Trueblood Case 9-2: Pharmagen 1. State the issue at hand. (Typically this is merely the question you are asked at the end of the case.) How to account for the funding of the R&D and royalty payments 2. State the fact pattern. BRIEFLY present the relevant facts. (Bullet points can be very useful here.) (This can be a challenge, given that some Trueblood cases are only a few paragraphs long, it can be hard to further summarize them.) • Pharmagen entered into a funding agreement with Company XYZ, an unrelated third-party private equity investor (PEI) • Pharmagen will receive $500 million from PEI for R&D costs associated with drug X • The funding is to be used solely for the development of X and may not be used for any other purposes …show more content…
o ASC 730-20-25-7 – “An entity that incurs a liability to repay the other parties shall charge the research and development costs to expense as incurred. The amount of funds provided by the other parties might exceed the entity's liability.” • Pharmagen needs to also disclose in the footnotes the terms of the royalty arrangements that it is to pay the PEI. o ASC 730-20-50-1 – “An entity that under the provisions of this Subtopic accounts for its obligation under a research and development arrangement as a contract to perform R&D for others shall disclose both of the following: o a. The terms of significant agreements under the research and development arrangement (including royalty arrangements, purchase provisions, license agreements, and commitments to provide additional funding) as of the date of each balance sheet presented. o b. The amount of compensation earned and costs incurred under such contracts for each period for which an income statement is presented.” • I believe Pharmagen should recognize the funding from the PEI as debt as opposed to deferred income. o ASC 470-10-25-2 “While the classification of the proceeds from the investor as debt or deferred income depends on the specific facts and circumstances of the transaction, the
Project financing: Despite the new project not having to invest in capital equipment for set amount; it is clear that due to the present amount of cash flow for the
However, due to the efforts put into the development of OuchX, Bust-a-Knee is unable to develop Drug X. Therefore, Bust-a-Knee decides to transfer its ownership of Drug X to Pharmers. This transaction is considered a sale agreement and thus requires certain journal entries to record. Our group will provide three major options on how to record the transaction and analyze each of them.
Pharma Co. should account for the restructuring program in different ways for the U.K parent and to U.S.-based lender.
In this case study, we deal with two separate agreements between SolvGen and Careway Pharma that are being audited for the possible sale of SolvGen to Direct Drugs, Inc. First, is the research and development agreement between SolvGen and Careway. And second, is the license and distribution agreement between the aforementioned. These agreements are both written and contractually binding and are within the scope of Multiple Deliverable Arrangements.
eventual disposition of the asset (asset group). That assessment shall be based on the carrying amount
FASB Accounting Standards Codification (ASC) 805-20 (Business Combinations – Identifiable Assets and Liabilities, and Any Noncontrolling Interest) is applicable to our company’s transactions regarding the acquisition of ARU since our acquisition meets the definition of a business combination. Per ASC 805-20-05-1, it states this subtopic provides guidance on how the acquirer shall recognize and measure the identifiable assets acquired, liabilities assumed, and noncontrolling interests in the acquiree. Therefore, this subtopic is applicable to our concern on the disclosure of the extinguishment of debt in financial statements. In addition, per ASC 805-15-2 and ASC 805-15-3, the scope and scope exceptions mention the guidance in this topic applies to all entities and all transactions that meet the definition of a business combination. Per ASC 805-20-50-1, it provides guidance on how our company shall disclose the business combination that occurs during the reporting period, as follows:
It is stated that DeviceCo has put in $550,000 towards LeaseMed’s equity, while Pharmador put in $450,000. This totals $1 million dollars of equity. All $1 million dollars are considered “at-risk”, since these investments in the legal entity (LeaseMed) participate significantly in profits and losses even if those investments do not carry voting rights (ASC 810-10-15-14).
Here is the part where you state the facts in the light most favorable to your
1- It licensed XenoMouse technology to numerous corporate collaborators including leading pharmaceutical companies. A collaborator paid an upfront fee, agreed to payments as the drug development program reached
I drafted a loan agreement that incorporates and implements the essential agreed terms between A Financial Pty Ltd (‘AF’) and Purple Fox Property Developments Pty Ltd (‘PFPD’). I also prepared a separate security document for PFPD’s director guarantee.
Provide a brief background to the case to put your analysis in context. Provide a discussion of the
In a narrative format discuss the key facts and critical issues presented in the case.
Finally, you need to make sure that your version of the truth explains away the story that the prosecution is building. You need to break down the prosecution’s story and show how their viewpoint of the truth is flawed
After review of the primary issue it has been discovered that (in accordance with both U.S. GAAP and IFRSs guidelines) Pharma Company’s plan to relocate its manufacturing operation meets the criteria
The largest influencer that directly affects the success of Pfizer is world governments and regulatory agencies. The government and other drug approval authorities directly affect Pfizer’s ability to effectively and efficiently deliver drugs and other therapeutic remedies to the general public. In more recent news, the Food and Drug Administration approved a vaccine developed by Pfizer that combatted a life-threatening and dangerous strain of meningitis. (Thomas, 2014) Pfizer has also found success finding government approval in cancer research. In 2012, U.S. regulators approved Pfizer’s latest drug Inlyta. This drug is used to treat advanced kidney cancer. This drug was approved by all members in the committee, stating “the