Academic journal article Journal of Critical Incidents

Global Blood Therapeutics, Inc.: What Is the Best Funding Choice?

Academic journal article Journal of Critical Incidents

Global Blood Therapeutics, Inc.: What Is the Best Funding Choice?

Article excerpt

Case Overview

Global Blood Therapeutics, Inc. (GBT) is a small, privately held biotechnology firm that decided to focus on their new drug candidate, GBT440, to treat the rare sickle cell disease (SCD) that has no known cure. The CEO raised venture capital (VC) funds in the past and current clinical trial data for GBT440 were encouraging. However, additional external funds were needed by yearend 2015 to replace depleted cash and enable company expansion to support GBT440 development for future FDA approval. The case ends July 1, 2015 with the CEO pondering over four traditional funding sources, going public (IPO), seeking additional VC funds, finding angel investors, or seeking a strategic partnership to sustain GBT and satisfy its key stakeholders. Students are asked to use pertinent strategic management and decision-making tools and methods to address the needs of key stakeholders and ultimately select the best funding source for GBT. Graduate and advanced undergraduate courses in strategy, business policy, entrepreneurship, product marketing, and decision-making are the focus. The CI would be best used in graduate level strategy, agriculture, and biotechnology management courses. Due to the biotechnology context, related life science classes and workshops for professionals in the life science industry should also be considered.

Research Methods

This decisional critical incident (CI) is based on contact with top management employees and interviews with the Global Blood Therapeutics, Inc. CEO, Dr. Ted Love. Other pertinent data were provided by the firm or retrieved from company records and public domain sources such as research studies. The company name, facts, events, and people are not disguised and the CEO has granted the authors a publication release.

Learning Outcomes

After reading the critical incident, students should be able to:

1. Identify the difference between internal and external factors and determine the effect these factors have on funding approaches for startup organizations attempting to meet stakeholder needs. (Q #1)

2. Evaluate the needs of key stakeholders in startup firms prior to FDA product approval. (Q #2)

3. Analyze and defend decision criteria for feasible funding approaches that allow startup biotechnology firms to sustain operations prior to the commercialization phase. (Q #3)

Discussion Questions

The CI reflects that the CEO felt acquiring new external funding as the key problem was a "no brainer". However, pertinent supporting information, tools and analysis were provided to address the major questions and concerns raised in the Management Decision Challenges section of the CI regarding what was the best funding source. Key supporting information such as the GBT stakeholder priority and the four pertinent external funding sources were provided in the CI. Additionally, strong hints about success criteria and appropriate decision- making tools were provided in the CI Analytic Considerations. Areas of major concern were determining the critical success factors for these decision-making tools, keeping stakeholder interests in line with the company goals, finding the best external funding options, and on July 1, 2015, deciding which option made the most sense for GBT? Three discussion questions are posited to address the major concerns and the learning outcomes:

1. What are the most important tools to determine critical success factors for evaluating Global Blood Therapeutics, Inc. funding choices on July 1, 2015? (LO 1)

2. What is the most important stakeholder from the list of prioritized key Global Blood Therapeutics, Inc., stakeholders with regard to finding the best funding sources for the firm, and discuss why? (LO 2)

3. How could the Force Field decision-making method be utilized to identify pertinent factors for selecting the best funding choices to sustain Global Blood Therapeutics, Inc. …

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