I was wondering if you could help me with this Commercial Law practice problem? I have a test coming up and I already finished the problem I am just not sure if I am right, I just needed a for sure answer to make sure I am ready for the test.

Two scientists, Dr. Carla Lewis, Ph.D., and Dr. Michael Ortiz, Ph.D., have been developing a drug, "MD-12", that has the potential of reducing macular degeneration in humans. On August 15, 2006, Lewis and Ortiz discovered that MD-12 caused a significant reduction of this disease in laboratory animals (i.e. mice). After additional findings, Lewis and Ortiz have decided to seek the Federal and Drug Administration's (FDA) approval to advance MD-12 to human clinical trials. Their studies and experiments of MD-12 have been performed at the University of Michigan over the past three years as part of their research as professors there. Two other scientists, Zurich and Fischer, claim that they made the big breakthrough in the concentration process of MD-12 and patented the drug last year. Prior to this breakthrough, these scientists had been working in the field for years but had not been able to isolate MD-12 in sufficient purity and amount to conduct successful experiments. Zurich and Fischer published a paper two years ago about the experimentation of MD-12. It is estimated that the Phase I clinical trial (which is expected to include 20 patients) will cost $7.7 million. This figure encompasses all necessary clinical costs and patient expenses with a possible variation of 2 to 3%, up or down. They wonder when a licensing agreement might come into play and would like more insight about such agreements. Lewis would like to serve as the Chief Operating Officer and oversee the research and development of MD-12, while Ortiz would like to serve as the Chief Executive Officer and serve as the liaison with the FDA through the clinical trial process.

In a professional memorandum, flesh out and provide sound advice for ALL of the legal, governance and regulatory issues/concerns involved in this scenario, and provide Lewis and Ortiz with proper guidance ranging from the beginning stages of the entity to be established to raising the necessary capital. Be sure to incorporate all pertinent facts. At times you will need to be creative - a simple example is choosing a name for the entity but ensuring that it does not raise any legal concerns.