Pisgah Labs’ approach to profitability is to couple drug product intellectual property protection with an effective branding strategy. Development and marketing efforts have a greater chance of success if they eschew the crystal ball and the “race to the bottom” model. A sample Q & A is below:
Q: Will the revenue projections support today’s investment into the product?
Our Answer: Revenue projections are anticipated to increase for the next period (for example, over five years) based on an increasing market share, a predictable cost structure and significant barriers (patents) to competitive entry.
Q: Does the net present value of future sales support the level of investment required to launch this product?
Our Answer: With revenue predictions based on market demand and savvy business fundamentals, a development allocation is justified.
Q: What is the internal cost of capital and what discount rate provides a promising net present value for future sales?
Our Answer: A lower threshold can be assigned to the cost of capital since significant risk is removed from the project based on the smart branding strategy and product protection through patents. Additionally, the percentage rate associated with discounted cash flows (DCF) can be evaluated under present market conditions.
Q: What factors may influence sales projections at a future date?
Our Answer: A competitive drug product having the same therapeutic classification may be launched but must have substantially improved performance to overcome the cost hurdles and our approach can withstand balance sheet competition.
Q: When will we start making money?
Our Answer: Crossing into positive territory begins with FDA approval and an effective product launch compatible with a branding strategy.
Q: What cash burn-rate can we tolerate before making money?
Our Answer: Cash burn rates are predictable and manageable for product development and launch given the market position acquired through our technology and product protection.