Genzyme/Geltex Pharmaceuticals Joint Venture

Early in 1997, Genzyme pot began negotiations with Geltex Pharmaceuticals in an undertake to launch a joint jeopardy to market Geltexs first product, RenaGel. Geltex was a juvenile biotech research company with only two products in its pipeline, and they didnt progress to the resources necessary to launch RenaGel on their own. Genzyme, on the other hand, was a quickly growing company that experienced revenues of $518 million in 1996. They were attracted to the joint venture with Geltex because of the likelihood of increased earnings, as well as the joint venture being an excellent agree for Genzymes specialty therapeutics. Genzyme also felt that the joint venture would pull up stakes to a similar deal in launching Geltexs insurgent product, CholestaGel. Before cementing a deal with Geltex, Genzyme managers had to ask themselves three questions:

        What is the seeming enterprise value of the joint venture?

        How much of the venture should Genzyme acquire?

        How much should Genzyme pay for its busy?

We will attempt to answer these questions by first giving a picture overview of the two companies involved, and then by calculating the Net bring in Value of the joint venture based on pass judgment cash flows. Because we were given no operating history of the two companies, this is the only method we will use to determine what interest Genzyme should take in the joint venture.



We will provide answers in three different scenarios: Genzymes estimates, conservative, and worst-case.

Launched in 1981 by Henry Blair, Genzyme Corporation is the fourth-largest biotech company in America. What differentiates Genzyme from its competition is that it uses living organisms or their products to start out drugs, rather than chemicals. Genzyme made its name in the industry with Ceradase, a treatment for Gauchers disease. This drug was approved for sale in exhibit of 1991 and had a market...

If you want to get a full essay, identify it on our website: Orderessay



If you want to get a full essay, wisit our page: write my essay .