Businessmodel of Celgene

Customer Segments

Celgene has a niche market business model, with a specialized customer segment. The company targets its offerings at consumers suffering from cancer and other severe, immune, inflammatory conditions.

Value Proposition

Celgene offers three primary value propositions: accessibility, risk reduction, and brand/status.

The company creates accessibility by offering a wide variety of options. It has acquired numerous firms throughout its history, enabling it to expand its capabilities and diversify its portfolio. These firms include Receptos, Quanticel, Avila Therapeutics, Abraxis BioScience, Gloucester Pharmaceuticals, Pharmion Corporation, Anthrogenesis, and Signal Pharmaceuticals.

The company reduces risk by maintaining high safety and security standards. Its internal experts constantly adopt strategies and examine new technologies in order to restrict counterfeiting of its products. In addition, it maintains the Global Risk Management Oversight Committee (GRMOC), which focuses on implementing risk minimization techniques to ensure safe use of its products.

The company has established a strong brand due to its success. It markets its products in over 50 countries globally. As of 2016, there were over 300 clinical trials at leading medical centers using its compounds. More than 400,000 compounds are featured in its proprietary library. Lastly, it has won many honors, including the following:

• Recognition as one of America’s Best Midsize Employers by* Forbes*
• Recognition as one of the Fastest Growing Pharmaceutical Companies in the Fortune 500
• Ranking as one of the 25 Best Healthcare Companies to Work for in America by Business Insider
• Ranking as one of the 30 Most Meaningful Companies to Work for in America by Business Insider
• Placement on the Future Brand 2015 Index: Top 100 Global Companies
• Recognition as one of the 25 Most Reputable Healthcare Companies by the Reputation Institute
• Recognition as one of the 100 Most Respected Companies Worldwide by Barron’s 500 List ### Channels

Celgene’s main channels are contracted pharmacies and wholesale distributors. The company promotes its offering through its website, social media pages, direct-to-consumer print and television advertising, and participation in trade shows and conferences.

Customer Relationships

Celgene’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. The company’s website features a section called “Online Patient Resources” that includes information on sources of patient support, professional organizations, and clinical trial data.

That said, there is a personal assistance component – Celgene offers “Celgene Patient Support”, a free service providing a dedicated point of contact for patients and healthcare professionals that prescribe its products. The service provides information on everything from reimbursement to co-pay assistance to product distribution channels.

Key Activities

Celgene’s business model entails designing, developing, and manufacturing its products for customers.

Key Partners

Celgene’s key partners are the suppliers that provide it with the materials it needs to manufacture its products. It also works with third-party contract manufacturers to provide backup manufacturing services for certain offerings. The company also maintains the following types of partnerships:

• Business Development Partnerships – The company works with other pharmaceutical firms in order to complement its internal research and develop cutting-edge therapies. Specific partners include AstraZeneca, Baylor, Clovis, Northern Biologics, OncoMed Pharmaceuticals, and Zymeworks.
• Global Health Partnerships – The company maintains Celgene Global Health, an initiative through which it works with academic institutions, public/private funding organizations, non-governmental organizations, contract research organizations, and other pharmaceutical groups. Specifically, it collaborates with them in order to get assistance in evaluating its proprietary library of 400,000 compounds. Specific partners include Advinus Therapeutics and the University of Colorado.
• Advocacy Partnerships – The company works with independent patient organizations to help them strengthen their support and advocacy for patients through the entire care cycle – from diagnosis to treatment to end-of-life care. ### Key Resources

Celgene’s main resources are its human resources, who include the scientists and engineers that design, develop, and manufacture its products. The company maintains important physical resources in the form of manufacturing facilities in Boudry and Zofingen, Switzerland, and research and development facilities in the United States and Europe. The R&D facilities are as follows:

• Celgene Institute for Translational Research Europe (CITRE) in Seville, Spain
• Celgene Avilomics Research in Bedford, MA
• Celgene Cellular Therapeutics in Warren, NJ
• The Celgene Translational Development Center in San Francisco, CA
• The Drug Discovery & Alliance Development Center in San Diego, CA ### Cost Structure

Celgene has a value-driven structure, aiming to provide a premium proposition through frequent product enhancements. Its biggest cost driver is cost of goods sold, a variable expense. Other major drivers are in the areas of research/development and sales/marketing, both fixed costs.

Revenue Streams

Celgene has two revenue streams: revenues it generates from net sales of its products and “other revenues” whose nature is not specified.