Hybridon, Inc‪.‬

A biotechnology and drug research company has an anti-cancer compound that is ready for further development. The company faces two options. It can form a licensing agreement with a large pharmaceutical partner that would fund the necessary clinical studies and bear much of the risk. The pharmaceutical company would assume an equity position within the drug research company and would also receive licensing rights to any compounds that successfully result from the research. The other option is to create a spin-off company with venture capitalists. The stand-alone company would be able to focus on realizing the potential of the new compound, but the drug research company would lose majority control. The vice-president of business development must decide how to proceed in order to maximize value to his company and to the investors.