Context
The interviewer will typically start the case by giving a brief overview of the context, ending with a question that points to the problem definition. At the end of the description, you will have an opportunity to ask questions you might have to clarify the information that has been provided to you.
Let’s assume our client is GlobaPharm, a major pharmaceutical company (pharmaco) with $10 billion a year in revenue. Its corporate headquarters and primary research and development (R&D) centers are in Germany, with regional sales offices worldwide.
GlobaPharm has a long, successful tradition in researching, developing, and selling “small molecule” drugs. This class of drugs represents the vast majority of drugs today, including aspirin and most blood-pressure or cholesterol medications. GlobaPharm is interested in entering a new, rapidly growing segment of drugs called “biologicals.” These are often proteins or other large, complex molecules that can treat conditions not addressable by traditional drugs.
R&D for biologicals is vastly different from small-molecule R&D. To gain these capabilities, pharmacos have three options: they can build them from scratch, partner with existing start-ups, or acquire the start-ups. Since its competitors are already several years ahead of GlobaPharm, GlobaPharm wants to jumpstart its biologicals program by acquiring BioFuture, a leading biologicals start-up based in the San Francisco area. BioFuture was founded 12 years ago by several prominent scientists and now employs 200 people. It is publicly traded and at its current share price the company is worth about $1 billion in total.
GlobaPharm has engaged McKinsey to evaluate the BioFuture acquisition and advise on its strategic fit with GlobaPharm's biologicals strategy.
Our overall question today, therefore, is “Should GlobaPharm acquire BioFuture?”
Helpful hints
- Write down important information.
- Feel free to ask interviewer for explanation of any point that is not clear to you.