Fill out the excel sheet attached and prepare a 3 page memo to support
In2021, Eirene Kontopoulos was considering whether Fidelity should expand itsstake in Gilead. In thinking about this question, she was particularlyinteresting in examining the management decisions of Gilead.
Lookingat the history of the firm, she noted that between 2014 and 2020, the firmssuccess in HIV and hepatitis-C, resulted in between $25 and $30 billion peryear in revenues.
Beforeshe could recommend whether Fidelity should expand its position in Gilead, shewanted to understand how the firm had allocated this historic windfall. Shefelt this provided important insight into how the firm would operate goingforward.
Aspart of this process, Kontopoulos has asked you to summarize the firms capitalallocation over this time period. Please write a 2-3 page memo (notincluding exhibits) containing your analysis.
Indrafting this memo, please make sure to address the following questions:
1. What major capital allocationdecisions did Gilead make between 2014 and 2020? Do you believe these were wisedecisions? If so, why? If you believe that they were unwise, what otheroptions would you have recommended to management?
2. Kontopoulos in particular would likean evaluation of the Immunomedics acquisition. Was this a gooddecision? How would it create value for Gileads shareholders? (I haveincluded a shell model that you can use to think about this acquisition, butyou do not need to submit any model).
3. From 2010 2021, Gilead made 3acquisitions of more than $10 billion. Compare and contrast the sourcesof value creation from these mergers.