Case Study 2: Rocky Mountain Advanced Genome This paper provides an objective valuation of Rocky Mountain Advanced Genome (RMAG) to be adopted by Big Sur regarding the purchase of a 90% equity stake for $46 million. Forecast Horizon: The forecast horizon was lengthened to 15 years, as RMAG is a young, “highly promising, high risk” firm, only established 15 months prior, it should reach maturity in 2010 as sales, expenses and free cash flows stabilise (Fig.1). RMAG exhibits characteristics of a high growth firm with no dividends, high risk, high CAPEX expenditures and no leverage. Furthermore, it would be inadequate to adopt the forecast horizon dictated by RMAG and Big Sur of 10 years as cash flows only breakeven in Year 8 (Fig.2). …show more content…
Secondly, no descriptive information was given regarding Other Diagnostics but from the cash flow forecasts provided, appears the only profitable product category from 1995. Hence, Other Diagnostics was estimated as a similar growth model to Cancer Diagnostics yet will mature faster, with 5% in 2006, whilst the growth rate falls by 0.5% thereafter. Agricultural sales were forecasted to grow at 4% in 2006-07 then 3.5% in 2008-10. This consistency in figures is because disease-resistant corn and commodity plants reflect a staple societal need yet there is foreseeable competitiveness in this segment due to strategic alliances and significant interest by producers. Human Therapeutics as “the most economically attractive segment” is also the riskiest due to the prolonged FDA process, uncertainty in R&D stages and external competitiveness with “most of the activity in this segment funded by major pharmaceutical companies under joint ventures”. Hence, it is expected that explosive sales of 7% in 2006 fall sharply by 1% until the forecast horizon. COGS, R&D and SG&A were all modeled as percentage of sales figures and it was assumed that these accounts stabilized as sales plateau and efficiencies in production are realised. Hence COGS, R&D and SG&A were predicted at 30%, 8% and 22% respectively. Due to the consistent nature of Contract Revenue at $3.5
In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.
• Net profit margin has been negative and no major patterns over the 9 year period on net profit since the trend of the industry is based mostly on economic factors, and whether or not they secure contracts. Due to high percentage of COGS they are only left with a net profit of $980 or
We assume that Net fixed assets as percentage of sales will eventually become constant at 1%, and revenue growth rate will eventually become constant at 6%, thus the assumed profit margin will also eventually become constant. It is reasonable to assume that at the beginning the profit margin increases because Crocs enjoys economics of scale and direct sales
A highly conserved gene will be used to identify a prokaryotic species isolated from the body. Fundamental lab techniques will be also explored and utilized, such as amplifying using PCR, cloning, and transforming the gene into a host cell. DNA electrophoresis and specific substrate plating will serve as analysis check points. The final product will be sequenced and compared to similar species to observe phylogenetic relationships.
Gregory Stock, in his article Choosing Our Genes, asserts that at this point not ethics are important, but rather the future of genetic technology. Stock supports his conclusion by providing powerful examples of how genetic modifications can benefit our population anywhere from correcting genes at the time of conception to extending lifespan. He wants to inform his audience about all of the benefits of genetic technology in order to prove that there are way more advantages in this technology that are highly desirable by people of different ages. He reaches his readers by writing a very detailed yet coherent article that brings awareness to various groups of people from parents to be to older populations.
From a strategic viewpoint, it is my belief that Pills & Co should make a play to purchase Star Genomics for these reasons:
Based on the sales manager’s research, he predicted 2,200,000 yards to be sold. In our financial model, we factored in a 7% increase in the average price per yard and a 10% increase in the average cost per yard, both of which the sales manager projected with confidence. The key underlying assumption this lead to was a 12.90% increase in revenue. Next, we averaged the past four years SG&A margin (SG&A/Sales) because this will serve as an adequate proxy for the forecasted SG&A expense. Although 2004 SG&A expense was an anomaly, we felt that it must be calculated in the average to accommodate for any shifting trends towards higher SG&A costs. Calculating interest expense was simple because we were given that Alliance Concrete pays 8.5% on outstanding debt. Our assumption for the tax rate came from the average tax rate the firm has paid out over the past 4 years, which was 34.81%.
This paper explores the history and some interesting facts about DNA. The last couple centuries have seen an exponential growth in our knowledge of DNA. The history of the DNA can be traced back to multiple devoted scientist. This article attempts to summarize, and review the basic history of DNA while providing some fascinating information about it.
As an investment manager from Sierra Capital Partners, Rodney Chu is interested in purchasing a 60% equity interest of Arcadian Microarray Technologies, Inc., a biotechnology firm. The bid is currently at $40 million. The Arcadian’s managers have optimistic projections for their firms’ performance over the next 11 years.
In order to decide on the R&D portfolio, an objective quantitative analysis might not be suitable considering the high levels of uncertainities and consequently the risks involved in pharmaceutical research projects. It is important to have a qualitative analysis of the situation as a whole that includes Vertex’s own financial position, strategic implications, a quantitative analysis of its Portfolios with realistic estimations and a risk analysis of the portfolios.
Biotech companies’ values are primarily driven by intellectual property, they do not need to rely much on their suppliers. These companies also have relatively easy access to sources of raw materials (such as chemicals), scientific tools, computers and testing equipment.
There are several rewards to consider with expansion of Biocon. Currently in India, there is a growing market for contract research organization and the growth of Biocon falls right within this opportunity. The growth is expected to last for more than few years with a rate that looks promising. Clinigene is expected to reap revenues much higher than the current Biocon and Syngene combined (Kalegaonkar A., Nov 4, 2008). It will take clinical studies to a higher level with better options in terms of drug manufacturing. With other countries ready to outsource the service of clinical studies, Clinigene’s future looks bright.
DNA is a term that has been used in science as well as in many parts of daily
Every state within the United States runs its own newborn screening program which test for at least 30 serious conditions which are treatable if caught early. The program is designed to save lives and uses the dried blood sample collected during the first week after birth. The blood sample is used to measure the presence of disease markers. The current newborn screening programs are fast, cost effective, and accurate in identifying disease before symptoms appear. Genome sequencing cost have now decrease to a price range like other complex medical test to be readily available for clinical application. It is possible for genome sequencing to replace or supplement the existing traditional panels for newborn screening tests. The
Human Genome Project The Human Genome Project is an international project basically sponsored by the U.S Government. It started in October 1990 with an aim to sequence the entire human genome. The complete set of information present in the form of the genes in an organism forms its genome. Each human being has 23 pairs of chromosomes having DNA double helix in each.