...The establishment of GlaxoSmithKline earnings is now fixed in a strategically finding procedure that works commonly across sharing success, business, reward and recognition. The team’s objectives include distributing cooperation savings larger than 10% of total spend for bought merchandises and services for the next several years and directing supply chain impacts for its mass network streamlining, whereas certifying all corporate requests are met or continue to exceed in the procedure. Expansion and license proceeds indicates payment of deferred revenue linking to expenditures received pursuant to the collaborative studies and license procedure that came into agreement with GSK throughout October 2009. Discounting increase on sale of products, total operating expenses for 2010 were $37.8 million while the same prior year period was $38.7 million. The main causes for the reduction in total operating expenses for 2010 is because of a reduction in research and development expenditures correlated to the presenting of their product expansion undertakings as well as the cancellation of a Phase I clinical trial for SGI-1776, and lesser stock-based reparation cost counterbalance in shares by an unassertive increase in a universal trade and permissible expenditures. Stock-based reparation expenditure, a non-cash expense that is incorporated in operating costs, was $1.4 million in 2010 while in 2009, the non-cash expense was $2.5 million. GlaxoSmithKline reported net income for 2010...
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...Harvard Business School 9-196-123 Rev. May 10, 2000 Bed Bath & Beyond Strange as it may seem, there’s something romantic about housewares. Visit the giant Bed Bath & Beyond store in Manhattan on a busy Saturday and you’ll see all kinds of couples kissing and cooing as they discuss what size sofa pillows to buy or whether a certain set of burgundy towels will match their bath mats. It’s just one more bit of evidence that America has been in a cocooning mood the past few years. And few people have benefited more from this nest-building trend than Leonard Feinstein and Warren Eisenberg, who founded Bed Bath & Beyond in Springfield, N.J., back in 1971. After 14 fairly sluggish years in the business, the duo in 1985 started experimenting with large stores, running to 20,000 square feet and stacked to the ceiling with towels, curtains, bedspreads and housewares. Feinstein and Eisenberg haven’t looked back since. This year, with 49 of these superstores in operation, Bed Bath & Beyond is expected to ring up sales of $415 million, an increase of 35% from last year’s $306 million take. Earnings are expected to grow to $28 million, or 82 cents per share, from $21.9 million, or 64 cents last year. But questions are starting to be raised about how long Bed Bath & Beyond can keep up its heady growth. Some smart investors have been selling the company’s high-flying shares, and these sellers include Feinstein and Eisenberg themselves. Rising interest rates have been slowing housing starts...
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...Chapter 11 The Cost of Capital Sources of Capital Component Costs WACC Adjusting for Flotation Costs Adjusting for Risk 11-1 What sources of long-term capital do firms use? Long-Term Capital Long-Term Debt Preferred Stock Common Stock Retained Earnings New Common Stock 11-2 Calculating the Weighted Average Cost of Capital WACC = wdrd(1 – T) + wprp + wcrs The w’s refer to the firm’s capital structure weights. The r’s refer to the cost of each component. 11-3 Should our analysis focus on before-tax or after-tax capital costs? Stockholders focus on A-T CFs. Therefore, we should focus on A-T capital costs, i.e. use A-T costs of capital in WACC. Only rd needs adjustment, because interest is tax deductible. 11-4 Should our analysis focus on historical (embedded) costs or new (marginal) costs? The cost of capital is used primarily to make decisions that involve raising new capital. So, focus on today’s marginal costs (for WACC). 11-5 How are the weights determined? WACC = wdrd(1 – T) + wprp + wcrs Use accounting numbers or market value (book vs. market weights)? Use actual numbers or target capital structure? 11-6 Component Cost of Debt WACC = wdrd(1 – T) + wprp + wcrs rd is the marginal cost of debt capital. The yield to maturity on outstanding L-T debt is often used as a measure of rd. Why tax-adjust; i.e., why rd(1 – T)? 11-7 A 15-year, 12% semiannual coupon bond sells for $1,153.72. What is the cost of debt (rd)? Remember...
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...Roche’s case analysis questions 1. Why is Roche seeking to acquire 44% of Genentech it does not own? From Roche’s point of view, what are the advantages of owing 100% of Genentech? What are the risks? Answer 1: The following are the advantages for Roche which will accrue by owning 100% of Genentech: * Genentech in the current form had become an important part of Roche’s business, accounting for 24% of Roche’s pharmaceutical product sales in 2008. Several of Genentech’s pioneering products had achieved very strong market positions due to their medical differentiation, commanding high prices. Products originating from Genentech represented 46% of total sales of Roche’s 20 top-selling drugs on a worldwide basis. For example, Avastin, which was the best selling Genentech drug accounted for 14% of Roche’s total pharmaceutical sales in 2008. * Biotechnology industry around that time was much smaller and less mature than the pharmaceutical industry, but was growing much faster rate. It generated $89.7 billion in revenues in USA along. Since Genentech along with Amgen were the dominant players in the sector, it could corner a major portion of this market. * Genentech was increasingly coming into direct competition with Roche in several U.S. markets. In developing small molecular products, Genentech had begun to encroach on Roche’s traditional territory, while Roche was preparing to launch products in the U.S. that would compete with existing Genentech products. A merger...
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...Case Memo of Roche Group Members: Cai Aiyong, Gong Haoran, Song, Shizhong, Li Wei, Zhou, Wenjun 1. Why is Roche seeking to acquire the 44% of Genentech it does not own? From Roche’s point of view, what are the advantages of owning 100% of Genentech? What are the risks? (1) reasons and advantages are as follows: A. Genentech had become an important part of Roche’s business, representing 24% of Roche’s pharmaceutical product sales in 2008. Several of Genentech’s pioneering products achieved very strong market positions due to their medical differentiation, commanding high prices. Products originating from Genentech represented 46% of total sales of Roche’s 20 top-selling drugs on a worldwide basis. Avastin, for example, accounted for 14% of Roche’s total pharmaceutical sales in 2008. The market had many “me-too” drugs, which were similar in composition and treatment to existing products, and relatively little innovation. Given the lack of success in bringing new and innovative drugs to market, many pharmaceutical companies were also seeking to diversify from the prescription drug business by acquiring generic-drug companies. B. Genentech was increasingly coming into direct competition with Roche in several U.S. markets. In developing small molecular products, Genentech had begun to encroach on Roche’s traditional territory, while Roche was preparing to launch products in the U.S. that would compete with existing Genentech products. A merger of the two companies would...
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...Brambilla Brambilla is a short story in the collection Cross Channel by Julian Barnes, which was published in 1996. All the stories in this collection focus on the connection between England and France. At the very beginning, we meet Andy, who’s a rider and his friend and coach. They’re both on the top of Mount Moran and are going to descend from the mountain. They don’t use breaks, but rush as fast as possible down the mountain. We also get to know Chreesteen, who is Andy’s girlfriend; she ran away from home together with Andy and went to France where Andy is going to participate in Tour De France. Another guy we get to know in the story is Sean Kelly, who’s probably Andy’s idol. Andy doesn’t feel like the Tour is something exciting, but rather boring, because they don’t do anything else, but biking all day and seeing the same boring view, and he’s a bit scared of the hills too. Chreesteen has got a job as a stripper at a bar, and she enjoys it, because the atmosphere at her job is good, and her boss is great. Andy tells several stories in the text for instance where a rider is going to get drug tested and the rider is using a woman’s urine, which leads to the conclusion that the rider is clean, but pregnant, and another Story about Sean Kelly and Linda’s marriage and so on. At the end we get to know who Brambilla was. He was an Italian rider, who lost Tour De France on the last day. He used to slap himself if he was bad. At the end of Brambillas career he buried his...
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...Questions for the Roche case Case write-ups due on Wednesday, March 30, at 8:10 pm 1. Why is Roche seeking to acquire the 44% of Genentech it does not own? From Roche’s point of view, what are the advantages of owning 100% of Genentech? What are the risks? (1 pt) Roche already had 56% of shares of Genentech and now it seeks to acquire rest of the 44% shares so as to get the benefits of synergies. The pharmaceutical companies have been unable to introduce new products lately, and their only way to remain profitable is by mergers and acquisitions. Roche also used this method. Acquisition will help the firm compete in the market and thus will help it grow. Advantages of owning 100% of Genentech’s shares: * 1 The merger will lead to formation of the world’s largest biotechnology company. * 2 Value of total benefit from synergies will be $5billion. This will be a result of M&D, manufacturing, development and administrative costs reduction. * 3 Complete ownership will give the company complete access to technology and R&D projects. * 3 It will also give the company access to its cash amounting to $9.5billion, which can also be used to make payment for debt raised for acquisition. * 4 The company can also create a contract allowing it to distribute Genentech’s best selling drugs. Risks of owning 100% of Genentech’s shares: * 1 The acquired company’s minority shareholders are mostly its employees. The company’s culture is like a family environment...
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...DHL: MORE GLOBAL THAN LOCAL Since the early 1970s, DHL has been the leading (or often only) overnight carrier in many markets around the world. Founded in 1969 by Adrian Dalsey, Larry Hillblom, and Robert Lynn (hence, the D, H, and L) to transport letters of credit across the Pacific, DHL expanded rapidly in Asia and Europe (the early 1970s), the Middle East (1976), Latin America (1977), Africa (1978), Eastern Europe (early 1980s), China (1986), and Albania and the Baltic States (1992). Today, DHL has more than 53,000 employees, 209 aircraft, 2,381 stations, 12,203 vehicles, and 32 hubs and subhubs serving more than 675,000 destinations in 227 countries. In one year, it handles 95 million shipments—not bad for a company approaching its thirtieth birthday! To handle all these shipments, DHL uses a worldwide hub and spoke system. It collects packages, documents, and letters from individual local business offices and sends them to the nearest service center. The service center then sends the parcels to a hub that serves a larger geographic area (such as Australia or the Middle East). There, the items are sorted by destination and shipped to service centers in each country, where they are resorted for the last leg of the journey to a local destination. The Brussels hub is typical. Each night, starting at 10:30 P.M., the first of more than 120,000 documents and packages begin arriving at the hub. As they are unloaded, workers throw them onto $15 million worth of sorting machines...
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...Company History * 1935- Cipla was registered as a public limited company in Mumbai. Khwaja Abdul Hamied, the founder of Cipla (Chemical, Industrial & Pharmaceutical Laboratories) was gave the company all his patent and proprietary formulas for several drugs and medicines, without charging any royalty. * 1941–As the Second World War cuts off drug supplies, the company starts producing fine chemicals, dedicating all its facilities for the war effort and helped British with drugs during World War II to create goodwill so that after war we India can request for freedom * 1952– Sets up first research division for attaining self–sufficiency in technological development. * 1960– Starts operations at second plant at Vikhroli, Mumbai, producing fine chemicals with special emphasis on natural products. * 1960- Cipla began manufacturing a new, patented drug, propranolol, and when the drug's patent holder, ICI, protested to the Indian government, the CEO of Cipla successfully lobbied the government of Indira Gandhi to change India's patent laws to eliminate patents that directly covered drugs, and instead to allow only patents that covered methods to make drugs. This change made propranolol and other patented drugs, generic and led to criticism of both India's patent laws and Cipla. India reinstated patents on drugs in 2005 * 1968– Cipla manufactures ampicillin for the first time in the country. * 1972–Starts Agricultural Research Division at Bangalore...
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...its total sales of $5 million were made in the capital last year. There are no governmental restrictions on whom the company can sell to. The only requirement is that the wholesaler, retailer, or end user have a business license and a taxation number. Of the 400 wholesalers in the country, 130 are customers of Ball-McCulloch-Frantz- Geringer-Minor: The Swiss pharmaceutical global corporation Hoffman-La Roche has made a major breakthrough in the relief of a serious disabling disease that affects 3 percent of the world’s population. Its new product Tigason is the first product that effectively controls severe cases of psoriasis and dyskeratoses, skin disorders that cause severe flaking of the skin. Sufferers from this disease frequently retreat from society because of fear of rejection, thus losing their families and jobs. Tigason does not cure the disease, but it causes the symptoms to disappear. There is one potential problem. Because of the risk of damage to unborn babies, women should not take the drug for one year before conception or during pregnancy. Hoffman-La Roche is well aware of the potential for harm to the company if the product is misused. It has seen the problems of another Swiss firm, Nestlé. After much discussion, the company has decided the product is too important to keep off the market. It is, after all, the product that gives the greatest relief to sufferers. The marketing department is asked to formulate a strategy for disseminating product information...
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...Analysis on Merck's Acquisition of Medco The reason behind a lot of Mergers & Acquisitions is due to the many changing forces in the business environment. Competitiveness, survival and profitability are key factors to the M&A. In the case of Merck, the plan for acquisition of Medco followed as competitors such as SmithKline Beecham, Roche Holdings Limited Eli Lilly and Company announced their plans to acquire other pharmaceutical companies and Health systems such as those of Diversified Pharmaceutical Services Incorporate, Syntel Corporation and PSC Health Systems, respectively. There still exist concerns on the executive team's side regarding whether or not to move forward with the acquisitions. Some favor the move and some do not. There are concerns about the synergies and integration of a highly research oriented pharmaceutical company such as Merck with a drug marketing company like Medco. In addition, there are concerns on the need to continue increasing the stock price for Merck and about the different business cultures between the two and how they may not mix well. This could result in an expensive failure. On the other hand, the marketing department fully supports the acquisition. The acquisition will provide leverage for marketing opportunities in the managed care area, given the size of the database for Medco. So, the plan is for Merck to acquire Medco for a $6.6 billion offer. Clear and substantive analysis of the M&A is needed for better decision making. Medco...
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...Monday, April 21, 2008 Roche vs CIPLA: The Rhetoric of Patent Busting Roche, a multinational pharma company and CIPLA, a generic manufacturer from India. CIPLA brazenly defied Roche's patent over an anticancer drug, Tarceva and went ahead and introduced a generic version at 1/3rd the price. It claimed that the patent ought not have been granted in the first place. CIPLA's counsel, Arun Jaitley argued very persuasively in court that Roche's drug did not meet the requirements of section 3(d), a unique section introduced into India's patent regime in 2005 to prevent a phenomenon widely known as "evergreening". Under section 3(d), derivatives of existing pharmaceutical substances would not merit patent protection, unless such derivative was more "efficacious" than the earlier existing pharma substance. The section was challenged by Novartis as being violative of TRIPS and of the Indian constitution CIPLA also stressed that since the price differential between the patented drug and the generic version sold by CIPLA was extremely high, "public interest" demanded that no injunction be granted in favour of Roche. In a remarkably sophisticated and well researched judgment, Justice S Ravindra Bhat of the Delhi High Court ruled in favour of CIPLA. The matter is now under appeal. Unless Roche is able to demonstrate empirically that CIPLA's lower prices for Tarceva (the lung cancer drug in issue) does not really translate to increased access to poor patients, it is difficult...
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...Jillian A. Gaudio ETH/316 Professor Clark-Washington Nov. 9th, 2011 Dr. Fritz Hoffmann-La Roche founded the now multinational pharmaceutical company Roche in 1896 in Switzerland. (F. Hoffmann-La Roche, 2014) The Roche Company was founded during the Industrial Revolution in Europe. Its founders recognized that the industrial manufacturing of medicines would be a major advance in the fight against disease, and they were right. In 1898 Roche developed a cough syrup called Sirolin, which was an immediate success. After World War I, Roche developed a line of vitamins and was able to gain a footing in the U.S. market by making its first investments in New York and Nutley. Although their vitamin products were a huge success, the leadership at Roche decided that they should avoid a dependency on vitamins and they intensified their pharmaceutical research. During this time, Roche researchers discovered a compound of benzodiazepine that sedates without causing drowsiness. This discovery propelled them into success and today Roche is a global presence. Roche as a company is very concerned about ethics. They have an established group, the Roche Scientific Ethics Advisory Group (SEAG), which offers advice and counsel on a broad range of ethical matters. The group is comprised of independent, multi-cultural experts from all different fields in the pharmaceutical industry. The SEAG helps Roche follow set global standards involving research and testing. Every physician involved in pharmaceutical...
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...Market intelligence > Top ten global pharma Top ten global pharma Dr Vishal Agrawal, project manager, and Sunehli Jamwal, analyst, from GlobalData, highlight the top ten pharmaceutical companies by 2011 revenue. Pfizer 1 Johnson & Johnson 2 US pharmaceutical giant Pfizer maintained its top position in 2011 with stipulated revenue of $67.4 billion, up by 1% compared with $67.1 billion in 2010. The company’s new marketing strategy, coupled with focused organisational, financial and R&D restructuring efforts, compensated for the losses caused by Lipitor’s patent expiry. The approval of Xalkori for lung cancer, Inlyta and pneumococcal vaccine Prevnar 13 have proved to be a real lifeline for Pfizer. Moving ahead, the steady progress of the late-stage pipeline (with 22 projects in phase III and 11 under registration) will be a primary source of confidence for the company. The key strategy of the group is now to advance experimental drugs towards approval: these include Bosutinib, Tofacitinib, experimental clot-preventing drug Eliquis and its many pipeline drugs to make up for the inevitable decline in Lipitor revenue. With a view to reducing costs, Pfizer’s huge research budget has been cut by 12%. In 2012, Pfizer will focus on small to mid-sized deals and effective research partnerships to strengthen its portfolio in all therapeutic segments. Johnson & Johnson (J&J) reported 2011 revenues of $65 billion, a 5.6% increase over 2010. In 2011, the company generated...
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...SQUARE SQUARE today symbolizes a name – a state of mind. But its journey to the growth and prosperity has been no bed of roses. From the inception in 1958, it has today burgeoned into one of the top line conglomerates in Bangladesh. Square Pharmaceuticals Ltd., the flagship company, is holding the strong leadership position in the pharmaceutical industry of Bangladesh since 1985 and is now on its way to becoming a high performance global player. SQUARE Pharmaceuticals Limited is the largest pharmaceutical company in Bangladesh and it has been continuously in the 1st position among all national and multinational companies since 1985. It was established in 1958 and converted into a public limited company in 1991. The sales turnover of SPL was more than Taka 7.5 Billion (US$ 107.91 million) with about 16.92% market share (April 2006– March 2007) having a growth rate of about 23.17%. History of SQUARE Group |1958 : | |Debut of Square Pharma as a Partnership Firm. | | | |1964 : | |Converted into a Private Limited Company. | | ...
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