THE MEDFIELD PHARMA CASE: FIRM VALUATION AND ETHICAL CONSIDERATIONS OF REFORMULATION Understand that the Medfield case has 2 major problems: 1) Firm Valuation Impact of Patent Loss and Reformulation; 2) Ethical Considerations How to Ensure Patients and third-party payees are not hurt Organize your paper around the case questions, use them as an organizing device. This will benefit you in several ways: 1) provide a framework for constructing your paper; 2) ensure I (your reader) understand exactly what question you are answering; and 3) ensure you answer every question. Use examples from Pfizer, AstraZeneca and other firms in EXHIBIT 3 to substantiate your thought. 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Incremental Research 35 35 Incremental Special Marketing 25 25 25 25 25 Growth 2% -50% 2% 2% 2% 2
% 2% 2% 2% 2% -50% -50% -50% New Sales 214.77 Marginal Sales (New Sales Original Sales 0.00 New Cost of Sales 49.40 Marginal Cost of Sales 0.00 New Direct Marketing 57.99 Old Direct Marketing 57.99 59.15 29.57 14.79 7.39 0 0 0 0 0 0 0 0 0 Marginal Direct Marketing 0.00 New G&A 8.59 Old G&A 8.59 8.76 4.38 2.19 1.10 0 0 0 0 0 0 0 0 0 Marginal G&A 0.00 Marginal Cash Flow pre Tax (60.00) 29.52 14.76 7.38 Marginal NOPAT (40.80) 20.07 10.04 5.02 IF YOU SUPPORT REFORMULATION: IF YOU ARE AGAINST REFORMULATION 7. Under what conditions might you be in favor of reformulation? Your Turnitin Score needs to be 0-30% tops. Try to get it down there. If it is higher, I will read your paper, and see why the score is high but your grade will reflect the score. Purchase the answer to view it Purchase the answer to view it Purchase the answer to view it