jP K. Case study
Read the text and do the following exercises.
Guilford Shares Gain 24 Percent
Ellen McCarthy, “Washington Post”
Guilford Pharmaceuticals Inc. announced a potentially lucrative licensing deal with Pfizer Inc.
and a smaller first-quarter loss last week, helping shares of the Baltimore biotech rise.Pfizer, the pharmaceutical maker based in New York, agreed to pay Guilford $ 15 million for the right to develop its potential treatments for neu- rodegenerative diseases and pain. Pfizer plans to pay for the research and manufacturing costs associated with the project and award Guilford a $ 42 million royalty for each compound that is developed and $ 20 million for each further indication of a compound.
Guilford said its first-quarter loss was $ 11.2 million (37 cents per share), compared with a loss of $ 13.5 million (45 cents) in the same period last year. The company’s revenue for the three months ended March 31 declined to $ 3.5 million from $ 6.2 million. The company also said it landed an $ 18.8 million loan that will allow it to restructure a lease on its Baltimore facility, freeing up an additional $ 40 million in working capital. Shares of Guilford gained 24 percent last week to close at $ 6.04.
The Washington Post-Bloomberg regional stock index closed at 176.32, up 1.77 points. The NVTC Potomac Tech 60, an index of 60 local technology companies, closed at 571.41, down 12.48 points.
Digene Corp. of Gaithersburg also posted gains last week. Digene said Tuesday it cut its loss for the three months ended March 31 to $ 619,000 (3 cents), compared with a $ 3.3 million (19 cents) loss in the same period last year. The firm’s revenue for its fiscal third quarter climbed to $ 17 million from $ 14.2 million, based largely on a 43 percent increase in sales of its cervical cancer test. Last week shares of Digene climbed 11 percent to close at $ 22.10.
Richmond-based Ethyl Corp.’s improved first-quarter earnings did little to help its stock last week. The firm earned $ 16.3 million (98 cents) during the three months ended March 31, compared with a $ 1.6 million (10 cents) loss in the same period last year. The company’s revenue rose to $ 173.5 million, from $ 146.2 million in the year-earlier period. Ethyl warned that it remained “concerned about certain aspects of the global economy” that could have a negative impact during the second and third quarters of the year. Shares of Ethyl fell 14 percent last week to close at $ 8.60.
K.l. Make an analysis and compare the operation of three companies:
- Guilford Pharmaceuticals Inc.;
- Digene Corp. of Gaithersburg;
- Ethyl Corp.
K.2. Answer the questions.
- Why is the licensing deal with Pfizer considered to be lucrative? In what way can it help the shares of Baltimore biotech?
- Which of the companies is the most successful?
K.3. Find information about the operation of two or three similar companies on the Internet. Analyze and compare their performances.
K.4. Think of a conversation between a journalist and the Head of one of the companies. Discuss the present state of affairs and the future perspectives.