In June 2004, Purinex, Inc, a pharmaceutical company with multiple clinically and economically promising drugs in development, is expected to provide a partnership with a major pharmaceutical company, in the next four to 12 months. This partnership, if provided, will Purinex to develop one of the leading compounds as a medicament. The company, however, had no sales or income, and only 11 months of cash on hand. The student must assess whether the company should try to ensure that funding now or wait until it is completed partnership deals. Problems for students include the assessment of the likelihood that the cooperation with the pharmaceutical company will actually happen, determining whether a company is to stay above water until then occurred and the analysis of other risks for the company in these circumstances.
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by Robert F. Bruner and Sean Carr Source: Darden School of Business 11 pages. Publication Date: December 8, 2005. Prod. #: UV1386-PDF-ENG
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