Genmor Pharmaceuticals' Acquisition of Vascorex Corporation

20 Pages Posted: 21 Oct 2008

See all articles by Robert F. Bruner

Robert F. Bruner

University of Virginia - Darden School of Business

Paul J. Simko

University of Virginia - Darden School of Business

Mary Margaret Frank

University of Virginia - Darden School of Business

Marc Goldstein

Impact LLC

Abstract

This case asks students to identify and evaluate the merits of two factors that have led a buy-side analyst to conclude that an acquiring company is a high-risk investment: (1) the company's allocation of acquisition proceeds and (2) the quality of the target's intellectual-property (IP) portfolio. The acquirer's allocation of the acquisition cost of the target is quite different from that of one of the company's previous deals. Careful interpretation of each line item for both acquisitions yields insights into the value management seeks with the acquisition. An IP-quality report supplied by an independent IP consulting firm likewise raises a number of issues students should identify. The primary objectives of the case are to (1) introduce IP-quality concepts as they relate to a firm's patent portfolio, (2) understand the accounting basis for firms' purchase-price allocations in IP-intensive acquisitions, and (3) compare and contrast the risk implications of acquisitions of in-process portfolios of drug candidates with established products.

Keywords: mergers and acquisitions, investment analysis, patents, intellectual property

JEL Classification:

Suggested Citation

Bruner, Robert F. and Simko, Paul J. and Frank, Mary Margaret and Goldstein, Marc, Genmor Pharmaceuticals' Acquisition of Vascorex Corporation. UVA-C-2226, Available at SSRN: https://ssrn.com/abstract=908106

Robert F. Bruner (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://faculty.darden.edu/brunerb/

Paul J. Simko

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-1391 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/simko.htm

Mary Margaret Frank

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4432 (Phone)
434-243-5021 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/frank.htm

Marc Goldstein

Impact LLC ( email )

434-953-9929 (Phone)

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