Also, the decision includes risk because if the project fails early, then Nucleon would be stuck with a plant and no products to manufacture for years. If Nucleon successfully builds and runs the pilot plant, investors will gain assurance about Nucleon's capabilities. Nucleon could benefit from manufacturing CRP from Phase I through Phase III under certain circumstances. Nucleon will benefit from in-house manufacturing if the process technology proves highly specialized. Partners will be difficult to find, and would charge a high price to compensate for the risk of deciphering a specialized process.
Patents provide limited protection of intellectual property.
Nucleon's specialized in-house manufacturing capabilities would serve as a barrier to imitation. However, Nucleon faces several risks from vertical integration into manufacturing. Research and development performance could suffer if management shifts attention towards manufacturing. Nucleon may diversify too much and lose the present competitive advantage in research and development. Technical change in process technology could leave Nucleon with an obsolete plant.