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Keep the drug or license it out?
The prompt
A fictional biotech in Boston owns a drug about to enter Phase II. A large pharma company offers USD 50 million upfront now, plus USD 200 million if the drug is approved. The biotech estimates a 15 percent chance of approval from here, in line with the BIO data for drugs entering Phase II. If it keeps the drug, it must spend USD 120 million on trials, and if the drug is approved it expects it to be worth USD 1,000 million. Ignoring the time value of money, which option has the higher expected value?
Your interviewer will share data as you ask for it. Ask clarifying questions, state a hypothesis, then lay out your structure out loud before you calculate.
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