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  • August 2016
  • Simulation

BDP Pharmaceuticals

By: Kevin Schulman, Emma Rasiel and Suresh Balu
  • Format:Electronic
  • | Language:English
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Abstract

Susan Durham has just been hired as the Chief Financial Officer of Blue Devil Pharmaceuticals (BDP). Her charge is to understand the optimal pathway for the development of a novel molecule, BDP-1, to understand the cost of drug development, the market opportunity, and the optimal financing strategy for the development of this technology. The case includes a unique simulation model that examines key unknowns in making this assessment including the volatility in the financial markets, volatility in in-licensing markets. Financial strategies include: go-alone, partner with a pharmaceutical company, receive financing from from a private equity firm, or there is an option to sell the molecule. Students can see how uncertainty in the development and financing strategy can impact the value of the firm to shareholders.

Keywords

Finance; Entrepreneurship

Citation

Schulman, Kevin, Emma Rasiel, and Suresh Balu. "BDP Pharmaceuticals." Harvard Business School Simulation 317-702, August 2016.
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