the official history see www.elancorp.com
delivery is a small part, or niche business, in the pharmaceutical industry.
procedures are observed and that accurate information is kept at all What Was Accomplished
It costs millions of dollars to develop a new treatment and investment is times, which is a very demanding task.
EXISTING
risky. In spite of this, the industry is very competitive because the rewards can be high. Also, new developments in the life sciences are changing the Diastat® uses the drug diazepam to treat face of the industry. The combination of these life sciences with Founded Elan Pharmaceutical Research Corporation diltiazem. the key improvement is reducing the epileptic seizures. Other companies have used diazepam to help anxiety and sleep disorders.
pharmaceuticals is giving rise to a new biotech industry and many new This was an old drug (diazepam) introduced EXISTING
This was the same drug (diltiazem) improved companies are emerging to compete with Elan.
Established Institute of Biopharmaceuticals in Athlone.
for the same market (heart-disease).
However, many analysts feel that companies with the most convenient In general, Elan products are not sold over the counter.These treatments This company provides analytical services to the industry and user-friendly drug delivery technologies will succeed. In other words, are normally prescribed by doctors and physicians for the end users, who Completed construction of manufacturing plant in Athlone Elan’s nicotine patch is an example of a new drug delivery will be the differentiator. If this is so, it is clear that Elan is are their patients. It is principally the doctors and physicians who are Elan started to research and develop products itself - (Mind other comapnies have some-what siliar drugs.
It is a new product in an existing market.This cessation).This was a new drug (nicotine) in a well placed to achieve a leadership position in the biotech industry.
Elan’s customers. They decide which product should be purchased for is a new drug (Bot-B) in an existing market their patients. Obviously these people must be kept well informed and A new product, CARDIZEM, approved by the Food and Drug Administration (FDA) in the US, launched by a partner up-to-date with product developments and research findings.
This model indicates that Elan could expand its business in four ways. Elan 1. Define the following terms
In the USA, Ireland and the UK Elan employs a large sales force to market Another new treatment, launched in the US. Launched by products directly to doctors, that means direct sales channels are
another partner company. Elan established research group in • Find new outlets for an existing product in an existing market – Box 1 used. In other countries, products may also be marketed by subsidiaries
• Introduce an existing product to a new market – Box 2 and by joint-venture companies. In a joint venture, two companies
Yet another Elan product, launched in the USA by a partner • Introduce a new product in an existing market – Box 3 agree to co-operate because each brings some benefit to the other. It • Introduce a new product to a new market – Box 4 makes sense for Elan to engage the sales and marketing services of More products in the USA including a nicotine patch another company in areas where it does not have the resources. In other 2. New product development (NPD) is an important process in
countries, Elan licenses products to other companies to sell its products
bringing new products to market. Outline the steps that Elan or sometimes uses the services of a distributor. By using these various
A new product approved and launched in Japan takes before launching a new product. In your opinion, in what routes to market, Elan ensures that its product portfolio is well
Dedicated research center established in Trinity College, might this process differ from that used by other companies? There are many ways to measure the success of a business. Such performance indicators can include growth in market share, the
3. Elan is one company but has 3 different activities.
number of new products developed and an improvement in competitive a) Describe Elan’s drug delivery and drug discovery and Elan purchased a company in Israel – Elan Medical position. However, most people would consider financial performance to a) Who are the clients for each business unit? Another product launched. Athena Neuroscience Inc., When a business is successful it can use its profits to grow. Using retained 4. Who are the clients for each buisness unit?
acquired in the USA and this marks the start of Elan- profits (reserves), the company can invest in research and development
As a public limited company (plc), Elan Corporation PLC publishes its
5. Elan has grown significantly since 1996 both organically and
(R&D) to discover and develop new products, purchase premises,
accounts on a quarterly basis.These accounts are thoroughly scrutinised Established Elan’s sales-force in US and Europe to sell Elan recruit additional staff or engage in other activities to expand its business.
by shareholders and financial analysts. Most countries have laws 6. Using Ansoff ’s product/market matrix how would you market a
This is called organic growth, since it is supported by the company’s
governing the production of company accounts. In the USA the A continuing stream of new products and company current product being introduced into a new evolving market in own resources.The company can also grow by Securities Exchange Commission (SEC) controls such matters.
acquisitions to grow Elan’s drug delivery and drug discovery • purchasing other businesses; this is called acquisition
expertise and to develop new sales forces.These companies • combining with another company; this is called a merger
In the six months to 30 June 2001, Elan earned $891 million in revenue • entering into partnership arrangements with another company; such resulting in profits of $211 million.The Balance Sheet reveals total assets Sano Corporation, Neurex Corporation, NanoSystems LLC partnerships are called alliances.
of $5,455 million. It is clear that Elan is a large and successful company by Dura Pharmaceuticals Inc and The Liposome Company Inc www.elan.com www.elancorp.com
These approaches to expansion are often referred to as non-organic.
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Source: http://www.business2000.ie/pdf/pdf_5/elan_5th_ed.pdf