Analyzing Angiotech Through Four Classical Articles

Since the beginning of mankind, health has always been regarded as one of the most important aspects of human life. Humans have always been looking for ways to prolong their lives. Driven by our obsession for prolonging our lives, we are willing to go to the extremes in order to achieve it. Regardless of the means, we seem determined to pursue our quest, as is evident in Hernando Cortes’ conquest of Mexico in search for the Fountain of Youth. Cortes wiped out a whole nation of Aztecs hoping to find a key to one’s life. The prime indicator of life is health. Nowadays, according to the Canadian Public Health Association, health status is directly related to social status. Social status today is heavily affected by poverty, unemployment, education, living and working conditions, families, friends, workplaces, social support and physical environments. Therefore, health too is affected by the previously stated issues. On any given day, thousands of potentially useful drug molecules are being studied in pharmaceutical laboratories in the United States, Europe, and around the world. Each year from this large number, a small fraction are determined to be very promising drugs and are chosen for testing in carefully-controlled clinical trials involving patient volunteers. After many years of research, those medications that prove their effectiveness and safety are approved by the United States Food and Drug Administration (FDA) for use in this country. It is this thorough, research-based system that is responsible for providing the drugs that we have come to rely on for improved health and quality of life.

Today, Angiotech Pharmaceuticals is the world leader in emerging field of drug-eluting biomaterials and medical devices. They are pioneering the science of adding drugs to medical devices and biomaterials to dramatically improve their performance and to solve some of medicines most vexing problems. The company has undergone rapid growth, which is attributable to the discovery of the antiproliferative drug: paclitaxel. This multi-functional drug could also block an important cellular pathway involved in inflammation. Angiotech’s leading product is the paclitaxel-eluting coronary stent, TAXUS which has now been implanted in over a million patients worldwide, and is the most successfully launched product in medical history. Their main competitor in the stent market is Johnson & Johnson, which uses a different approach through drug labeled rapamycin to achieve the same outcome. In an attempt to overcome their main competitor, Angiotech has purchased the American-based company Afmedica. It is a private company which develops perivascular technology using the drug rapamycin to treat peripheral vascular disease, coronary artery disease and end stage renal disease. This transaction enables Angiotech to reach beyond the use of paclitaxel and expand its research platform to potentially commercialize rapamycin in peripheral bypass surgery and other selected disease indications. This paper will criticize Angiotech’s acquisition through the following four classic articles: The Sigmoid Curve, by Charles Handy; The Enduring Logic of Industrial Success, by Alfred D. Chandler; Marketing Myopia, by Theodore Levitt; and The Balanced Scorecard, by Robert Kaplan & David Norton.

In Sigmoid Curve, the author discusses the necessity of preparing a company for change while still experiencing growth. Handy claims “the world keeps changing. It is one of the paradoxes of success that the things and the ways which got you where you are are seldom those that keep you there.” The following graph is the example of the Sigmoid Curve:

Point X is where the second curve should begin. This is when the organization has the necessary resources and energy to begin a new curve through its initial explorations. At this point, the institution is still undergoing a constant growth. The shaded area is a time of great confusion when old ideas and perceptions are being challenged by new ones. The shaded portion is a time of uncertainty and struggle between following the old ways and experimenting with new ideas. During that time, several strategies are revised for future implementation. Point Y is when resources are declining and profits are less bountiful if you are on your first curve. Experiencing a slight increase, instead of a decline, in growth is an indicator that your latest changes in company’s strategy and market approach have moved you on to another curve. At this point, it is too difficult to initiate a new curve simply because it will take a mighty effort with less resources and energy available. Angiotech is ready to take the same strategy from its drug-eluding stent program to a whole new level вЂ" to countless other medical device and biomaterials that are placed in the human body every year. These devices and biomaterials can be greatly enhanced through co-administration of the right drug designed to improve the performance of the product. Industry is now beginning to recognize this technological shift. Angiotech’s acquisition of Afmedica has concluded the long-anticipated shift for the past ten years. In other words, while growing, Angiotech purchased Afmedica to begin a new growth curve.

In The Enduring Logic of Industrial Success, the author states that companies who are first to make large investments quickly dominate their industries and continue to do so for decades. These corporations are known as first movers. Their long term management strategy is to grow into related product markets, or by moving abroad. Angiotech is a pioneer in the science of adding drugs to medical devices and biomaterials. In order to dramatically improve their performance, the company is expanding their research platform and moving into new related markets using rapamycin in perivascular. Also, through the acquisition of Michigan-based Afmedica, Angiotech has successfully launched its products in the United States. According to the logic of managerial enterprise, the above