Entrepreneurship CaseNovazyme

Assignment Questions

1. What is the typical financial arrangement between a university researcher and the university? How was Canfield’s deal with the University of Oklahoma different? What were the upsides and downsides for a) Canfield and b) the University of Oklahoma?

In a typical scenario, all intellectual property developed on university grounds with university resources and equipment belonged to university. However, if a researcher intends to commercialize his/her findings a negotiation could be made where researcher needed to make upfront payments with additional milestone payments, royalty between 2-6% and a few sponsored research agreements, if possible.

This deal was different as Uni of Oklahoma took an equity position instead of royalty payments.

Cranfield: Upsides:

2. Was Crowley the right choice to be the CEO of Novazmye? Why or why not?

Yes, Crowley was right choice to be the CEO of Novazyme because:

Competence: His work at Bristol-Myers Squibb, a pharmaceutical company, was somewhat similar to Novazyme a biotechnology research company.

Personal Interest: His interest in Pompe and enzyme replacement therapy was very personal as his two children, Megan and Patrick, were suffering from

Pompe's disease. Their survival was dependent on success of this drug.

3. From whom, when, and in what form did Novazyme’s funding come from? Was this a lot of coin? Was the timetable right? What made it possible or impossible for Novazyme to raise money?

Novazyme received funding from both VC’s and agel investors. However, majority of the funding came from VC’s.

It received half a million dollars as investment from Neose technologies.

Thereafter, Catalyst healthcare committed another $2Million.

Followed by $2m commitment by Purecell. The highest fund commitment was by Perseus-Soros

and HealthCare Ventures for $3m raising the total to $8m.

With help of strong management team Novazyme was able to identify critical factors for company’s success which included funding, regulatory issues and clinical trial strategy. With everything in place, they were able to raise enough money to roll out the drug.

4. When and why did Crowley start thinking about an exit strategy for Novazyme? What are his three options (and the pros and cons of each) at the moment?

Genetech, IncGenezyme Co

5. What choice would you make? Why?Genezyme,