Case 7

CEBU ROOSEVELT MEMORIAL COLLEGES

BOGO CITY, CEBU

CASE # 7 ANALYSIS

PURINEX, INC.

PREPARED BY:

FELIPE JY VERAQUE

ROLEX ESPINA

SEDRECK ARAGON

SUBMITTED TO:

MR. GERARDO SAYUD

I. CASE FACTS:

In June 2004 Purinex, Inc., a pharmaceutical company with several clinically and commercially promising drugs in development, expected to secure a partnership with a major pharmaceutical company sometime in the next four to 12 months. That partnership, if secured, would enable Purinex to develop one of its leading compounds as a drug. The company, however, had no sales or earnings and only 11 months of cash on hand. The student must assess whether the company should attempt to secure financing now or wait until it consummated a partnership deal. The tasks for the student include evaluating the probabilities that collaboration with a pharmaceutical company would actually happen; determining whether the company stay above water until such occurred; and analyzing the other risks to the company under these circumstances.

Purinex was a drug-discovery and -development company based in Syracuse, New York, that sought to commercialize therapeutic compounds based on its purinedrug-development platform. Purine was a naturally occurring molecule that played an important role in numerous biochemical processes. Purinex had developed a process for creating small molecules that acted as selected agonists (activators) or antagonists (blockers) for specific purine receptors in the cell membrane. Purinex’s goal was to develop products that evoked a receptor-specific pharmacodynamiceffect without producing undesirable outcomes that could result from interactions with other receptors. The company had 14 employees and maintained a chemistry laboratory a few miles from its main office. Purinex’s intellectual-property portfolio...