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Case_44_Medfield_Pharma_F1636X.xlsx
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This spreadsheet supports STUDENT analysis of the case “Medfield Pharmaceuticals” (UVA-F-1636).
This spreadsheet was prepared by Marc L. Lipson, Associate Professor of Business Administration. Copyright © 2011 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. For customer service inquiries, send an e-mail [email protected]. No part of this publication may be reproduced, stored in a retrieval system, posted to the Internet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the Darden School Foundation.
Nov. 14, 2011

Exhibit 1 Income Statement

Exhibit 1
MEDFIELD PHARMACEUTICALS
Income Statement (in thousands of U.S. dollars)
2007 2008 2009 2010
Revenue 223,721 261,253 300,556 329,203
Cost of Goods Sold 55,788 65,724 75,241 76,472
Gross Profit 167,933 195,529 225,315 252,731
SG&A Expenses 71,586 82,446 97,542 105,166
Research and Development 42,175 54,078 57,535 62,457
113,761 136,524 155,077 167,623
Earnings Before Interest and Taxes 54,172 59,005 70,238 85,108
Interest 984 1,385 1,403 1,457
53,188 57,620 68,835 83,651
Income Taxes 16,457 18,982 22,495 25,875
Net Income 36,731 38,638 46,340 57,776
Note: The company has negligible depreciation and amortization.

Exhibit 2 Balance Sheet

Exhibit 2
MEDFIELD PHARMACEUTICALS
Balance Sheet (in thousands of U.S. dollars)
2007 2008 2009 2010
Cash 21,465 28,227 29,542 32,251
Receivables 28,815 39,568 39,117 41,927
Inventory 24,704 24,316 27,859 30,559
74,984 92,111 96,518 104,737
Property and Equipment 102,977 118,553 127,498 129,171
Other Assets 45,937 49,312 61,569 67,718
223,898 259,976 285,585 301,626
Accounts Payable 25,187 26,460 27,070 30,142
Accrued Expenses 39,236 52,634 55,256 59,850
Current LTD 2,882 3,373 3,801 4,501
67,305 82,467 86,127 94,493
LTD 17,069 23,609 25,278 26,850
Equity 139,524 153,900 174,180 180,283
223,898 259,976 285,585 301,626

Exhibit 4 Financial Forecast

Exhibit 4
MEDFIELD PHARMACEUTICALS
Financial Forecast Based on Existing Products (in millions of U.S. dollars, unless otherwise noted)
Costs of Sales 23.0% Direct Marketing 27.0% Taxes 32.0%
Research 19.0% General and Admin 4.0% Discount Rate 8.5%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
Fleximat 2% 2% -50% -50% -50%
Sales 210.56 214.77 219.07 109.53 54.77 27.38
Cost of Sales 47.46 49.40 50.39 25.19 12.60 6.30
Lodamadal 2% 2% 2% 2% 2% -50% -50% -50%
Sales 39.67 40.47 41.28 42.10 42.94 43.80 21.90 10.95 5.48
Cost of Sales 10.55 9.31 9.49 9.68 9.88 10.07 5.04 2.52 1.26
Orsamorph 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% -50% -50% -50%
Sales 78.97 80.55 82.16 83.80 85.48 87.19 88.93 90.71 92.52 94.37 96.26 98.19 100.15 102.15 104.20 52.10 26.05 13.02
Cost of Sales 18.46 18.53 18.90 19.27 19.66 20.05 20.45 20.86 21.28 21.71 22.14 22.58 23.03 23.50 23.97 11.98 5.99 3.00
Reximet 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% -50% -50% -50%
Sales 80.00 81.60 83.23 84.90 86.59 88.33 90.09 91.89 93.73 95.61 97.52 99.47 101.46 103.49 105.56 107.67 109.82 112.02 114.26 116.54 58.27 29.14 14.57
Cost of Sales 18.40 18.77 19.14 19.53 19.92 20.32 20.72 21.14 21.56 21.99 22.43 22.88 23.34 23.80 24.28 24.76 25.26 25.76 26.28 26.81 13.40 6.70 3.35
Total Sales 329.20 335.79 422.50 317.04 266.42 243.27 197.43 189.99 188.09 186.27 189.99 193.79 197.67 201.62 205.66 155.59 131.61 120.69 109.82 112.02 114.26 116.54 58.27 29.14 14.57
Cost of Sales 76.47 77.23 97.18 72.92 61.28 55.95 45.41 43.70 43.26 42.84 43.70 44.57 45.46 46.37 47.30 35.78 30.27 27.76 25.26 25.76 26.28 26.81 13.40 6.70 3.35
Research 62.46 63.80 80.28 60.24 50.62 46.22 37.51 36.10 35.74 35.39 36.10 36.82 37.56 38.31 39.07 29.56 25.01 22.93 20.87 21.28 21.71 22.14 11.07 5.54 2.77
Direct Marketing 91.22 90.66 114.08 85.60 71.93 65.68 53.31 51.30 50.78 50.29 51.30 52.32 53.37 54.44 55.53 42.01 35.53 32.59 29.65 30.25 30.85 31.47 15.73 7.87 3.93
General and Administrative 13.94 13.43 16.90 12.68 10.66 9.73 7.90 7.60 7.52 7.45 7.60 7.75 7.91 8.06 8.23 6.22 5.26 4.83 4.39 4.48 4.57 4.66 2.33 1.17 0.58
85.11 90.66 114.08 85.60 71.93 65.68 53.31 51.30 50.78 50.29 51.30 52.32 53.37 54.44 55.53 42.01 35.53 32.59 29.65 30.25 30.85 31.47 15.73 7.87 3.93
Taxes 27.15 29.01 36.50 27.39 23.02 21.02 17.06 16.41 16.25 16.09 16.42 16.74 17.08 17.42 17.77 13.44 11.37 10.43 9.49 9.68 9.87 10.07 5.03 2.52 1.26
NOPAT 57.96 61.65 77.57 58.21 48.91 44.66 36.25 34.88 34.53 34.20 34.88 35.58 36.29 37.02 37.76 28.57 24.16 22.16 20.16 20.57 20.98 21.40 10.70 5.35 2.67