finance-301-module-5-slp - FINANCE 301 EXTENTED COURSE...

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FINANCE 301- EXTENTED COURSE MODULE 5 – SLP DR. STEPHEN POLLARD Accentia Biopharmaceuticals Inc. said it has acquired the rights to a treatment in the late stages of development that is designed to help people with autoimmune diseases, including multiple sclerosis. The plan for Accentia is to issue stock once the treatment is approved. They are raising approximately $20 million in cash through a financial agreement with several investors. The cash will be raised by issuing convertibles (bonds or preferred stocks that can be converted into common stock) for supporting late drug development programs. Accentia sublicensed the technology from Revimmune and will pay royalties on net sales and forgo 800,000 shares to Revimmune at $8 a share. This type of funding gives investors partial control of the company which could be beneficial to Accentia and extremely risky for investors. Also, they are using other people money to fund this project. This put the burden on the investors who has some belief that accentia will not default on the repayment.
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