GG&G

[uksausage]

it certainly was a different approach although they have suggested some form o f partnership in that past. I think Andy is looking to get a large upfront payment so that cash flow is a worry he can forget about. There are many parameter that go into any partnership agreements not least of which is volume commitments and marketing budget commitments (from both sides). But looking at basic product revenue percentages I would throw these out for consideration for starters.

I hope there are no more exclusive deals. There are a number of licencing models he could adopt including private labeling so it becomes a Walgreens pain patch and CVS Pain loop etc. I think we still assume BIEL does the manufacturing.

Assuming the current revenues are (to make it easy) retail $30, retailer buys at $20, wholesaler buys at $15 cost from BIEL (50% RRP), cost to make is $5 giving BIEL $10 per patch profit (33% of retail).

A model that offers $10m+ upfront for US retail licencing or private label with a 33% RRP fee would give the licencee (assume Walgreens so no distributor in the mix) $10 more per patch (double) and halve BIELS on going profit. I suspect they would negotiate hard for under 30% licence or less if the upfront amount is closer to the $50m talked about a few years ago. That could buy back lots of shares!

As for new products such as a more powerful RecoveryRx product in conjunction with BBraun and/or Reflexonic they may just licence the technology and let them manufacture (or contract with their manufacturer) themselves in which case it would be say 10-15% fee to cover the R&D.

As mentioned there can be no more exclusive deals unless the commitments are very high. Amazon has to be able to sell them for starters!