AG Biotech Partnership Draft Business Plan 2003

AG Biotech Partnership Draft Business Plan 2003
Date: March 27, 2003
Mentor Ms. Nancy Giges
Team leader Alexander Gurman Alexander@alexgurman.com
Phone 917- 825 8225
Version 2.3
Team Members.

1. Alexander Gurman
2. Jieun Son
3. Efroim Gurman
4. Genadiy Gurman
5. Joan Hagstrom,
6. Kin-U Ho

Summary

AG Biotech Partnership: (AGBP)

Biotech analysis, b2b, biotechnology market, startup, $1.5 million

The Product:
AG Biotech Partnership does biotechnology market where companies can sell and buy projects.
AG Biotech Partnership does our sale via web site and also in person meetings.

The Market:
The target markets are pharmacology and biotechnology companies around the globe.
AG Biotech Partnership will approach companies oversees who want to sell their abandon or current projects to the USA companies and AG Biotech Partnership will help them to pitch to the companies in the USA.

The Business Model:
AG Biotech Partnership will make a web site that will have a board with all projects. AG Biotech Partnership plan to charge fee for posting a project eventually (at first posting would be free), AG Biotech Partnership plan to charge fee for viewing projects (eventually). AG Biotech Partnership plan to charge fee for improving, organizing, translating, and pitching to buyers.

Progress So Far:
AG Biotech Partnership has a team ready and willing to go out and collect necessary data for successful deal. AG Biotech Partnership has key advisors and AG Biotech Partnership have initial contacts to post first 11 projects.

Problems:
AG Biotech Partnership does not have yet our business plan. AG Biotech Partnership has not done yet one sale.

Product Uses:
Biotechnology companies, pharmacology companies, genomics companies, in the USA and overseas.

The Client:
1. The clients are pharmaceutical and biotech companies. The users are decision people who sell and buy projects and their research staff.
2. Government organizations such as CIA, USA government, defense and homeland agencies. ( Research in biotechnology that was abandoned in Russia and other former Soviet Union republics could be safely sell to them for mutual profit for inventor university (the author and owner) and to the grand provider such as Sores Foundation.

Value of AG Biotech Partnership (AGBP)
Right now AG Biotech Partnership has 11 potential projects to post. The current value is $0. AG Biotech Partnership expects to have value by the end of December 2003 about $50000.

Data sources:
Public domain: journal, magazine, and newspapers articles, databases (eg AC Nelson, IRA, Human Genome Project, Millennium Inc)
Personal domain: advisors from academics, prospect client
Private domain: contacts and relationships.
http://www.alliancat.com/
http://www.biotechnologia.pl/biotech/ang/services.htm
http://www.birdengineering.nl/home.htm
http://www.drugdiscoveryonline.com/content/homepage/default.asp
http://members.tripod.com/~ChristopherMarrs/
http://www.zsassociates.com/welcome.html
http://www.pharmaceutical-technology.com/


Competitive Analysis

Market size.
The size of the market is about $600 Billion. There are about 700 direct competitors around the globe. There are approximately five major buyers whom are American and 50,000 sellers around the globe.
Demographics of the direct competition:
The major players are located in Boston, NYC, NJ and Silicon Valley.
Major competitors and what they do:
Celera and Human Genome Project Inc. specialize in virtual experiments, and are the final products biggest providers. Here are just a few of the websites of some of the competitors for the first stage of the company’s life as a biotechnology company:
http://www.alliancat.com/, http://www.biotechnologia.pl/biotech/ang/services.htm,
http://www.birdengineering.nl/home.htm,http://www.drugdiscoveryonline.com/content/homepage/default.asp,http://members.tripod.com/~ChristopherMarrs/,
http://www.zsassociates.com/welcome.html, http://www.pharmaceutical-technology.com/.
AG Biotech Partnership gathered 50 annual reports from local public companies. ALDF, HSUS, DDAL, PCRM, are animal organizations that have lists of prospective buyers and sellers.
How we differentiate from them
AG Biotech Partnership has 3 stages of our business. The first stage AG Biotech Partnership introduces buyers and sellers manually as a biotechnology brokerage firm, for a fee. Stage 2, AG Biotech Partnership will build special software to match buyers and sellers, with analytical functionality that will allow us to analyze each enquiry for validity, cost, and location. The third stage, after 150 successful inquiries, AG Biotech Partnership will build our model that will lead us to our goal of research and experimentation on virtual models instead of animal and human tissue.
Why we will succeed
1. Most of the competitors are biologist
AG Biotech Partnership will succeed because we have strength. AG Biotech Partnership has young and balanced expertise (most of the founders are Baruch students.), AG Biotech Partnership has Dr. Gurman, senior expert in the industry, because AG Biotech Partnership is younger the life of the company will be longer since, most of the founders retire the company dies. Aggressive sales and marketing. Financial, marketing and accounting background of the founders.

5. SWOT analysis (Strength, Weakness, Opportunity, Threat )

Direct competitors.
From 700 direct competitors that we estimate are on the biotechnology broker business about 200 are ex executives of big pharmaceutical companies who know people in the industry and the business is based on their personal relationships with current executives.
These 200 competitors are usually have one main person who run the business and stuff that just merely support the ex executive current broker. They are on the high end of the market niche in dollar amounts.
There are about 200 companies among 700 who operate for at least 3-6 years and have not done any sale yet. They claim that they are actively searching or creating value for the firm, but they have not done any sale yet. Some of them try to make money by providing services rather than broker service.
There are about 5 major buyers on the market who determine taste making and industry trends (Pfizer.com, Merck.com, Johnson and Johnson, P&G, and Roche).

Those 5 buyers have about 80% of the market share. There are about 2000 biotechnology companies in the USA, who buy projects on different stages. Around the globe there are about 5000 biotechnology companies (including 2000 US) who are our prospect buyers.
There are about 50000 prospect sellers around the globe with more or less realistic projects for sale.

Operational plan.
Summary of what our business does.
AG Biotech Partnership is a biotechnology brokerage firm specializing in brokering biotechnology advances between firms in the medical industry, biotechnology software, business to business marketing and sales of biotechnology and virtual technology. Biotechnology is the branch of molecular biology that studies the use of micro-organisms to perform specific industrial processes, especially in genetic engineering and recombinant DNA technology.
Our business is Biotechnology Brokerage for the first stage, after we complete first stage our business will shift to Biotechnology Software and after second stage our business will migrate to Biological Modeling.
The 3 stages of evolution for our business
AG Biotech Partnership business is based on Biotechnology advances. Biotechnology is the branch of molecular biology that studies the use of microorganisms to perform specific industrial processes.
The first stage Bio Broker:
AG Biotech Partnership will introduce buyers of and sellers of biotechnology manually as a biotechnology brokerage firm, for a fee. This stage will last from 6 months up to 2 years. Stage 1 starts now, we are trying to go to conferences for medicine and technology in software to make physical contacts with companies. AG Biotech Partnership will have weekly meetings to work on our marketing and sales strategies, and preparing proposals June 2003.Then introduction of buyers and sellers will take place. Our goal for AG Biotech Partnership will be 20 transactions in this time period.
The second stage Bio Software:
AG Biotech Partnership will build special software to match buyers and sellers. Since AG Biotech Partnership has analytical functionality this will allow us to analyze each enquiry for validity, cost, and location. This stage is possible only if the Bio Broker stage will successfully complete at least 10 transactions. AGBP is currently working on developing this website, we would need the different companies specific information to finish developing our website and this will come from stage 1. We are optimistic that we will have our required transactions in the 2 year time frame and we will continue having meetings, sending out proposals, marketing our company via internet, mail, and phone calls.
The third stage Bio Virtual Model:
After 150 successful inquiries, AG Biotech Partnership will build a virtual model of experimentation and vivisection. The AG Biotech Partnership model will lead us to our goal of research and experimentation on virtual models instead of on animals and human tissue. Our model is the last stage of our business we are aggressively looking for experienced people to help with part of our business thru our conferences and animal organizations. This phase of AG Biotech Partnership is in the future only after the brokerage stage of our company is physically and financially sound can we move to build our virtual biological model.
Summary of the functions
Summary for whatever time periods you choose of what your specific goal is and how you will achieve it. You need to show that you expect to progress week by week, month by month.
In the first stage of AG Biotech Partnership development, AG Biotech Partnership will act as a middle person between the pharmaceutical companies and the research labs in China and Russia and other countries. Since the research labs in China and Russia have the advantage in cheaper labors and fewer regulations in doing biological researches, AG Biotech Partnership will help them to find the U.S. pharmaceutical companies to invest on the research projects they think is worth investing. AG Biotech Partnership will also help the U.S. pharmaceutical companies to find the right research labs or already-done research for the drugs they are developing. For this reason, AG Biotech Partnership is building a network in China and Russia with all the individual research labs and university research labs, Moscow State University, Odesa State University, St. Peterburg State University, Bauman State University, Kiev State University, Novosibirsk State University, Tula State University and etc., so AG Biotech Partnership can keep them informed what our U.S. clients are looking for. We also have constant contact with the U.S. Pharmaceutical companies Pfizer, Merck, Johnson and Johnson, Monsanto, AstraZeneca to up-date what kind of research they are looking for and what research data AG Biotech Partnership find and think that it is valuable to them.
The small and middle size research labs in China and Russia usually do not have the access to the U.S. bio-tech market because of the language barriers and the differences of the research system. The U.S. pharmaceutical companies are also facing the same problems and they usually would not take the risk to buy research data from the foreign research lab that we have never done business with. That is the reason why they need AG Biotech Partnership to be the middle man to find the right sellers and right buyers for them. Buyers and sellers will trust AG Biotech Partnership because of outstanding service, transparent business practice, published accounting and financial statements, detail business plan, partners’ reputation, professionalism and step by step proven success record.
The research system in China and Russia is different from the one in the U.S. AG Biotech Partnership has a team of experienced bio-tech scientists to help them to rearrange their research data before AG Biotech Partnership can sell them to the U.S. investors. When AG Biotech Partnership is looking for a certain research data for U.S. client, we will also investigate on the research lab in China or Russia to secure to U.S. Client.

So, when AG Biotech Partnership is dealing with our U.S. clients, AG Biotech Partnership can show them that we have the access to a number of qualified research labs in China and Russia to help them to find whatever AG Biotech Partnership are looking for. This also work the other way. AG Biotech Partnership can also show the research labs in China and Russia that AG Biotech Partnership has a network in the U.S. with all the pharmaceutical companies to find the investors for their research.

Responsibilities per team member. (bio and reason for each team member is at the end of the paper)
1. Sales: Joan Hagstrom
2. Marketing: Olga Gonzalez
3. Finance: Jieun Son
4. Research: Efroim Gurman, Alexander Gurman
5. Legal: Ian Singer
6. Personnel/Administrative: Alexander Gurman
How AG Biotech Partnership is going to achieve our goals?
1. AG Biotech Partnership will do presentations to potential clients.
2. AG Biotech Partnership will mail proposals the first week of June to prospective companies.
3. AG Biotech Partnership will call prospective clients each day about 50 phone calls with follow up.
4. AG Biotech Partnership has the list of potential client from the Internet and we will get other resources from libraries and books.
5. Currently the team is working on web site creation, business documentation and procedures.

OVER ALL OPERATING PLAN:
I. Bio Broker Stage

A. Time Period: (Starts 2 weeks after the end of Spring Semester) Duration from 6 month up to 2 years. The ideal time for this stage is one year and will continue when Software stage starts.
B. Requirements: To have a completed business plan. The willingness of the team members to start business, and optional but desired to put part of the winning $50,000 towards business expenses. The readiness of marketing materials and materials for the web site. Prospects will be informed about web site location by email, mail campaign, phone calls, at the professional conferences, via advertisement and professional networks.
C. Expected Outcome: To have at least 10 successful transactions.
D. Challenges to overcome: During the previous semester our team had too few times actually meeting with all members together at the same time. AG Biotech Partnership will fix this time problem. During the spring semester our team would have at least 1 meeting that is mandatory for all team members to be present in a month and the other meetings will be required but not mandatory for the whole group. We found that meeting with at least two members of the team usually work for us, but now our challenge is to make our team more united.

In the two weeks after spring semester 2003 AG Biotech Partnership will start polishing existing marketing and sales materials. AG Biotech Partnership will create them from samples and materials available to us that AG Biotech Partnership would be able to gain from direct competitors.
One member of the team, Julia Son, would not have access to the materials of the competitors. This would allow us to create an original version different from the general path of the industry. The rest of materials would be used as a goal to grasp all the best from the existing materials in the industry.
When AG Biotech Partnership finds a client AG Biotech Partnership has a lawyer to handle the legal end of the transaction.
Actually AG Biotech Partnership has a few friendly lawyers who are more than willing to back us with legal support. They are Ian Singer, Igor Shvedkov, and Helen Kalika.
The List of Buyers
Consists of major pharmaceutical companies, US government, cosmetic, chemical, and medical companies and we will access them primarily in NY, NJ, PA, and MA areas because they are local to us.

The List of Sellers
AG Biotech Partnership has Universities and biotechnology companies through their contact information such as emails, phone calls, and mail addresses. AG Biotech Partnership also has access as future alumni’s at Baruch’s library with Lexus-Nexus and other databases.
Tasks:
1. Julia is responsible for continuing to order annual reports of the biotechnology companies and analyzing them. Julia will oversee other team members working with annual reports.
2. Alexander Gurman will continue doing management, promoting, and sales duties.
3. Joan will continue contacting industry professionals, helping with economic analysis, and putting together and updating our AG Biotech Partnership information.
4. Kin U Ho is responsible for economics analysis of first10 clients for bio broker stage.

Milestones dates that AG Biotech Partnership expect to achieve.
Company starts operations two weeks after classes at Baruch College are over for spring semester. Before AG Biotech Partnership will start operations, AG Biotech Partnership will continue to study at Baruch College, do marketing research, improve our business plan, and consult friends, partners, advisors, and our great mentor.
Milestone 1:
Have the first version of all documents, sales, marketing, financial, and accounting documents ready by June 20, 2003.
Milestone 2:
First round of creating awareness and interest for our business among potential clients will start June 15, 2003 after near completion of the first milestone and will run seriously for the next month almost to the middle of July, 2003.
Of course all papers would be improved on a Total Quality Control basis for each case. Also, milestone 2 would have continuous activities but after July 2003 the focus would migrate to the next milestone.
Milestone 3:
Pursuing buyers and sellers to sign contracts with AG Biotech Partnership. Based on our database that would be created at milestone 2. With the estimation that all contacts that AG Biotech Partnership has made, and the probability they will actually have our AG Biotech Partnership web site.
AG Biotech Partnership web site:
During the preparation stage AG Biotech Partnership will publish it’s web site with regular business fields such as News section, Contact section, Services, Products, documents, FAQ, Partners, etc, our bios, vision, and mission statement.
Separate section for sellers and buyers.
Explanation to sellers and buyers on how our business works
Explanation of the benefits and challenges of our business.

Tasks to be performed:
1. Write the competitive analysis.
2. Write a business plan.
3. Have proposals and presentations ready.
4. Put up the web site.
5. To make a document called “Our Credo” where we would describe out code of conduct how we serve to out partners and investors, how we watch out clients interests, and how we treat our future employees.

Decisions made and logic behind it:
AG Biotech Partnership will outsource the web site design and programming of the database because we believe that we will gain the best value by doing so with Russia or Ukrainian Company or few independent free lances. The price difference is so tremendous that it makes not sense to do that work in house. We have contacts with suppliers who are willing to do the work from $1 to $.25 cents per hour comparing to local USA companies that charge at least $6 per hour of work. In any instance web site and program development requires clear specifications and reliable quality assurance.

AG Biotech Partnership needs to do:
Kin U offered to do marketing materials that AG Biotech Partnership need to create:
1) Brochure about our business (three page)
2) Sales pitches (15 seconds, 2 minutes, 15 minutes, and 30 minutes)
3) Power point presentation


Other operations that AG Biotech Partnership has to do:
1) Web site
2) Construct demo version for Pfizer Based on preliminary good will agreement with Pfizer.
3) Investigate what topics Glaxo-Wellcome and Merck want to see. By conducting executive interviews with CEO and purchase department executives AG Biotech Partnership will achieve that objective.
4) Calculate suitable price and negotiate for up-front payment of costs. That is tedious process that requires robust marketing research.
5) Calculate additional staffing requirements.
6) Investigate data sources.
7) Calculate effort required per topic for DB set-up.
8) Create database of potential buyers and sellers that would have information about the company and people that work there and make it accessible to all team members. (Database driven web site)

Operations Management:
Operations would be run from the office and from the client site and from Baruch College. Location for office is preferable in Manhattan. Most likely we would be allowed to use Pfizer facilities at 42nd street but that to be confirmed
Productivity – expected to be on the level of aggressive start up. Team members are young and that is why we have more energy and power than old aged competitors (from competitive analysis – AG Biotech Partnership will face mostly old age competitors).
Operations Strategy for Competitive Advantage – we will do more up to date techniques that we learn at school and our competitors with their old and outdated methods would lose to us. We believe that knowledge that we gain at Baruch College would place us at competitive advantage versus old companies.
Motivations that we will use to our employees and clients are profit, happiness of the humanity to achieve stage 3 – Modeling when we will save animals life’s.
Operations in Global Environment – AG Biotech Partnership has advantage over competitors in those operations because we geographically close to our buyers and we mentally close to them, we will know more about our buyers than our competitors outside the USA.
Forecasting – we use academic techniques by the book to make most reliable forecast possible. Using not only expert assumptions but also quantities and qualitative techniques.
Management Quality of our service would be done with just in time techniques and Taguchi concepts and Total Quality Management.
Capacity that we can serve is limited by the time that we can input in to the projects.
Use of Internet – we will create our web site and use all possible means to make our business as e-commerce as it possible.
Location Strategy is our luck that we are in NYC the financial capital and we are close to NJ where majority of Pharmacological and Chemical companies are looking for local Bio Broker like us.
Human Resource and Job Design – we shared responsibilities in the team but we are interested and willing to supplement each other and to assist other members of the team in work.
Supply – Chain Management – AG Biotech Partnership will keep close ties with sellers via emails, phone calls and personal meetings as well as with regular mail services.
Inventory management would be constructed on database at first in Access XP we have one already at our hosting at www.Alexandergurman.com and later on when we would need more robust operations we would migrate to Oracle database. If we would need to grow and we would face financial difficulties than we would use freeware such as mySQL or Sybase for Linux.
Maintenance and Reliability would be controlled by the administrator and by the advisory board (we will create a board of directors and advisors to lead the business to prosperity).


Financial Summary for Bio Broker:

Financial / Operating Projections.

From 50,000 of the potential sellers AG Biotech Partnership expects to reach good will intentions from about 5000 to collaborate the first year. From 2000 potential buyer AG Biotech Partnership expects during the first year to reach and sign contracts with 10 buyers. The first year $150,000 are coming from the three sales of $50,000 each. That is subjective evaluation based on industry expert Dr. Gurman Ph.D. AG Biotech Partnership expects to have one deal by the end of December 2003 and to have 2 deals May 2004. This industry is seasonal, the best time to close sale is May and October, AG Biotech Partnership expects to have 3 customers during the year, but to close deals only with three of them.

The upfront start up cost is $120,000 that is the money that AG Biotech Partnership needs to have co founders to convince and start that business and disregard other business activities for the AG Biotech Partnership. This $120000 come from co founders $10000 from each partner, each partner is committed to invest at least $100000. That is right now $60000 together and the other $60000 comes from award, the competition money. In case partners will not be able to raise capital AG Biotech Partnership will sell shares to Michael Kenworthy the owner of www.techcommcorp.com, the existing client of the AG Biotech Partnership who is venture capitalist and has 2 years of business collaboration with Alexander Gurman. AG Biotech Partnership also can raise money from other business plan competitions, from Infon members,

AG Biotech Partnership needs to have the money upfront because that would convince us to do the business. The investment of the money would mean that co founders believe in the business and judges believe in the business that would give AG Biotech Partnership confidence to actually make it happen.

For the first six-months AG Biotech Partnership is losing money, but by the end of the 6th month AG Biotech Partnership expects to have the first sale. That is a regular sales cycle for the Biotechnology Brokerage industry according to experts that consult AG Biotech Partnership (Dr. Sokol, M. Kenworthy, Dr. Efroim Gurman)

AG Biotech Partnership expects to break even at the end of the first year when AG Biotech Partnership will make the third sales, because at the investment of $120000 by the third sale AG Biotech Partnership will have revenue $150000.
AG Biotech Partnership expects to be profitable by the end of the first year of operations. The amount that would be needed is $120000 to start the operations. After initial funding, business would be primary financed from sales and brokerage fee. After the fifth year AG Biotech Partnership expects to go public and raise $200,000,000 in a IPO at NASDAQ to start the second stage of the company when AG Biotech Partnership will create software to automate the brokerage procedures. The second Software Stage would break even at the 5th year at the point of $500,000,000.

For the third stage to create Virtual model AG Biotech Partnership will raise money from institutional investors, charity organizations, we will also have bonds, AG Biotech Partnership will borrow money, in today money value AG Biotech Partnership would need 6 billion dollars to start the Virtual Modeling stage, this stage would brake even at the 15th year.

After five years return would be stabilize to 20% per year. AG Biotech Partnership would need 2 months to be ready for the market. That is brokerage stage yet. With 90% of the competition disappear from the market after the first year, because that is industry standard. AG Biotech Partnership estimates that we would have more than general industry chances, 80% of success. Based on professional partners, market growth, right timing to start business, and attractive cost leadership position of the AG Biotech Partnership.

Potential to growth is tremendous in this industry, this industry is today over 600 billion only in brokerage fees. Biotechnology Consortium 2002, Princeton, NJ. This is one of the most growing markets in the world of business. Genetics and biotechnology are growing faster than other industries. World becomes better place to trade and being in the right place at the right time for us is as like potential Klondike.

Data sources that we used: this is good but you need to be more specific about what came from where above.
1. 50 annual reports from diverse Biotechnology and Pharmacology companies.
Abbott Laboratories, Actinova, Adolar, Agouron Pharmaceuticals, Allergan, Allergy Schering, Alliance Pharmaceutical, Alpha-Beta Technology, Inc, AlphaRx, amaxa biosystems, American
Amgen, Amgen Germany, Amylin Pharmaceuticals, Angiotech Pharmaceuticals, Antisoma Aiming, Apoptogen, Ariad Pharmaceuticals, Arris Pharmaceuticals, Astra Pharmaceuticals,
Astra MerckGERD Information Resource Center, AstraZeneca Pharmaceutical,
Aventis Pharma, Avigen, Axys Pharmaceuticals, Bayer, Baxter, Berlex Betaseron® Multiple Sclerosis Resource Center, Biocache Pharmaceuticals, Bio Balance A Biotechnology/Pharmaceutical Discovery Company,Biogen, Inc. Biotechnology company, BioPartners , Biophage Discovery, BioProtein Technologies, Biopure, Biovail, Boehringer Ingelheim, Boehringer Mannheim Biochemicals, Bristol-Myers Squibb Medicines,
CEL-SCI Corporation, Cell Genesys and etc.

2. Focus group discussions with industry professionals. Reading the Biotechnology press and newsletters.
3. Attending Biotechnology conferences and lectures and discussions with professionals.
4. Executive interviews with Biotechnology CEO’s.
5. Experience from real dealmaker Efroim Gurman, a team member and a biotechnology brokerage consultant with experience in the field for over 40 years.

There is never enough money, but that is a reasonable amount to start. That projection was consulted with industry professionals and it was suggested that it is reasonable and sufficient to start the business. Perhaps finances could be more explained and details could be added, but it is enough to start the business right now, because if AG Biotech Partnership will miss momentum right now, that we might not have that opportunity and guts to risk for it later when we will burn on it. Spending plan was discussed with accounting professors at Baruch College (Professor Seward, and it was approved)

AG Biotech Partnership did financial statements in years, for the next version of the Business Plan AG Biotech Partnership will do statements in months, especially for the first year because vendors would not wait on us a year as per our Mentor. AG Biotech Partnership will try to break first three months expenses by weeks in order to look at the plan in details. In business like brokerage it is really hard to make a precise projection when the sales would be made because there are hundred of important factors that affect timing. Such as tax season when companies do not buy, during summer vacation key decision makers are on a trips and not all team members are in the office to make a decision, winter also has holidays season when companies do not like to buy. Most of the deals in the industry are closing in September and October periods. But other factors as sales cycle affect timing also. Usually buyers have twice longer buying cycle than sellers that also creates uncertainty. Once the AG Biotech Partnership will get engaged in brokerage process, it would be easier to formulate projections based on statements from previous years. Stock market affects the Biotechnology Brokerage business in great extent also.

Alex Gurman Biotechnology Partnership
Balance Sheet
As of December 31, 2003

2003 2004 2005 2006 2007
Assets
Cash 133,500 65,833 1,352,167 3,868,500 7,552,833
Current Asset
Total Assets $133,500 $65,833 $1,352,167 $3,868,500 $7,552,833

Liabilities and Equity
Liabilities
Total Liabilities - - - - -
Equity
Opening equity 60,000
Partners' Equity 60,000
Retained earnings $13,500 $65,833 $1,352,167 $3,868,500 $7,552,833

Total Equity 133,500 65,833 1,352,167 3,868,500 7,552,833
Total Liabilities and Owners' Equity $133,500 $65,833 $1,352,167 $3,868,500 $7,552,833




Alex Gurman Biotechnology Partnership
Statement of Retained Earnings
For Year Ending December 31, 2003

2003 2004 2005 2006 2007
Opening Retained earnings $0 $13,500 $65,833 $1,352,167 $3,868,500
Net Income 13,500 52,333 1,286,333 2,516,333 3,684,333
Ending Retained earnings $13,500 $65,833 $1,352,167 $3,868,500 $7,552,833



Alex Gurman Biotechnology Partnership
Statement of Cash Flow
As of December 31, 2003
2003 2004 2005 2006 2007
Cash flows for operating activities:
Net income $ 13,500 $ 52,333 $ 1,286,333 $ 2,516,333 $ 3,684,333

Net cash used in operating activities 13,500 52,333 1,286,333 2,516,333 3,684,333

Net increase (decrease) in cash 13,500 52,333 1,286,333 2,516,333 3,684,333

Cash, beginning balance - 13,500 65,833 1,352,167 3,868,500
Cash, ending balance $ 13,500 $ 65,833 $ 1,352,167 $ 3,868,500 $ 7,552,833


Alex Gurman Biotechnology Partnership

Worksheet

2003 2004 2005 2006 2007
Cash on hand (Start-up)
Award money 60,000
Partner's input (each partner per $10,000) 60,000
Total Cash on hand 120,000
Cash receipts
Selling price per 1 deal 50,000 50,000 50,000 50,000 50,000
# of Sales 3 10 40 70 100
Total Sales 150,000 500,000 2,000,000 3,500,000 5,000,000

Total cash receipts $270,000 $500,000 $2,000,000 $3,500,000 $5,000,000

Cash paid out
Research and Development $ 2,000 $ 16,000 $ 17,000 $ 18,000 $ 25,000
Website 16,000 50,000 50,000 50,000 50,000
Travel within USA 9,000 18,000 18,000 25,000 50,000
Travel abroad 9,000 18,000 18,000 25,000 50,000
Meeting with Client in NYC 50,000 70,000 80,000 90,000 100,000
Rent - 50,000 70,000 90,000 120,000
Salary 25,000 150,000 170,000 180,000 200,000
Advertising 2,000 2,000 2,000 2,000 2,000
Professional Services-Lawyer 2,000 2,000 2,000 2,000 2,000
Commission 20,000 66,667 266,667 466,667 666,667
Sales lead fee 1,000 3,333 13,333 23,333 33,333
Finder Fee 500 1,667 6,667 11,667 16,667
Total cash out $136,500 $447,667 $ 713,667 $ 983,667 $1,315,667


Selling price per 1 deal 50,000 50,000 50,000 50,000 50,000
# Of Sales 3 10 40 70 100
Total Sales 150,000 500,000 2,000,000 3,500,000 5,000,000

Commission per 1 deal 40% 40% 40% 40% 40%
Number of deal occurred by commission 1 3 13 23 33
Commission paid 20,000 66,667 266,667 466,667 666,667


Sales lead fee 20
Approximated number to make one deal 50
Sales lead fee per one deal (sales) 1,000 1,000 1,000 1,000 1,000
Number of deal accrued by sales lead 1 3 13 23 33
Sales lead fee paid 1,000 3,333 13,333 23,333 33,333

Finder Fee per 1 deal 500 500 500 500 500
Number of deal occurred by Finder 1 3 13 23 33
Finder Fee paid 500 1,667 6,667 11,667 16,667



Alex Gurman Biotechnology Partnership
Return on Investment

2003 2004 2005 2006 2007

Net operation income 13,500 52,333 1,286,333 2,516,333 3,684,333
Average operation assets 66,750 99,667 709,000 2,610,333 5,710,667
Return on Investment 20.22% 52.51% 181.43% 96.40% 64.52%

Net operation income 13,500 52,333 1,286,333 2,516,333 3,684,333
Sales 150,000 500,000 2,000,000 3,500,000 5,000,000
Margin 9.00% 10.47% 64.32% 71.90% 73.69%


Sales 150,000 500,000 2,000,000 3,500,000 5,000,000
Average operation assets 66,750 99,667 709,000 2,610,333 5,710,667
Turnover 2.2472 5.0167 2.8209 1.3408 0.8756


Margin 9.00% 10.47% 64.32% 71.90% 73.69%
Turnover 2.2472 5.0167 2.8209 1.3408 0.8756
Return on Investment 20.22% 52.51% 181.43% 96.40% 64.52%




Alex Gurman Biotechnology Partnership
Income Statement
For Year Ending December 31, 2002
2003 2004 2005 2006 2007
Sales 150,000 500,000 2,000,000 3,500,000 5,000,000
Less variable expenses
Research and Development 2,000 16,000 17,000 18,000 25,000
Travel within USA 9,000 18,000 18,000 25,000 50,000
Travel abroad 9,000 18,000 18,000 25,000 50,000
Meeting with Client in NYC 50,000 70,000 80,000 90,000 100,000
Commission 20,000 66,667 266,667 466,667 666,667
Sales lead fee 1,000 3,333 13,333 23,333 33,333
Finder Fee 500 1,667 6,667 11,667 16,667
Total variable expenses 91,500 193,667 419,667 659,667 941,667
Contribution Margin 58,500 306,333 1,580,333 2,840,333 4,058,333
Less fixed expenses
Website 16,000 50,000 50,000 50,000 50,000
Rent - 50,000 70,000 90,000 120,000
Salary 25,000 150,000 170,000 180,000 200,000
Advertising 2,000 2,000 2,000 2,000 2,000
Professional Services-Lawyer 2,000 2,000 2,000 2,000 2,000
Total fixed expenses 45,000 254,000 294,000 324,000 374,000
Net Income $ 13,500 $ 52,333 $ 1,286,333 $ 2,516,333 $ 3,684,333



Sales per Unit 50000 50000 50000 50000 50000
Variable expenses per 1 sale 30500 19367 10492 9424 9417
Variable expenses Ratio 61.00% 38.73% 20.98% 18.85% 18.83%
Contribution Margin per 1 sale 19500 30633 39508 40576 40583
Contribution Margin Ratio 39.00% 61.27% 79.02% 81.15% 81.17%


Break-even Analysis
Per 1 sale
Sales 50,000 50,000 50,000 50,000 50,000
Variable expenses 30,500 19,367 10,492 9,424 9,417
Contribution Margin 19,500 30,633 39,508 40,576 40,583
Fixed expenses 45,000 254,000 294,000 324,000 374,000
Projected profit - - - - -

Break-even in Units 2.31 8.29 7.44 7.98 9.22


Break-even in sales dollars $ 115,385 $ 414,581 $ 372,073 $ 399,249 $ 460,780





The cost of our subscription is based on industry assumptions and experience of Efroim.
$50,000 for booklet of the information in paper booklet, does not include who contact information. Legal advice is needed yet.
$50,000 for the meeting with the client, including lawyer fee.
Includes paper cover
1. Organize meeting
2. Seller would not lost
3. Buyer has exclusive meeting.

AG Biotech Partnership is following industry standards
After 3 months to have first 100 posting on the web site.
3 - 6 months of sale we can make first deal
The maximum time for trying we estimate is 2 years. If we would not make a deal in two years, we better close the business or move it to somewhere else.

First deal would be $50,000 for booklet

AG Biotech Partnership work for free for the first 6 month
1. AG Biotech Partnership needs $20000 for programming
2. 3-5 K for web site
3. For traveling expenses $10000 -15000 within USA
4. $ 2000 per trip
5. At least 2 -3 trips before sale need to be done.
6. To create company money $300 to make a legal documentation
7. Most of the documentation will be printed on computers and printers that we already possess.
8. Lawyer consulting $ 2000 first expenses
9. Business cards
10. 5 business trips to Boston because Boston is the capital of science in biotechnology.
11. 5 trips within NJ, NY, for trips per trip $400 -$500 = $5000 total
12. Two foreign trips, Russia, Europe, India, Russia 3K, Europe 2K, India 4 K
13. Other consulting services
14. Advertisement online, banners academic press in Russia, India, china
2000 per country
15. And $10000 advertisement in the USA
16. Consulting pharmacology experts =15K
17. It would be an expense to meet prospects at hotels

Total cost is about $90000
$10,000 per person co – founders will invest in business plus to the money that we expect to win from the competition.

For our expenses:
How AG Biotech Partnership could make a fund for start-up business?
- Loan from the banks to partners.
- Grant from NYC and business developments funds and other government organizations.
- Competition award money = AG Biotech Partnership is competing for $10000 in the first price money and for $50000 in the start up funding.
How much will AG Biotech Partnership will need at the first year and second year? $100,000 for the first year
- rent AG Biotech Partnership will not pay because we can not afford it, AG Biotech Partnership will use private facilities of the partners and Baruch College to meet clients as well as public places as libraries and hotels, AG Biotech Partnership has portable computers and web site to carry the information. AG Biotech Partnership will have a office if the team would be able to sell part of the business to the real estate provider, AG Biotech Partnership will try to gain rent free space from buyers in NYC in Manhattan. AG Biotech Partnership is engaged in negotiations with Pfizer and other possible providers of the rent free suppliers.
For revenue:
How many contract does AG Biotech Partnership expects to have in 2003 = $50,000, 2004 = $200,000, and 2005= $2,000,000


II. Software Development stage – Electronic Matching Stage

Stage 2, AG Biotech Partnership will build special software to match buyers and sellers. AG Biotech Partnership will go public when the business would have enough resources to do so.
A. Period: (Starts after successful completion of Bio Broker stage) Virtual Model stage starts. Duration from 2 years up to 10 years. Ideal time for the stage is five years.
B. Requirements: completion of the Bio Broker stage, closing at least 10 transactions, finding new ideas on how to make match making process automatic and computerized, robust database and active website, and a large pull of potential users for software.
C. Expected Outcome: at least 10 successful transactions per month.
D. Activities to deliver: creation of the software, administration and maintenance of the infrastructure, make company public on NYSE, maintain high stock price.
E. Challenges to overcome: differentiate from competition, make profit and gain experience for Virtual Model stage. Thomas Baumann will lead the development of the software that would do most of the revenue catching. At that stage AG Biotech Partnership will employ hundreds of affordable programmers to develop robust, fast and reliable solutions.
F. Finances: Subscription fee between $200,000 to $100,000 closer to $200,000 per year first client will get 70% discount. Cost for the posting between $3,000 -$5,000 per year and the first hundred clients for the first year would post for free.
Several companies aim to generate data and software to be used by a client for tasks. These can be classified as:
Data suppliers: Genomics Incyte, Sequana, TIGR, NCBI
Proteomics AxCell, Rigel
Jackson Labs, Pangea (Ecocyc)
Software suppliers:
Data management Gene Logic
Analysis and mining tools Pangea, Molecular Applications Group
Modeling Entelos, Physiome

III. Virtual Model stage

The third stage, after 150 successful inquiries, AG Biotech Partnership will build our virtual model that will lead us to our goal of research and experimentation on virtual models instead of animal and human tissue.
a. Period: (Starts after successful completion of Bio Software stage.) Duration from 20 years up to 60 years. Ideal time for the stage is fifty years.
b. Requirements: completion of the Bio Software stage, closing at least 150 transactions, bringing company value in billions of dollars, public support, and US government support.
c. Expected Outcome: creation of the Virtual Model that delivers similar and even better functionality as Human Genome Project and helps research Universities.
d. Activities to deliver: making sure that AG Biotech Partnership public stock on NYSE maintains high standards.
Challenges to overcome: To connect with most of the research around the globee, maintain friendly relationships with US and other governments, deliver equal or better value than Pfizer, Merck and other great companies.
AG Biotech Partnership will invite professional scientists to join our project. AG Biotech Partnership will acquire existing companies that do promising work in our field.
Team members:
1. Alexander Gurman Alexander@alexgurman.com Team leader is Alexander Gurman (917) 825 8225 Alexander Gurman (team leader) Marketing Management senior major at Baruch College, original training in biochemistry (Odessa State University, Ukraine), experience in computer science plus some formal education from Polytechnic University in Brooklyn. Alexander grew up in a successful entrepreneurial family. Main responsibilities include marketing, admin and product specification.
2. Kin-U Ho, hokinu@yahoo.com Baruch Student, Economics
3. Jieun Son, (Julia) accountant and financial member julia5653@hotmail.com Jieun Son accountant and financial member Baruch College senior student.
4. Joan Hagstrom, JUNA12@aol.com communications, Baruch Senior Student, Economics/Finance Grad Fall 2002, Mathematics degree from Kingsborough. Management and Sales experience. communications@Alexandergurman.com
5. Gennady Gurman, carishon@yahoo.com Biology analyst
6. Efroim Gurman, efroim@surfbest.net Biotechnology consultant, Efroim Gurman PhD. Original training in physiology with PhD in gastroenterology.