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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
1. Why are Genzyme GelTex looking to set up a joint venture with GelTex for Renagel rather than buying an equity share in GelTex directly? 2. What do you think about the timing of GelTex’s fundraising? Is it a good idea to approach new investors before FDA approval? Please explain your argument. 3. Genzyme is planning to invest $27.5M for 50% in Renagel. Is this a good investment? Please value the joint venture using scenario analysis as in class. a- Assume that the following risks are quantifiable in mid 1997. scientific risk is almost entirely resolved. The likelihood of passing FDA approval is 65%. But the main problem is regulatory delay. for simplicity assume 30% probability of 2 year delay 1. scenario a: Renagel gets FDA approval (with 65% probability) without delay (with 70% probability) 2. scenario b: Renagel gets FDA approval (with 65% probability), but has 2 years delay 3. scenario c: Renagel fails in phase III trails (15%) 4. scenario d: renagel passes phase III trails but in the end FDA does not approve the drug (20%) b. For all other parameters values please use the averages provided in the case
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