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You work for Corona-Drugs, a start-up Biotech firm that works on vaccines. The company has just received a 15-year patent on a new drug that

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You work for Corona-Drugs, a start-up Biotech firm that works on vaccines. The company has just received a 15-year patent on a new drug that has the potential of being used to treat the most acute COVID19 cases. The company plans to license this drug to a larger pharmaceutical company, and it has 2 offers. Amgen has offered to pay $100 million immediately and $60 million a year, each year for the next 10 years. Pfizer has offered to pay $50 million today and share 2% of projected Operating income from the company's Infectious Diseases Division, each year for the next 12 years. (The Infectious Diseases Division is expected to generate $2.5 billion in Operating Income per year for the next 15 years). You have been advised that the discount rate to evaluate offers of this nature is 10%. Which offer will create more value to Corona-Drugs shareholders? Justify your answer with numbers. (15 Points)

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