Great case, really enjoyed it. Can someone please explain how the wheelchair deaths I calcuated. Would appreciate a more simpler overview of second part of the formula so I understand the logic. Thank you!
Volume growth = Incidence patients - wheelchair patient deaths / wheelchair patient population base x changes in wheelchair lifetime / penetration
Wheelchair patient deaths = 490,000 (700K x 70%) + 320,000 (800K x 40%) + 65,000 (260K x 25%) x 3% = 26,000
Hi Ksenia,
So the key here is the exhibit, which points out the prevelance and pentration rate for the US. The #s multiplied across the 3 diseases gets you the total # of people currently in wheelchairs. Then, the x 3% portion is essentially saying 3% of that population will die per year.
The "base" US deal rate is around 1% of the total pop per year. However, given that this is a more compromised population, one can assume a much higher death rate (here, the author decided 3x).
This is up the to the candidate's judgement and is part of market sizing!
Hi!
I suggest you ping directly the author, he is on PrepLounge!
I am sure he´ll be happy to help.
Cheers,
Clara
Case by