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Genesis Corp, a biotech company, has approached Rx Pharmaceuticals,

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Assignment Genesis Corp.;Genesis Corp, a biotech company, has approached Rx Pharmaceuticals, a large drug;manufacturer, to acquire a minority interest in Genesis for funding drug development. In return;for the equity investment, genesis will commit to a co-marketing agreement with Rx for those;drugs. Rx thinks Genesis has a promising lineup of drugs, but all are still in Phase II clinical;trials, meaning that there remains a substantial risk that the drugs might not receive approval for;release to the public. Also, Rx has a strategic interest in the drugs that Genesis is proposing to;take to market, and would be disadvantaged if a competitor bought a stake in Genesis. The;CEO of Genesis is optimistic about the prospects of regulatory approval and for sales revenue;of the new drugs.;a. What are the deal design problems here? Where might Rx and Genesis find helpful tradeoffs that produce a win-win deal to both?;b. Suppose Rx decides to make an equity investment in Genesis, but the buyer and target differ;widely in their valuation of the target. How might the parties bridge the gap?;View Full Attachment

 

Paper#28616 | Written in 18-Jul-2015

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