How Genzyme came to its unique focus on orphan drugs?
Genzyme Corporation had a humble beginning as it was founded by a small number of scientists who were devoted to researching diseases that were genetically inherited. Some years after Genzyme was founded, the Orphan Drug Act was passed into law in the 1980s by countries such as the U.S., Japan, Australia, Canada, and Russia. Such countries intended to encourage developments in drug research, diagnostics, and vaccines that would help improve the treatment options for such rare diseases (Pryde & Groft, 2014). Luckily, this legislation provided various tax exemptions and breaks on costs of Orphan drugs. Notably, an orphan drug is a term used to describe a pharmaceutical product that is given an orphan status by a regulatory agency and are intended to cure diseases below the threshold established for specific and rare diseases. Many people and companies failed to see this unique opportunity, making Genzyme enjoy the uncompetitive market. By the year 2009, Genzyme Company had established itself as one of the leading biotechnology firms in over 40 countries. Genzyme’s success in business, however, comes from formulating strategies that reduced its level of risks. It also produced diverse products and secured itself from future competition.
How Genzyme aligned the forces to make this work
Primarily, to succeed in the job market, innovation is not enough. A company ought to know when competition from other bigger companies will affect its position (Segers, 2015). For this reason, in 2011, Genzyme partly merged with Sanofi, one of the largest pharmaceutical corporations in France. Fundamentally, this merger made Sanofi-Genzyme one of the greatest drug giants in the biotech industry (Litterman, Rhee, Swinney, & Ekins, 2014). Today, Genzyme is worth $4 billion and remains a driving force in Boston and across the world.
How this kind of analysis may also lead to recommendations on practical issues such as what a company like Genzyme should do in the future?
Genzyme's target market is a small niche because for a drug to be considered Orphan, it has to affect less than 200, 000 people globally. Genzyme should, therefore, take advantage of their merger with Sanofi to conduct funded research on more Orphan drugs. More research will help the company see loopholes that other companies have ignored and use this information to position themselves strategically (Segers, 2015). As Sanofi has done, Genzyme should have departments that exclusively specialize on general medicines, speciality care, vaccines, animal health, diabetes, and cardiovascular drugs. If each unit runs on its own, there will be a healthy competition that will lead to creativity and innovation within the company.
References
Litterman, N. K., Rhee, M., Swinney, D. C., & Ekins, S. (2014). Collaboration for rare disease drug discovery research. F1000Research, 3.
Pryde, D. C., & Groft, S. C. (2014). Definitions, history and regulatory framework for rare diseases and orphan drugs. Journal of Medicine, 34.
Segers, J. P. (2015). The interplay between new technology-based firms, strategic alliances and open innovation, within regional systems of innovation context. The case of the biotechnology cluster in Belgium. Journal of Global Entrepreneurship Research, 5(1), 1-17.
