After reading several articles on Bloomberg, I came across an article that intrigued me; The CEO who Saved a Life and Lost his Job. As I was reading this article, a statement by Kevin Donovan stood out. He said "The company's obligation is the greatest good for the greatest number." This statement got me thinking. How is this statement relevant? The company has spent millions of dollars getting the drug ready for the market, however, these costs are sunk costs. Why would the company, financially speaking, need to refuse to allow the family the use of the drug?
The article explains that Josh Hardy's medical condition didn't meet the criteria set for all previous trials. The company had a number of assumed risk to consider: first, Josh's treatment didn't meet the criteria, second, the possible delays that could occur if the drug didn't work, or three, if the FDA pulled it all together. These risk could have had drastic financial consequence because the results on Josh's condition were unknown.
After Chimerix completed a new analysis, I am sure the Net Present Value would now be lower than expected from shareholders. This could potentially prevent investors from continuing to invest in the drug. The company currently was not earning any revenue and was relying strictly on money from investors. This insight helped me understand Kevin's statement as I related to Chemerix point of view versus taking an emotional position.