1 ) Statement of Problem
This kind of study is definitely commissioned to assess the Purinex, Inc. auto financing plan, which can be related to decide the best financing alternative for the company in securing extra cash required to establish a relationship with a large-capitalization pharmaceutical company. Gilad Harpaz, Purinex's key financial official believes a partnership package could bring the company to execute it is mission, growing drugs for the treatment of sepsis and diabetes. However , the condition facing Purinex is thatвЂ”while there is a chance for Purinex to secure a partner within the next four to 12 months, Purinex just provides available funds to last around 10 months; furthermore, there is nonetheless a very good chance which a different partnership would take place about twelve months later. To put it briefly, Purinex is currently facing the challenge of the insufficient capital to succeed in the collaboration deals. In line with the case, Gilad Harpaz can be considering three options to get Purinex to resolve the problem. To help identify the feasibility and attractiveness of such financing alternatives, this analyze is based on your decision tree method of evaluate the options. 2 . Discussion
As explained in the case, first of all, the relationship deal could entitle Purinex to receive a combination of up-front charges, milestone obligations, and royalties for treating either sepsis or diabetes (see Appendix 1 pertaining to the comprehensive information). Secondly, due to the deficiency of capital, you will find three loans options: 1) raising a one-time round financing by a Investment capital (VC) company, 2) merely waiting in the expectation that either sepsis deal and also the diabetes deal would come through, and 3) undertaking one more one-time circular financing from a number of angel investors. It really is needed to remember that when Purinex seeks exterior funding purchases either by VC firm or angel investing, the investors is going to acquire selected equity in Purinex (see Appendix two for the expected ownership percentage). On the other hand, if...