Business plan

Regardless of the source of funding (private, governmental or institutional) and scope of the project, the financial viability of the facility must be addressed and formally evaluated through a sound business plan. On one hand, a comprehensive facility with large cyclotron (30 MeV), especially one associated with a national institute or university, requires a very large financial investment which may never be recovered. The financial viability will depend on potential revenues from sales of radiopharmaceuticals and the beam time.

On the other hand, a dedicated PET facility with a small cyclotron and lesser resource requirement is very likely to be financially viable.

Having all financial aspects evaluated, one should make an exhaustive business plan, assessing at least the following elements: cost of production, market analysis (potential sales volume and competition from commercial suppliers), organizational structure, personnel plan, financial plan and breakeven analysis. If the breakeven analysis shows that the project is self sustainable, the project planning can continue towards more detailed design issues. Otherwise, the whole project should be revised starting from the

selection of the appropriate cyclotron. Even if the facility is being subsidized by the government, there must be some guarantees as to the continuing funding.

Some guidance can be found in articles concerning the establishment of new PET facilities [2.2–2.6].

2.5.1. Business plan

An outline of a business plan might be as follows.

Executive summary. This should include the following elements. It should include a brief description of each element and end with a conclusion that the venture will be self-sustaining:

— Amount requested;

— Purpose;

— Potential market;

— Marketing strategy;

— Potential revenues;

— Management expertise;

— Conclusion.

The executive summary should be no more than two pages, with the key issues and how they will be addressed in the plan. The summary can be followed with a detailed writeup that includes the following elements:

— Background and vision. In this section there should be a description of the utility of the radionuclides and nuclear medicine scans which are being considered. If SPECT scans are being done routinely, then the current radionuclide and radiopharmaceutical needs and a projection of future needs should be included. Since these scans are a routine part of nuclear medicine practice, there is not much need to explain the utility of doing these scans. If FDG is a major product, then there should be a summary of the clinical uses of FDG and an analysis of the specificity and selectivity of FDG versus other evaluation of treatment options. This section should also include a typical cost of FDG scans worldwide. Any barriers to the use of these radionuclides should be listed. These might include:

• The number of qualified physicians who routinely use the diagnostic or therapeutic radiopharmaceuticals or would be anxious to use them in the future;

• The number of qualified technicians who are available without an extensive training programme;

• The number of scans which must be carried out per month or year to make the facility sustainable;

• The amount of money which must be paid to both the physicians and technicians to carry out these duties;

• The cost of being in compliance with the regulations and having the licences to operate the facility.

Products and services. What products and services are planned? Is it just for the production of FDG or a comprehensive facility for production of PET and SPECT radiopharmaceuticals as well as applications in other fields?

Marketing plan. The key here is to understand the market and how to increase the demand for radiopharmaceuticals. There should be a careful evaluation of any competition both present and future. There should also be a plan to increase awareness among physicians and health care providers of the benefits and costs of imaging studies.

Operational plan and equipment. The operation of the facility and the use of the radiopharmaceuticals consist of five separate operations. The cost of these operations must be included in the overall costs of the facility. In general these operations are:

(1) Production of the radionuclides;

(2) Synthesis of the radiopharmaceutical from the radionuclide;

(3) Quality control and release of the radiopharmaceutical for use;

(4) Distribution of radiopharmaceuticals;

(5) Marketing of radiopharmaceuticals.

Each of these steps is in turn made up of several operations and there are equipment and personnel costs associated with each of them which must be recognized.

There must also be an operational plan for the development of radiation protection documents and of standard operating procedures to cover each of the previously mentioned operations. A plan must be in place to develop these documents and the costs associated with their development need to be included in the operational costs.

Management and organization. This section must include a realistic organizational chart which includes a list of the required staff. Staff requirements will depend largely upon the type of the centre envisioned and scope of the project. Some suggestions are given here although this is not exhaustive and more than one of some of the categories are highly recommended if this facility will be making its own products:

— Facility director;

— Radiation safety officer;

— Industrial safety officer;

— Radiopharmacist (releasing chemist);

— Production radiochemist(s);

— QC chemist(s);

— Cyclotron operator(s);

— Technician(s);

— Transportation personnel or hired company.

Start-up expenses and capitalization. There will be initial costs for equipment which may be amortized over the expected lifetime of that equipment. An estimate of such expenses is given in Refs [2.1, 2.5]. Some examples taken from Ref. [2.1] are given in Section 2.5.2.

2.5.2. Typical costs

Table 2.1 gives some typical costs for equipment and construction. These are ranges which may vary considerably depending on local distributors and construction costs.

2.5.3. Financial plan

There are many factors as discussed in formulating a financial plan. A summary of these considerations would include:

— Initial investment and cost of money, including recovery time;

— Estimate of cost of production based upon cost of operation (materials, labour, utilities, etc.);

— Potential revenues based upon sales volume and value;

— Future growth and expansion;

— A minimum volume of sales to sustain the continued operation;

— Availability of technical staff and cost thereof;

— Estimate of break-even point;

— Risk analysis (including future need for the products manufactured and competition).

In addition to all the above considerations, the key factor for financial success will be the throughput of the facility. The number of radiopharmaceutical doses produced per day will determine the financial viability.