Purinex Case Solution

The case consists of two major pharmaceutical companies that joint to collaborate their research and pharmaceutical technologies to start a joint venture in India. Both have valuable resources that have benefited both companies during the joint venture. Now both are questioning if there is still any value in maintaining the joint venture in India and will be deciding what will be the best route to take. Ranbaxy Laboratories wants to be bought out, but Eli Lilly is worried of the financial implications of such move.

The agreement states Pharmagen will receive up to $500 million funding for R&D costs as they are incurred solely for the research efforts of a potential new drug “X”

Extremely risky drug discovery and development, lengthening development times which increase development cost, return on investments, and generic competitors.

Opportunities for Pfizer exist in two areas, first being the restructuring into a more lean and competitive organization and second is the penetration into emerging markets such as China and India who are now more able to purchase their products. With sales of approximately $50 billion per year, Pfizer has the opportunity to streamline its operations, cut costs, and add flexibility to the organization. If successful in this, they can better realize their profits and invest that money into future competitive products for the market.

The only other possible way of dealing with this contractual agreement that I could think of was splitting up the transaction between ASC 730-20 and 470-10. If Pharmagen was able to allocate the $500 million between the R&D of drug X and the purchase of future revenues for the already commercialized drug they would be able to apply both accounting methods to this transaction.

* No foreseeable new product in pipeline. Currently takes up to 11,000 compounds to be screened to find one (1) compound to send through final testing (human trials). And even then it’s not guaranteed to make it past the FDA.

Purine: Consists of a pyrimidine ring fused to an imidazole ring. It is the most widely occurring nitrogen-containing heterocycle in nature. A building block for nucleic acids, specifically nucleobases Adenine and Guanine.

Urate’s pro-oxidant effects could link hyperuricemia and inflammatory disease, yet the mechanism is obscure. For humans, dietary purine is broken down and released as urate. Urate builds up in human serum because we lack the enzyme Uricase to promote its excretion. In healthy doses urate acts as an antioxidant and scavenges reactive oxygen species. Yet, high serum urate (hyperuricemia) is associated with gout, metabolic syndrome and cardiovascular disease, the link being oxidative stress. Urate promotes oxidative stress by generating reactive oxygen species or promoting biomolecule oxidation. Concentration affects urate’s antioxidant or pro-oxidant activity, ergo the ‘dose makes the poison’.

Alexion Pharmaceuticals is a biopharmaceutical company that creates drugs to treat ultra rare and life threatening diseases. Ultra rare diseases are categorized as a percent and to be considered an ultra rare disease, the disease must affect less than twenty people in a population of one million.One of Alexion’s popular drugs on the market right now is Soliris, which treats Paroxysmal nocturnal hemoglubinaria (PNH), which is a life threatening disease of the blood. On March 31st, 2016 we were able to go on a site visit to Alexion in Smithfield that started with a demonstration using macaroni on the upstream and downstream processes. During the visit I met Kristie who worked in wet chemistry, Kerrie who worked in raw materials, Betsy who worked in microbiology and Cassie, who worked in immunochemistry.

In 2000, Merck began to cooperate with Schering-Plough on several research products and in 2009 acquired their longtime partner in an effort to diversify its products and reach a broader consumer base. With challenges that include rising prices of research and prescription drugs, Merck has managed to forge forward and overcome obstacles. Merck’s survival has been a subject of speculation many times throughout the years; from the 2004 recall of their top selling drug (Vioxx) due to undesirable side effects to the recently curtailed trials of their very promising new anti-clotting drug (Vorapaxar) due to negative trial results. Kenneth Frazier, Merck’ CEO, has also come under heavy criticism due to his unconventional decision not to cut research budgets in order to increase profits. This strategy differs greatly from the usual path and it has cost Merck investor confidence which resulted in lowered stock prices . Although Merck has been subjected to challenges throughout their history they have always managed to stay afloat and maintain their reputation as a leader in healthcare.

Pharmaceutical organization that has gotten funding, enlisted a few different scientists, licensed the equation and built up its suitability in clinical tests. The company has received the endorsement of the US Food and Drug Administration (FDA) for this medication and the medicine can be obtained only by prescription. The product did exceptionally well even after not being able to infiltrate the business sector.

* Patent Expiration - in the next four years, the two highest sales producing pharmaceutical products will go off patent. Patents on Merck’s Cozaar and Singulair will expire in February 2010 and August 2012, respectively, exposing about $8.2 billion worth of sales to generic competition. This equates to about 35% of Merck’s forecasted revenue in 2012 [and 29% of 2009 revenues].

Drug research is connected to a range of academic studies such as biology, pharmacology, medicinal chemistry and toxicology. Pharmaceutical researchers can design novel therapeutic drugs based on these studies above. The invention of new drug can be divided by function into two stages: drug discovery and drug development. Drug discovery is the process by which a new drug candidate is found and identified. Distinctively, bringing a new drug candidate to the market through clinical trials is called drug development. The first part of this essay provides an overview of drug discovery and pre-clinical research and development

Pfizer Inc is a multinational investment company. It ventures in the medical and pharmaceutical industry. It is renowned as a giant pharmaceutical company, founded in 1849. It is based in the United States, New York, Manhattan at Midtown. It is the largest universal producer and trader of pharmaceuticals (Turner, 2005, pg 161). Some of the products availed to the market by the company are Lipitor, Lyrica, Diflucan, Zithromax, Zoloft, Viagra and Celebrex. These products are targeted to patients and persons in need of enhancements in their body systems and anatomy. It has an employee capacity of 12000 people in all its departmental sectors and sub-branches. The sub-branches are distributed all over and in all continents (Turner, 2005, pg 163).

The research and development of the pharmaceutical industry is very important as the industry relies on it to develop new products to maintain and sustain the growth of the industry (ALRC 2014). According to the Australian Government Law Reform Commission, every year, the total spending in research and development in pharmaceutical industry, which includes drug discovery, pre-clinical testing and clinical trials on drugs is around $300 million (ALRC 2014). Mergers and acquisitions are intensifying in the global pharmaceutical industry, especially over the last 10 years. With factors like exorbitant research and development costs, the relatively shorter product life cycles, and the rarity of discovering a new life-changing drug acting as catalysts, leading pharmaceutical companies now have more cause to step out and look for external collaboration. This results in an increasing number of smaller biotechnology companies merging with bigger pharmaceutical companies (The