Seminar in PM Week 5 Assignment

Sheet1

			Lifecycle Pharmaceutical		Interest Rate = 5%
	Assumptions for Valuation
	Drug Candidate	Current Stage	Complete Phase I	Complete Phase II	Complete Phase III	Drug Approval	Remaining Development Costs
	LC-1	Phase II	NA	Q2 2004	Q1 2006	Q2 2007	$100 MM
	LC-2	Phase II	NA	Q2 2006	Q2 2008	Q1 2009	$300 MM
	LC-3	Phase II	Q1 2004	Q4 2007	Q2 2008	Q2 2008	$600 MM
	LC-4	Preclinical	Q2 2005	Q4 2007	Q1 2009	Q2 2009	$220 MM
		PTC-Ph 1	PTC-Ph 2	PTC Ph-3	Probability of Approval		PTC = Probability of Technical Success
	LC-1	100%	40%	65%	75%
	LC-2	100%	60%	50%	50%
	LC-3	80%	60%	60%	75%
	LC-4	70%	50%	75%	80%		Clinical Phase Durations (estimates)
							Phase I	1 year
		Peak Sales	Profit Margins	Annual Expenses			Phase II	730 days
	LC-1	$600 MM	90%	$40 MM			Phase III	3 years
	LC-2	$800 MM	90%	$65 MM			Drug Regulatory Submission	0.5 year
	LC-3	$1,000 MM	80%	$80 MM
	LC-4	$750 MM	82%	$65 MM