Biotech Values

[Carl Chris]

Quote:
…PGNX gets a 50-60% split of [EU] revenues as compared to up to 20% of US revenues.
How did such a disparity come about? (I know the history with respect to SLXP and Ono Pharmaceutical.)

I am afraid it is a misunderstanding of the term.

Salix is not marketing Relistor in EU but sublicense it to other company, currently it is TMC pharma service. The 60% of revenue refers to the payment received from the sublicensees, but not the total revenue from the drug sales (in EU). There should be a term between Salix and TMC pharma about the % of sales that TMC will pay to Salix, this % is not disclosed and would not be high. Say it is 30%, then if TMC made a sale of $100mn, it will pay Salix $30mn and then Progenics will receive $18mn from Salix for the EU sales.

TMC pharma is not really specialized in marketing and likely will sublicense it again to other small or large sellers. In fact, there is no mention of Relistor revenue outside of US in both Salix and Progenics filings, which indicates so far the the EU marketing effort is insignificant. Given the current status of the planed launch of Movantik in Q2 in EU, the real campaign for Relistor in EU might have to be held until the approval of oral.

Now Valeant acquired the rights, given the global coverage, Valeant may want to marketing the drug ex-US by itself, which will need to adjust the terms on this part.