IB CASE QUESTIONS & ANSWERS

Case-1: Pharmacyclics
Please provide an A4 Excel/Word sheet for each question,
explaining the numbers in a/the separate/same sheet.
No other formal case-report, as described in Case Style document, required.
1. Why is Pharmacyclics considering an equity issue in March 2000? Why $60 million?
What factors should Dr Richard Miller consider in deciding whether to raise equity?
2. Compare forecasted cash-flows through 2002, assuming Xcytrin and Lutrin are approved,
with the firms liquid assets. As of March 2000, how many future years of funding does
the company have?
3. What funding strategy is apparent in the firms pre-IPO financing? Why do the managers
of the firm follow this strategy? Would the investor approve the strategy?
4. What is your estimate of the value per share of the company?