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Olayemi Bamisile Rena Huynh Luciana Vallejo

Olayemi Bamisile Rena Huynh Luciana Vallejo. To add value to Johnson & Johnson we are considering acquiring Incyte Corporation. Executive Summary. Products/Services: Pharmaceutical Company Segments: Consumer Products Pharmaceutical Products Medical Devices & Diagnostics.

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Olayemi Bamisile Rena Huynh Luciana Vallejo

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  1. OlayemiBamisile Rena Huynh Luciana Vallejo

  2. To add value to Johnson & Johnson we are considering acquiring Incyte Corporation. Executive Summary

  3. Products/Services: Pharmaceutical Company • Segments: • Consumer Products • Pharmaceutical Products • Medical Devices & Diagnostics JNJ Products & Segments

  4. Strategy: Decentralized Management • Issues: Scandals surrounding products in medical devices & diagnostics segments • Costs of Unprincipled Leadership • $8M in damages per customer • Over 10,000 potential cases • Up to $80B in damages JNJ’s Unprincipled Leadership

  5. Managers need to lead the company into becoming a socially responsible company • Coordinate & influence modifications in operations, engineering, logistics, product design, and financing Leading JNJ into Becoming an Ethical Company

  6. 2012 Acquisition of Synthes, Inc.: $20B • Products: Manufactures orthopedic devices • Premium: 37% JNJ’s Cash Flows

  7. JNJ’s Cost of Capital: 9%

  8. Terminal Value: $490B • SGR: 7% JNJ is Under Valued *Source: Yahoo Finance

  9. 1st and only FDA approved drug to treats intermediate to high-risk myelofibrosis (bone marrow disorder) Incyte’s Leading Product

  10. Develop, and commercialize compounds independently in 2 core disease areas such as oncology and inflammation • Collaborations with: Incyte’s Business Strategy

  11. Incyte’s Cash Flows

  12. Incyte’sCost of Capital: 14%

  13. Incyte is Over Valued *Source: Yahoo Finance

  14. Waiting time for FDA approval: 3 years • 2 Dosages Available: 250mg & 500mg • Each dosage comes in 30-days supply Incyte’s New Drug Adds Value of $300M

  15. Put dosage • Payback Period: 4.5 years • Project’s Expected Return: 82% Incyte’s New Drug Adds Value of $300M

  16. JNJ will not acquire Incyte • Insufficient Operating Cash Flows • Finance company for future cash flows • Company is overvalued • JNJ should focus on fixing house issues related to defective products and unprincipled leadership • Incyte should implement our project Recommendations

  17. Ingram-Albright. (2007). Interpreting Cash Flows. In S. Oblinger (Ed.), Financial Accounting Information for Decisions (pp. 184-187) Dewey, Rob. • Nielsen, R. P. (1989). Changing Unethical Organizational Behavior. Academy Of Management Executive (08963789), 3(2), 123-130. doi:10.5465/AME.1989.4274762 • When J&J learned of Implant Problems. Wall Street Journal, Torello, A. (2013, January 31, 2013). EU sends anti-trust complaint to J&J, Novartis. Wall Street Journal References

  18. Questions?

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