Intellipharmaceutics International Inc. (IPCI)

[AngeloFoca]

I posted the following on June 10th and hold to these numbers.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=123230322

I think what is far more important than the filing is the FDA acceptance of the NDA which is usually within 30 days after filing, and issuance at that time the PDUFA date... which should be for 6 months from date of filing since they are fast-tracked.

Acceptance of the NDA pretty much cements that they do NOT indeed need to do a phase 3 - which saves about 20 million $, and even more importantly around 2 years of time,

I think once that is known for sure... we'll see a partnership announced that takes all that into consideration.

I believe it will in fact be accepted and I am then expecting a $400 million total package -

$40 million up front + 20% royalty payments ON SALES OR REVENUE
$60 million on FDA approval
$100 million on $1 Billion aggregate sales milestone
$200 million on $3 billion aggregate sales milestone

or possibly 25% to 30% royalty payments on a $250 to $300 million total package. Also believe they will get a "rights of First Refusal" on Rexista w/ PODRAS

Royalty splits vary and depend mostly as to what stage of the approval process the drug is in - preclinical usually pays ~ 5% - if at successful phase 1, then usually ~ 10% - successful phase 2 can net you 12% to 15% - a successful phase 3 usually pays 20% - If FDA approved, easily 30% to 50% can be had - in Rexista's case if partnered before approval I would say 20% is conservative. Royalty payments are based on sales or revenues... not profits... so if IPCI negotiates 20% royalties it will be 20% of sales and the full payment is all profit to them... like the Focalin payments.

Rolling out a drug is very expensive and usually an agreed amount... say $30 million first year - 15 million 2nd year is set aside before royalties are paid... but long term profit margins on drugs - especially pills like Rexista are very high - my guess 65% to 80% profit margin - but, the royalty payments will be on sales or revenues, NOT profits.

Additionally... part of the approval process is that IPCI needs to have in place, proof that it can produce commercial quantities of Rexista utilizing current Good Manufacturing Process cGMP.

IPCI has always maintained that it intends to manufacture Rexista to assure trade secrets are not disclosed, so my guess is they will need around $20 million to set that up... I expect that will come from the partner as milestone payment once the deal is signed, I would also expect partner will want possibly 5 million shares at market cost... so any figures should reflect ~ 40 Million shares FULLY DILUTED.