What would be the effect on the IRR if for the first 3 years the R&D cost an extra 25%. What would the effect on the IRR be if an extra 1 year basic R&D was required at a cost of $3.5M. If the project is limited to a total of 28 years in all cases, which would be better to pay an extra 25% on R&D for the first 3 years of the project or extend the R&D for 1 year.

Therapeutic DNA vaccine for Tuberculosis From PDP supplied by LAKE-EE QUEK, June 2005 Tuberculosis (TB) is one of the most persistent diseases that affects the world population. One third of the world population has been infected, and TB is the 2nd largest cause of death by an infectious agent, after HIV. A TB patient dies every 15 seconds. The situation is complicated by the fact that antibiotics are outdated, and drug resistant Mycobacterium strains are increasing. The only treatment, DOTS (Direct Observed Treatment-Short course) program, is ineffective due to poor patient compliance and long treatment duration. Therefore there is a need for a cure for TB. The proposed product is a therapeutic DNA vaccine that, when used along with existing antibiotics, eliminates bacterial load in the lungs, blocks endogenous reactivation and protects from further exogenous re-infection. More importantly, the product will cut DOTS treatment time by half, and is effective against resistant Mycobacterium. The rational behind the DNA vaccine is that it restores the necessary quality and quantity of the host immune response originally disabled by the pathogen. Dr. Sung's research team was the first to design a novel combination of Mycobacterium antigens and a plasmid vector construct that conferred the highest level of protective immunity compared to previous DNA vaccines. Preliminary tests in mice showed very promising results. Given an R&D time of 12 years, the product should be ready for commercialisation by 2025. The 12 years of R&D consists of an initial 3 years of basic research, 3 years of expensive preclinical studies (involving tests with primates as well as rats and dogs, plus optimisation of vaccine formulation and stability), 1 year Phase 1, 2 years Phase II and 3 years of Phase III clinical trials. The clinical trials are relatively low cost due to proposed subsidies by the World Health Organisation. No more than 20 spreadsheets should be developed. Your IRR figures should be summarized in a table. All spreadsheets are to be shown, and IRR values on the spreadsheet should show the IRR value to 4 decimal places. The spreadsheets must show the PV values for each year and the NPV value should be shown to equal zero for each sheet. Spreadsheets should show Totals for each column (Capital, R&D, Production, Marketing, Distribution, Patent, Royalties, Sales, Tax, Cash Flow and PV). Total Discussion for all answers should be no more than 2 pages. 8 TUBERCULOSIS ECONOMIC PROJECTIONS Year YEAR Capital R&D Production Marketing Distribution Patent Sales 1 2012 -2,400,000 -18,500 2 2013 -2,400,000 -18,500 3 2014 -3,500,000 -18,500 4 2015 -3,500,000 -18,500 5 2016 -5,300,000 -18,500 6 2017 -5,500,000 -18,500 7 2018 -2,100,000 -18,500 2019 4,000,000 -18,500 9 2020 -4,000,000 -18,500 10 2021 4,000,000 -18,500 11 2022 4,000,000 -18,500 12 2023 -4,000,000 -18,500 13 2024 -6,600,000 -1,000,000 -18,500 14 2025 -4,700,000 -1,500,000 -1,000,000 -18,500 120,000,000 15 2026 -7,300,000 -1,500,000 -2,000,000 -18,500 250,000,000 16 2027 -9,000,000 -1,500,000 -2,500,000 -18,500 330,000,000 17 2028 -9,000,000 -1,000,000 -2,500,000 -18,500 330,000,000 18 2029 -9,000,000 -1,000,000 2,500,000 -18,500 350,000,000 19 2030 -9,000,000 -1,000,000 -2,500,000 -18,500 350,000,000 20 2031 -10,000,000 -1,000,000 -2,800,000 -18,500 370,000,000 21 2032 -10,000,000 -1,000,000 -2,800,000 -18,500 370,000,000 22 2033 -10,000,000 -1,000,000 -2,800,000 -18,500 370,000,000 23 2034 -10,000,000 -1,000,000 -2,800,000 -18,500 370,000,000 24 2035 -8,500,000 -1,000,000 -2,300,000 -18,500 290,000,000 25 2036 -8,500,000 -1,000,000 -2,300,000 -18,500 290,000,000 26 2037 -8,500,000 - 500,000 -2,300,000 290,000,000 27 2038 -4,500,000 - 500,000 -500,000 70,000,000 28 2039 -4,500,000 -500,000 70,000,000 Therapeutic DNA vaccine for Tuberculosis From PDP supplied by LAKE-EE QUEK, June 2005 Tuberculosis (TB) is one of the most persistent diseases that affects the world population. One third of the world population has been infected, and TB is the 2nd largest cause of death by an infectious agent, after HIV. A TB patient dies every 15 seconds. The situation is complicated by the fact that antibiotics are outdated, and drug resistant Mycobacterium strains are increasing. The only treatment, DOTS (Direct Observed Treatment-Short course) program, is ineffective due to poor patient compliance and long treatment duration. Therefore there is a need for a cure for TB. The proposed product is a therapeutic DNA vaccine that, when used along with existing antibiotics, eliminates bacterial load in the lungs, blocks endogenous reactivation and protects from further exogenous re-infection. More importantly, the product will cut DOTS treatment time by half, and is effective against resistant Mycobacterium. The rational behind the DNA vaccine is that it restores the necessary quality and quantity of the host immune response originally disabled by the pathogen. Dr. Sung's research team was the first to design a novel combination of Mycobacterium antigens and a plasmid vector construct that conferred the highest level of protective immunity compared to previous DNA vaccines. Preliminary tests in mice showed very promising results. Given an R&D time of 12 years, the product should be ready for commercialisation by 2025. The 12 years of R&D consists of an initial 3 years of basic research, 3 years of expensive preclinical studies (involving tests with primates as well as rats and dogs, plus optimisation of vaccine formulation and stability), 1 year Phase 1, 2 years Phase II and 3 years of Phase III clinical trials. The clinical trials are relatively low cost due to proposed subsidies by the World Health Organisation. No more than 20 spreadsheets should be developed. Your IRR figures should be summarized in a table. All spreadsheets are to be shown, and IRR values on the spreadsheet should show the IRR value to 4 decimal places. The spreadsheets must show the PV values for each year and the NPV value should be shown to equal zero for each sheet. Spreadsheets should show Totals for each column (Capital, R&D, Production, Marketing, Distribution, Patent, Royalties, Sales, Tax, Cash Flow and PV). Total Discussion for all answers should be no more than 2 pages. 8 TUBERCULOSIS ECONOMIC PROJECTIONS Year YEAR Capital R&D Production Marketing Distribution Patent Sales 1 2012 -2,400,000 -18,500 2 2013 -2,400,000 -18,500 3 2014 -3,500,000 -18,500 4 2015 -3,500,000 -18,500 5 2016 -5,300,000 -18,500 6 2017 -5,500,000 -18,500 7 2018 -2,100,000 -18,500 2019 4,000,000 -18,500 9 2020 -4,000,000 -18,500 10 2021 4,000,000 -18,500 11 2022 4,000,000 -18,500 12 2023 -4,000,000 -18,500 13 2024 -6,600,000 -1,000,000 -18,500 14 2025 -4,700,000 -1,500,000 -1,000,000 -18,500 120,000,000 15 2026 -7,300,000 -1,500,000 -2,000,000 -18,500 250,000,000 16 2027 -9,000,000 -1,500,000 -2,500,000 -18,500 330,000,000 17 2028 -9,000,000 -1,000,000 -2,500,000 -18,500 330,000,000 18 2029 -9,000,000 -1,000,000 2,500,000 -18,500 350,000,000 19 2030 -9,000,000 -1,000,000 -2,500,000 -18,500 350,000,000 20 2031 -10,000,000 -1,000,000 -2,800,000 -18,500 370,000,000 21 2032 -10,000,000 -1,000,000 -2,800,000 -18,500 370,000,000 22 2033 -10,000,000 -1,000,000 -2,800,000 -18,500 370,000,000 23 2034 -10,000,000 -1,000,000 -2,800,000 -18,500 370,000,000 24 2035 -8,500,000 -1,000,000 -2,300,000 -18,500 290,000,000 25 2036 -8,500,000 -1,000,000 -2,300,000 -18,500 290,000,000 26 2037 -8,500,000 - 500,000 -2,300,000 290,000,000 27 2038 -4,500,000 - 500,000 -500,000 70,000,000 28 2039 -4,500,000 -500,000 70,000,000