David Richard Walwyn

How to Manage Risk Better

OVERVIEW: Risk management practices in the R&D departments of many chemical and pharmaceutical companies lack much of the rigor and sophistication of the equivalent corporations in the financial sector. For instance, investment decisions on research projects are guided by techno-economic indicators that do not reflect changes in the financial framework of the project such as the prevailing interest rate structure, or the risk of “project default” as a result of termination. Although much has been achieved over the last ten years in improving the returns from R&D through the implementation of quality assurance processes such as the stage–gate methodology, considerable potential still exists for improving the management of investment risk and ensuring a return for shareholders. The Jarrow and Turnbull model for credit-risky bond pricing can help to calculate the internal rate of return (IRR) spread or hurdle rate that should be applied at each stage of a research project.

Determining quantitative targets for public funding of tuberculosis research and development

South Africa’s expenditure on tuberculosis (TB) research and development (R&D) is insignificant relative to both its disease burden and the expenditure of some comparator countries with a minimal TB incidence. In 2010, the country had the second highest TB incidence rate in the world (796 per 100,000 population), and the third highest number of new TB cases (490,000 or 6% of the global total). Although it has a large TB treatment program (about

Patents and profits: A disparity of manufacturing margins in the tenofovir value chain.

588 million per year), TB R&D funding is small both in absolute terms and relative to its total R&D expenditure. Given the risk and the high cost associated with drug discovery R&D, such neglect may make strategic sense. However in this analysis it is shown that TB R&D presents a unique opportunity to the national treasuries of all high-burden countries. Using two separate estimation methods (global justice and return on investment), it is concluded that most countries, including South Africa, are under-investing in TB R&D. Specific investment targets for a range of countries, particularly in areas of applied research, are developed. This work supports the outcome of the World Health Organization’s Consultative Expert Working Group on Research and Development: Financing and Coordination, which has called for “a process leading to the negotiation of a binding agreement on R&D relevant to the health needs of developing countries”.

Characterisation of the carotenoprotein found in carapace shells of Jasus lalandii

Registered in 2001, tenofovir disoproxil fumarate (TDF) has quickly become a mainstay of first line regimens for the treatment of HIV. Initially only available in developed countries at a cost of US

The effect of increased photovoltaic energy generation on electricity price and capacity in South Africa

5 000 per person per year (ppy), Gileads Access Programme (GAP) has extended the use of the product to 2.4 million patients in low and middle income countries. The programme has two components: distribution of the branded product at reduced prices and licensing partnerships with generic manufacturers. The licensing partnerships now supply 75% of the market by volume, at a treatment cost of US

Local Government Resists the Implementation of Renewable Technologies

57 ppy (1% of the branded cost). From Gileads perspective, GAP must be considered a huge success. It has enabled the company to maintain high prices in developed countries whilst reducing its input costs and deflecting criticism of its failure to provide essential medicines for the poor, hence risking the possibility of compulsory licensing. Over the period 2001 to 2011, TDF in its various forms has generated for Gilead more than US

An evaluation of South Africa’s public–private partnership for the localisation of vaccine research, manufacture and distribution

31 billion revenue at a gross margin of 80%, equivalent to a gross profit of US

Biology as Population Dynamics: Heuristics for Transmission Risk

25 billion. Analysis of the TDF value chain, from preparation of the active pharmaceutical ingredient (API) to sale of the formulated product, shows that manufacturing margins are highly skewed in favour of the originator, with the latters profit being US

The right attitude to rain Presentation to PICMET 2008

3.2 billion vs. US

A comparison of the cost of research in South Africa's public research and higher education institutions

4 million for API manufacturers and US