Allon Therapeutics Inc. and Oncothyreon Inc. are both involved in the discovery, research, and development of therapeutic products. Allon Therapeutics focuses mainly on discovering and developing first drugs that impact the progression of neurodegenerative diseases, while Oncothyreon researches and develops therapeutic products for the treatment of cancer.
Instructions
From the company websites, obtain the comparative financial statements of Allon for its year ended December 31, 2010, and of Oncothyreon for its year ended December 31, 2010. Review the financial statements and answer the following questions.
(a) Compare the companies' statements of operations and comment on their results over the past two fiscal periods. What is the major reason for the results that are reported?
(b) How would you expect companies in this industry and stage of development to be financed? Why? Is this consistent with what is reported on their statement of financial position? Comment.
(c) For the two most recent years reported by each company, write a brief explanation of their cash activities at the subtotal level of operating, investing, and financing flows. Note any similarities and differences.
(d) How do the investments that Allon and Oncothyreon make differ from the investments made by companies in other industries? Describe the difference in general, and then specifically explain how it affects each of the financial statements.
(e) Are the companies liquid? Explain. On what does the solvency and financial flexibility of companies in this industry depend?