Case Studies
In this chapter we present two case studies. For each case a template Excel spreadsheet has been prepared. These template spreadsheets can be requested from the authors (e-mail addresses can be found in the cover pages). The reader can solve the case stud
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Introduction In this chapter we present two case studies. For each case a template Excel spreadsheet has been prepared. These template spreadsheets can be requested from the authors (e-mail addresses can be found in the cover pages). The reader can solve the case studies as an extended exercise – a sketch of the solution is added at the end of each case. Each case study addresses a specific topic. The first case, “Creating a Term-Sheet for BT-100”, is about structuring a term sheet for the buy-side. A mid-sized pharmaceutical company is interested in in-licensing a phase I project. The solution requires a well-structured Excel sheet with rNPV valuation. The solution in takes about 2 hours. In the second case, “Bio-Tec’s Lead Compound”, the student must compare different strategic options for a project. Either the company licenses it now, after the next phase, or not at all. For the solution the student is expected to create an Excel spreadsheet with rNPV and real options. He must compare different options and how these alternatives can be used in negotiating a term sheet. The solution in class takes 3-4 hours.
Case Study 1: Creating a Term-Sheet for BT-100 General Midpharm is a medium sized pharmaceutical company with an established sales force in Europe. Midpharm commercialises its drugs in the rest of the world through various partners. Midpharm has its own research labs but also in-licenses up to 50% of all drug candidates they have in their pipeline. The license agreement may start as early as discovery phase, but usually Midpharm has a preference for products in clinical development. Typically they conclude worldwide license contracts with Midpharm as the sole developer of the product. However, in some cases they agree to codevelop the compound with the licensor, who then usually maintains the
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Case Studies
commercialisation rights outside of Europe. Licensing and business development is therefore an important part of Midpharm’s business model. Midpharm focuses on different disease categories, amongst them cancer. Dr. Partnering is responsible for cancer opportunities within Midpharm’s licensing department. In this function he visits conferences and also conducts the negotiations between Midpharm and the potential licensor’s. However, he is not involved in the later commercialisation agreements. BT-100 In order to spot in-licensing opportunities Dr. Partnering participates in industry conferences. In one such conference he gets to know Mrs. Business Developer from Bio-Tec. Bio-Tec has a promising CNS technology, as far as Dr. Partnering can judge. However, Bio-Tec still in early stages, with the most advanced drug in phase I. In addition they also have a cancer drug – BT-100 – against Glioblastoma. The CNS technology turned out to be Bio-Tec’s value driver and all cancer activities except this drug in phase I have been abandoned. Dr. Partnering is interested in BT-100 because of three reasons. First, Glioblastoma can only be treated with Temodar until now, and only 15% of all patients react positively
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