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Copy of Purinex
Transcript of Copy of Purinex
Matt Cochran (Intern) Company Background Fictional Company
Drug Discovery and Development
Two potential therapeutic compounds
Aimed at treating Sepsis and Diabetes
35 Patents Pending
Gilad Harpaz CFO Sepsis/Diabetes
Severe infection leading to a systemic inflammatory response
Can cause organ dysfunction and death
Leading cause of death in noncoronary ICU patients
285 million people worldwide
"One of the most common causes of death and disability in America"
Bodies ability to process glucose
Impacts eyes, kidneys, nervous system Financing option that provides:
Highest company valuation
Mitigates Financial Risk by
Increasing Short-Term Liquidity
Increasing "credibility value"
Greatest Control Decision Criteria Advantages Wait Six Months 12% Retain 100% Control
Valuation $25m Disadvantages Possible down round scenario
Pre-money valuation $5m The Partnership Profit sharing on future drug sales Costs Up-front funds
Supply production facilities Benefits Immediate Long-Term
Shared liabilities, resources and financial commitment The Sepsis & Diabetes drug compounds are poised with appropriate applications for partnership deals with “Big Pharma” firms Drug Valuations Discount Rate Sepsis Diabetes Angel Financing
Lower financial risk
Minimal Control Loss Conclusion -$60,000 11 Months No Sales $700,000 Current Financial Position Biotech Financing Trends Cons Pros Immediate Access to Funds
Potential to increase value of the Partnership Significantly lower company valuation
Loss of control
Restrictive Covenants Valution PV of CFs VC Venture Capital No Sales Financial Consultants Advantages Angel Investment Valuation
Short term financing needs met
Give up very little Control (less than 15%) $17.5m Disadvantages Less short term financing then VC firm
Estimated valuation loss $7.5m Value Creation Greatest abilitity to satisfy decision criteria Angel Investment VC VC Angel Valuation Questions? Milestone Payments: percentage based on figure 3
Up-Front payment five million
Royalties -10%(Chance drug goes to market) of 10% (Royalty Percentage) of 500 million
Horizon Payments is a perpetuity assuming 37% of sales after drug goes generic Milestone Payments: percentage based on figure 3. Diabetes drug is still in preclinical testing.
Up-Front payment 8 million
Royalties -10%(Chance drug goes to market) of 12% (Royalty Percentage) of 4 billion
Horizon Payments is a perpetuity assuming 37% of sales after drug goes generic Pre-partnership Financing
$65.6M of private placement financing
Two-stage financing Plan Mid 90's- trend was for "Big Pharma" companies conducted all their own R&D and produce and distribute product on their own
Today, 60% of Pfizer's drug discovery comes from Biotech Partnerships Sepsis Diabetes Assumption: 8 yrs remaining Assumption: 10 yrs