In 1997, Centocor had a promising drug in Phase II trials and a pharmaceutical company, Schering-Plough, interested in a deal to market it internationally. The only problem was that the drug, a biologic aimed at Crohn disease and rheumatoid arthritis, would be first in the space and thus no historical data existed about the size of the potential market. That number, of course, was key to the company's future.
"The historical research wasn't very useful, so we needed new information," says James Schoeneck, then general manager of the immunology business unit at Centocor and a key negotiator in the deal. Enter forecasting. Centocor did its information gathering and modeling, and entered negotiations projecting an approximate $1 billion international market by 2007. Schering-Plough, however, predicted annual sales of around $300 million.
While the two companies were far apart in their forecasts, Schoeneck's team was confident that it had done a thorough ...
