LAB, a specialized pharmaceutical company, was offering Merck to license his new developing drug, which was ready to enter the three-phase clinical testing. LAB already had a few drugs under the three testing phases. Some were denied by the FDA after all three tests, and others were still under testing phases, so none of them successfully completed the FDA approval. LAB's stock price dropped 30% due to failure of testing approval. Therefore, LAB could not raise enough funds to support Davanrik to pass all three phases and get approval from the FDA, and they were looking for a larger company, who had financial ability to successfully complete clinical tests, and launch the drug into market. In return, LAB would receive an initial payment, additional payments as Davanrik completes each clinical testing phase, and a royalty based on Danvanrik's sales.LAB, a specialized pharmaceutical company, was offering Merck to license his new developing drug, which was ready to enter the three-phase clinical testing. LAB already had a few drugs under the three testing phases. Some were denied by the FDA after all three tests, and others were still under testing phases, so none of them successfully completed the FDA approval. LAB's stock price dropped 30% due to failure of testing approval. Therefore, LAB could not raise enough funds to support Davanrik to pass all three phases and get approval from the FDA, and they were looking for a larger company, who had financial ability to successfully complete clinical tests, and launch the drug into market. In return, LAB would receive an initial payment, additional payments as Davanrik completes each clinical testing phase, and a royalty based on Danvanrik's sales.